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HCS CSSB 53(L&C): "An Act relating to consumer credit insurance; to regulation of risk retention or purchasing groups; to preemption of the regulation of insurance agents and insurance producers; to the general powers of the director of the division of insurance; to insurance examination hearings; to insurer certificates of authority; to annual and quarterly statements, taxes, and prohibited acts of insurers; to reinsurance credit allowed a domestic insurer; to risk based capital for insurers; to insurer assets and liabilities; to insurer investments; to insurance holding companies; to regulation, licensing, examination, and trade practices of insurance producers, managing general agents, third-party administrators, brokers, independent adjusters, and reinsurance intermediary managers; to surplus lines insurance; to criminal insurance acts; to premium increases in automobile insurance; to insurance rating; to assigned risk pools; to filing and approval of certain insurance policy forms; to required insurance coverage for acupuncture, nurse midwives' services, mammography, and phenylketonuria; to health insurance provided by small employers; to transfer of an insurer's status as a domestic insurer; to quarterly statements of benevolent associations, fraternal benefit societies, and health maintenance organizations; to reciprocal insurers; to the definition of 'member insurer' for purposes of the Alaska Life and Disability Insurance Guaranty Association; to electronic insurance data transfer and insurance funds transfer; to the definitions of 'managing general agent' and 'person' applicable to insurance law; to automobile assigned risk plans; requiring that insurers appoint independent counsel for an insured when certain conflicts of interest arise; placing a person employed by the division of insurance as an actuary or assistant actuary into the exempt service; amending Alaska Rule of Civil Procedure 45; and providing for an effective date."

00 HOUSE CS FOR CS FOR SENATE BILL NO. 53(L&C)                                                                             
01 "An Act relating to consumer credit insurance; to regulation of risk retention                                          
02 or purchasing groups; to preemption of the regulation of insurance agents and                                           
03 insurance producers; to the general powers of the director of the division of                                           
04 insurance; to insurance examination hearings; to insurer certificates of authority;                                     
05 to annual and quarterly statements, taxes, and prohibited acts of insurers; to                                          
06 reinsurance credit allowed a domestic insurer; to risk based capital for insurers;                                      
07 to insurer assets and liabilities; to insurer investments; to insurance holding                                         
08 companies; to regulation, licensing, examination, and trade practices of insurance                                      
09 producers, managing general agents, third-party administrators, brokers,                                                
10 independent adjusters, and reinsurance intermediary managers; to surplus lines                                          
11 insurance; to criminal insurance acts; to premium increases in automobile                                               
12 insurance; to insurance rating; to assigned risk pools; to filing and approval of                                       
13 certain insurance policy forms; to required insurance coverage for acupuncture,                                         
14 nurse midwives' services, mammography, and phenylketonuria; to health insurance                                         
01 provided by small employers; to transfer of an insurer's status as a domestic                                           
02 insurer; to quarterly statements of benevolent associations, fraternal benefit                                          
03 societies, and health maintenance organizations; to reciprocal insurers; to the                                         
04 definition of 'member insurer' for purposes of the Alaska Life and Disability                                           
05 Insurance Guaranty Association; to electronic insurance data transfer and                                               
06 insurance funds transfer; to the definitions of 'managing general agent' and                                            
07 'person' applicable to insurance law; to automobile assigned risk plans; requiring                                      
08 that insurers appoint independent counsel for an insured when certain conflicts                                         
09 of interest arise; placing a person employed by the division of insurance as an                                         
10 actuary or assistant actuary into the exempt service; amending Alaska Rule of                                           
11 Civil Procedure 45; and providing for an effective date."                                                               
12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
13    * Section 1.  AS 06.20.260(a) is amended to read:                                                                    
14  (a)  A further or other charge or amount for an examination, service, brokerage                                       
15 commission, expense, fee,  bonus, or other thing  may not be directly or indirectly                                     
16 charged, contracted for, or received except                                                                             
17   (1)  lawful fees actually paid out by the licensee to a public officer for                                           
18 filing, recording, or releasing any instrument securing the loan, or for transferring                                   
19 certificate of title to a motor vehicle securing the lien or noting a lien on that                                      
20 certificate;                                                                                                            
21   (2)  premiums actually paid out for insurance on any one or combination                                              
22 of the following:  pledged property of the borrower, or consumer credit [LIFE]                                        
23 insurance; in this paragraph "consumer credit insurance" has the meaning given                                         
24 in AS 21.57.160 [ON THE LIFE OF ONE OR MORE BORROWERS, CREDIT LOSS                                                     
25 OF INCOME INSURANCE, OR CREDIT DISABILITY INSURANCE TO PROVIDE                                                          
26 INDEMNITY FOR PAYMENTS BECOMING DUE ON THE INDEBTEDNESS];                                                               
27   (3)  taxable costs and expenses to which the licensee becomes entitled                                               
28 under general law in any court proceedings to collect a loan or to realize on the                                       
29 security after default;                                                                                                 
30   (4)  reasonable fees paid by a licensee for appraisals, surveys, and title                                           
31 insurance or reports if the loan is secured by an interest in real estate;                                              
01   (5)  a late payment fee of not more than 10 percent of the payment that                                              
02 is due or $15, whichever is less.                                                                                       
03    * Sec. 2.  AS 06.20.287(a) is amended to read:                                                                       
04  (a)  A licensee may obtain consumer credit [LIFE, CREDIT DISABILITY,]                                               
05 and property insurance on open-end loans under this chapter.  The consumer credit                                     
06 [LIFE AND CREDIT DISABILITY] insurance obtained by a licensee shall satisfy the                                         
07 requirements of AS 21.57.  The property insurance obtained by a licensee shall satisfy                                  
08 the requirements of AS 21.39 and AS 21.42.  The licensee shall comply with                                              
09 AS 21.36.160 and 21.36.165 during all transactions with borrowers involving                                            
10 consumer credit [LIFE, CREDIT DISABILITY] and property insurance.                                                      
11    * Sec. 3.  AS 21.03.010 is amended by adding a new subsection to read:                                               
12  (c)  A person who transacts insurance in this state, or relative to a subject                                         
13 resident, located, or to be performed in this state as or on behalf of a risk retention                                 
14 group or purchasing group formed under and in compliance with 15 U.S.C. 3901 -                                          
15 3906 (Liability Risk Retention Act), shall comply with the provisions of this title not                                 
16 preempted by federal law.                                                                                               
17    * Sec. 4.  AS 21.03.060 is amended to read:                                                                          
18  Sec. 21.03.060.  PRE-EMPTION.  The state hereby pre-empts the field of                                                
19 regulating insurers and their managing general agents, insurance producers                                          
20 [AGENTS], and representatives.  All political subdivisions of the state, including home                                 
21 rule boroughs or cities, are prohibited from requiring of an insurer, managing general                                
22 agent, insurance producer [AGENT], or representative regulated under this title an                                    
23 authorization, permit, or registration of any kind for conducting transactions lawful                                   
24 under the authority granted by the state under this title.                                                              
25    * Sec. 5.  AS 21.06.080 is amended by adding a new subsection to read:                                               
26  (e)  If the director determines that a catastrophe has occurred in this state and                                     
27 in good faith believes that the governor or the President of the United States has issued                               
28 or is about to issue a declaration of disaster, the director may take the action that the                               
29 director considers necessary to assure that a contract of insurance already issued will                                 
30 be honored under the terms of the contract.  Actions that the director may take include                                 
31 emergency orders permitting the immediate licensing of adjusters to facilitate handling                                 
01 of claims, permitting a licensee to open or close an office, permitting a licensee to                                   
02 move or remove a record as required by the existence of the catastrophe, or permitting                                  
03 the issuance by an insurer of checks or drafts drawn on an out-of-state bank in                                         
04 payment of a claim.  Until a declaration of the disaster has been lifted, the director                                  
05 may take action to respond to a disaster without a hearing.  An action taken under this                                 
06 subsection may not remain in effect more than six months from the date that the                                         
07 director determines that a catastrophe has occurred unless, after a hearing, the director                               
08 determines that the action is still necessary to respond to the disaster.                                               
09    * Sec. 6.  AS 21.06.120(c) is amended to read:                                                                       
10  (c)  In place of an examination by the director, the director may accept a full                                       
11 report of the last recent examination of a foreign or alien insurer, certified to by the                                
12 insurance supervisory official of another state, territory, commonwealth, or district of                                
13 the United States.  The director may require that the [IF]                                                            
14   (1)  [THE] insurance regulatory agency conducting the examination be,                                              
15 [WAS] at the time of the examination, accredited by the National Association of                                       
16 Insurance Commissioners;                                                                                                
17   (2)  [THE] examination be [IS] performed under the supervision of an                                               
18 insurance regulatory agency accredited by the National Association of Insurance                                         
19 Commissioners; and the supervising examiner, after a review of the examination work                                   
20 papers and report, state [STATES] under oath that the examination and report comply                                   
21 with the standards and procedures required by their accredited state insurance                                          
22 regulatory agency; or                                                                                                   
23   (3)  [THE] examiner conducting the examination be [WAS] employed                                                   
24 by an insurance regulatory agency accredited at the time of the examination by the                                      
25 National Association of Insurance Commissioners and that the examiner, after review                                   
26 of the examination work papers and report, state [STATES] under oath that the                                         
27 examination and report comply with the standards and procedures required by the                                         
28 accredited insurance regulatory agency.                                                                                 
29    * Sec. 7.  AS 21.06.150(g) is amended to read:                                                                       
30  (g)  The director may withhold a document, information, account, record,                                              
31 examination, or report from the public inspection for as long as the director finds the                                 
01 withholding is necessary to protect a person against unwarranted injury or is in the                                    
02 public interest.  The director may close an examination hearing to the public when                                     
03 the director finds the closure is necessary to protect a person against unwarranted                                     
04 injury or is in the public interest.  The director may publish the examination report                                  
05 or a summary of it in a newspaper in the state if the director determines that the                                      
06 publication is in the public interest.                                                                                  
07    * Sec. 8.  AS 21.09.110 is amended to read:                                                                          
08  Sec. 21.09.110.  APPLICATION FOR CERTIFICATE OF AUTHORITY.  To                                                        
09 apply for an original certificate of authority an insurer shall file with the director its                              
10 application, [(] accompanied by the applicable fees set under AS 21.06.250, [)]                                     
11 showing its name, location of its home office, or principal office in the United States                               
12 [(] if an alien insurer [)], kinds of insurance to be transacted, date of organization or                               
13 incorporation, form of organization, state or country of domicile, and additional                                       
14 information that the director may reasonably require, together with the following                                       
15 documents, as applicable:                                                                                               
16   (1)  if a foreign insurer, a copy of its corporate charter or articles of                                            
17 incorporation, with all amendments certified by the public officer with whom the                                        
18 originals are on file in the state or country of domicile;                                                              
19    (2)  if a reciprocal insurer, copies of the power of attorney of its                                                
20 attorney-in-fact and of its subscribers' agreement, if any, certified by its                                            
21 attorney-in-fact;                                                                                                       
22   (3)  a copy of its financial statement as of the preceding December 31,                                              
23 and all subsequent quarterly financial statements, sworn to by at least two executive                                   
24 officers of the insurer, or certified by the public insurance supervisory official of the                               
25 insurer's state of domicile or of entry into the United States;                                                         
26   (4)  a copy of the report of last examination, if any, made of the insurer,                                          
27 certified by the insurance supervisory official of its state of domicile or of entry into                               
28 the United States;                                                                                                      
29   (5)  appointment of the director under AS 21.09.180, as its attorney to                                              
30 receive service of legal process;                                                                                       
31   (6)  if a foreign or alien insurer, a certificate of the public official                                             
01 having supervision of insurance in its state or country of domicile, or state of entry                                  
02 into the United States, showing that it is authorized to transact the kinds of insurance                                
03 proposed to be transacted in this state;                                                                                
04   (7)  if an alien insurer, a copy of the appointment and authority of its                                             
05 United States manager, certified by its officer having custody of its records; and                                    
06   (8)  if a foreign insurer, a certificate as to deposit if it is to be tendered                                       
07 under AS 21.09.090 [;                                                                                                   
08   (9)  SPECIMEN COPIES OF POLICIES PROPOSED TO BE                                                                      
09 OFFERED IN THIS STATE IF THEN AVAILABLE, TOGETHER WITH                                                                  
10 PREMIUMS OR PREMIUM RATES APPLICABLE IF THEN KNOWN, OR A                                                                
11 DECLARATION THAT THE RATES AS APPLICABLE WILL BE THOSE                                                                  
12 PROMULGATED BY DESIGNATED RATING ORGANIZATIONS AUTHORIZED                                                               
13 TO FILE RATES IN THIS STATE ON BEHALF OF THE INSURER OR BY THE                                                          
14 INSURER].                                                                                                               
15    * Sec. 9.  AS 21.09.110 is amended by adding a new subsection to read:                                               
16  (b)  Policy forms and rates that require approval under AS 21.39 or AS 21.42                                          
17 shall be submitted under AS 21.39.040(j) or AS 21.42.120(g) and may not be                                              
18 submitted with the application for a certificate of authority.                                                          
19    * Sec. 10.  AS 21.09.130(b) is amended to read:                                                                      
20  (b)  If not continued by the insurer, its certificate of authority shall be                                          
21 suspended [EXPIRES] at midnight on June 30 following the failure of the insurer to                                     
22 continue it in force.  The certificate of authority shall expire on June 30 one year                                   
23 following its suspension due to failure to continue the certificate of authority.  The                                 
24 director shall promptly notify the insurer of the occurrence of a failure that may result                              
25 in suspension [RESULTING IN IMPENDING EXPIRATION] of its certificate of                                                
26 authority.                                                                                                              
27    * Sec. 11.  AS 21.09 is amended by adding a new section to read:                                                     
28  Sec. 21.09.135.  VOLUNTARY SURRENDER OF CERTIFICATE OF                                                                
29 AUTHORITY.  (a)  A foreign admitted insurer may apply for voluntary surrender of                                        
30 its certificate of authority and the director may accept the application, if the foreign                                
31 admitted insurer                                                                                                        
01   (1)  is in compliance with the applicable sections of this title, or the                                             
02 director waives in writing each condition of noncompliance;                                                             
03   (2)  provides written confirmation that obligations incurred before the                                              
04 voluntary surrender of the certificate of authority shall be paid to guarantee funds or                                 
05 insurance pools established by law; and                                                                                 
06   (3)  is domiciled in a state that is                                                                                 
07   (A)  accredited by the National Association of Insurance                                                            
08 Commissioners at the time of the request for voluntary surrender; or                                                    
09   (B)  not accredited by the National Association of Insurance                                                        
10 Commissioners at the time of the request and agrees in writing to be subject                                            
11 to                                                                                                                      
12   (i)  AS 21.09.200 and 21.09.205 for a period of two                                                                
13 years, including payment of any fee related to filing information with                                                  
14 the director; and                                                                                                       
15   (ii)  any other provision of this title that may be required                                                       
16 in writing by the director and for the period of time the director may                                                  
17 specify.                                                                                                                
18  (b)  If a foreign admitted insurer who surrenders a certificate of authority                                          
19 ceases to exist, all business written and in force relative to a risk resident, located, or                             
20 to be performed in this state shall be lawfully cancelled or reinsured.  A reinsurance                                  
21 agreement covering all or a part of a risk described in this subsection shall be                                        
22 approved by the director before accepting the certificate of authority for surrender if                                 
23 the agreement meets the following criteria:                                                                             
24   (1)  insurance coverage has not deteriorated from the policies existing                                              
25 at the time of the transfer;                                                                                            
26   (2)  the assuming insurer is of equal or better financial standing; and                                              
27   (3)  the assuming insurer is admitted to do business in this state, unless                                           
28 this requirement is waived by the director.                                                                             
29    * Sec. 12.  AS 21.09.200(f) is amended to read:                                                                      
30  (f)  In addition to the requirements of (a) of this section, an authorized [A                                       
31 DOMESTIC] insurer shall file its annual statement with the National Association of                                      
01 Insurance Commissioners on electronic media acceptable to the association by the                                      
02 due date established by the association, and shall pay the applicable filing fee.  The                                 
03 director may waive the filing requirement if the insurer only transacts business                                        
04 in this state and only accepts risks relative to a subject resident, located, or to be                                  
05 performed in this state.  An insurer that fails to comply with this subsection is                                      
06 subject to the penalties specified in (e) of this section, calculated from the filing and                               
07 fee due date established by the National Association of Insurance Commissioners.                                        
08    * Sec. 13.  AS 21.09.205 is amended by adding a new subsection to read:                                              
09  (d)  In addition to the requirements of (a) of this section, an authorized insurer                                    
10 shall file its quarterly statement with the National Association of Insurance                                           
11 Commissioners on electronic media acceptable to the association by the due date                                         
12 established by the association, and shall pay the applicable filing fee.  The director                                  
13 may waive the filing requirement if the insurer only transacts business in this state and                               
14 only accepts risks relative to a subject resident, located, or to be performed in this                                  
15 state.  An insurer that fails to comply with this subsection is subject to the penalties                                
16 specified in (c) of this section, calculated from the filing and fee due date established                               
17 by the National Association of Insurance Commissioners.                                                                 
18    * Sec. 14.  AS 21.09.210 is amended by adding new subsections to read:                                               
19  (k)  If, within three years after the date the tax under this section was due, an                                     
20 insurer discovers a mistake or misinterpretation that resulted in an overpayment of the                                 
21 tax in an amount exceeding $250 in any one calendar year, the insurer may make a                                        
22 written request to the director for a refund.  If the director determines a valid mistake                               
23 or misinterpretation has occurred, the director shall refund to the insurer the amount                                  
24 of the excess tax by granting, at the director's discretion, a monetary refund or                                       
25 premium tax credit.  A premium tax credit shall be used in the next calendar year to                                    
26 the extent possible and any unused credit shall be paid as a monetary refund.  A                                        
27 premium tax credit may not reduce the payable tax, calculated without use of the                                        
28 credit, to less than zero.                                                                                              
29  (l)  A premium tax credit granted under (k) of this section may not carry over                                        
30 as an attribute in a transaction under AS 21.69.610, 21.69.620, AS 21.78, or a similar                                  
31 transaction entered into by a foreign insurer.                                                                          
01  (m)  In this section, "premium tax credit" means an amount that an insurer may                                        
02 use as an offset against a premium tax payment.                                                                         
03    * Sec. 15.  AS 21.09.250 is amended to read:                                                                         
04  Sec. 21.09.250.  PROHIBITED ACTS.  An insurer doing business in this state                                            
05 may not make, write, place, or cause to be made, written, or placed in this state a                                     
06 policy, duplicate policy, or contract of insurance of any kind or character, or general                                 
07 or floating policy upon persons or property resident, situated, or located in this state,                               
08 from or through a [BROKER, AGENT, GENERAL AGENT, SURPLUS LINE                                                           
09 BROKER, OR] person required to be licensed who has not secured a license in this                                      
10 state.  An insurer may not pay a commission or any form of remuneration to a person,                                    
11 firm, or organization for the writing or placing of insurance coverage in this state                                    
12 unless that person, firm, or organization holds a license issued by the director.                                       
13    * Sec. 16.  AS 21.09 is amended by adding new sections to read:                                                      
14  Sec. 21.09.290.  RISK RETENTION GROUPS.  (a)  A risk retention group                                                  
15 formed in this state shall                                                                                              
16   (1)  comply with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act);                                               
17 and                                                                                                                     
18   (2)  qualify for and hold in good standing a certificate of authority under                                          
19 this chapter, limited to liability insurance only.                                                                      
20  (b)  A risk retention group shall submit with its application for a certificate of                                    
21 authority                                                                                                               
22   (1)  the identity of                                                                                                 
23   (A)  the initial members of the risk retention group;                                                               
24   (B)  all persons who organized the risk retention group;                                                            
25   (C)  all persons who will provide administrative services to the                                                    
26 risk retention group;                                                                                                   
27   (D)  all persons who will influence or control the activities of                                                    
28 the risk retention group;                                                                                               
29   (2)  the amount and nature of initial capitalization;                                                                
30   (3)  a plan of operation or a feasibility study that includes the coverage,                                          
31 deductible, coverage limit, rate, and rating classification system for the type or class                                
01 of liability insurance the group intends to offer; and                                                                  
02   (4)  the states in which the risk retention group intends to operate.                                                
03  (c)  At least 30 days before a domestic risk retention group implements a                                             
04 material change or revision to an approved plan of operation or feasibility study, the                                  
05 material change or revision shall be filed with the director.  A material change or                                     
06 revision may not be implemented unless the domestic risk retention group receives the                                   
07 director's written approval.  In this subsection, "material change or revision" includes                                
08 an offering of an additional type or class of liability insurance.                                                      
09  (d)  In this section,                                                                                                 
10   (1)  "liability" means legal liability for damages, including costs of                                               
11 defense, legal costs and fees, and other claims expenses, because of injury to another                                  
12 person, damage to property, or other damage or loss to a person resulting from or                                       
13 arising out of a business, whether profit or nonprofit, trade, product, service, including                              
14 a professional service, or an activity of a state or local government, or an agency or                                  
15 political subdivision of a state or local government; "liability" does not include                                      
16 personal risk liability or employer's liability with respect to its employees other than                                
17 legal liability under 45 U.S.C. 51 (Federal Employers' Liability Act);                                                  
18   (2)  "personal risk liability" means liability for damages because of                                                
19 injury to a person, damage to property, or other loss or damage resulting from a                                        
20 personal, familial, or household responsibility or activity and that is not a responsibility                            
21 or activity described under (1) of this subsection.                                                                     
22  Sec. 21.09.300.  DISCLOSURE OF MATERIAL TRANSACTIONS.  (a)  A                                                         
23 domestic insurer shall file a report with the director disclosing a material acquisition                                
24 and disposition of assets or a material nonrenewal, cancellation, or revision of ceded                                  
25 reinsurance agreements unless the acquisition and disposition of assets or material                                     
26 nonrenewal, cancellation, or revision of ceded reinsurance agreements have been                                         
27 submitted to the director for review, approval, or information purposes as required by                                  
28 this title.                                                                                                             
29  (b)  The report required under (a) of this section is due 15 days after the end                                       
30 of the calendar month in which a reportable transaction occurs.                                                         
31  (c)  Except as provided in this section, a report obtained by or disclosed to the                                     
01 director under this section is confidential, is not subject to subpoena, and may not be                                 
02 made public by the director, or another person, without the prior written consent of the                                
03 insurer submitting the report.  A report under this section may be disclosed to an                                      
04 insurance regulatory agency of another state or to the National Association of                                          
05 Insurance Commissioners, with notice of the disclosure sent to the insurer.  If the                                     
06 director, after giving an insurer notice and an opportunity to be heard, determines that                                
07 the interest of policyholders, shareholders, or the public will be served by publication                                
08 of the report, the director may publish all or any part of the report in a manner the                                   
09 director determines appropriate.                                                                                        
10  (d)  A domestic insurer's report of an acquisition or disposition of an asset                                         
11   (1)  shall be made under (a) of this section if the acquisition or                                                   
12 disposition is material; for purposes of this subsection, an acquisition or disposition,                                
13 or the aggregate of a series of related acquisitions or related dispositions during any                                 
14 30-day period is material if it is nonrecurring, not in the ordinary course of business,                                
15 and involves more than five percent of the reporting insurer's total admitted assets as                                 
16 reported in its most recent financial statement required by law that is filed with the                                  
17 division;                                                                                                               
18   (2)  shall be made on asset acquisition, including a purchase, lease,                                                
19 exchange, merger, consolidation, succession, or other acquisition other than the                                        
20   (A)  construction or development of real property by or for the                                                     
21 reporting insurer; or                                                                                                   
22   (B)  acquisition of material for construction or development of                                                     
23 real property;                                                                                                          
24   (3)  shall be made on asset disposition including a sale, lease, exchange,                                           
25 merger, consolidation, mortgage, hypothecation, assignment for the benefit of creditors,                                
26 or abandonment;                                                                                                         
27   (4)  must include information on the                                                                                 
28   (A)  date of transaction;                                                                                           
29   (B)  manner of acquisition or disposition;                                                                          
30   (C)  description of the assets involved;                                                                            
31   (D)  nature and amount of the consideration given or received;                                                      
01   (E)  purpose of, or reason for, the transaction;                                                                    
02   (F)  manner by which the amount of consideration was                                                                
03 determined;                                                                                                             
04   (G)  gain or loss recognized or realized as a result of the                                                         
05 transaction; and                                                                                                        
06   (H)  names of persons from whom the assets were acquired or                                                         
07 to whom the assets were disposed.                                                                                       
08  (e)  A domestic insurer's report of nonrenewal, cancellation, or revision of a                                        
09 ceded reinsurance agreement                                                                                             
10   (1)  shall be made under (a) of this section if the nonrenewal,                                                      
11 cancellation, or revision is material; for purposes of this subsection, a material                                      
12 nonrenewal, cancellation, or revision is one that affects (A) for property and casualty                                 
13 business, including accident and health business when written as property and casualty                                  
14 business, more than 50 percent of an insurer's ceded written premium; or (B) for life,                                  
15 annuity, and accident and health business, more than 50 percent of the total reserve                                    
16 credit taken for business ceded, on an annualized basis as indicated in the insurer's                                   
17 most recently filed statutory statement; however, a filing is not required if the insurer's                             
18 ceded written premium or the total reserve credit taken for business ceded represents,                                  
19 on an annual basis, less than 10 percent of direct written premiums and assumed                                         
20 written premiums or 10 percent of the statutory reserve requirement before a cession;                                   
21   (2)  shall be filed without regard to which party has initiated the                                                  
22 nonrenewal, cancellation, or revision of ceded reinsurance whenever any of the                                          
23 following conditions exist:                                                                                             
24   (A)  the entire cession has been cancelled, nonrenewed, or                                                          
25 revised and ceded indemnity and loss adjustment expense reserves after a                                                
26 nonrenewal, cancellation, or revision represent less than 50 percent of the                                             
27 comparable reserves that would have been ceded had the nonrenewal,                                                      
28 cancellation, or revision not occurred;                                                                                 
29   (B)  an admitted or accredited reinsurer has been replaced on an                                                    
30 existing cession by an unauthorized reinsurer; however, a report shall be filed                                         
31 only if the result of the revision affects more than 10 percent of the cession;                                         
01 or                                                                                                                      
02   (C)  collateral requirements previously established for                                                             
03 unauthorized reinsurers have been reduced; however, a report shall be filed                                             
04 only if the result of the revision affects more than 10 percent of the cession;                                         
05 and                                                                                                                     
06   (3)  must include                                                                                                    
07   (A)  the effective date of the nonrenewal, cancellation, or                                                         
08 revision;                                                                                                               
09   (B)  a description of the transaction with an identification of the                                                 
10 initiator of the transaction;                                                                                           
11   (C)  the purpose of, or reason for, the transaction; and                                                            
12   (D)  if applicable, the identity of the replacement reinsurers.                                                     
13  (f)  An insurer is required to report under (a) of this section on a                                                  
14 nonconsolidated basis unless the insurer is part of a consolidated group of insurers that                               
15 utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the                                    
16 solvency and integrity of the insurer's reserves and the insurer ceded substantially all                                
17 of its direct and assumed business to the pool.  An insurer is presumed to have ceded                                   
18 substantially all of its direct and assumed business to a pool if the insurer has less than                             
19 $1,000,000 total direct written premiums and assumed written premiums during a                                          
20 calendar year that is not subject to a pooling arrangement and the net income of the                                    
21 business not subject to the pooling arrangement represents less than five percent of the                                
22 insurer's capital and surplus.                                                                                          
23  Sec. 21.09.310.  AUTHORIZATION OF UNITED STATES BRANCHES OF                                                           
24 ALIEN INSURERS AND GENERAL REQUIREMENTS.  (a)  This section applies                                                     
25 to all United States branches of alien insurers using this state as a state of entry to                                 
26 transact the business of insurance in the United States.  Except as provided elsewhere                                  
27 in this title, a United States branch is subject to all state laws applicable to an insurer                             
28 domiciled in this state.                                                                                                
29  (b)  An alien insurer may apply for a certificate of authority to use this state                                      
30 as a state of entry to transact the business of insurance in the United States by                                       
31   (1)  qualifying as an insurer licensed to do business in this state;                                                 
01   (2)  establishing a trust under a trust agreement approved in writing by                                             
02 the director with a United States bank acceptable to the director in an amount not less                                 
03 than the greater of                                                                                                     
04   (A)  the minimum basic capital or basic guarantee surplus and                                                       
05 additional maintained surplus required under AS 21.09.070; or                                                           
06   (B)  the authorized control level risk based capital under                                                          
07 AS 21.14;                                                                                                               
08   (3)  submitting a copy of its charter and bylaws, if any, currently in                                               
09 force, and other documents necessary to show the kind of business it is authorized to                                   
10 transact in its domiciliary jurisdiction; documents submitted under this paragraph must                                 
11 be attested to as accurate and complete by the insurance supervisory official in the                                    
12 domiciliary jurisdiction, and must include an English translation, if in a language other                               
13 than English;                                                                                                           
14   (4)  submitting a full statement, subscribed and affirmed as true by two                                             
15 officers or equivalent responsible representatives in a manner that the director                                        
16 prescribes, of its financial condition as of the close of its latest fiscal year, showing                               
17 its assets, liabilities, income disbursements, business transacted, and other facts                                     
18 required to be shown in its annual statement, as reported to the insurance supervisory                                  
19 official in its domiciliary jurisdiction; all documents submitted under this paragraph                                  
20 must include an English translation if in a language other than English;                                                
21   (5)  submitting to an examination under AS 21.06.120(b) at its principal                                             
22 office within the United States, and elsewhere if necessary, unless the director accepts                                
23 a report of the insurer's recent examination and the report has been certified by the                                   
24 insurance supervisory official of the insurer's domiciliary jurisdiction; and                                           
25   (6)  payment of fees established under AS 21.06.250.                                                                 
26  (c)  Before issuing or renewing a certificate of authority for a United States                                        
27 branch, the director may require satisfactory proof that the insurer does not intend to                                 
28 transact insurance business in violation of the provisions of this title or that is not                                 
29 authorized by its charter.  Proof required under this subsection may include the alien                                  
30 insurer's charter, an agreement evidenced by a duly certified resolution of its board of                                
31 directors, or other proof that the director may require.                                                                
01  (d)  The director may renew a certificate of authority for a United States branch                                     
02 if satisfied, by proof the director may require, that the insurer is not delinquent with                                
03 respect to a requirement or qualification imposed by this title and that its continuance                                
04 to transact the business of insurance in this state will not be hazardous or prejudicial                                
05 to the best interest of the people of this state.                                                                       
06  (e)  A United States branch may not receive or renew a certificate of authority                                       
07 in this state                                                                                                           
08   (1)  to transact a kind of insurance or a combination of kinds of                                                    
09 insurance that are not permitted to be transacted by domestic insurers in this state;                                   
10   (2)  if it transacts business other than the business of insurance                                                   
11 anywhere else within the United States unless the business, in the opinion of the                                       
12 director, is necessarily or properly incidental to the kind of insurance that it is                                     
13 authorized to transact in this state;                                                                                   
14   (3)  if it fails to keep full and correct entries of its transactions; records                                       
15 of entries shall at all times be maintained in its principal office within this state; or                               
16   (4)  if it fails to comply with a requirement or limitation of this title that                                       
17 it is not exempted from by another provision of this title and that is applicable to                                    
18 similar domestic insurers and if, in the judgment of the director, the requirement or                                   
19 limitation is necessary to protect the interest of the policyholders.                                                   
20  (f)  A United States branch that transacts a kind or combination of kinds of                                          
21 insurance outside this state that is not permitted to be done in this state by similar                                  
22 domestic insurers may not have a certificate of authority issued or renewed in this state                               
23 unless, in the judgment of the director, the transaction of that kind of insurance is not                               
24 prejudicial to the best interest of the people of this state.                                                           
25  (g)  A United States branch shall maintain assets in a trust account in an                                            
26 amount not less than the United States branch's reserves and other liabilities, plus the                                
27 greater of                                                                                                              
28   (1)  the minimum basic capital or basic guaranteed surplus and                                                       
29 additional maintained surplus required under AS 21.09.070; or                                                           
30   (2)  the authorized control level risk based capital under AS 21.14.                                                 
31  (h)  A written trust agreement must contain provisions that                                                           
01   (1)  vest legal title to trusteed assets in the trustees, and their lawfully                                         
02 appointed successors;                                                                                                   
03   (2)  require that all assets deposited in the trust be continuously kept                                             
04 within the United States;                                                                                               
05   (3)  provide for substitution of a new trustee in case of a vacancy by                                               
06 death, resignation, or other reason, subject to the prior written approval of the director;                             
07   (4)  require that the trustee continuously maintain a record sufficient to                                           
08 identify the assets of the trust fund;                                                                                  
09   (5)  require that trusteed assets consist only of cash, investments eligible                                         
10 for investment of the funds of domestic insurers, and accrued interest on the assets, if                                
11 collectible by the trustee, subject to the limits on investment of funds by domestic                                    
12 insurers under this title;                                                                                              
13   (6)  require that the trust be for the exclusive benefit, security, and                                              
14 protection of the policyholders, or policyholders and creditors, of the United States                                   
15 branch in the United States and that the trust be maintained as long as there is an                                     
16 outstanding liability of the alien insurer arising out of its transaction of insurance in                               
17 the United States; and                                                                                                  
18   (7)  provide that withdrawal of an asset may not be made or permitted                                                
19 by a trustee without the prior written approval of the director except                                                  
20   (A)  to make deposits required by law in a state for the security                                                   
21 or benefit of all policyholders, or policyholders and creditors, of the United                                          
22 States branch in the United States;                                                                                     
23   (B)  to withdraw funds deposited in another state under (A) of                                                      
24 this paragraph if                                                                                                       
25   (i)  the written trust agreement requires prior written                                                            
26 approval of the insurance supervising official of that other state;                                                     
27   (ii)  written notice of the nature and extent of the                                                               
28 withdrawal is provided to the director within 30 days of the withdrawal;                                                
29 and                                                                                                                     
30   (iii)  the total trusteed assets remaining are in excess of                                                        
31 the total assets required to be maintained in trust under (g) of this                                                   
01 section;                                                                                                                
02   (C)  upon the specific written direction of the United States                                                       
03 manager, who is duly authorized and is acting under either general or specific                                          
04 written authority previously given or delegated by the board of directors, to                                           
05 substitute other assets as permitted by this title if the substituted assets are of                                     
06 at least equal value and quality to those withdrawn;                                                                    
07   (D)  to transfer assets to an official liquidator or rehabilitator                                                  
08 under an order of a court of competent jurisdiction; or                                                                 
09   (E)  if provided under the terms of the written trust agreement,                                                    
10 to pay over to the United States manager of the United States branch, upon                                              
11 request, income, dividends, or interest accumulations of the assets of the trust                                        
12 fund that are in excess of the total assets required to be maintained in trust                                          
13 under (g) of this section.                                                                                              
14  (i)  A written trust agreement and all amendments to it shall be authenticated                                        
15 in a form and manner that the director may prescribe and may not take effect until                                      
16 approved by the director.  The director may not approve a trust agreement unless the                                    
17 director makes a written finding that                                                                                   
18   (1)  the written trust agreement or its amendments are sufficient in form                                            
19 and in conformity with law;                                                                                             
20   (2)  a person designated as a trustee is eligible to act in that capacity;                                           
21 and                                                                                                                     
22   (3)  the written trust agreement is adequate to protect the interests of the                                         
23 beneficiaries of the trust.                                                                                             
24  (j)  The director may approve written modifications of, or variations in, a                                           
25 written trust agreement upon a finding that the proposed changes are not prejudicial                                    
26 to the interests of the people of this state or the United States policyholders and                                     
27 creditors of the United States branch.                                                                                  
28  (k)  The director may conduct examinations of the trusteed assets of an                                               
29 authorized United States branch at the insurer's expense and may require the trustee                                    
30 or trustees to file a statement, in a form as prescribed by the director, certifying the                                
31 assets and amounts of the trust fund.                                                                                   
01  (l)  The director, upon finding that the requisites for the approval of the trust                                     
02 agreement no longer exist, may issue an order that withdraws approval of a written                                      
03 trust agreement and amendments to it.  An order issued under this subsection takes                                      
04 effect 10 days after being issued.                                                                                      
05  (m)  In addition to all other actions permitted under this title, refusal or neglect                                  
06 of a trustee to comply with the requirements of this title is a cause for suspension or                                 
07 revocation of the United States branch's certificate of authority or the liquidation of the                             
08 alien insurer's United States branch.                                                                                   
09  (n)  Annual statements under AS 21.09.200 and quarterly statements under                                              
10 AS 21.09.205 (1) may only relate to insurance transactions and affairs within the                                       
11 United States, assets held by or for the United States branch for the protection of                                     
12 policyholders and creditors within the United States, and liabilities incurred against                                  
13 those assets; and (2) may not contain a statement in regard to assets and business                                      
14 transacted in a place not described in this subsection.  The annual and quarterly                                       
15 statements shall be signed and verified by the United States manager, attorney-in-fact,                                 
16 or a duly empowered assistant United States manager of the United States branch.                                        
17  (o)  In a form prescribed by the director, an authorized United States branch                                         
18 shall file with its annual and quarterly statements a statement of trusteed surplus                                     
19 covering the same time period.  The trusteed surplus shall consist of the aggregate                                     
20 value of the United States branch's general state deposits and assets deposited with a                                  
21 trustee under this section, plus accrued interest income if the interest were collected                                 
22 by the states for the trustees, less the aggregate net amount of all its reserves and other                             
23 liabilities in the United States as determined under this subsection.  The items of                                     
24 securities and other property held under trust deeds shall be certified by the United                                   
25 States trustee.  To determine the net amount of the United States branch's liabilities in                               
26 the United States to be reported in the statement of trusteed surplus, the United States                                
27 branch shall adjust its total liabilities reported on its accompanying annual or quarterly                              
28 statement as follows:                                                                                                   
29   (1)  by adding back liabilities used to offset admitted assets reported in                                           
30 the accompanying annual or quarterly statement; and                                                                     
31   (2)  by deducting                                                                                                    
01   (A)  unearned premiums on agent's balances or uncollected                                                           
02 premiums not more than 90 days past due;                                                                                
03   (B)  reinsurance on losses with authorized insurers, less unpaid                                                    
04 reinsurance premiums;                                                                                                   
05   (C)  reinsurance recoverables on paid losses from unauthorized                                                      
06 insurers that are included as an asset in the annual statement, but only to the                                         
07 extent a liability for unauthorized recoverables as described in this paragraph                                         
08 are included in the liabilities report in the trusteed surplus statement;                                               
09   (D)  special state deposits held for the exclusive benefit of                                                       
10 policyholders, or policyholders and creditors, of a particular state not exceeding                                      
11 net liabilities reported for that state;                                                                                
12   (E)  secured accrued retrospective premiums;                                                                        
13   (F)  if a life insurer,                                                                                             
14   (i)  the amount of its policy loans to policyholders within                                                        
15 the United States, not exceeding the amount of legal reserve required                                                   
16 on an affected policy; and                                                                                              
17   (ii)  the net amount of uncollected and deferred                                                                   
18 premiums; and                                                                                                           
19   (G)  other nontrusteed assets, upon a written finding by the                                                        
20 director that the other nontrusteed assets secure liabilities in a substantially                                        
21 similar manner to those permitted under this subsection.                                                                
22  (p)  In addition to the annual and quarterly statements and the statements of                                         
23 trusteed surplus, the director may require additional information relating to total                                     
24 business or assets, or any portion of them, of the alien insurer or its United States                                   
25 branch.                                                                                                                 
26  (q)  In addition to the general statement of the financial condition of the United                                    
27 States branch, a report of examination must include a trusteed surplus statement as of                                  
28 the date of the examination.                                                                                            
29  (r)  In this section,                                                                                                 
30   (1)  "trusteed assets" are the assets maintained in a trust account under                                            
31 (g) of this section;                                                                                                    
01   (2)  "United States branch" means the business unit through which                                                    
02 business is transacted within the United States by an alien insurer and the assets and                                  
03 liabilities of the insurer within the United States applicable to that business.                                        
04    * Sec. 17.  AS 21.12.020(a) is amended to read:                                                                      
05  (a)  Credit for reinsurance transactions shall be allowed a domestic ceding                                           
06 insurer as either an asset or a deduction from liability on account of reinsurance ceded                                
07 only if the reinsurance is ceded to an                                                                                  
08   (1)  assuming insurer that is licensed to transact insurance or reinsurance                                          
09 in this state;                                                                                                          
10   (2)  assuming insurer that is accredited as a reinsurer in this state; an                                            
11 accredited reinsurer is one that                                                                                        
12   (A)  files evidence of submission [SUBMITS] to this state's                                                       
13 jurisdiction, submits to this state's authority to examine its books and records                                       
14 under AS 21.06.120, is licensed to transact insurance or reinsurance in at least                                       
15 one state that is accredited by the National Association of Insurance                                                   
16 Commissioners, or, in the case of a United States branch of an alien                                                   
17 admitted insurer, is entered through and licensed to transact insurance or                                              
18 reinsurance in at least one state that is accredited by the National                                                    
19 Association of Insurance Commissioners; [AND FILES ANNUALLY WITH                                                       
20 THE DIRECTOR A COPY OF THE REINSURER'S ANNUAL STATEMENT                                                                 
21 FILED WITH THE INSURANCE DEPARTMENT OF THE REINSURER'S                                                                  
22 STATE OF DOMICILE AND A COPY OF THE REINSURER'S MOST                                                                    
23 RECENT AUDITED FINANCIAL STATEMENT; OR]                                                                                 
24   (B)  [IN THE CASE OF A UNITED STATES BRANCH OF                                                                      
25 AN ALIEN ASSUMING INSURER, IS ENTERED THROUGH, AND                                                                      
26 LICENSED TO TRANSACT INSURANCE OR REINSURANCE IN, AT                                                                    
27 LEAST ONE STATE ACCREDITED BY THE NATIONAL ASSOCIATION                                                                  
28 OF INSURANCE COMMISSIONERS, FILES ANNUALLY WITH THE                                                                     
29 DIRECTOR A COPY OF ITS ANNUAL FINANCIAL STATEMENT THAT                                                                  
30 IS FILED WITH THE INSURANCE REGULATORY AGENCY OF ITS                                                                    
31 STATE OF DOMICILE, AND] maintains at least $20,000,000 in policyholder                                                  
01 surplus and whose accreditation has not been denied by the director within                                             
02 90 days of application to the director, or maintains less than $20,000,000                                              
03 in policyholder surplus and whose application for accreditation has been                                                
04 approved by the director; and                                                                                           
05   (C)  files annually with the director a copy of the reinsurer's                                                     
06 annual financial statement filed with the insurance department of the                                                   
07 reinsurer's state of domicile or state of entry and a copy of the reinsurer's                                           
08 most recent audited financial statement [THE SURPLUS REQUIREMENTS                                                      
09 IN THIS SUBPARAGRAPH DO NOT APPLY TO REINSURANCE CEDED                                                                  
10 AND ASSUMED UNDER A POOLING ARRANGEMENT AMONG                                                                           
11 INSURERS IN THE SAME HOLDING COMPANY SYSTEM];                                                                           
12   (3)  assuming insurer that is domiciled in a state, or in the case of a                                              
13 United States branch of an alien assuming insurer, is entered through a state accredited                                
14 by the National Association of Insurance Commissioners that employs standards                                           
15 regarding credit for reinsurance ceded substantially similar to those applicable under                                  
16 (1) and (2) of this subsection, the assuming insurer maintains a policyholder surplus                                   
17 of at least $20,000,000, and the assuming insurer submits to the authority of this state                                
18 to examine its books and records; the surplus requirements in this paragraph do not                                     
19 apply to reinsurance ceded and assumed under a pooling arrangement among insurers                                       
20 in the same holding company system;                                                                                     
21   (4)  assuming alien insurer that                                                                                     
22   (A)  maintains a trust fund in a qualified United States financial                                                  
23 institution for the payment of the valid claims of its United States policyholders                                      
24 and ceding insurers, and their assigns and successors in interest, that conforms                                        
25 to the following requirements:                                                                                          
26   (i)  the trust shall be established in a form approved by                                                          
27 the director; the trust instrument must provide that contested claims are                                               
28 valid and enforceable upon the final order of any court of competent                                                    
29 jurisdiction in the United States; the trust shall vest legal title to its                                              
30 assets in the trustees of the trust for its United States policyholders and                                             
31 ceding insurers, their assigns, and successors in interest; the trust and                                               
01 the assuming insurer are subject to examination as determined by the                                                    
02 director; the trust must remain in effect for so long as the assuming                                                   
03 insurer has outstanding liabilities due under the reinsurance agreements                                                
04 subject to the trust;                                                                                                   
05   (ii)  on or before March 1 of each year the trustees shall                                                         
06 report in writing to the director on the balance of the trust and list the                                              
07 trust's investments at the end of the preceding year, and shall certify the                                             
08 date of termination of the trust, if so planned, or certify that the trust                                              
09 does not expire before the following December 31;                                                                       
10   (iii)  in the case of a single assuming insurer, the trust                                                         
11 shall consist of trust money representing the assuming insurer's                                                        
12 liabilities attributable to business written in the United States and, in                                               
13 addition, include a trust surplus of not less than $20,000,000; the single                                              
14 assuming insurer shall make available to the director an annual                                                         
15 certification of the insurer's solvency by the insurer's domiciliary                                                    
16 regulator and by an independent certified public accountant or an                                                    
17 accountant holding a substantially equivalent designation as                                                            
18 determined by the director;                                                                                            
19   (iv)  in the case of a group, including incorporated and                                                         
20 [OF] individual unincorporated insurers, the trust shall consist of trust                                               
21 money representing the group's liabilities attributable to business written                                             
22 in the United States and, in addition, include a trust surplus not less                                                 
23 than $100,000,000; the incorporated members of the group may not                                                       
24 be engaged in any business other than underwriting as a member                                                          
25 of the group and are subject to the same level of solvency                                                              
26 regulation and control by the group's domiciliary regulator as are                                                      
27 the unincorporated members; the group shall make available to the                                                      
28 director an annual certification of the solvency of each insurer [OF                                                  
29 THE INDIVIDUAL UNINCORPORATED INSURERS] by the group's                                                                  
30 domiciliary regulator and by an independent certified public accountant,                                               
31 or an accountant holding a substantially equivalent designation as                                                      
01 determined by the director;                                                                                            
02   (v)  in the case of a group of incorporated insurers under                                                         
03 common administration that complies with the reporting requirements                                                     
04 contained in (ii) of this subparagraph, that has continuously transacted                                                
05 an insurance business outside the United States for at least three years                                                
06 immediately before making application for accreditation, that submits                                                   
07 to this state's authority to examine its books and records and bears the                                                
08 expense of the examination, and that has aggregate policyholders'                                                       
09 surplus of $10,000,000,000, the trust shall be in an amount equal to the                                                
10 group's several liabilities attributable to business ceded by United States                                             
11 ceding insurers to a member of the group under reinsurance contracts                                                    
12 issued in the name of the group, and the group shall maintain a joint                                                   
13 trustee surplus, of which $100,000,000 shall be held jointly for the                                                    
14 benefit of United States ceding insurers of a member of the group as                                                    
15 additional security for the group's liabilities, and each member of the                                                 
16 group shall make available to the director an annual certification of the                                               
17 member's solvency by the member's domiciliary regulator and the                                                         
18 member's independent certified public accountant, or an accountant                                                     
19 holding a substantially equivalent designation as determined by the                                                     
20 director; and                                                                                                          
21   (B)  reports annually to the director information substantially the                                                 
22 same as that required to be reported on the National Association of Insurance                                           
23 Commissioners' annual statement form by licensed insurers to enable the                                                 
24 director to determine the sufficiency of the trust fund;                                                                
25   (5)  assuming insurer that does not meet the requirements of (1) - (4)                                               
26 of this subsection, but only with respect to the insurance of risks located in                                          
27 jurisdictions where the reinsurance is required by applicable law or regulation of that                                 
28 jurisdiction.                                                                                                           
29    * Sec. 18.  AS 21.12.020(g) is amended to read:                                                                      
30  (g)  An [A LIFE] insurer may receive credit for reinsurance transactions if the                                     
31 reinsurance agreement meets all applicable requirements established by the director.                                    
01    * Sec. 19.  AS 21.14.040 is amended to read:                                                                         
02  Sec. 21.14.040.  AUTHORIZED CONTROL LEVEL EVENT.  If an authorized                                                    
03 control level event occurs, the director shall take the action necessary                                                
04   (1)  under AS 21.14.030(a) [AS 21.14.030(b)] against the insurer; or                                               
05   (2)  to place the insurer under regulatory control under AS 21.78 if,                                                
06 after a hearing under AS 21.06.180 - 21.06.240, the director determines it to be in the                                 
07 best interest of the policyholders and creditors of the insurer, and of the public.                                     
08    * Sec. 20.  AS 21.18.060(b) is amended to read:                                                                      
09  (b)  The director may require that the reserves be equal to the unearned                                              
10 portions of the gross premiums in force after deducting applicable reinsurance in                                       
11 solvent  insurers as computed on each respective risk from the policy's date of issue.                                  
12 [EXCEPT AS REQUIRED BY THE DIRECTOR UNDER THIS SUBSECTION, THE                                                          
13 PORTIONS OF THE GROSS PREMIUM IN FORCE, LESS APPLICABLE                                                                 
14 REINSURANCE IN SOLVENT INSURERS, TO BE HELD AS AN UNEARNED                                                              
15 PREMIUM RESERVE SHALL BE COMPUTED ACCORDING TO THE                                                                      
16 FOLLOWING TABLE:                                                                                                        
17  TERM FOR WHICH POLICY                                          RESERVE FOR UNEARNED                                    
18  WAS WRITTEN       PREMIUM                                                                                              
19  1 YEAR OR LESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1/2                                   
20  2 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 3/4                                   
21                                                                          2ND YEAR 1/4                                   
22  3 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 5/6                                   
23                                                                          2ND YEAR 1/2                                   
24                                                                          3RD YEAR 1/6                                   
25  4 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 7/8                                   
26                                                                          2ND YEAR 5/8                                   
27                                                                          3RD YEAR 3/8                                   
28                                                                          4TH YEAR 1/8                                   
29  5 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1ST YEAR 9/10                                   
30                                                                         2ND YEAR 7/10                                   
31                                                                          3RD YEAR 1/2                                   
01                                                                         4TH YEAR 3/10                                   
02                                                                         5TH YEAR 1/10                                   
03  OVER 5 YEARS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PRO RATA.]                                   
04    * Sec. 21.  AS 21.18.060(c) is amended to read:                                                                      
05  (c)  An [IN LIEU OF COMPUTATION ACCORDING TO THE TABLE IN                                                           
06 (b) OF THIS SECTION, THE] insurer shall [AT ITS OPTION MAY] compute all of                                            
07 the reserves on a monthly or more frequent pro rata basis.                                                              
08    * Sec. 22.  AS 21.18.090 is amended to read:                                                                         
09  Sec. 21.18.090.  LOSS RESERVES, LIABILITY INSURANCE, AND                                                              
10 WORKERS' COMPENSATION.  Where required in the form of annual statement                                                  
11 required of the insurer, the reserve for outstanding losses under insurance against loss                                
12 or damage from accident to or injuries suffered by an employee or other person and                                      
13 for which the insured is liable shall be computed as follows:                                                           
14   (1)  for all liability claims under policies written more than three                                                
15 years before the end of the calendar year covered by the annual statement, the                                          
16 reserve shall be the undiscounted value of the determined and the estimated                                             
17 future payments [SUITS BEING DEFENDED UNDER POLICIES WRITTEN MORE                                                      
18 THAN                                                                                                                    
19   (A)  10 YEARS BEFORE THE DATE THE STATEMENT IS                                                                      
20 MADE, $1,500 FOR EACH SUIT;                                                                                             
21   (B)  FIVE OR MORE AND LESS THAN 10 YEARS BEFORE                                                                     
22 THE STATEMENT IS MADE, $1,000 FOR EACH SUIT;                                                                            
23   (C)  THREE OR MORE AND LESS THAN FIVE YEARS                                                                         
24 BEFORE THE STATEMENT IS MADE, $850 FOR EACH SUIT];                                                                      
25   (2)  for all liability policies written during the three years immediately                                           
26 preceding the date the statement is made, the reserve shall be the greater of 60                                      
27 percent of the earned liability premiums of each of the three years less all losses and                                 
28 expense payments made under liability policies written in the corresponding years or                                   
29 the undiscounted value of the known and unknown claims; [BUT THE RESERVE,                                              
30 FOR THE FIRST OF THE THREE YEARS, SHALL BE NOT LESS THAN $750                                                           
31 FOR EACH OUTSTANDING LIABILITY SUIT ON THE YEAR'S POLICIES];                                                            
01   (3)  for all workers' compensation claims under policies written more                                                
02 than three years before the end of the calendar year covered by the annual                                          
03 statement [IS MADE], the reserve may not [SHALL] be less than the present value                                     
04 at four percent interest of the determined and the estimated future payments;                                           
05   (4)  for all workers' compensation claims under policies written in the                                              
06 three years immediately preceding the end of the  calendar year covered by [DATE]                                     
07 the annual statement [IS MADE], the reserve may not [SHALL] be less than 65                                       
08 percent of the earned workers' compensation premiums of each of the three years, less                                 
09 all loss and loss expense payments made in connection with the claims under policies                                    
10 written in the corresponding years; [BUT IN THE FIRST YEAR OF THE                                                       
11 THREE-YEAR PERIOD,] the reserve may not [SHALL] be [NOT] less than the                                                
12 present value at four [4] percent interest of the determined and the estimated unpaid                                 
13 compensation claims under policies written during the three-year period [YEAR].                                       
14    * Sec. 23.  AS 21.18.110(a) is amended to read:                                                                      
15  (a)  The director shall annually value, or cause to be valued, the reserve                                            
16 liabilities (hereinafter called reserves) for all outstanding life insurance policies and                               
17 annuity and pure endowment contracts of every life insurer doing business in this state,                                
18 and may certify the amount of the reserves, specifying the mortality table or tables,                                   
19 rate or rates of interest, and methods (net level premium method or other) used in the                                  
20 calculation of the reserves.  In calculating the reserves, the director may use group                                   
21 methods and approximate averages for fractions of a year or otherwise.  For an alien                                    
22 insurer, the valuation shall be limited to its insurance transactions in the United States.                             
23 For the purpose of making the valuation the director may employ a competent actuary                                     
24 who shall be paid by the insurer for which the service is rendered [; BUT A                                             
25 DOMESTIC INSURER MAY MAKE THE VALUATION AND IT MAY BE                                                                   
26 RECEIVED BY THE DIRECTOR UPON SATISFACTORY PROOF OF ITS                                                                 
27 CORRECTNESS].  For a foreign or alien insurer, the director may accept, in [IN]                                       
28 lieu of the valuation of the reserves required of a foreign or alien insurer, [THE                                      
29 DIRECTOR MAY ACCEPT] a valuation made, or caused to be made, by the                                                     
30 insurance supervisory official of a state or other jurisdiction if the valuation complies                               
31 with the minimum standard provided in this section and if the official of the state or                                  
01 jurisdiction accepts as sufficient and valid for all legal purposes the certificate of                                  
02 valuation of the director when the certificate states the valuation was made in a                                       
03 specified manner in which the aggregate reserves would be at least as large as if they                                  
04 had been computed in the manner prescribed by the law of that state or jurisdiction.                                    
05 An insurer that at any time adopted a standard of valuation producing greater aggregate                                 
06 reserves than those calculated according to the minimum standard provided in this                                       
07 section may, with the approval of the director, adopt a lower standard of valuation, but                                
08 not lower than the minimum provided in this section.                                                                    
09    * Sec. 24.  AS 21.18.110(n) is amended to read:                                                                      
10  (n)  The actuarial opinion must                                                                                       
11   (1)  be submitted with the annual statement reflecting the valuation of                                              
12 the reserve liabilities;                                                                                                
13   (2)  apply to all business in force, including individual and group health                                           
14 insurance plans;                                                                                                        
15   (3)  be based on standards adopted by the Actuarial Standards Board;                                                 
16 and                                                                                                                     
17   (4)  unless exempted by regulation, include an assessment as to                                                    
18 whether the reserves and related actuarial items held in support of the policies and                                    
19 contracts, when considered in light of the assets held by an insurer with respect to the                                
20 reserves and related actuarial items, including investment earnings on the assets and                                   
21 considerations anticipated to be received and retained under policies and contracts,                                    
22 make adequate provision for an insurer's obligations under a policy or contract                                         
23 including the benefits under and expenses associated with a policy or contract.                                         
24    * Sec. 25.  AS 21.18.110(q) is amended to read:                                                                      
25  (q)  A qualified actuary who submits an opinion under (m) of this section                                             
26   (1)  is not liable for damages to a person, other than the insurance                                                 
27 company and the director, for an act, error, omission, decision, or conduct with respect                                
28 to the actuary's opinion except in a case of fraud or wilful misconduct;                                                
29   (2)  is subject to disciplinary action by the director; and                                                          
30   (3)  shall prepare [INCLUDE] a memorandum, in form and substance                                                   
31 acceptable to the director, to support the actuarial opinion.                                                           
01    * Sec. 26.  AS 21.18.110(r) is amended to read:                                                                      
02  (r)  If the insurer fails to provide a supporting memorandum as requested by                                         
03 the director [REQUIRED BY (q)(3) OF THIS SECTION] within a period specified                                            
04 by regulation or the director determines that the supporting memorandum fails to meet                                   
05 the standards adopted by regulation or is otherwise unacceptable to the director, the                                   
06 director may engage a qualified actuary, at the expense of the insurer, to review the                                   
07 opinion and the basis for the opinion and to prepare a supporting memorandum as                                         
08 required under (q) of this section.                                                                                     
09    * Sec. 27.  AS 21.21.230 is amended to read:                                                                         
10  Sec. 21.21.230.  SAVINGS AND LOAN.  To the extent that the account is                                                 
11 insured by the Federal Deposit [SAVINGS AND LOAN] Insurance Corporation, an                                           
12 insurer may invest in share or savings accounts of savings and loan and building and                                    
13 loan associations.                                                                                                      
14    * Sec. 28.  AS 21.21.250(a) is amended to read:                                                                      
15  (a)  An insurer may make loans or investments not otherwise expressly                                                 
16 permitted under this chapter, in aggregate amount not over five percent of the insurer's                                
17 assets and not over one percent of the insurer's assets for [OF] any one loan or                                    
18 investment, if the loan or investment fulfills the requirements of AS 21.21.030, and                                    
19 otherwise qualifies as a sound investment. However, a loan or investment may not be                                     
20 represented by                                                                                                          
21   (1)  an item described in AS 21.18.030, or a loan or investment                                                      
22 otherwise expressly prohibited;                                                                                         
23   (2)  agents' balances, or amounts advanced to or owing by agents or                                                  
24 former agents of the insurer, whether or not secured; except policy loans, mortgage                                     
25 loans, and collateral loans otherwise authorized under this chapter;                                                    
26   (3)  a category of loans or investments eligible under other provisions                                              
27 of this chapter; or                                                                                                   
28   (4)  an asset theretofore acquired or held by the insurer under any other                                            
29 category of loans or investments eligible under this chapter.                                                           
30    * Sec. 29.  AS 21.21.370(a) is amended to read:                                                                      
31  (a)  A domestic insurer may [NOT] acquire, directly or indirectly, a medium                                           
01 grade or lower grade obligation of an institution if, after giving effect to the                                        
02 acquisition,                                                                                                            
03   (1)  the aggregate amount of all medium grade and lower grade                                                        
04 obligations held by the domestic insurer does not exceed [EXCEEDS] 20 percent of                                      
05 its admitted assets and if not more than                                                                              
06   (A)  10 percent of its admitted assets consist of obligations rated                                                 
07 four, five, or six by the securities valuation office;                                                                  
08   (B)  three percent of its admitted assets consist of obligations                                                    
09 rated five or six by the securities valuation office; and                                                               
10   (C)  one percent of its admitted assets consist of obligations                                                      
11 rated six by the securities valuation office; and [OR]                                                                
12   (2)  the aggregate amount of all medium grade and [OR] lower grade                                                 
13 obligations held by the domestic insurer does not exceed [EXCEEDS] 30 percent of                                      
14 its policyholders' surplus account as shown by the insurer's most recent report filed                                   
15 under AS 21.06.150, AS 21.09.200, or 21.09.205.                                                                         
16    * Sec. 30.  AS 21.22.010(g) is amended to read:                                                                      
17  (g)  The provisions of this section do not apply to                                                                   
18   (1)  an offer of, request for, invitation for, or agreement regarding [,                                           
19 OR] acquisition of a voting security that, immediately before the consummation of the                                   
20 offer, request, invitation, agreement, or acquisition, was not issued and outstanding; or                               
21   (2)  an offer, request, invitation, agreement, or acquisition that the                                               
22 director by order may exempt as not having been made or entered into for the purpose                                    
23 and not having the effect of changing or influencing the control of the domestic                                        
24 insurer.                                                                                                                
25    * Sec. 31.  AS 21.22.030 is amended by adding a new subsection to read:                                              
26  (d)  The director may retain at the acquiring person's expense an attorney,                                           
27 actuary, accountant, or other expert not otherwise a part of the director's staff, if                                   
28 reasonably necessary to assist the director in reviewing the proposed acquisition of                                    
29 control.                                                                                                                
30    * Sec. 32.  AS 21.22.060(b) is amended to read:                                                                      
31  (b)  Every insurer subject to registration shall file a registration statement on                                     
01 a form provided by the director, that must contain current information about                                            
02   (1)  the capital structure, general financial condition, ownership, and                                              
03 management of the insurer and any person controlling the insurer;                                                       
04   (2)  the identity of every member of the insurance holding company                                                   
05 system;                                                                                                                 
06   (3)  the following agreements in force, relationships subsisting, and                                                
07 transactions currently outstanding between the insurer and its affiliates:                                              
08   (A)  loans, other investments, or purchases, sales, or exchanges                                                    
09 of securities of the affiliates by the insurer or of the insurer by its affiliates;                                     
10   (B)  purchases, sales, or exchanges of assets;                                                                      
11   (C)  transactions not in the ordinary course of business;                                                           
12   (D)  guarantees or undertakings for the benefit of an affiliate that                                                
13 result in an actual contingent exposure of the insurer's assets to liability, other                                     
14 than insurance contracts entered into in the ordinary course of the insurer's                                           
15 business;                                                                                                               
16   (E)  all management and service contracts and all cost-sharing                                                      
17 arrangements [, OTHER THAN COST ALLOCATION ARRANGEMENTS                                                                 
18 BASED UPON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES];                                                                   
19 and                                                                                                                     
20   (F)  reinsurance agreements [COVERING ALL OR                                                                        
21 SUBSTANTIALLY ALL OF ONE OR MORE LINES OF INSURANCE OF                                                                  
22 THE CEDING COMPANY]; and                                                                                              
23   (4)  other matters concerning transactions between registered insurers                                               
24 and any affiliates that may be included from time to time in a registration form                                        
25 adopted or approved by the director.                                                                                    
26    * Sec. 33.  AS 21.22.060(c) is amended to read:                                                                      
27  (c)  The director may permit an authorized insurer that is a member of a                                              
28 holding company system subject to registration under the laws or regulations of its                                     
29 state of domicile that are in the opinion of the director substantially similar to those                                
30 contained in this chapter to satisfy the requirements of (a) of this section by filing a                                
31 statement in accordance with the laws of its state of domicile [EXCEPT THAT THE                                         
01 DIRECTOR MAY AT ANY TIME REQUIRE A COPY OF THAT STATEMENT BE                                                            
02 FILED WITH THE DIRECTOR].                                                                                               
03    * Sec. 34.  AS 21.22.060(d) is amended to read:                                                                      
04  (d)  Information [NO INFORMATION] need not be disclosed on the                                                    
05 registration statement filed under (b) of this section if that information is not material                              
06 for the purposes of this section.  Unless the director by regulation or order provides                                  
07 otherwise, sales, purchases, exchanges, loans or extensions of credit, [OR] investments,                               
08 or the aggregate of a series of related transactions, involving one-half of one                                        
09 percent or less of an insurer's admitted assets or five percent or less of the                                      
10 policyholder's surplus as of the 31st day of December of the calendar year in which                                     
11 the transaction took place are not considered material for purposes of this section.                                    
12    * Sec. 35.  AS 21.22.060(k) is amended to read:                                                                      
13  (k)  An insurer subject to registration under (a) of this section shall register                                      
14 annually by April 1 of each year for the previous calendar year unless, for good cause                                  
15 shown, the director extends the time for registration.  The director may require an                                     
16 insurer [AUTHORIZED TO DO BUSINESS IN THE STATE, THAT IS A MEMBER                                                       
17 OF A HOLDING COMPANY SYSTEM AND] that is allowed to register as                                                        
18 provided [NOT SUBJECT TO REGISTRATION] under (c) [(a)] of this section, to                                           
19 furnish a copy of                                                                                                       
20   (1)  the registration statement;                                                                                  
21   (2)  [,] the summary specified in (l) of this section; [,] or                                                     
22   (3)  other information filed by the insurer with the insurance regulatory                                          
23 authority of the insurer's state of domicile.                                                                           
24    * Sec. 36.  AS 21.27.010(a) is amended to read:                                                                      
25  (a)  Except as provided otherwise in this chapter, a [A] person may not act                                         
26 as or represent to be an insurance producer, managing general agent, reinsurance                                        
27 intermediary broker, reinsurance intermediary manager, surplus lines broker, or                                         
28 independent adjuster in this state or relative to a subject resident, located, or to be                                 
29 performed in this state unless licensed under this chapter. A person may not act as or                                  
30 represent to be a managing general agent, reinsurance intermediary broker, or                                           
31 reinsurance intermediary manager representing an insurer domiciled in this state                                        
01 regarding a risk located outside this state unless licensed by this state.                                              
02    * Sec. 37.  AS 21.27.020 is amended by adding new subsections to read:                                               
03  (f)  The director may adopt regulations establishing additional education or                                          
04 experience requirements for applicants or licensees under this chapter upon due                                         
05 consideration of the availability and accessibility of education and training                                           
06 opportunities in rural areas of the state.  Regulations adopted under this subsection are                               
07 subject to the following provisions:                                                                                    
08   (1)  additional educational or experience requirements may not apply to                                              
09 a licensee who has been licensed by the division of insurance before January 1, 1980;                                   
10   (2)  a licensee shall complete at least 24 credit hours of approved                                                  
11 continuing education courses during each two-year license period;                                                       
12   (3)  if a licensee has accumulated more credit hours than required under                                             
13 (2) of this subsection by the end of the license period, a maximum of eight hours may                                   
14 be carried over to meet the requirements of (2) of this subsection in the next license                                  
15 period;                                                                                                                 
16   (4)  a program or seminar may not be approved as an acceptable                                                       
17 continuing education program unless it is a formal program of learning that contributes                                 
18 to the professional competence of the licensee; individual study programs or                                            
19 correspondence courses may be used to fulfill continuing education requirements if                                      
20 approved by the director;                                                                                               
21   (5)  a nonresident licensee is exempt from the requirements of this                                                  
22 subsection if the licensee submits evidence satisfactory to the director that the licensee                              
23 has satisfied any continuing education requirements of the licensee's domiciliary state.                                
24  (g)  The director shall establish a continuing education advisory committee.                                          
25 The committee consists of one representative from the division of insurance, one life                                   
26 and disability insurance representative, one limited lines insurance representative, one                                
27 property and casualty insurance representative, and one independent insurance adjuster                                  
28 representative.  Each committee representative from the insurance industry must                                         
29 possess a valid, current insurance license issued in this state for the field to be                                     
30 represented.                                                                                                            
31  (h)  The director may make arrangements, including contracting with an outside                                        
01 agency, for administrative services.                                                                                    
02    * Sec. 38.  AS 21.27.025(a) is amended to read:                                                                      
03  (a)  A licensee shall notify the director within 30 days in writing by certified                                      
04 mail of a change in residence, employment that is licensed under this chapter, place                                    
05 of business, legal name, fictitious name or alias, mailing address, or phone number;                                  
06 a suspension, [OR] revocation, or disciplinary action of a license by another state or                              
07 jurisdiction; or a conviction of a misdemeanor or felony.                                                               
08    * Sec. 39.  AS 21.27.060(d) is amended to read:                                                                      
09  (d)  This section does not apply to an applicant                                                                      
10   (1)  for a limited license under AS 21.27.150(1), (2), or (6);                                                     
11   (2)  who, at any time within the two-year period immediately preceding                                               
12 the date the current pending application is received by the division, had been licensed                                 
13 in good standing in this state under a license requiring substantially similar                                          
14 qualifications as required by the license applied for; or                                                               
15   (3)  whose license in its [THE] resident jurisdiction requires the same                                            
16 qualifications as the license applied for in this state if the license in all jurisdictions                             
17 is in good standing [AND ITS RESIDENT JURISDICTION IS ACCREDITED BY                                                     
18 THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS].                                                                   
19    * Sec. 40.  AS 21.27.100 is amended by adding a new subsection to read:                                              
20  (e)  An individual in a firm who acts solely on behalf of a firm that is                                              
21 appointed as an agent on behalf of an admitted insurer under this section, may not be                                   
22 required to also have an appointment if the individual in the firm is licensed with that                                
23 firm.                                                                                                                   
24    * Sec. 41.  AS 21.27.130 is amended to read:                                                                         
25  Sec. 21.27.130.  FORM AND CONTENT OF LICENSES.  A license shall be                                                    
26 in the form the director prescribes and must set out                                                                    
27   (1)  the name and [MAILING] address of the licensee, and, if the                                                   
28 licensee is required to have a place of business, the physical address of the place of                                  
29 business;                                                                                                               
30   (2)  if for a firm, the name of the principal or manager of the firm;                                                
31   (3)  the kind or class of insurance the licensee is licensed to handle;                                              
01   (4)  the effective date and expiration date of the license;                                                          
02   (5)  the condition under which the license is granted;                                                               
03   (6)  the date of issuance of the license;                                                                            
04   (7)  each fictitious name and alias under which the licensee may do                                                  
05 business; and                                                                                                           
06   (8)  other information required by the director.                                                                     
07    * Sec. 42.  AS 21.27.360(b) is amended to read:                                                                      
08  (b)  All money, except that made payable to the insurer, representing premium                                         
09 taxes and fees, premiums or return premiums received by the licensee, shall be                                          
10 received in the fiduciary account of the licensee and shall be promptly accounted for                                   
11 and paid to the person entitled to the money.  The fiduciary account shall be located                                  
12 in this state unless the licensee is licensed as a nonresident under AS 21.27.270.                                     
13 For purposes of this section, the fiduciary account of the firm shall be considered the                                 
14 fiduciary account of an individual licensee acting on behalf of the firm and shall be                                   
15 the responsibility of the firm.  Money deposited into a fiduciary account may not be                                    
16 commingled or otherwise combined with other money, except as allowed under (d) of                                       
17 this section and AS 21.27.365.                                                                                          
18    * Sec. 43.  AS 21.27.380(a) is amended to read:                                                                      
19  (a)  Except as provided in this title, the director may renew a license biennially                                    
20 on a date set by the director if the licensee continues to be qualified under this chapter                             
21 and on or before the close of business of the renewal date, meets all renewal                                           
22 requirements established by regulation and pays the [IF] renewal license fees set                                    
23 under AS 21.06.250 for each license to [ARE RECEIVED BY] the director [ON OR                                          
24 BEFORE THE CLOSE OF BUSINESS OF THE RENEWAL DATE].  A licensee is                                                       
25 responsible for knowing the date that a license lapses and for renewing a license before                                
26 expiration.  The director shall mail a renewal notice to the licensee's current address                                 
27 on file with the director 30 days before the renewal date.                                                              
28    * Sec. 44.  AS 21.27.420 is amended by adding a new subsection to read:                                              
29  (c)  With the consent of an applicant or licensee, the director may issue or                                          
30 renew a license with restrictions upon the scope of the person's license or may                                         
31 otherwise restrict or condition the activities of the licensee if the director determines                               
01 that the person has violated the provisions of this title or to protect the public from                                 
02 injury or potential injury.                                                                                             
03    * Sec. 45.  AS 21.27.530 is amended to read:                                                                         
04  Sec. 21.27.530.  INSURANCE PRODUCER QUALIFICATIONS.  In addition                                                      
05 to the general qualifications under AS 21.27.020, to qualify for issuance or renewal of                                 
06 an insurance producer license, an applicant or licensee                                                                 
07   (1)  must possess the competence necessary to fulfill the responsibilities                                           
08 of an insurance producer;                                                                                               
09   (2)  if previously licensed in good standing in this state as an insurance                                           
10 producer, must not have had a license suspended or revoked within the previous four                                     
11 calendar years;                                                                                                         
12   (3)  for a fraternal society limited insurance producer license, shall file                                          
13 with the application a statement by an officer or director of the appointing fraternal                                  
14 society that affirms that the society has satisfied itself that the applicant is trustworthy                            
15 and competent to act as its insurance agent;                                                                            
16   (4)  for a license with a scope that includes variable contracts, must                                               
17 either be currently registered with the federal Securities and Exchange Commission as                                   
18 a broker-dealer or personally take and pass, to the satisfaction of the director, tests of                              
19 the knowledge and competence of the applicant concerning securities; and                                                
20   (5)  except for an applicant or licensee who represents to be and acts                                               
21 solely on behalf of admitted insurers as an agent and who does not receive money                                        
22 required to be received in the fiduciary account of the licensee, shall file with the                                   
23 application and maintain in force while licensed a bond in the amount of $10,000,                                       
24 unless a greater amount is required by another provision of this title; a licensee who                                 
25 maintains more than one place of business may satisfy the bond requirement with                                         
26 a single bond.                                                                                                         
27    * Sec. 46.  AS 21.27.570(a)(3)(B) is amended to read:                                                                
28   (B)  the controlling insurance producer shall render accounts to                                                    
29 the controlled insurer detailing all transactions, including information in the                                      
30 accounts necessary to support compensation, commissions, charges, and other                                            
31 fees received by, or owing to, the controlling producer;                                                                
01    * Sec. 47.  AS 21.27.620(j) is amended to read:                                                                      
02  (j)  If the director determines after a hearing under AS 21.06.170 - 21.06.240                                        
03 that a managing general agent caused loss or damage arising out of a violation of                                     
04 AS 21.27.590 - 21.27.630 to an insurer, the director may order the managing general                                     
05 agent to make restitution to the insurer, receiver, [THE] rehabilitator, or [THE]                                     
06 liquidator of the insurer for the loss.  Restitution ordered under this subsection is in                                
07 addition to any other liability of the managing general agent and does not affect the                                   
08 rights of a policy holder, claimant, creditor, or third party.  The director may, at the                               
09 request of the insurer, maintain or bring a civil action brought by or on behalf                                        
10 of the insurer and its policyholders and creditors for recovery of compensatory                                         
11 damages for the benefit of the insurer and its policyholders and creditors or seek                                      
12 other appropriate relief.  If an order of rehabilitation or liquidation of the insurer                                  
13 has been entered under AS 21.78, the receiver appointed under the order                                                 
14 determines that a person has not materially complied with AS 21.27.590 -                                                
15 21.27.630 or an order of the director, and the insurer suffers loss or damage from                                      
16 the noncompliance, the receiver may bring a civil action for the recovery of                                            
17 damages or other appropriate sanctions for the benefit of the insurer.                                                 
18    * Sec. 48.  AS 21.27.690(b) is amended to read:                                                                      
19  (b)  An [A DOMESTIC] insurer may use a nonresident reinsurance                                                      
20 intermediary broker who is not licensed under this chapter if the person is licensed in                                 
21 good standing as a resident reinsurance intermediary broker by an insurance regulator                                   
22 of another state that is accredited by the National Association of Insurance                                            
23 Commissioners.  Upon written request, the director may grant written permission for                                     
24 a domestic insurer to use an alien reinsurance intermediary broker not licensed by and                                  
25 without a place of business in a jurisdiction subject to accreditation by the National                                  
26 Association of Insurance Commissioners if the alien reinsurance intermediary broker                                     
27 is licensed in good standing by its domiciliary insurance regulator.  The domestic                                      
28 insurer and unlicensed reinsurance intermediary broker are subject to all other                                         
29 requirements of this section.                                                                                           
30    * Sec. 49.  AS 21.27.690(e) is amended to read:                                                                      
31  (e)  If the director determines after a hearing under AS 21.06.170 - 21.06.240                                        
01 that a reinsurance intermediary broker caused losses or damage arising out of a                                       
02 violation of AS 21.27.670 - 21.27.700 to an insurer or reinsurer, the director may order                                
03 the reinsurance intermediary broker to make restitution to the insurer, reinsurer,                                     
04 receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses                                  
05 incurred by the insurer or reinsurer.  Restitution ordered under this subsection is in                                  
06 addition to any other liability of the reinsurance intermediary broker and does not                                     
07 affect the rights of a policyholder, claimant, creditor, or third party.  The director                                 
08 may, at the request of the insurer, maintain or bring a civil action brought by or                                      
09 on behalf of the reinsurer or insurer and its policyholders and creditors for                                           
10 recovery of compensatory damages for the benefit of the reinsurer or insurer and                                        
11 its policyholders and creditors or seek other appropriate relief.  If an order of                                       
12 rehabilitation or liquidation of the insurer has been entered under AS 21.78, the                                       
13 receiver appointed under the order determines that a person has not materially                                          
14 complied with AS 21.27.670 - 21.27.700 or an order of the director, and the                                             
15 insurer suffers loss or damage from the noncompliance, the receiver may bring                                           
16 a civil action for the recovery of damages or other appropriate sanctions for the                                       
17 benefit of the insurer.                                                                                                
18    * Sec. 50.  AS 21.27.760(j) is amended to read:                                                                      
19  (j)  If the director determines after a hearing under AS 21.06.170 - 21.06.240                                        
20 that a reinsurance intermediary manager caused losses or damage arising out of a                                      
21 violation of AS 21.27.730 - 21.27.770 to an insurer or reinsurer, the director may order                                
22 the reinsurance intermediary manager to make restitution to the insurer, reinsurer,                                    
23 receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses                                  
24 incurred by the insurer or reinsurer.  Restitution ordered under this subsection is in                                  
25 addition to any other liability of the reinsurance intermediary manager and does not                                    
26 affect the rights of a policyholder, claimant, creditor, or third party.  The director                                 
27 may, at the request of the insurer, maintain or bring a civil action brought by or                                      
28 on behalf of the reinsurer or insurer and its policyholders and creditors for                                           
29 recovery of compensatory damages for the benefit of the reinsurer or insurer and                                        
30 its policyholders and creditors or seek other appropriate relief.  If an order of                                       
31 rehabilitation or liquidation of the insurer has been entered under AS 21.78, the                                       
01 receiver appointed under the order determines that a person has not materially                                          
02 complied with AS 21.27.730 - 21.27.770 or an order of the director, and the                                             
03 insurer suffers loss or damage from the noncompliance, the receiver may bring                                           
04 a civil action for the recovery of damages or other appropriate sanctions for the                                       
05 benefit of the insurer.                                                                                                
06    * Sec. 51.  AS 21.34.040(c)(4) is amended to read:                                                                   
07   (4)  a Lloyd's or other similar group including incorporated and                                                    
08 individual unincorporated underwriters,  [GROUP OF ALIEN INDIVIDUAL                                                  
09 INSURERS] may qualify if it maintains a trust fund in an amount not less than                                           
10 $50,000,000, as security to the full amount, for the protection of all its policy holders                               
11 and creditors of each member of the group in the United States; the incorporated                                       
12 members may not be engaged in any business other than underwriting as a                                                 
13 member of the group and shall be subject to the same level of solvency regulation                                       
14 and control by the group's domiciliary regulator as are the unincorporated                                            
15 members; the trust fund must consist of instruments of substantially the same                                          
16 character and quality as those that are eligible investments for the capital and statutory                              
17 reserves of admitted insurers authorized to write like kinds of insurance in this state                                 
18 or of irrevocable, clean, and unconditional letters of credit; the trust fund must have                                 
19 an expiration date that at no time is less than five years;                                                             
20    * Sec. 52.  AS 21.34.080(c) is amended to read:                                                                      
21  (c)  A producing broker shall execute and deliver to the surplus lines broker not                                     
22 later than the end of each month on a form prescribed by the director, and a surplus                                    
23 lines broker shall file with the director with the report required by (a) of this section                               
24 or with the surplus lines association with the evidence of insurance required by (b) of                                 
25 this section, for surplus lines insurance first placed or renewed in the preceding                                      
26 calendar month, an affidavit that shall be open to public inspection, as to the diligent                                
27 efforts to place the coverage with admitted insurers, and the results of those efforts.                                 
28 The affidavit must contain a statement by the producing broker that the insured was                                   
29 expressly informed in writing before the [PLACEMENT OF THE SURPLUS LINES]                                             
30 insurance contract or coverage was bound that the surplus lines insurer with whom                                     
31 the insurance was to be placed is not licensed in this state, is not subject to this state's                            
01 supervision, and, in the event of the insolvency of the surplus lines insurer, losses will                            
02 not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act).                                              
03    * Sec. 53.  AS 21.34.110 is amended to read:                                                                         
04  Sec. 21.34.110.  SURPLUS LINES BROKER'S DUTY TO NOTIFY                                                                
05 INSURED.  (a)  A contract of insurance placed by a surplus lines broker under this                                    
06 chapter is not binding upon the insured and a premium charged is not due and payable                                    
07 until                                                                                                                   
08   (1)  the surplus lines broker has notified the insured in writing, a copy                                          
09 of which shall be maintained by the licensee with the records of the contract, available                                
10 for examination, that the insurer with which the surplus lines broker places the                                        
11 insurance does not hold a certificate of authority issued by this state and is not subject                              
12 to its supervision, and in the event of the insolvency of the surplus lines insurer, losses                             
13 will not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act); or                                     
14   (2)  the surplus lines broker has obtained the affidavit of the                                                      
15 producing broker that the notice required under AS 21.34.080(c) has been given                                          
16 to the insured; a licensee shall maintain a copy of the affidavit with the record of                                    
17 the contract available for examination.                                                                                
18  (b)  Nothing in this section may be construed as nullifying [SHALL                                                
19 NULLIFY] an agreement by an insurer to provide insurance.                                                               
20    * Sec. 54.  AS 21.34.190(a) is amended to read:                                                                      
21  (a)  The fee for filing the statement under AS 21.34.180(b) is an amount equal                                        
22 to one percent on gross premium charged less any return premiums during the                                             
23 preceding calendar year [QUARTER].  The surplus lines broker shall pay the fee at                                     
24 the time of filing of the statement.                                                                                    
25    * Sec. 55.  AS 21.36.120(d) is amended to read:                                                                      
26  (d)  Nothing in this section may be construed as prohibiting the payment of                                           
27 commissions or other compensation to persons duly transacting business under                                         
28 AS 21.27 [LICENSED AGENTS OR SOLICITORS], or as prohibiting an insurer from                                            
29 allowing or returning to its participating policyholders, members, or subscribers, lawful                               
30 dividends, savings, or unabsorbed premium deposits.                                                                     
31    * Sec. 56.  AS 21.36.160 is amended to read:                                                                         
01  Sec. 21.36.160.  RIGHT OF DEBTOR OR BORROWER TO SELECT                                                               
02 INSURANCE PRODUCER [AGENT, BROKER,] AND INSURER.  If property                                                          
03 insurance is required in connection with a debt or loan, the debtor or borrower has the                                 
04 reasonable right to select the insurance producer [AGENT, BROKER,] and insurer                                        
05 through whom the insurance is to be placed if (1) the insurance is provided for the                                     
06 protection of the creditor's or lender's interest in the property at the commencement of                                
07 the risk; or (2) in the case of renewal of insurance, the renewal policy is delivered to                                
08 the creditor or lender no later than 30 days before the renewal date.                                                   
09    * Sec. 57.  AS 21.36.195 is amended to read:                                                                         
10  Sec. 21.36.195.  SURPLUS LINES BROKERS AND INSURANCE                                                                 
11 PRODUCERS; PROHIBITED ACTS.  A surplus lines broker or an insurance                                                   
12 producer may not fail to provide evidence [THE EVIDENCES] of insurance,                                              
13 affidavits, filings, or reports, or fail to maintain the records, or fail to pay the taxes and                          
14 fees, required under AS 21.34.                                                                                          
15    * Sec. 58.  AS 21.36.235(a) is amended to read:                                                                      
16  (a)  Except as provided in AS 21.36.305 [AS 21.36.420], if the renewal                                              
17 premium is increased more than 10 percent for a reason other than an increase in                                        
18 coverage or exposure base, or if after renewal there will be a material restriction or                                  
19 reduction in coverage not specifically requested by the insured, written notice shall be                                
20 mailed to the insured and to the agent or broker of record as required by AS 21.36.260                                  
21   (1)  at least 20 days before expiration of a personal insurance policy;                                              
22 or                                                                                                                      
23   (2)  at least 45 days before expiration of a business or commercial                                                  
24 policy.                                                                                                                 
25    * Sec. 59.  AS 21.36.290 is amended to read:                                                                         
26  Sec. 21.36.290.  POLICY PERIOD.  Except as described in (b) of this                                                  
27 section, a [A] policy with a policy period or term of less than 12 months shall, for the                               
28 purposes of AS 21.36.210 - 21.36.310, be considered to be written for a policy period                                 
29 or term of 12 months except in case of cancellation under any of the circumstances                                      
30 specified in AS 21.36.210, and a policy written for a term longer than one year or a                                    
31 policy with no fixed expiration date shall be considered to be written for successive                                   
01 policy periods or terms of one year and termination by an insurer effective on an                                       
02 anniversary date of the policy shall be considered a failure to renew.                                                  
03    * Sec. 60.  AS 21.36.290 is amended by adding a new subsection to read:                                              
04  (b)  For determining the appropriate rate or premium, a personal automobile                                           
05 insurance policy with a policy period or term of less than six months shall, for the                                    
06 purposes of AS 21.36.210 - 21.36.310, be considered to be written for a policy period                                   
07 or term of six months.                                                                                                  
08    * Sec. 61.  AS 21.36 is amended by adding a new section to read:                                                     
09  Sec. 21.36.305.  PREMIUM INCREASES ON PERSONAL AUTOMOBILE                                                             
10 INSURANCE POLICIES.  (a)  An insurer may not increase the premium on a personal                                         
11 automobile insurance policy unless the increase applies to all insureds of the same                                     
12 class.                                                                                                                  
13  (b)  An insurer may not increase the premium or add a surcharge to a personal                                         
14 automobile insurance policy because of the issuance of a citation for a moving traffic                                  
15 violation unless the insured or another person who resides in the insured's household                                   
16 and is covered by the policy has been convicted of the violation or has entered a plea                                  
17 of no contest to the violation.                                                                                         
18  (c)  The director shall adopt regulations to determine circumstances under                                            
19 which an insurer may increase the premium or add a surcharge to a personal                                              
20 automobile insurance policy.                                                                                            
21  (d)  An insurer that increases the premium or adds a surcharge to a personal                                          
22 automobile insurance policy may only make the increase or surcharge effective on the                                    
23 renewal date of the policy.                                                                                             
24  (e)  An insurer that increases the premium or adds a surcharge to a personal                                          
25 automobile insurance policy shall give written notice of the increase or surcharge at                                   
26 least 20 days before it takes effect, stating the reason for the change and the right of                                
27 appeal under AS 21.39.090.  This subsection does not apply to                                                           
28   (1)  premium increase resulting from a change requested by an insured,                                               
29 if the insured is notified at the time the request is made that the amount of the                                       
30 insured's premium will change as a result of the requested policy change; or                                            
31   (2)  rate approved by the director if the insurer gives written notice of                                            
01 a premium increase to the insured at least 20 days before the renewal date of the                                       
02 affected policy.                                                                                                        
03    * Sec. 62.  AS 21.36.360(i) is amended to read:                                                                      
04  (i)  A criminal insurance act is committed by a person [AN INSURER] doing                                           
05 business in this state or relative to a subject resident, located, or to be performed                                  
06 in this state who knowingly                                                                                            
07   (1)  writes, places, or causes to be written or placed in this state or                                             
08 relative to a subject resident, located, or to be performed in this state a policy,                                    
09 duplicate policy, or contract of insurance of any kind or character, or general or                                      
10 floating policy upon persons or property resident, situated, or located in this state, from                             
11 or through a person not authorized to transact business under AS 21.27 or a risk                                       
12 retention group or purchasing group not registered under AS 21.89.070                                                  
13 [BROKER, AGENT, SURPLUS LINE BROKER, OR PERSON WHO HAS NOT                                                              
14 SECURED A GENERAL AGENT LICENSE IN THIS STATE]; or                                                                      
15   (2)  pays a commission or other form of remuneration to a person, firm,                                            
16 or organization for the writing or placing of insurance coverage in this state or relative                             
17 to a subject resident, located, or to be performed in this state unless that person,                                   
18 firm, or organization is authorized under AS 21.27 to transact [HOLDS A LICENSE                                       
19 ISSUED BY THE DIRECTOR FOR] the kind or class of insurance written or placed,                                        
20 or, in the case of a risk retention group or purchasing group, is registered under                                      
21 AS 21.89.070.                                                                                                          
22    * Sec. 63.  AS 21.36.360(j) is amended to read:                                                                      
23  (j)  A criminal insurance act is committed by a person in this state or relative                                     
24 to a subject resident, located, or to be performed in this state who acts as an                                        
25 insurance producer, managing general agent, third-party administrator,                                               
26 reinsurance intermediary broker, reinsurance intermediary manager, surplus lines                                      
27 broker [SOLICITOR], or independent adjuster without being licensed by the director                                  
28 as required under this title or as a risk retention group or purchasing group                                           
29 without being registered as required under AS 21.89.070.  A criminal insurance act                                     
30 is committed by an insurance producer, managing general agent, third-party                                           
31 administrator, reinsurance intermediary broker, reinsurance intermediary                                              
01 manager, or surplus lines broker [OR SOLICITOR] who solicits or takes application                                      
02 for, procures, or places for others any insurance for which the person is not licensed                                 
03 as required under AS 21.27 or for which the license of the person has been                                             
04 suspended or revoked.  A criminal insurance act is committed by a person in this                                       
05 state or relative to a subject resident, located, or to be performed in this state who                                  
06 acts as or on behalf of a risk retention group or a purchasing group that is not                                        
07 registered under AS 21.89.070  [THIS SUBSECTION DOES NOT APPLY TO A                                                    
08 PERSON DESCRIBED IN AS 21.90.910 OR TO A PERSON SECURING AND                                                            
09 FORWARDING INFORMATION REQUIRED FOR THE PURPOSE OF A GROUP                                                              
10 INSURANCE COVERING THE UNPAID BALANCE OR REMAINING PAYMENTS                                                             
11 PROPOSED TO BE MADE IN CONNECTION WITH THE PURCHASE OF                                                                  
12 MERCHANDISE OR SERVICES IF NO COMMISSION OR OTHER                                                                       
13 COMPENSATION IS PAYABLE ON ACCOUNT OF THE INSURANCE TO THE                                                              
14 PERSON].                                                                                                                
15    * Sec. 64.  AS 21.36.360(k) is amended to read:                                                                      
16  (k)  A criminal insurance act is committed by an insurance producer,                                                 
17 managing general agent, [GENERAL AGENT,] third-party administrator,                                                   
18 reinsurance intermediary broker, reinsurance intermediary manager, or surplus                                         
19 lines broker [OR SOLICITOR] who knowingly compensates or offers to compensate                                          
20 in any manner a person other than an insurance producer, managing [AGENT,]                                            
21 general agent, third-party administrator, reinsurance intermediary broker,                                           
22 reinsurance intermediary manager, or surplus lines broker [OR SOLICITOR]                                               
23 licensed as required under this title in this or another jurisdiction [STATE OR                                     
24 PROVINCE], for procuring or in any manner helping to procure applications for or to                                     
25 place insurance in this state.  A criminal insurance act is committed by a person in                                   
26 this state or relative to a subject resident, located, or to be performed in this state                                 
27 who acts as or on behalf of a risk retention group or a purchasing group that is                                        
28 not registered under AS 21.89.070.  This subsection does not apply to the payment                                      
29 of compensation that is not contingent upon volume of business transacted in the form                                   
30 of salaries to the regular employees of the insurance producer, managing general                                      
31 agent, third-party administrator, reinsurance intermediary [GENERAL AGENT,]                                           
01 broker, reinsurance intermediary manager, or surplus lines broker [OR                                                 
02 SOLICITOR].                                                                                                             
03    * Sec. 65.  AS 21.36.360(n) is amended to read:                                                                      
04  (n)  A criminal insurance act is committed by an agent, managing general                                             
05 agent, third-party administrator, reinsurance intermediary broker, reinsurance                                          
06 intermediary manager, or other representative of an insurer involved in the procuring                                  
07 or issuance of an insurance contract who intentionally fails to report to the insurer the                               
08 exact amount of consideration charged as premium for the contract and to maintain                                       
09 records showing that information.                                                                                       
10    * Sec. 66.  AS 21.36.360(p) is amended to read:                                                                      
11  (p)  A fraudulent insurance act is committed by a person who                                                          
12   (1)  violates a provision of this title or a regulation issued under it;                                          
13   (2)  falsely makes, completes, or alters a certificate of insurance or                                               
14 other document relating to insurance;                                                                                   
15   (3)  knowingly possesses a forged certificate of insurance or other                                                  
16 document relating to insurance; or                                                                                      
17   (4)  knowingly issues a forged certificate of insurance or other                                                     
18 document relating to insurance.                                                                                        
19    * Sec. 67.  AS 21.36.360(q) is amended to read:                                                                      
20  (q)  A fraudulent or criminal insurance act described in                                                              
21   (1)  (b) of this section that is committed to obtain $10,000 or more is                                              
22 a class B felony;                                                                                                       
23   (2)  (c) or (d) of this section is a class B felony;                                                                 
24   (3)  (b) of this section that is committed to obtain $500 or more but less                                           
25 than $10,000 is a class C felony;                                                                                       
26   (4)  (e), (f), (g), or (h), of this section is a class C felony;                                                     
27   (5)  (b) of this section that is committed to obtain less than $500 is a                                             
28 class A misdemeanor;                                                                                                    
29   (6)  (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor;                                       
30   (7)  (o) of this section is a class B misdemeanor; [AND]                                                             
31   (8) (p)(1) [(p)] of this section is a class B misdemeanor unless another                                           
01 specific penalty is provided for the violation of the provision; and                                                   
02   (9)  (p)(2) - (4) of this section may be prosecuted under AS 11.46.                                                 
03    * Sec. 68.  AS 21.36.380 is amended to read:                                                                         
04  Sec. 21.36.380.  NOTICE ON CLAIM FORM.  A claim form must contain a                                                   
05 statement that states in substance the following:  "A person who knowingly and with                                     
06 intent to injure, defraud, or deceive an insurance company files a claim containing                                     
07 false, incomplete, or misleading information may be prosecuted under state law [IS                                    
08 GUILTY OF A FELONY]."  A lack of the statement on a claim form does not                                                 
09 constitute a defense to prosecution under this title.                                                                   
10    * Sec. 69.  AS 21.39.040 is amended by adding new subsections to read:                                               
11  (j)  An insurer who has submitted an application for a certificate of authority                                       
12 under AS 21.09.110 and a filing of policy forms under AS 21.42.120 may file a                                           
13 proposed rating system as described in this section.  The director's approval of the                                    
14 rating system is contingent upon the issuance of a certificate of authority under                                       
15 AS 21.09.120.                                                                                                           
16  (k)  The director may adopt regulations detailing the format and content of a                                         
17 rating system filing under this section.                                                                                
18    * Sec. 70.  AS 21.39 is amended by adding a new section to read:                                                     
19  Sec. 21.39.055.  CANCELLATION OF APPROVED FILING.  The voluntary                                                      
20 surrender of a certificate of authority or the failure of the surrendering admitted foreign                             
21 insurer to continue a certificate of authority in force has the effect of cancelling an                                 
22 approval that the insurer may have received under this chapter, unless the approval has                                 
23 been affirmed by the director at the time of the surrender or noncontinuation of the                                    
24 certificate of authority.                                                                                               
25    * Sec. 71.  AS 21.39.155(a) is amended to read:                                                                      
26  (a)  The director may require insurers [CARRIERS], except a reciprocal                                              
27 insurer formed by and insuring only a group of municipalities or nonprofit public                                       
28 utilities under AS 21.75 or a reciprocal insurer formed under AS 21.75 to provide                                       
29 marine insurance, [OR A JOINT INSURANCE ARRANGEMENT FORMED UNDER                                                        
30 AS 21.76,] as a condition of writing a line of insurance dealing with medical                                           
31 malpractice or workers' compensation, to participate in an assigned risk pool if the                                    
01 director finds that mandatory carrier participation is in the public interest.                                          
02    * Sec. 72.  AS 21.42.120 is amended by adding new subsections to read:                                               
03  (f)  This section does not apply to a type of insurance subject to AS 21.57.                                          
04  (g)  An insurer who has submitted an application for a certificate of authority                                       
05 under AS 21.09.110 may file a proposed policy form as described in this section.  The                                   
06 director's approval of the policy form is contingent upon the issuance of a certificate                                 
07 of authority under AS 21.09.120.                                                                                        
08  (h)  The director may adopt regulations detailing the format and content of the                                       
09 filing of a policy form under this section.                                                                             
10    * Sec. 73.  AS 21.42.345 is amended by adding a new subsection to read:                                              
11  (b)  An insurer authorized under AS 21.09 to offer, issue for delivery, deliver,                                      
12 or renew an individual or group disability insurance policy for medical coverage on                                     
13 an expense incurred basis in the state, a hospital or medical service corporation                                       
14 authorized under AS 21.87 to offer or renew an individual or group subscriber's                                         
15 contract for medical coverage in the state, or a health maintenance organization                                        
16 authorized under AS 21.86 to offer an enrollee contract to provide health care services                                 
17 on a prepaid basis shall offer coverage for family members, including newly born                                        
18 children, adopted children, or children placed for adoption and is subject to the                                       
19 conditions in (a) of this section, regardless of the marital status of the covered person.                              
20    * Sec. 74.  AS 21.42.353 is amended to read:                                                                         
21  Sec. 21.42.353.  COVERAGE FOR COSTS OF ACUPUNCTURE                                                                    
22 TREATMENT.  An insurer authorized under AS 21.09 to offer, issue for delivery,                                          
23 deliver, or renew a disability insurance policy in the state, [OR] a hospital or medical                                
24 service corporation authorized under AS 21.87 to offer or renew a subscriber's contract,                               
25 or a health maintenance organization authorized under AS 21.86 to offer an                                              
26 enrollee contract to provide health care services on a prepaid basis may offer                                         
27 coverage for services of an acupuncturist licensed under AS 08.06 if the policy or                                      
28 contract covers acupuncture treatment by a health care provider who is subject to other                                 
29 provisions of AS 08.                                                                                                    
30    * Sec. 75.  AS 21.42.355 is amended to read:                                                                         
31  Sec. 21.42.355.  COVERAGE FOR COST OF SERVICES PROVIDED BY                                                            
01 NURSE MIDWIVES.  (a)  If an individual or group disability insurance policy,                                            
02 subscriber's contract, enrollee contract, or fraternal benefit society certificate provides                           
03 indemnity for the cost of services of a physician provided to women during pregnancy,                                   
04 childbirth, and the period after childbirth, indemnity in a reasonable amount shall also                                
05 be provided for the cost of an advanced nurse practitioner who provides the same                                        
06 services.  Indemnity may be provided under this subsection only if the advanced nurse                                   
07 practitioner is certified to practice as a nurse midwife in accordance with regulations                                 
08 adopted under AS 08.68.100(a), and the services provided are within the scope of                                        
09 practice authorized by that certification.                                                                              
10  (b)  If an individual or group disability insurance policy, [A] subscriber's                                        
11 contract, enrollee contract, or fraternal benefit society certificate provides for                                    
12 furnishing those services required of a physician in the care of women during                                           
13 pregnancy, childbirth, and the period after childbirth, the contract shall also provide                                 
14 that an advanced nurse practitioner may furnish those same services instead of a                                        
15 physician.  Services may be provided under this subsection only if the advanced nurse                                   
16 practitioner is certified to practice as a nurse midwife in accordance with regulations                                 
17 adopted under AS 08.68.100(a), and the services provided are within the scope of                                        
18 practice authorized by that certification.                                                                              
19    * Sec. 76.  AS 21.42.375(a) is amended to read:                                                                      
20  (a)  An insurer authorized under AS 21.09 to offer, issue for delivery, deliver,                                      
21 or renew an individual or group disability insurance policy for medical coverage on                                     
22 an expense incurred basis in the state, [OR] a hospital or medical service corporation                                  
23 authorized under AS 21.87 to offer or renew a subscriber's contract for medical                                         
24 coverage in the state, or a health maintenance organization authorized under                                           
25 AS 21.86 to offer an enrollee contract to provide health care services on a prepaid                                     
26 basis shall provide coverage for low-dose mammography screening under the schedule                                     
27 described in (b) of this section if the policy or contract covers mastectomies and                                      
28 prosthetic devices and reconstructive surgery incident to mastectomies.                                                 
29    * Sec. 77.  AS 21.42.380 is amended to read:                                                                         
30  Sec. 21.42.380.  COVERAGE FOR TREATMENT OF PHENYLKETONURIA.                                                           
31 (a)  An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, or                                     
01 renew an individual or a group disability insurance policy for major medical coverage                                   
02 on an expense-incurred basis in the state, [OR] a hospital or medical service                                           
03 corporation authorized under AS 21.87 to offer or renew a group contract for major                                      
04 medical coverage in the state, or a health maintenance organization authorized                                         
05 under AS 21.86 to offer an enrollee contract to provide health care services on a                                       
06 prepaid basis shall [MUST] provide coverage for the formulas necessary for the                                         
07 treatment of phenylketonuria. This subsection does not apply to                                                         
08   (1)  a Medicare supplement insurance policy;                                                                         
09   (2)  long-term care insurance;                                                                                       
10   (3)  an insurance policy regulated under 5 U.S.C. 8901 - 8914 or 42                                                  
11 U.S.C. 1395mm;                                                                                                          
12   (4)  an insurance policy that provides services or reimbursement                                                     
13 exclusively for optometric or vision care, dental or orthodontic care, podiatric,                                       
14 ambulance, mental health, or chiropractic care;                                                                         
15   (5)  an insurance policy that the director has, in writing, determined                                               
16 should be excluded from this subsection.                                                                                
17  (b)  The insurer, hospital or medical service corporation, or health                                             
18 maintenance organization providing coverage under this section may impose                                              
19 reasonable contract limitations but may not refuse coverage based on a preexisting                                      
20 condition of phenylketonuria or require that the insured or subscriber pay a higher                                     
21 deductible or copayment for the cost of treating phenylketonuria than for the cost of                                   
22 treating another condition or illness.                                                                                  
23  (c)  In this section,                                                                                               
24   (1)  "copayment" means the portion of the cost to be paid by the                                                     
25 insured, [OR] subscriber, or enrollee in excess of the deductible;                                                  
26   (2)  "cost" means the lowest of the following:                                                                       
27   (A)  the actual charge for the treatment received for                                                               
28 phenylketonuria;                                                                                                        
29   (B)  the usual, customary, and reasonable charge for the                                                            
30 treatment as determined by the contract of coverage; or                                                                 
31   (C)  the charge agreed to by contract between the provider and                                                      
01 the insurer, hospital [SERVICE CORPORATION,] or medical service                                                         
02 corporation, or health maintenance organization;                                                                      
03   (3)  "deductible" means the portion of covered costs that must be                                                    
04 incurred before benefits become payable;                                                                                
05   (4)  "long-term care insurance" has the meaning given in AS 21.53.200;                                               
06   (5)  "major medical coverage" means a disability insurance contract,                                                 
07 [OR] a subscriber contract, or an enrollee contract that provides benefits for hospital                               
08 and medical care with potential lifetime maximum benefits for the insured, [OR]                                       
09 subscriber, or enrollee of at least $10,000.                                                                          
10    * Sec. 78.  AS 21.56.180(c) is amended to read:                                                                      
11  (c)  Except as provided in this subsection, a small employer insurer may not,                                         
12 directly or indirectly, enter into a contract, agreement, or arrangement with an                                       
13 insurance producer [AGENT, BROKER], managing general agent, or third-party                                             
14 administrator that provides for or results in the compensation paid to an insurance                                    
15 producer [AGENT OR BROKER] for the sale of a health benefit plan to be varied                                          
16 because of the health status, claims experience, industry, occupation, or geographic                                    
17 location of the small employer.  This subsection does not apply to a compensation                                       
18 arrangement that provides compensation to an insurance producer [AGENT,                                               
19 BROKER], managing general agent, or third-party administrator on the basis of a                                         
20 percentage of premium, provided that the percentage does not vary because of the                                        
21 health status, claims experience, industry, occupation, or geographic area of the small                                 
22 employer.                                                                                                               
23    * Sec. 79.  AS 21.56.180(d) is amended to read:                                                                      
24  (d)  A small employer insurer                                                                                         
25   (1)  shall provide reasonable compensation, as provided under the plan                                               
26 of operation of the program, to an insurance producer [AGENT, BROKER],                                                
27 managing general agent, or third-party administrator, if any, for the sale of a basic or                                
28 standard health benefit plan;                                                                                           
29   (2)  or insurance producer [AGENT, BROKER], managing general                                                       
30 agent, or third-party administrator may not induce or otherwise encourage a small                                       
31 employer to separate or otherwise exclude an employee from health coverage or                                           
01 benefits provided in connection with the employee's employment;                                                         
02   (3)  may only deny an application for coverage from a small employer                                                 
03 in writing and if the reasons for the denial are stated.                                                                
04    * Sec. 80.  AS 21.57.010 is amended to read:                                                                         
05  Sec. 21.57.010.  PURPOSE.  The purpose of this chapter is to promote the                                              
06 public welfare by regulating consumer credit [LIFE INSURANCE AND CREDIT                                               
07 DISABILITY] insurance.  Nothing in this chapter is intended to prohibit or discourage                                   
08 reasonable competition.  The provisions of this chapter shall be liberally construed.                                   
09    * Sec. 81.  AS 21.57.020 is repealed and reenacted to read:                                                          
10  Sec. 21.57.020.  APPLICABILITY.  Consumer credit insurance transacted in                                              
11 connection with a credit transaction for a personal, household, or family purpose is                                    
12 subject to the provisions of this chapter except                                                                        
13   (1)  insurance written in connection with a credit transaction that is                                               
14   (A)  secured by a first mortgage or first deed of trust; and                                                        
15   (B)  made to finance the purchase of real property, the                                                             
16 construction of a dwelling, or to refinance a prior credit transaction made for                                         
17 that purpose;                                                                                                           
18   (2)  an isolated insurance transaction by the insurer not related to an                                              
19 agreement or a plan for insuring debtors of the creditor;                                                               
20   (3)  insurance for which no identifiable charge is made to the debtor;                                               
21 or                                                                                                                      
22   (4)  a loan or other credit transaction that exceeds $30,000.                                                        
23    * Sec. 82.  AS 21.57.030 is repealed and reenacted to read:                                                          
24  Sec. 21.57.030.  AUTHORIZED TYPES OF CONSUMER CREDIT                                                                  
25 INSURANCE.  A type of consumer credit insurance defined in AS 21.57.160 may be                                          
26 written separately or in combination with other types of consumer credit insurance on                                   
27 an individual or group basis.                                                                                           
28    * Sec. 83.  AS 21.57.040 is repealed and reenacted to read:                                                          
29  Sec. 21.57.040.  AMOUNT OF CONSUMER CREDIT INSURANCE.  (a)  The                                                       
30 amount of coverage for credit life insurance payable at the time of loss                                                
31   (1)  may not exceed the greater of the actual net debt or the scheduled                                              
01 net debt, except insurance on an                                                                                        
02   (A)  agricultural credit transaction commitment, not exceeding                                                      
03 one year in duration, may be written up to the amount of the loan commitment                                            
04 on a nondecreasing or level term plan; and                                                                              
05   (B)  educational credit transaction commitment may be written                                                       
06 for the net outstanding balance plus any unused commitment;                                                             
07   (2)  may not be less than the actual net debt less any payments more                                                 
08 than two months overdue if the coverage is written on the actual outstanding net debt;                                  
09   (3)  may not exceed the following if the coverage is written on the                                                  
10 scheduled outstanding net debt:                                                                                         
11   (A)  the scheduled net debt if the actual net debt is less than or                                                  
12 equal to the scheduled net debt;                                                                                        
13   (B)  the actual net debt if the actual net debt is greater than the                                                 
14 scheduled net debt but less than or equal to the scheduled net debt plus two                                            
15 months of payments; or                                                                                                  
16   (C)  the scheduled net debt plus two months of payments if the                                                      
17 actual net debt is greater than the scheduled net debt plus two months of                                               
18 payments;                                                                                                               
19   (4)  must equal the actual net debt on the date of death if a premium is                                             
20 assessed to the debtor on a monthly basis and is based on the actual net debt; and                                      
21   (5)  may be less than the net debt when the partial coverage is                                                      
22 calculated using one of the following:                                                                                  
23   (A)  the amount of insurance is the lesser of a stated amount and                                                   
24 the amount is determined by (2) of this subsection;                                                                     
25   (B)  the amount of insurance is the lesser of a stated amount and                                                   
26 the amount is determined by (3) of this subsection;                                                                     
27   (C)  the amount of insurance is a constant percentage of the                                                        
28 amount determined by (2) or (3) of this subsection; or                                                                  
29   (D)  in the absence of any preexisting condition exclusion, the                                                     
30 amount of insurance payable in the event of death due to natural causes is                                              
31 limited to the balance as it existed six months before the date of death if                                             
01   (i)  there has been at least one increase in the outstanding                                                       
02 balance during that six-month period, other than an increase due to the                                                 
03 accrual of interest or late charges; and                                                                                
04   (ii)  evidence of individual insurability has not been                                                             
05 required during that six-month period.                                                                                  
06  (b)  The director may provide for other patterns of insurance consistent with                                         
07 (a) of this section by regulation.                                                                                      
08  (c)  The total amount of periodic indemnity payable in the event of disability                                        
09 or unemployment, as defined in the policy, may not exceed the sum of the periodic                                       
10 scheduled unpaid installments of the gross debt.  The amount of a periodic indemnity                                    
11 payment may not exceed the original gross debt divided by the number of periodic                                        
12 installments.                                                                                                           
13  (d)  If credit disability insurance or credit unemployment insurance is written                                       
14 in connection with an open-end consumer credit agreement, the amount of insurance                                       
15 may not exceed the gross debt that would accrue on the amount using the creditor's                                      
16 minimum repayment schedule.  The periodic indemnity need not relate to the creditor's                                   
17 minimum repayment schedule.                                                                                             
18    * Sec. 84.  AS 21.57.050 is repealed and reenacted to read:                                                          
19  Sec. 21.57.050.  DURATION OF COVERAGE.  (a)  The effective date of                                                    
20 coverage for                                                                                                            
21   (1)  consumer credit insurance that is elected by the debtor before or                                               
22 contemporaneous with a credit transaction is the date when the debtor becomes                                           
23 obligated to the creditor, except that when evidence of individual insurability is                                      
24 required and the evidence is furnished more than 30 days after the date when the                                        
25 debtor becomes obligated to the creditor, the effective date may be the date on which                                   
26 the insurance company determines the evidence to be satisfactory;                                                       
27   (2)  insurance coverage that is elected by the debtor on a date                                                      
28 subsequent to the date of the credit transaction is, subject to acceptance by the insurer,                              
29 a date not earlier than the date the election is made by the debtor or later than 30 days                               
30 following the date on which the insurer accepts the risk for coverage; an insurer shall                                 
31 determine if a risk is acceptable by an objective method, including one related to a                                    
01 particular date within a billing or repayment cycle or a calendar month; and                                            
02   (3)  a group policy that provides coverage with respect to a debt existing                                           
03 on the policy effective date, must be on or after the effective date of the group policy.                               
04  (b)  A charge for insurance may not be made to the debtor and retained by the                                         
05 creditor or insurer for a time before commencement of the consumer credit insurance                                     
06 to which the charge is related.                                                                                         
07  (c)  The duration of coverage for consumer credit insurance may not extend                                            
08   (1)  beyond the termination date specified in the policy; the termination                                            
09 date of insurance may precede, coincide with, or follow the scheduled maturity date                                     
10 of the debt to which it relates, subject to any other requirements and restrictions of this                             
11 chapter; and                                                                                                            
12   (2)  more than 15 days beyond the scheduled maturity date of the debt                                                
13 except when extended                                                                                                    
14   (A)  without additional cost to the debtor; or                                                                      
15   (B)  under a written agreement signed by the debtor, in                                                             
16 connection with a variable interest rate credit transaction or a deferral, renewal,                                     
17 refinancing, or consolidation of debt.                                                                                  
18  (d)  If the debt is discharged due to renewal, refinancing, or consolidation                                          
19 before the scheduled termination date of the insurance, insurance in force must be                                      
20 terminated before new insurance may be written in connection with the renewed,                                          
21 refinanced, or consolidated debt.                                                                                       
22  (e)  If insurance coverage terminates before the scheduled termination of the                                         
23 insurance, the insurer shall make an appropriate refund or credit to the debtor.  The                                   
24 refund or credit must consist of the unearned insurance charge paid by the debtor for                                   
25 insurance after the date of the termination, except that a refund is not required of a                                  
26 charge made for insurance if the insurance is terminated by performance of the                                          
27 insurer's obligation with respect to the insurance.                                                                     
28  (f)  An insured debtor may terminate consumer credit insurance at any time by                                         
29 providing advance notice to the insurer.  The individual policy or group certificate may                                
30 require that the notice be in writing or that the debtor surrender the individual policy                                
31 or group certificate, or both.  The debtor's right to terminate coverage may also be                                    
01 subject to the terms of the credit transaction contract.                                                                
02    * Sec. 85.  AS 21.57 is amended by adding a new section to read:                                                     
03  Sec. 21.57.055.  DISCLOSURE TO DEBTORS.  (a)  Before a debtor elects to                                               
04 purchase consumer credit insurance in connection with a credit transaction, the insurer                                 
05 shall disclose the following in writing to the debtor:                                                                  
06   (1)  the purchase of consumer credit insurance is optional and not a                                                 
07 condition of obtaining credit approval;                                                                                 
08   (2)  if more than one kind of consumer credit insurancer is being made                                               
09 available to the debtor, whether the debtor can purchase the insurance separately or the                                
10 multiple coverage only as a package;                                                                                    
11   (3)  the conditions of eligibility;                                                                                  
12   (4)  if the debtor has other insurance that covers the risk, the debtor may                                          
13 not want or need credit insurance;                                                                                      
14   (5)  if the creditor requires consumer credit insurance as additional                                                
15 security for a debt, the debtor has the option of furnishing the required amount of                                     
16 insurance through existing policies owned or procured by the debtor or of procuring                                     
17 and furnishing the required insurance through an insurer authorized to transact                                         
18 insurance business in this state;                                                                                       
19   (6)  the effective date of the coverage;                                                                             
20   (7)  the debtor may cancel the coverage within the first 30 days after                                               
21 receiving the individual policy or group certificate and have a premium paid by the                                     
22 debtor refunded or credited; thereafter, the debtor may cancel the policy at any time                                   
23 during the term of the loan and receive a refund of unearned premium;                                                   
24   (8)  a brief description of the coverage, including                                                                  
25   (A)  the amount;                                                                                                    
26   (B)  the term;                                                                                                      
27   (C)  any exceptions, limitations, or exclusions;                                                                    
28   (D)  the insured event;                                                                                             
29   (E)  any waiting or elimination period;                                                                             
30   (F)  any deductible;                                                                                                
31   (G)  any applicable waiver of premium provision;                                                                    
01   (H)  to whom the benefits would be paid; and                                                                        
02   (I)  the premium rate for a coverage or for multiple coverage in                                                    
03 a package;                                                                                                              
04   (9)  if the premium or insurance charge is financed, it is subject to                                                
05 finance charges at the rate applicable to the credit transaction or at another specified                                
06 rate; and                                                                                                               
07   (10)  whether or not the benefits provided are sufficient to pay off the                                             
08 debt in full, including finance charges unearned at the time of the claim.                                              
09  (b)  The disclosure required in (a) of this section shall be provided in the                                          
10 following manner:                                                                                                       
11   (1)  in connection with consumer credit insurance offered                                                            
12 contemporaneously with the extension of credit or offered through direct mail                                           
13 advertisements, the disclosure shall be presented to the consumer in a clear and                                        
14 conspicuous manner; or                                                                                                  
15   (2)  in conjunction with the offer of credit insurance by telephone and                                              
16 contemporaneously with the extension of credit or subsequent to the extension of credit                                 
17 by other than direct mail advertisements, the initial disclosure may be provided orally                                 
18 as long as written disclosure is provided to the debtor not later than 10 days after the                                
19 offer or the date any other written material is provided to the debtor, whichever occurs                                
20 first.                                                                                                                  
21  (c)  If the debtor elects to purchase coverage, the delivery of the disclosure                                        
22 required in (b) of this section shall be acknowledged by the debtor at the time of                                      
23 delivery, and the insurer shall maintain the debtor's written acknowledgement for at                                    
24 least five years.                                                                                                       
25    * Sec. 86.  AS 21.57.060 is repealed and reenacted to read:                                                          
26  Sec. 21.57.060.  PROVISIONS OF POLICIES AND CERTIFICATES OF                                                           
27 INSURANCE.  (a)  Consumer credit insurance shall be evidenced by an individual                                          
28 policy or a group certificate of insurance.                                                                             
29  (b)  The individual policy or group certificate must, in addition to other                                            
30 requirements of law, set out                                                                                            
31   (1)  the name and home office address of the insurer;                                                                
01   (2)  the name of the debtor;                                                                                         
02   (3)  the premium to be paid by the debtor disclosed separately for each                                              
03 kind of coverage or for all coverage in a package, except that for open-ended loans,                                    
04 the premium rate and the basis of premium calculation must be specified;                                                
05   (4)  a full description of the coverage including the amount, the term,                                              
06 and any exceptions, limitations, or exclusions;                                                                         
07   (5)  a statement that the benefits shall be paid to the creditor to reduce                                           
08 or extinguish the unpaid debt and that, whenever the amount of insurance benefit                                        
09 exceeds the unpaid debt, the excess is payable to the debtor, a beneficiary other than                                  
10 the creditor named by the debtor, or the debtor's estate;                                                               
11   (6)  an explanation of how refunds are calculated in the event of policy                                             
12 termination; and                                                                                                        
13   (7)  if the benefit is not adequate to completely pay off the debt existing                                          
14 on the date of death or disability, a statement to that effect on the face of the                                       
15 individual policy or group certificate in not smaller than 10 point, bold face type.                                    
16    * Sec. 87.  AS 21.57.070 is repealed and reenacted to read:                                                          
17  Sec. 21.57.070.  REQUIREMENTS FOR EVIDENCE OF INSURANCE.  (a)                                                         
18 Unless the individual policy or group certificate of insurance is delivered to the debtor                               
19 at the time the debt is incurred or when the debtor elects to purchase coverage, a copy                                 
20 of the application for the policy or a notice of proposed insurance, signed by the                                      
21 debtor and setting out (1) the name and home office address of the insurer, (2) the                                     
22 name of the debtor, (3) the premium rate to be paid by the debtor for the insurance,                                    
23 and (4) the amount, term, and a brief description of the coverage provided, shall be                                    
24 delivered to the debtor at the time the debt is incurred or the election to purchase                                    
25 coverage is made, or, within 10 days from the date of the election to purchase                                          
26 coverage, if the election to purchase coverage is made by telephone.  The copy of the                                   
27 application for or notice of proposed insurance must refer exclusively to insurance                                     
28 coverage and must be separate and apart from the loan, sale, other credit statement of                                  
29 account, instrument, or agreement, unless the information required by this subsection                                   
30 is prominently set out in it.  Upon acceptance of the insurance by the insurer and                                      
31 within 30 days of the date upon which the debt is incurred or the election to purchase                                  
01 coverage is made, the insurer shall deliver the individual policy or group certificate of                               
02 insurance to the debtor.  The application or notice of proposed insurance must state                                    
03 that upon acceptance by the insurer, the insurance shall become effective as provided                                   
04 in AS 21.57.050(a).                                                                                                     
05  (b)  The application or notice of proposed insurance may be used to fulfill all                                       
06 of the requirements of AS 21.57.055(a) and 21.57.060(b) if it contains all of the                                       
07 information required by those subsections.                                                                              
08  (c)  A debtor has 30 days from the date the debtor receives the individual                                            
09 policy or the group certificate to review the coverage purchased.  At any time within                                   
10 the 30-day period, the debtor may contact the creditor or insurer issuing the policy or                                 
11 certificate and request that the coverage be cancelled.  An individual policy or group                                  
12 certificate may require the request be in writing, that the policy or certificate be                                    
13 returned to the insurer, or both.  If a policy is cancelled, the insurer shall return a full                            
14 refund or credit of all premiums or insurance charges to the debtor within 30 days.                                     
15  (d)  If the named insurer does not accept the risk, the debtor shall receive a                                        
16 policy or certificate of insurance listing the name and home office address of the                                      
17 substituted insurer and the amount of the premium to be charged.  If the amount of                                      
18 premium is less than the amount in the notice of proposed insurance, the insurer shall                                  
19 issue an appropriate refund within 30 days.  If the risk is not accepted by an insurer,                                 
20 a premium paid by the debtor shall be refunded or credited to the debtor within 30                                      
21 days of the date of application.                                                                                        
22  (e)  For the purposes of (a) of this section, an individual policy or group                                           
23 certificate delivered in conjunction with an open-end consumer credit agreement or                                      
24 consumer credit insurance requested by the debtor after the date of the debt is                                         
25 considered to be delivered at the time the debt is incurred or election to purchase                                     
26 coverage is made if the delivery occurs within 30 days of the date the insurance is                                     
27 effective.                                                                                                              
28  (f)  An individual policy or group certificate delivered in conjunction with an                                       
29 open-end consumer credit agreement shall continue from its effective date through the                                   
30 term of the agreement unless the individual policy or group certificate is terminated                                   
31 under its terms at an earlier date.                                                                                     
01    * Sec. 88.  AS 21.57.080 is repealed and reenacted to read:                                                          
02  Sec. 21.57.080.  FILING OF FORMS AND RATES.  (a)  An insurance policy,                                                
03 certificate of insurance, notice of proposed insurance, insurance disclosure notice,                                    
04 application for insurance, endorsement, and rider delivered or issued for delivery in                                   
05 this state, and the applicable schedules of premium rates shall be filed with the director                              
06 before being used.                                                                                                      
07  (b)  A document required to be filed under (a) of this section must be on file                                        
08 for a waiting period of 30 days before it is used or becomes effective, unless the                                      
09 director gives prior written approval.  This period may be extended for an additional                                   
10 30 days if the director gives written notice within the waiting period to the insurer                                   
11 making the filing.  The director shall disapprove a filing if the premium rate charged                                  
12 is not reasonable in relation to benefits or if it contains provisions that are unjust,                                 
13 unfair, inequitable, misleading, deceptive, encourage misrepresentation of the policy,                                  
14 or are contrary to a provision of this title or a regulation adopted under this title.  A                               
15 filing is considered to be approved unless it is disapproved by the director within the                                 
16 waiting period.  In determining the reasonableness of premium rates in relation to                                      
17 benefits, the director may consider claim costs, general and administrative expenses,                                   
18 reasonable compensation to producers, profit, or other relevant data.                                                   
19  (c)  If the director notifies the insurer that a document required to be filed                                        
20 under (a) of this section is disapproved, the insurer may not issue or use any part of                                  
21 the document.  In providing notice of disapproval to the insurer, the director shall                                    
22 specify the reason for disapproval and indicate that the insurer is entitled to a hearing.                              
23  (d)  The director may, at any time after a hearing, withdraw approval of a filing                                     
24 on the grounds specified under (b) of this section.  The director shall provide the                                     
25 insurer at least 20 days' prior written notice of a hearing scheduled by the director, and                              
26 the notice of the hearing must state the reason for the proposed withdrawal.                                            
27  (e)  An insurer may not issue or use a document required to be filed under (a)                                        
28 of this section after the effective date of a withdrawal of approval under (d) of this                                  
29 section.                                                                                                                
30  (f)  If a group policy of consumer credit insurance (1) has been delivered in                                         
31 this state before July 1, 1995, or (2) has been or is delivered in another state before                                 
01 or after July 1, 1995, the insurer shall be required to file only the group certificate and                             
02 notice of proposed insurance delivered or issued for delivery in this state as specified                                
03 in AS 21.57.060(b) and 21.57.070(a).                                                                                    
04  (g)  Consumer credit insurance forms used for insurance described under (f) of                                        
05 this section shall be approved by the director if they conform with the requirements                                    
06 specified in this section and if the schedules of premium rates applicable to the                                       
07 insurance evidenced by the certificate or notice are in accordance with the insurer's                                   
08 schedules of premium rates filed with the director.  An item required to be filed under                                 
09 (a) of this section shall also be filed as specified in this chapter unless the item relates                            
10 to a group policy that is delivered in another state and the director has determined that                               
11 the other state has substantially similar statutes or regulations to this chapter.  Upon                                
12 this determination, the items required to be filed under (a) of this section shall be filed                             
13 for informational purposes.  If the director subsequently determines that the                                           
14 informational filing is not in compliance with the requirements of this chapter, the                                    
15 insurer may not use the insurance policy, form, certificate, notice of proposed                                         
16 insurance, disclosure notice, advertisement, application for insurance, endorsement, or                                 
17 rider.                                                                                                                  
18    * Sec. 89.  AS 21.57.090 is amended to read:                                                                         
19  Sec. 21.57.090.  PREMIUMS AND REFUNDS.  (a)  An insurer may revise its                                                
20 schedules of premium rates from time to time, and file the revised schedules with the                                   
21 director.  An insurer may not issue a consumer credit [LIFE INSURANCE POLICY                                          
22 OR CREDIT DISABILITY] insurance policy for which the premium rate differs from                                        
23 [EXCEEDS] that determined by the schedules of the insurer then approved by [ON                                        
24 FILE WITH] the director.                                                                                                
25  (b)  An [EACH] individual policy or group certificate must provide for a                                           
26 refund of all unearned premiums [THAT] if the insurance is terminated before the                                       
27 scheduled maturity date of the insurance and notice of termination is given to the                                     
28 insurer.  The [INDEBTEDNESS, ANY] refund of an amount paid by the debtor for                                           
29 insurance shall be paid or credited promptly to the person entitled to it; provided,                                    
30 however, that the director shall prescribe a minimum refund and a [NO] refund that                                    
31 would be less than the minimum need not be made.  A refund formula that an                                           
01 insurer desires to use must provide refunds that are at least as favorable to the                                       
02 debtor as refunds based on the rule of anticipation.  The formula to be used in                                        
03 computing refunds shall be filed with and approved by the director.                                                     
04  (c)  If a creditor requires a debtor to make a payment for consumer credit                                          
05 [LIFE INSURANCE OR CREDIT DISABILITY] insurance and an individual policy                                                
06 or group certificate of insurance is not issued, the creditor shall immediately give                                    
07 written notice to the debtor and shall promptly make an appropriate credit to the                                       
08 account or issue a refund.                                                                                            
09  (d)  The amount charged to a debtor for consumer credit [LIFE OR CREDIT                                             
10 DISABILITY] insurance may not exceed the premium charged by the insurer, as                                             
11 computed at the time the charge to the debtor is determined.                                                            
12    * Sec. 90.  AS 21.57.090 is amended by adding a new subsection to read:                                              
13  (e)  Nothing in this chapter may be construed to authorize a payment for                                              
14 insurance prohibited under other provisions of law governing credit transactions.                                       
15    * Sec. 91.  AS 21.57.120 is amended to read:                                                                         
16  Sec. 21.57.120.  SELECTION RIGHTS OF INSURED [EXISTING                                                              
17 INSURANCE].  When consumer credit [LIFE INSURANCE OR CREDIT                                                           
18 DISABILITY] insurance is required as additional security for a debt [AN                                               
19 INDEBTEDNESS], the debtor shall, upon request to the creditor, have the option of                                       
20 furnishing the required amount of insurance through existing policies of insurance                                      
21 owned or controlled by the debtor or of procuring and furnishing the required coverage                                  
22 through an insurer authorized to transact an insurance business in this state.                                          
23    * Sec. 92.  AS 21.57 is amended by adding a new section to read:                                                     
24  Sec. 21.57.125.  DUTIES OF AN INSURER.  Except as otherwise prohibited                                                
25 by law, duties imposed upon an insurer by this chapter may be carried out by a                                          
26 creditor if the creditor is licensed under AS 21.27 as an insurance producer, a                                         
27 managing general agent, or a third-party administrator, and transacts business within                                   
28 the scope of its license on behalf of the insurer.                                                                      
29    * Sec. 93.  AS 21.57.150 is repealed and reenacted to read:                                                          
30  Sec. 21.57.150.  PENALTIES.  (a) In addition to any other penalty provided                                            
31 by law, a person licensed under AS 21.27 that the director determines under                                             
01 AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to                                      
02   (1)  a civil penalty equal to the compensation promised, paid, or to be                                              
03 paid, directly or indirectly, to the licensee in regard to a violation;                                                 
04   (2)  either a civil penalty of not more than $10,000 for a violation or,                                             
05 if the director determines that the person wilfully violated the provisions of this                                     
06 chapter, a civil penalty of not more than $25,000 for a violation; and                                                  
07   (3)  denial, nonrenewal, suspension, or revocation of a license.                                                     
08  (b)  In addition to any other penalty provided by law, an insurer that the                                            
09 director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this                                  
10 chapter is subject to                                                                                                   
11    (1)  a civil penalty equal to the premium earned, directly or indirectly,                                           
12 by the insurer in regard to a violation;                                                                                
13   (2)  either a civil penalty of not more than $10,000 for a violation or,                                             
14 if the director determines that the insurer wilfully violated the provisions of this                                    
15 chapter, a civil penalty of not more than $25,000 for a violation; and                                                  
16   (3)  denial, suspension, or revocation of a certificate of authority.                                                
17  (c)  In addition to any other penalty provided by law, any person that the                                            
18 director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this                                  
19 chapter is subject to                                                                                                   
20   (1)  either a civil penalty of not more than $10,000 for a violation or,                                             
21 if the director determines that the person wilfully violated the provisions of this                                     
22 chapter, a civil penalty of not more than $25,000 for a violation; and                                                  
23   (2)  denial of a license.                                                                                            
24    * Sec. 94.  AS 21.57.160 is repealed and reenacted to read:                                                          
25  Sec. 21.57.160.  DEFINITIONS.  In this chapter,                                                                       
26   (1)  "agriculture credit transaction commitment" means a binding                                                     
27 agreement to loan money up to a fixed amount as needed for agricultural purposes;                                       
28   (2)  "compensation" means commissions, dividends, retrospective rate                                                 
29 credits, service fees, expense allowances or reimbursements, gifts, furnishing                                          
30 equipment, facilities, goods, or services, or any other form of remuneration resulting                                  
31 directly from the sale of consumer credit insurance;                                                                    
01   (3)  "consumer credit insurance" means credit life insurance, credit                                                 
02 disability insurance, or credit unemployment insurance;                                                                 
03   (4)  "credit disability insurance" means insurance on a debtor to provide                                            
04 indemnity for payments or debt becoming due on a specific loan or other credit                                          
05 transaction while the debtor is disabled;                                                                               
06   (5)  "credit life insurance" means insurance on the life of a debtor under                                           
07 or in connection with all or a part of a specific loan or other credit transaction;                                     
08   (6)  "credit unemployment insurance" means insurance on a debtor to                                                  
09 provide indemnity for payments or debt becoming due on a specific loan or other                                         
10 credit transaction while the debtor is involuntarily unemployed;                                                        
11   (7)  "credit transaction" means a transaction by which the repayment for                                             
12 money loaned or a loan commitment made or payment for goods, services, or                                               
13 properties sold or leased is made at a future date;                                                                     
14   (8)  "creditor" means a person who lends money or who sells or leases                                                
15 goods, services, property, rights, or privileges, for which payment is arranged through                                 
16 a credit transaction, and includes a person who is a successor to the right, title, or                                  
17 interest of the lender, seller, or lessor;                                                                              
18   (9)  "debtor" means a person who borrows money, or purchases or                                                      
19 leases goods, services, property, rights, or privileges for which payment is arranged                                   
20 through a credit transaction;                                                                                           
21   (10)  "educational credit transaction commitment" means a binding                                                    
22 agreement to loan money up to a fixed amount as needed for educational purposes;                                        
23   (11)  "gross debt" means the total of the remaining payments owed to                                                 
24 the creditor by the debtor;                                                                                             
25   (12)  "identifiable charge" means a charge for consumer credit insurance                                             
26 that is made to a debtor having the benefit of the insurance, including a charge for                                    
27 insurance that is disclosed in the consumer credit agreement or other instrument                                        
28 furnished to the debtor that sets out the financial elements of the credit transaction, and                             
29 any difference in the finance, interest, service, or other similar charge made to a debtor                              
30 in a like circumstance, except for their insured or noninsured status;                                                  
31   (13)  "net debt" means the amount necessary to liquidate the remaining                                               
01 debt in a single lump sum payment, excluding all unearned finance charges;                                              
02   (14)  "open-end consumer credit" means consumer credit extended by                                                   
03 a creditor under an agreement in which                                                                                  
04   (A)  the creditor reasonably contemplates repeated transactions;                                                    
05   (B)  the creditor imposes a periodic finance charge on an                                                           
06 outstanding unpaid balance; and                                                                                         
07   (C)  the amount of consumer credit that may be extended to the                                                      
08 debtor during the term of the agreement, up to any limit set by the creditor, is                                        
09 generally made available to the extent that any outstanding balance is repaid;                                          
10   (15)  "rule of anticipation" means a refund method that results in                                                   
11 refunds equal to the premium cost of scheduled benefits subsequent to the date of                                       
12 cancellation or termination, computed at the schedule of premium rates in effect on the                                 
13 date of issue.                                                                                                          
14    * Sec. 95.  AS 21.69 is amended by adding new sections to read:                                                      
15  Sec. 21.69.645.  REDOMESTICATION.  (a)  An insurer organized under the                                                
16 laws of another state and admitted to do business in this state may become a domestic                                   
17 insurer of this state by complying with the requirements of this title relative to the                                  
18 organization and licensing of a domestic insurer and by designating its principal place                                 
19 of business at a place in this state.                                                                                   
20  (b)  A domestic insurer may, upon approval of the director, transfer its domicile                                     
21 to another state in which it is admitted to transact the business of insurance.  Upon a                                 
22 transfer as described in this subsection, the insurer shall cease to be a domestic insurer                              
23 of this state, but shall be considered admitted to this state.  The insurer shall meet the                              
24 qualifications to remain admitted to this state for a period of three years or, if ordered                              
25 by the director, a longer period.  The director may approve a proposed transfer unless                                  
26 the transfer is not in the interest of the policyholders of the insurer or the insurance                                
27 marketplace of this state.                                                                                              
28  (c)  Upon transfer of domestic status to or from this state, the certificate of                                       
29 authority, appointments under AS 21.27.100, rates, and other items that the director                                    
30 allows, and that are in existence at the time the insurer is licensed to transact the                                   
31 business of insurance in this state, shall continue in full force and effect and the insurer                            
01 shall remain duly qualified to transact the business of insurance in this state.                                        
02 Outstanding policies of a transferring insurer shall remain in full force and effect and                                
03 shall be endorsed with the new name of the company, its new location, and any other                                     
04 information the director may require.  A transferring insurer shall notify the director of                              
05 the details of the proposed transfer 30 days before the effective date of the transfer and                              
06 shall promptly file any resulting amendments to corporate documents filed or required                                   
07 to be filed with the director.                                                                                          
08  (d)  A transfer of domestic status by merger, consolidation, or any other lawful                                      
09 method of combination must meet the requirements of AS 21.69.590 or 21.69.600.  The                                     
10 certificate of authority, appointments under AS 21.27.100, rates, and other items that the                              
11 director allows, and that are in existence at the time the insurer is licensed to transact the                          
12 business of insurance in this state, shall continue in full force and effect and the insurer                            
13 shall remain duly qualified to transact the business of insurance in this state.                                        
14 Outstanding policies of a domestic insurer being merged, consolidated, or otherwise                                     
15 combined shall remain in full force and effect and shall be endorsed with the new name                                  
16 of the company, its new location, and any other information the director may require.                                   
17  (e)  An insurer that is transferring its domicile to this state shall file its revised                                
18 policy forms for approval under AS 21.42.                                                                               
19  (f)  A domestic insurer that is transferring its domicile to another state is not                                     
20 required to file policy forms at the time of transfer if the forms have already been                                    
21 approved under AS 21.42.                                                                                                
22  Sec. 21.69.648.  VOLUNTARY SURRENDER OF CERTIFICATE OF                                                                
23 AUTHORITY.  To voluntarily surrender the certificate of authority of a domestic insurer,                                
24 a request shall be made to the director to extinguish the certificate of authority six                                  
25 months before the planned effective date of the extinguishment of the charter.  Before                                  
26 the request is granted, the director shall conduct an examination under AS 21.06.120.                                   
27 The examination shall be completed within 12 months before the effective date of an                                     
28 extinguishment and all issues contained in the examination report must be resolved to                                   
29 the satisfaction of the director.  Insurance business of the domestic insurer shall be                                  
30 cancelled or reinsured as required under AS 21.69.610 or 21.69.620.                                                     
31    * Sec. 96.  AS 21.72 is amended by adding a new section to read:                                                     
01  Sec. 21.72.125.  QUARTERLY STATEMENTS.  The director may require a                                                    
02 benevolent association to file quarterly financial statements as provided in AS 21.09.205.                              
03 The statements must exhibit the items and facts required under AS 21.72.120(a).                                         
04    * Sec. 97.  AS 21.75 is amended by adding a new section to read:                                                     
05  Sec. 21.75.135.  QUARTERLY STATEMENTS.  (a)  The director may require                                                 
06 a reciprocal insurer's attorney-in-fact to file a quarterly financial statement as provided                             
07 in AS 21.09.205.                                                                                                        
08  (b)  A statement required under (a) of this section shall be supplemented by                                          
09 information that may be required by the director relative to the affairs and transactions                               
10 of the attorney-in-fact that relate to the reciprocal insurer.                                                          
11    * Sec. 98.  AS 21.75.170(e) is amended to read:                                                                      
12  (e)  Special meetings of the committee may be called by the attorney-in-fact, the                                     
13 chair of the committee, three members of the committee, or a signed petition of at least                                
14 one percent of the subscribers or three individual subscribers, whichever is greater,                                 
15 as of the most recent annual report of the reciprocal insurer.                                                          
16    * Sec. 99.  AS 21.75.170 is amended by adding a new subsection to read:                                              
17  (g)  Notwithstanding (a) of this section, a domestic reciprocal insurer transacting                                   
18 all of its insurance activities on a subject resident, located, or to be performed in this                              
19 state may, with the prior written approval of the director, have a subscriber's advisory                                
20 committee that consists of not less than five individuals who are elected by the                                        
21 subscribers, and who otherwise meet the requirements of (a) of this section.                                            
22    * Sec. 100.  AS 21.78.130(g) is amended to read:                                                                     
23  (g)  If it appears to the receiver that there has been a violation of civil or criminal                               
24 law, or breach of a contractual or fiduciary obligation detrimental to the insurer by an                                
25 officer, manager, insurance producer [AGENT, BROKER], employee, or other person,                                      
26 the receiver may pursue all appropriate legal remedies on behalf of the insurer.                                        
27    * Sec. 101.  AS 21.78.271(a) is amended to read:                                                                     
28  (a)  An                                                                                                               
29   (1)  insurance producer [AGENT, BROKER], premium finance                                                           
30 company, or any other person, other than the insured, responsible for the payment of a                                  
31 premium is obligated to pay an unpaid earned premium due the insurer at the time of the                                 
01 declaration of insolvency, as shown on the records of the insurer; neither a credit nor a                               
02 setoff is allowed to an insurance producer [AGENT, BROKER,] or premium finance                                        
03 company for an amount advanced to the insurer by the insurance producer [AGENT,                                       
04 BROKER,] or premium finance company on behalf of, but in the absence of a payment                                       
05 by, the insured;                                                                                                        
06   (2)  insured is obligated to pay an unpaid earned premium due the insurer                                            
07 at the time of the declaration of insolvency, as shown on the records of the insurer.                                   
08    * Sec. 102.  AS 21.79.900(6) is amended to read:                                                                     
09   (6)  "member insurer" means an insurer licensed to transact insurance in                                             
10 the state that issues a policy described in AS 21.79.020(a) and (b), or a subscriber                                    
11 contract providing benefits described in AS 21.87.120(a)(2) - (4) or 21.87.130(a)(2) and                                
12 (3), and includes an insurer whose license or certificate of authority in this state may                                
13 have been suspended, revoked, not renewed, or voluntarily withdrawn; "member insurer"                                   
14 does not include                                                                                                        
15   (A)  a health maintenance organization licensed under AS 21.86;                                                   
16   (B)  a fraternal benefit society licensed under AS 21.84;                                                         
17   (C)  a mandatory state pooling plan;                                                                                
18   (D)  a mutual assessment company or an entity that operates on                                                      
19 an assessment basis;                                                                                                    
20   (E)  an insurance exchange licensed under AS 21.75; or                                                            
21   (F)  a nonprofit hospital or medical service organization licensed                                               
22 under AS 21.87;                                                                                                        
23    * Sec. 103.  AS 21.80.020 is amended by adding a new subsection to read:                                             
24  (b)  This chapter does not apply to a risk retention group formed under 15 U.S.C.                                     
25 3901 - 3906 (Liability Risk Retention Act).                                                                             
26    * Sec. 104.  AS 21.84.340 is amended by adding a new subsection to read:                                             
27  (d)  The director may require a society to file quarterly financial statements.  If                                   
28 quarterly financial statements are required, the statements must follow for a given quarter                             
29 the reporting specified in the quarterly financial statement blank form and instructions                                
30 most recently approved by the National Association of Insurance Commissioners.                                          
31    * Sec. 105.  AS 21.86.080 is amended by adding new subsections to read:                                              
01  (b)  The director may require a health maintenance organization to file quarterly                                     
02 financial statements.  If quarterly financial statements are required, the statements must                              
03 follow for a given quarter the reporting specified in the quarterly financial statement                                 
04 blank form and instructions most recently approved by the National Association of                                       
05 Insurance Commissioners.                                                                                                
06  (c)  A filing under this section is subject to AS 21.09.200 and 21.09.205.                                            
07    * Sec. 106.  AS 21.89.030 is amended to read:                                                                        
08  Sec. 21.89.030.  PAYMENT.  An insurance company doing business in this state                                          
09 may not pay a judgment or settlement of a claim in this state for a loss incurred in this                               
10 state with an instrument other than a negotiable bank check payable on demand and                                       
11 bearing even date with the date of writing or by electronic funds transfer.                                           
12    * Sec. 107.  AS 21.89 is amended by adding new sections to read:                                                     
13  Sec. 21.89.080.  ELECTRONIC DATA TRANSFER.  The director may adopt                                                    
14 regulations to facilitate electronic data transfer.  Electronic data transferred under                                  
15 regulations may, at the discretion of the director, be in place of another method of filing                             
16 or communication otherwise required under this title.                                                                   
17  Sec. 21.89.090.  RISK RETENTION GROUPS AND PURCHASING GROUPS.                                                         
18 (a)  A risk retention group or a purchasing group formed under and in compliance with                                   
19 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act) shall register with the director and                               
20 shall at all times transact business in compliance with federal law and with the laws of                                
21 this state that are not preempted by federal law.                                                                       
22  (b)  A risk retention group or a purchasing group shall apply for initial                                             
23 registration on forms prescribed by the director.  Payment of a registration fee established                            
24 under AS 21.06.250 shall be submitted with the application.                                                             
25  (c)  A risk retention group or a purchasing group may continue its registration                                       
26 if it is in compliance with federal law.  Payment of an annual continuation fee                                         
27 established under AS 21.06.250 shall be submitted with the continuation application.                                    
28  (d)  A risk retention group holding a valid certificate of authority as a domestic                                    
29 insurer or a purchasing group duly licensed under AS 21.27 as a resident license is not                                 
30 required to be additionally registered under this section.                                                              
31  (e)  In addition to any other penalty provided by law, a person that the director                                     
01 determines under AS 21.06.170 - 21.06.240 has violated a provision of this title relative                               
02 to a risk retention group or a purchasing group is subject to a civil penalty of not more                               
03 than $10,000 for a violation or, if the director determines that the person wilfully                                    
04 violated a provision of this title, a civil penalty of not more than $25,000 for a violation.                           
05  (f)  The director may adopt regulations on the operation and reporting                                                
06 requirements of a risk retention group that are not in conflict with 15 U.S.C. 3901 - 3906                              
07 (Liability Risk Retention Act).                                                                                         
08  Sec. 21.89.100.  APPOINTMENT OF INDEPENDENT COUNSEL;                                                                  
09 CONFLICTS OF INTEREST.  (a)  If an insurer has a duty to defend an insured under                                        
10 a policy of insurance and a conflict of interest arises that imposes a duty on the insurer                              
11 to provide independent counsel to the insured, the insurer shall provide independent                                    
12 counsel to the insured unless the insured in writing waives the right to independent                                    
13 counsel.  An insurance policy may contain a provision that provides a method of                                         
14 selecting independent counsel if the provision complies with this section.                                              
15  (b)  For purposes of this section, the following do not constitute a conflict of                                      
16 interest:                                                                                                               
17   (1)  a claim of punitive damages;                                                                                    
18   (2)  a claim of damages in excess of the policy limits;                                                              
19   (3)  claims or facts in a civil action for which the insurer denies coverage;                                        
20 however, this paragraph does not apply if the insurer reserves the insurer's rights on the                              
21 issue for which coverage is denied and the outcome of that coverage issue can be                                        
22 controlled by counsel initially retained by the insurer for the defense of the claim.                                   
23  (c)  If the insured selects independent counsel at the insurer's expense, the insurer                                 
24 may require that the independent counsel have at least four years of experience in civil                                
25 litigation, including substantial defense experience in the subject at issue in the civil                               
26 action, and malpractice insurance.  Unless otherwise provided in the insurance policy,                                  
27 the obligation of the insurer to pay the fee charged by the independent counsel is limited                              
28 to the rate that is actually paid by the insurer to an attorney in the ordinary course of                               
29 business in the defense of a similar civil action in the community in which the claim                                   
30 arose or is being defended.  A dispute between the insurer and insured regarding attorney                               
31 fees that is not resolved by the insurance policy or this section shall be resolved by                                  
01 arbitration under AS 09.43.                                                                                             
02  (d)  If the insured selects independent counsel at the insurer's expense, the                                         
03 independent counsel and the insured shall consult with the insurer on all matters relating                              
04 to the civil action and shall disclose to the insurer in a timely manner all information                                
05 relevant to the civil action, except information that is privileged and relevant to disputed                            
06 coverage.  A claim of privilege is subject to review in the appropriate court.  Information                             
07 disclosed by the independent counsel or the insured does not waive another party's right                                
08 to assert privilege.                                                                                                    
09  (e)  An insured may waive the right to select independent counsel by signing a                                        
10 statement that reads substantially as follows:                                                                          
11 I have been advised of my right to select independent counsel to                                                      
12 represent me in this lawsuit.  I have considered this matter fully                                                      
13 and at this time I am waiving my right to select independent                                                            
14 counsel.  I have authorized my insurer to select a defense counsel                                                      
15 to represent me in this lawsuit.                                                                                        
16  (f)  If an insured selects independent counsel under this section, both the counsel                                   
17 representing the insurer and independent counsel representing the insured shall be                                      
18 allowed to participate in all aspects of the civil action.  Counsel for the insurer and                                 
19 insured shall cooperate fully in exchanging information that is consistent with ethical and                             
20 legal obligations to the insured.  Nothing in this section relieves the insured of the duty                             
21 to cooperate fully with the insurer as required by the terms of the insurance policy.                                   
22    * Sec. 108.  AS 21.90.900(26) is amended to read:                                                                    
23   (26)  "managing general agent" means a person, firm, or corporation that                                             
24   (A)  has authority to exercise general supervision over the                                                         
25 business, or any part of the business, of one or more admitted insurers; and                                            
26   (B)  performs administrative functions normally performed by the                                                    
27 insurer including claims administration and payment, marketing administration,                                          
28 agent appointment, premium accounting, premium billing, coverage verification,                                          
29 final underwriting authority, or [AND] certificate issuance;                                                          
30    * Sec. 109.  AS 21.90.900(28) is amended to read:                                                                    
31   (28)  "person" has the meaning given in AS 01.10.060 and includes an                                                 
01 insurer, Lloyd's, fraternal benefit society, medical service, or hospital service plan as                             
02 defined in AS 21.87, reciprocal or interinsurance exchange, syndicate, and any other                                    
03 legal entity engaged in the business of transacting insurance [, INCLUDING AGENTS,                                      
04 BROKERS, AND CLAIMS ADJUSTERS];                                                                                         
05    * Sec. 110.  AS 28.20.580 is amended to read:                                                                        
06  Sec. 28.20.580.  ASSIGNED RISK PLANS.  After consultation with the                                                    
07 insurance companies authorized to issue motor vehicle liability policies in this state, the                             
08 director of the division of insurance shall approve a reasonable plan, fair to the insurers                             
09 and equitable to their policyholders, for the apportionment among these companies of                                    
10 applicants for motor vehicle policies and other vehicle coverages who are in good faith                                 
11 entitled to but are unable to procure policies through ordinary methods.  When a plan is                                
12 approved, all the insurance companies shall subscribe to it and participate in it, except                              
13 a reciprocal insurer formed by and only insuring a group of municipalities or                                           
14 nonprofit utilities under AS 21.75, or a reciprocal insurer formed under AS 21.75                                       
15 to provide marine insurance.  An applicant for an assigned risk policy, a person                                       
16 insured under an assigned risk plan, and an insurance company affected may appeal to                                    
17 the commissioner of commerce and economic development from a ruling or decision of                                      
18 the authority designated to operate the plan.  Failure to adopt an assigned risk plan does                              
19 not relieve any person from responsibility under this chapter.                                                          
20    * Sec. 111.  AS 39.25.110 is amended by adding a new paragraph to read:                                              
21   (30)  a person employed as an actuary or assistant actuary by the division                                           
22 of insurance in the Department of Commerce and Economic Development.                                                    
23    * Sec. 112.  AS 21.18.110(b)(3); AS 21.27.650(f)(3); and AS 21.36.420 are repealed.                                  
24    * Sec. 113.  AS 21.57.110 and 21.57.170 are repealed.                                                                
25    * Sec. 114.  AS 21.09.300(c), enacted in sec. 16 of this Act, has the effect of amending                             
26 Alaska Rule of Civil Procedure 45, by providing that certain insurer reports of material                                
27 transactions are not subject to subpoena.                                                                               
28    * Sec. 115.  TRANSITION.  This Act applies to a policy of insurance that is entered into or                          
29 renewed on or after the effective date of the relevant provision of this Act.                                           
30    * Sec. 116.  Sections 71 and 110 of this Act are retroactive to January 1, 1983.                                     
31    * Sec. 117.  Sections 1, 2, 80 - 94, and 113 of this Act take effect October 1, 1995.                                
01    * Sec. 118.  Except as provided in secs. 116 and 117 of this Act, this Act takes effect July 1,                      
02 1995.