HCS CSSB 191(RLS): "An Act relating to civil liability for commercial recreational activities and for guest passengers on an aircraft or watercraft, to recovery of punitive damages resulting from an aviation accident, and to insurance pooling by air carriers; and providing for an effective date."
00 HOUSE CS FOR CS FOR SENATE BILL NO. 191(RLS) 01 "An Act relating to civil liability for commercial recreational activities and for guest 02 passengers on an aircraft or watercraft, to recovery of punitive damages resulting from 03 an aviation accident, and to insurance pooling by air carriers; and providing for an 04 effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 07 to read: 08 PURPOSE OF SECTION 2. It is the purpose of sec. 2 of this Act to establish the 09 responsibilities of persons who operate commercial recreational activities and persons who 10 participate in those recreational activities and to decrease uncertainty regarding the legal 11 responsibility for injuries that result from participation in commercial recreational activities. 12 It is also the purpose of sec. 2 of this Act to encourage the continued availability of businesses 13 that offer commercial recreational activities to the public. 14 * Sec. 2. AS 05 is amended by adding a new chapter to read:
01 Chapter 50. Civil Liability for Commercial 02 Recreational Activities. 03 Sec. 05.50.010. Acceptance of inherent risks. Participation in a commercial 04 recreational activity constitutes acceptance of the inherent risks of the commercial 05 recreational activity that are or should be apparent to an ordinarily prudent person. 06 Sec. 05.50.020. Contributory negligence. (a) A person who accepts an 07 inherent risk of a commercial recreational activity as described in AS 05.50.010 is 08 contributorily negligent to the extent that the inherent risk causes injury, death, or 09 property damage. 10 (b) In an action seeking to recover damages for injury or death to a person or 11 harm to property resulting from an inherent risk of a commercial recreational activity, 12 compensatory damages shall be reduced for contributory negligence as provided under 13 AS 09.17.060. 14 Sec. 05.50.030. Responsibilities of participants. A participant in a 15 commercial recreational activity has the responsibility to 16 (1) learn about and expressly accept the risks of the activities; 17 (2) act within the limits of the person's abilities and as allowed by the 18 person's health; 19 (3) heed all warnings regarding participation in the commercial 20 recreational activity; 21 (4) maintain control of the participant's person, a minor under the 22 control of the participant, and any equipment, devices, or animals the participant is 23 using or that are under the control of the participant; 24 (5) refrain from acting in a manner that may cause or contribute to 25 injury of the participant or another person. 26 Sec. 05.50.040. Responsibilities of operators of commercial recreational 27 activities. A person who operates a business that offers a commercial recreational 28 activity shall 29 (1) explain to a participant 30 (A) the fundamental inherent risks of the commercial 31 recreational activity; and
01 (B) the skills and equipment required to participate in the 02 commercial recreational activity that are not apparent to an inexperienced 03 participant; 04 (2) require that employees who are directly responsible for assisting 05 participants in the field in the actual performance of a commercial recreational activity 06 have training in basic first aid and cardiopulmonary resuscitation and explain to those 07 employees how to use emergency medical services available in the area; 08 (3) maintain recreational equipment and facilities in good repair; 09 (4) provide trained and competent personnel; and 10 (5) act in a reasonably safe and competent manner. 11 Sec. 05.50.050. Interaction with other laws. This chapter does not affect the 12 immunity of an owner of unimproved land under AS 09.65.200 or of a ski area 13 operator under AS 05.45. 14 Sec. 05.50.060. Effect of violations. A person who operates a business that 15 offers a commercial recreational activity and who violates AS 05.50.040 is negligent 16 and civilly liable to the extent the violation causes injury to a person or damage to 17 property. 18 Sec. 05.50.100. Definitions. In this chapter, 19 (1) "commercial recreational activity" means a recreational activity for 20 which the participants pay compensation; 21 (2) "recreational activity" means an outdoor activity undertaken for the 22 purpose of exercise, education, relaxation, pleasure, sport, or as a hobby. 23 * Sec. 3. AS 09.17.020(h) is amended to read: 24 (h) Notwithstanding any other provision of law, in an action against 25 (1) an employer to recover damages for an unlawful employment 26 practice prohibited by AS 18.80.220, the amount of punitive damages awarded by the 27 court or jury may not exceed 28 (A) [(1)] $200,000 if the employer has fewer [LESS] than 100 29 employees in this state; 30 (B) [(2)] $300,000 if the employer has 100 or more but fewer 31 [LESS] than 200 employees in this state;
01 (C) [(3)] $400,000 if the employer has 200 or more but fewer 02 [LESS] than 500 employees in this state; and 03 (D) [(4)] $500,000 if the employer has 500 or more employees 04 in this state; and 05 (2) an owner or operator of an aviation business to recover 06 damages resulting from an aviation accident, the amount of punitive damages 07 awarded by the court or jury may not exceed (A) $300,000 if the aircraft has a 08 passenger seat configuration of 20 or fewer seats, excluding each crewmember 09 seat, or a maximum payload capacity of less than 6,000 pounds; (B) $400,000 if 10 the aircraft has a passenger seat configuration of more than 20 seats but fewer 11 than 30 seats, excluding each crewmember seat, or a maximum payload capacity 12 of 6,000 or more pounds but less than 7,500 pounds; and (C) $500,000 if the 13 aircraft has a passenger seat configuration of 30 or more seats, excluding each 14 crewmember seat, or a maximum payload capacity of 7,500 or more pounds; in 15 this paragraph, "aviation accident" means an accident occurring during the 16 operation of an aircraft, and "maximum payload capacity" has the meaning 17 given in 14 C.F.R. 119.3. 18 * Sec. 4. AS 09.65 is amended by adding a new section to read: 19 Sec. 09.65.112. Civil liability for aircraft and watercraft guest passengers. 20 (a) An owner or operator of an aircraft or watercraft is not liable for the civil damages 21 of a person being transported in the owner's or operator's aircraft or watercraft if the 22 owner or operator is not for hire or being compensated for the transportation. In this 23 subsection, "compensated" means a substantial payment in money, services, or 24 materials, but does not include a token payment. 25 (b) This section does not apply to a civil action 26 (1) for damages resulting from 27 (A) gross negligence or reckless or intentional misconduct; 28 (B) an act or omission of an owner or operator of an aircraft or 29 watercraft who is a common carrier; or 30 (C) an act or omission of an owner or operator of an aircraft or 31 watercraft that occurs while demonstrating an aircraft or watercraft to a
01 prospective buyer; or 02 (2) described under (a) of this section if the owner or operator 03 (A) has insurance that would compensate the claimant for civil 04 damages awarded against the owner or operator; an owner or operator who is 05 insured as described in this subparagraph is not liable for civil damages 06 described in (a) of this section that exceed the applicable insurance; or 07 (B) does not have insurance that would compensate a person 08 being transported as described under (a) of this section for civil damages 09 awarded against the owner or operator and, before the person being transported 10 enters the aircraft or watercraft, the owner or operator fails to provide notice to 11 the person being transported that the owner or operator is uninsured as 12 described in this subparagraph. 13 * Sec. 5. AS 21 is amended by adding a new chapter to read: 14 Chapter 77. Joint Aviation Insurance Arrangements. 15 Sec. 21.77.010. Authority to establish joint aviation insurance 16 arrangements. (a) Air carriers may enter into cooperative agreements with each 17 other for the purpose of establishing, operating, or participating in joint aviation 18 insurance arrangements through which the participating members agree to pool 19 contributions in order to either assume risks from losses to the participants on a group 20 basis or purchase coverage for the participants on a group basis. 21 (b) A joint aviation insurance arrangement 22 (1) may be for any kind of insurance defined by this title except for 23 health insurance, life insurance, and title insurance; and 24 (2) shall be considered an alternative or supplement to any other policy 25 or contract of insurance authorized or required by law, including insurance under 26 AS 21.75. 27 (c) For purposes of AS 23.30.075, a joint aviation insurance arrangement is 28 considered to be an association duly authorized to transact workers' compensation 29 insurance in the state. 30 Sec. 21.77.020. Regulation by division of insurance, notice, and annual 31 report. (a) A joint aviation insurance arrangement may not be considered insurance
01 for the purpose of any other law of the state and is not subject to regulations adopted 02 by the director. 03 (b) Before an air carrier signs a cooperative agreement, the joint aviation 04 insurance arrangement shall notify the air carrier in writing that the joint aviation 05 insurance arrangement is not licensed in this state, is not subject to this state's 06 supervision, and, in the event of the insolvency of the joint aviation insurance 07 arrangement, losses will not be covered under AS 21.80 (Alaska Insurance Guaranty 08 Association Act). 09 (c) By October 1 of each year, the administrator of a joint aviation insurance 10 arrangement shall prepare and deliver to the Legislative Budget and Audit Committee 11 and the director a report showing the true and correct financial condition of the joint 12 aviation insurance arrangement. The report must 13 (1) be attested to by the administrator and the board of directors; 14 (2) include an analysis, certified by a member of the American 15 Academy of Actuaries, of the sufficiency of the loss reserves; and 16 (3) be certified by a certified public accountant. 17 Sec. 21.77.030. General provisions of cooperative agreements. (a) A 18 cooperative agreement must provide for the proper operation of the joint aviation 19 insurance arrangement and include provisions for 20 (1) administration of the arrangement by a board of directors, 21 specifying the number of members of the board and other requirements necessary for 22 the proper functioning of the board; 23 (2) appointment of an administrator and other persons as necessary for 24 the proper functioning of the arrangement; 25 (3) organization of the arrangement, including a roster of participating 26 members and the names of the members of the board of directors; 27 (4) procedures to establish and promote an aggressive risk 28 management program among the members of the arrangement, including procedures 29 for identifying and reducing the risks that can be reduced through implementing better 30 safety technologies and improved work techniques and procedures; 31 (5) enforcing the collection of contributions or payments in default
01 from members of the arrangement; 02 (6) the addition of new members to the arrangement or the withdrawal 03 of members from the arrangement; 04 (7) the method of apportioning costs and disposition of excess 05 contributions; 06 (8) transmission of financial statements and audit reports of the 07 arrangement to participating members; 08 (9) terminating the arrangement and disposing of its assets; and 09 (10) establishing and administering a joint aviation insurance fund. 10 (b) A cooperative agreement may 11 (1) authorize the board of directors to enter into contracts for services 12 necessary to perform the functions of a joint aviation insurance arrangement; a person 13 contracting to perform functions under this paragraph is subject to the licensing 14 requirements of this title; 15 (2) delegate to the board of directors, or authorize delegation by the 16 board to another person or group, the power to compromise, arbitrate, or otherwise 17 settle claims on behalf of the arrangement; 18 (3) authorize the board of directors to adopt rules not inconsistent with 19 law for the fair and equitable administration of the joint aviation insurance 20 arrangement and the joint aviation insurance fund. 21 (c) The board of directors shall file a copy of the cooperative agreement with 22 the director at least 60 days before the effective date of the agreement. The agreement 23 shall be available for public inspection. 24 Sec. 21.77.040. Financial provisions of agreements. (a) A joint aviation 25 insurance arrangement formed in accordance with the provisions of this chapter shall 26 (1) have and maintain a surplus no less than an amount equal to the 27 total of the capital and one-half of the surplus that would be required of a domestic 28 stock insurer writing the same lines as the joint aviation insurance arrangement; or 29 (2) post a bond for an amount equal to the capital that would be 30 required of a domestic stock insurer writing the same lines of insurance as the joint 31 aviation insurance arrangement and maintain a surplus of $500,000 in admitted assets
01 or a surplus sufficient to operate the joint aviation insurance arrangement for one year, 02 whichever is greater. 03 (b) A cooperative agreement must include a provision requiring an annual 04 determination by a casualty actuary who is a member of the American Academy of 05 Actuaries that procedures for establishing reserves for losses of the joint aviation 06 insurance arrangement are actuarially sound. 07 (c) A joint aviation insurance arrangement shall be subject to an annual 08 independent audit. The audit shall be conducted in accordance with generally 09 accepted auditing standards and must include a review of the actuarial assumptions 10 used for establishing the reserves under (b) of this section. The audit report must 11 include certification from a casualty actuary who is a member of the American 12 Academy of Actuaries that the actuarial assumptions continue to be sound and the 13 level of the reserves is adequate. 14 (d) A cooperative agreement may authorize the board of directors to purchase 15 excess or catastrophic insurance on behalf of the joint aviation insurance arrangement. 16 The cost of the insurance shall be apportioned in the manner specified in the joint 17 aviation insurance agreement. The board may purchase insurance under this 18 subsection only from an insurer authorized to do business in the state, except 19 insurance under this subsection may be purchased from a risk-sharing pool established 20 by a national association of similar entities if the risk-sharing pool meets the 21 qualifications for an unauthorized insurer under AS 21.34.040(b) and (d) and 22 21.34.220 and has capital and policyholders surplus in an amount at least as great as 23 would be required if the association were a domestic multiple line insurer. An 24 arrangement may purchase insurance under this subsection for property and liability 25 risks from unauthorized insurers allowed for use by licensed Alaska surplus lines 26 brokers. 27 Sec. 21.77.050. Joint aviation insurance fund. (a) A joint aviation 28 insurance arrangement shall establish a joint aviation insurance fund. The fund 29 consists of money 30 (1) contributed by members of the joint aviation insurance 31 arrangement through budgetary appropriations or transfers from a self-insurance
01 reserve; 02 (2) contributed by officers and employees of members of the joint 03 aviation insurance arrangement under an employee benefit plan; and 04 (3) collected by the joint aviation insurance arrangement through 05 subrogation of a claim paid from the fund to a member of the arrangement. 06 (b) An expenditure may be made from a joint aviation insurance fund only to 07 (1) pay claims, losses, or benefits, including interest on claims, losses, 08 or benefits, and the administrative and adjustment expenses incurred in connection 09 with claims, losses, or benefits, involving the types of protection for which the fund 10 provides coverage as specified in the joint aviation insurance agreement; and 11 (2) purchase insurance coverage for members of a joint aviation 12 insurance arrangement on a group basis. 13 (c) The administrator shall keep the fund separate from other funds of a 14 member of a joint aviation insurance arrangement. 15 (d) For each type of protection offered by the joint aviation insurance 16 arrangement, the method of accounting must show the order, source, date, and amount 17 of each payment from the fund. 18 (e) Within 150 days of the end of the fiscal year, the administrator shall 19 furnish a detailed report of the operation and condition of the fund to the board of 20 directors and the director. 21 (f) Money held by a fund as reserves and money not needed for daily 22 operations may be invested by the board of directors. 23 (g) A fund may not be terminated unless the administrator certifies that an 24 amount of money sufficient to pay accrued and contingent expenditures has been 25 placed in a fully collateralized escrow account. 26 Sec. 21.77.250. Definitions. In this chapter, 27 (1) "adjustment expenses" means expenses for investigative, 28 processing, legal, actuarial, arbitration, and settlement services incurred in the 29 adjustment of losses, claims, or benefits; 30 (2) "administrator" means a person or group appointed by the board of 31 directors to administer a joint aviation insurance arrangement or a joint aviation
01 insurance fund; 02 (3) "board" or "board of directors" means the board of directors 03 provided for in a cooperative agreement; 04 (4) "cooperative agreement" means a written agreement entered into 05 by two or more air carriers described in AS 21.77.010 for the purpose of establishing, 06 operating, or participating in a joint aviation insurance arrangement; 07 (5) "fund" or "joint aviation insurance fund" means a fund established 08 under AS 21.77.050; 09 (6) "joint aviation insurance arrangement" means a joint aviation 10 insurance arrangement authorized under AS 21.77.010. 11 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 APPLICABILITY. Sections 1 - 4 of this Act apply to acts or omissions that occur on 14 or after the effective date of this Act. 15 * Sec. 7. This Act takes effect July 1, 2002.