SSSB 202: "An Act relating to insurance; amending Rules 79 and 82, Alaska Rules of Civil Procedure; and providing for an effective date."
00SPONSOR SUBSTITUTE FOR SENATE BILL NO. 202 01 "An Act relating to insurance; amending Rules 79 and 82, Alaska Rules of 02 Civil Procedure; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. SHORT TITLE. This Act may be known as the Alaska Insurance Consumers 05 Protection Act. 06 * Sec. 2. PURPOSE. It is the purpose of this Act to amend existing law regarding 07 insurance in a manner that ensures that injured parties, whether first or third parties, are fairly 08 treated by insurers, fully compensated by applicable policy limits, and receive interest legally 09 due. 10 * Sec. 3. AS 21.09.250 is amended by adding a new subsection to read: 11 (b) An insurer doing business in this state may not terminate a contract with 12 an insurance producer, agent, broker, or independent adjuster, except for good cause. 13 The director shall adopt regulations to implement this subsection. The regulations 14 adopted under this subsection must include an administrative procedure that allows an
01 insurer, insurance producer, agent, broker, or independent adjuster to file a request for 02 review and appropriate action by the director. 03 * Sec. 4. AS 21.36.125 is amended by adding new paragraphs to read: 04 (16) restrict or limit oral or written communications between 05 (A) an agent, a claims adjuster, or other person representing an 06 insurer and an insured regarding a property or damage claim or repair estimate; 07 or 08 (B) a person who repairs damage to an automobile covered 09 under a policy of the insurer and an insured; 10 (17) restrict or limit oral or written communications between a person 11 who repairs damage to property covered under a policy of the insurer, including 12 damage to an automobile, and a claimant. 13 * Sec. 5. AS 21.36.210(a) is amended to read: 14 (a) An insurer may not exercise its right to cancel a policy of personal 15 automobile insurance except for the following reasons: 16 (1) nonpayment of premium; or 17 (2) the driver's license or motor vehicle registration of either the named 18 insured or of an operator who resides in the same household as the named insured or 19 who customarily operates a motor vehicle insured under the policy has been under 20 suspension or revocation during the policy period or, if the policy is a renewal, during 21 its policy period or the 180 days immediately preceding its effective date ; this 22 paragraph does not apply to administrative revocation as described under 23 AS 21.89.023 . 24 * Sec. 6. AS 21.42 is amended by adding a new section to read: 25 Sec. 21.42.285. Prejudgment interest. Prejudgment interest due an insured 26 from an insurer as a result of a claim covered under an insurance policy is not subject 27 to limitation or reduction by application of the policy limits. An insurer is liable for 28 prejudgment interest even if the payment would exceed applicable policy limits. 29 * Sec. 7. AS 21.42 is amended by adding a new section to read: 30 Sec. 21.42.305. Payment of loss claims. (a) Using due diligence, an insurer 31 shall make an estimate of those covered losses that can be reasonably determined
01 within 15 days after the date the insurer receives notice of a claim under an insurance 02 policy. 03 (b) If a claim involves a covered loss that cannot be reasonably determined as 04 required under (a) of this section, the insurer shall review and estimate the covered 05 loss within 15 days after the date the loss becomes determinable. 06 (c) Within 30 days after an insurer receives notice of a claim, the insurer shall 07 pay the claimant the amount due under (a) or (b) of this section, and this amount shall 08 be known as the undisputed covered claims. The insurer shall also provide a written 09 explanation of the payment to the insured. The written explanation must include 10 covered loss payments and any loss not covered. An insurer may not require an 11 insured to sign a release for claims that are undisputed before payment by the insurer. 12 (d) If, after the insurer makes the payment of undisputed claims required under 13 (c) of this section, the insured obtains judgment for damages resulting from the 14 disputed claims and the damages awarded by the jury or court are at least 10 percent 15 greater than the undisputed claims payment made by the insurer, the insurer shall also 16 pay reasonable actual attorney fees, actual costs incurred by the insured in obtaining 17 the judgment, interest due under AS 09.30.070, and a penalty equal to at least 20 18 percent of the damages awarded in the action. 19 (e) If the director determines that an insurer has violated (a) - (c) of this 20 section, the director or an insured who failed to receive a covered loss payment as 21 required by (c) of this section may bring an action for bad faith claims practices 22 against the insurer. 23 (f) Subsection (d) of this section does not apply to or preclude a bad faith 24 claims action described under (e) of this section and does not preclude an award of 25 interest under AS 09.30.070 if damages are 10 percent or less than the undisputed 26 claims payment. 27 * Sec. 8. AS 21.89.020(f) is amended to read: 28 (f) An automobile liability insurance policy must provide 29 (1) that all expenses and fees, not including counsel fees or adjuster 30 fees, incurred because of arbitration or mediation shall be paid by the insurer; the 31 arbitrator may, as a part of the arbitrator's decision, require the insured to
01 reimburse the insurer for expenses or fees paid by the insurer [AS DETERMINED 02 BY THE ARBITRATOR]; 03 (2) liability coverage in the amount set out in AS 28.22.101(d) for 04 motor vehicles rented in the United States or Canada by a person insured under the 05 policy; 06 (3) physical damage coverage for motor vehicles rented in the United 07 States or Canada [,] if the policy provides physical damage coverage; if the insured 08 declines physical damage coverage, the insurer shall offer physical damage coverage 09 for rented vehicles; 10 (4) that payments from applicable coverage provided under (2) and (3) 11 of this subsection will be made in the following order of priority: 12 (A) from a policy or coverage purchased by the operator from 13 the person who has the vehicle available for rent; 14 (B) from a policy or coverage covering the operator of a rented 15 vehicle but not purchased from the person who has the vehicle available for 16 rent; and 17 (C) from a policy or coverage of the person who has the vehicle 18 available for rent. 19 * Sec. 9. AS 21.89.020(g) is amended to read: 20 (g) An insurance company offering automobile liability insurance in this state 21 shall offer a short term policy valid for at least [NO MORE THAN] seven but not 22 more than 30 days. The coverage available for the short term policy must be 23 comparable to coverage available for longer term policies. The provisions of 24 AS 21.36.210 - 21.36.310 do not apply to short term policies issued under this 25 subsection. The premium charged for a short term policy described under this 26 subsection may not exceed 200 percent of the pro rata premium charged for 27 longer term policies. 28 * Sec. 10. AS 21.89 is amended by adding a new section to read: 29 Sec. 21.89.023. Automobile insurance following driver's license revocation. 30 (a) Notwithstanding AS 21.36.210, an insurer offering insurance in this state may not 31 (1) refuse to issue or renew automobile liability insurance coverage; (2) cancel an
01 existing policy of automobile liability insurance; (3) deny a covered claim; or (4) 02 increase the premium on an automobile liability insurance policy if the refusal, 03 cancellation, denial, or increase results only from the fact that the person's driver's 04 license was revoked under AS 28.15.183, 28.15.185, or 28.15.187. 05 (b) The provisions of (a) of this section may not prevent an insurer from 06 underwriting or rating for a loss experience in the same manner as it would for a 07 person who has not had the person's driver's license revoked under AS 28.15.183, 08 28.15.185, or 28.15.187. 09 * Sec. 11. AS 21.89 is amended by adding a new section to read: 10 Sec. 21.89.027. Required telephone contact. An insurer who offers, issues, 11 or delivers an automobile liability insurance policy in this state against automobile 12 liability must provide a statewide toll-free telephone listing in addition to any local 13 listing. 14 * Sec. 12. AS 28.20 is amended by adding a new section to read: 15 Sec. 28.20.447. Medical payments coverage requirements. (a) An insurance 16 company offering automobile liability insurance in this state shall initially and at 17 renewal offer coverage for medical payments. 18 (b) Using due diligence, an insurer providing medical payments coverage shall 19 make an estimate of the payment due an insured that can be reasonably determined 20 within 15 days after the date the insurer receives notice of a claim under the policy. 21 (c) Within 30 days after the insurer receives notice of a medical claim, the 22 insurer shall pay the claimant the amount due under (b) of this section, and this 23 amount shall be known as the undisputed medical claim. The insurer shall also 24 provide a written explanation of the payment to the insured. The written explanation 25 must include the covered medical claim payment and any medical claim not covered. 26 (d) If a motor vehicle liability policy provides medical payments coverage, a 27 medical payment claim is denied, and the claim is later determined to be covered 28 under the policy, the insurer shall pay the insured's 29 (1) actual costs, plus interest at the rate imposed under 30 AS 09.30.070(a); 31 (2) reasonable actual attorney fees;
01 (3) any arbitration costs related to the proceeding; and 02 (4) a penalty equal to at least 20 percent of the value of the claim. 03 (e) If a separate premium is paid for medical payments coverage, payments 04 under that coverage may not be offset or deducted from the limits of uninsured or 05 underinsured motorist coverage otherwise available to the claimant. 06 * Sec. 13. AS 28.22 is amended by adding a new section to article 2 to read: 07 Sec. 28.22.150. Medical payments coverage requirements. (a) An insurance 08 company offering automobile liability insurance in this state shall initially and at 09 renewal offer coverage for medical payments. 10 (b) Using due diligence, an insurer providing medical payments coverage shall 11 make an estimate of the payment due an insured that can be reasonably determined 12 within 15 days after the date the insurer receives notice of a claim under the policy. 13 (c) Within 30 days after the insurer receives notice of a medical claim, the 14 insurer shall pay the claimant the amount due under (b) of this section, and this 15 amount shall be known as the undisputed medical claim. The insurer shall also 16 provide a written explanation of the payment to the insured. The written explanation 17 must include the covered medical claim payment and any medical claim not covered. 18 (d) If a motor vehicle liability policy provides medical payments coverage, a 19 medical payment claim is denied, and the claim is later determined to be covered 20 under the policy, the insurer shall pay the insured's 21 (1) actual costs, plus interest at the rate imposed under 22 AS 09.30.070(a); 23 (2) reasonable actual attorney fees; 24 (3) any arbitration or all court costs related to the proceeding; and 25 (4) a penalty equal to at least 20 percent of the value of the claim. 26 (e) If a separate premium is paid for medical payments coverage, payments 27 under that coverage may not be offset or deducted from the limits of uninsured or 28 underinsured motorist coverage otherwise available to the claimant. 29 * Sec. 14. AS 21.42.305, enacted by sec. 7 of this Act, AS 28.20.447, enacted by sec. 12 30 of this Act, and AS 28.22.150, enacted by sec. 13 of this Act, amend Rule 79, Alaska Rules 31 of Civil Procedure, by providing for an award of costs that differs from an award under
01 Rule 79. 02 * Sec. 15. AS 21.42.305, enacted by sec. 7 of this Act, AS 28.20.447, enacted by sec. 12 03 of this Act, and AS 28.22.150, enacted by sec. 13 of this Act, amend Rule 82, Alaska Rules 04 of Civil Procedure, by providing for attorney fee awards in certain cases that may differ from 05 those awarded under Rule 82. 06 * Sec. 16. APPLICABILITY. This Act applies to a 07 (1) policy of insurance entered into or renewed on or after the effective date 08 of this Act; 09 (2) civil action that accrues on or after the effective date of this Act. 10 * Sec. 17. This Act takes effect January 1, 1999.