Enrolled SB 357: Relating to the regulation of insurance, insurance licenses, qualifications of insurance producers, surplus lines, fraud investigations, electronic transactions, and compliance with federal law and national standards; and providing for an effective date.
00Enrolled SB 357 01 Relating to the regulation of insurance, insurance licenses, qualifications of insurance 02 producers, surplus lines, fraud investigations, electronic transactions, and compliance with 03 federal law and national standards; and providing for an effective date. 04 _______________ 05 * Section 1. AS 21.06.120(c) is amended to read: 06 (c) In place of an examination by the director, the director may accept a full 07 report of the last recent examination of a foreign or alien insurer, issued [CERTIFIED 08 TO] by the insurance supervisory official of another state, territory, commonwealth, or 09 district of the United States. The director may require that the 10 (1) insurance regulatory agency conducting the examination be, at the 11 time of the examination, accredited by the National Association of Insurance 12 Commissioners; 13 (2) examination be performed under the supervision of an insurance
01 regulatory agency accredited by the National Association of Insurance 02 Commissioners; and the supervising examiner, after a review of the examination work 03 papers and report, state under oath that the examination and report comply with the 04 standards and procedures required by their accredited state insurance regulatory 05 agency; or 06 (3) examiner conducting the examination be employed by an insurance 07 regulatory agency accredited at the time of the examination by the National 08 Association of Insurance Commissioners and that the examiner, after review of the 09 examination work papers and report, state under oath that the examination and report 10 comply with the standards and procedures required by the accredited insurance 11 regulatory agency. 12 * Sec. 2. AS 21.07.010(b) is amended to read: 13 (b) A contract between a participating health care provider and a managed 14 care entity that offers a group managed care plan may not contain a provision that 15 (1) has as its predominant purpose the creation of direct financial 16 incentives to the health care provider for withholding covered health care services that 17 are medically necessary; nothing in this paragraph shall be construed to prohibit a 18 contract between a participating health care provider and a managed care entity from 19 containing incentives for efficient management of the utilization and cost of covered 20 health care services; 21 (2) requires the provider to contract for all products that are currently 22 offered or that may be offered in the future by the managed care entity; or [AND] 23 (3) requires the health care provider to be compensated for health care 24 services performed at the same rate as the health care provider has contracted with 25 another managed care entity. 26 * Sec. 3. AS 21.07.040(a) is amended to read: 27 (a) Medical [NOTWITHSTANDING AS 21.86.280, MEDICAL] and 28 financial information in the possession of a managed care entity regarding an applicant 29 or a current or former person covered by a managed care plan is confidential and is not 30 subject to public disclosure. 31 * Sec. 4. AS 21.07.040 is amended by adding a new subsection to read:
01 (d) This section does not apply to a managed care entity that is subject to 02 AS 21.36. 03 * Sec. 5. AS 21.09.110(a) is amended to read: 04 (a) To apply for an original certificate of authority, an insurer shall file with 05 the director its application, accompanied by the applicable fees set under 06 AS 21.06.250, showing its name, location of its home office, or principal office in the 07 United States if an alien insurer, kinds of insurance to be transacted, date of 08 organization or incorporation, form of organization, state or country of domicile, and 09 additional information that the director may reasonably require, together with the 10 following documents, as applicable: 11 (1) if a foreign insurer, a copy of its corporate charter or articles of 12 incorporation, with all amendments certified by the public officer with whom the 13 originals are on file in the state or country of domicile; 14 (2) if a reciprocal insurer, copies of the power of attorney of its 15 attorney-in-fact and of its subscribers' agreement, if any, certified by its attorney-in- 16 fact; 17 (3) a copy of its financial statement as of the preceding December 31 18 and all subsequent quarterly financial statements, sworn to by at least two executive 19 officers of the insurer or certified by the public insurance supervisory official of the 20 insurer's state of domicile or of entry into the United States; 21 (4) a copy of the report of last examination, if any, made of the insurer, 22 issued [CERTIFIED] by the insurance supervisory official of its state of domicile or 23 of entry into the United States; 24 (5) appointment of the director under AS 21.09.180 [,] as its attorney 25 to receive service of legal process; 26 (6) if a foreign or alien insurer, a certificate of the public official 27 having supervision of insurance in its state or country of domicile, or state of entry 28 into the United States, showing that it is authorized to transact the kinds of insurance 29 proposed to be transacted in this state; 30 (7) if an alien insurer, a copy of the appointment and authority of its 31 United States manager, certified by its officer having custody of its records; and
01 (8) if a foreign insurer, a certificate as to deposit if it is to be tendered 02 under AS 21.09.090. 03 * Sec. 6. AS 21.09.170 is repealed and reenacted to read: 04 Sec. 21.09.170. Duration of suspension, insurer's obligations, and 05 reinstatements. (a) Suspension of an insurer's certificate of authority shall be for a 06 fixed period of time determined by the director, or until the occurrence of a specific 07 event necessary for remedying the reasons for suspension. The director may modify, 08 rescind, or reverse a suspension under this section. 09 (b) During the period of suspension, the insurer 10 (1) may not solicit or write any new business in this state; 11 (2) shall file its annual statement and pay fees, licenses, and taxes 12 required under this title; and 13 (3) may service its outstanding business in force in this state as if the 14 certificate had continued in full force. 15 (c) If the suspension of the certificate of authority is for a fixed period of time 16 and the certificate of authority has not been otherwise terminated, upon expiration of 17 the suspension period, the insurer's certificate of authority shall be reinstated unless 18 the director finds that the insurer is not in compliance with the requirements of this 19 title. The director shall promptly notify the insurer of any reinstatement, and the 20 insurer may not consider its certificate of authority reinstated until notified by the 21 director. If not reinstated, the certificate of authority expires at the end of the 22 suspension period or at the time the insurer fails to continue the certificate during the 23 suspension period under (b) of this section, whichever event occurs first. 24 (d) If the suspension of the certificate of authority continues until the 25 occurrence of a specific event and the certificate of authority has not been otherwise 26 terminated, upon the presentation of evidence satisfactory to the director that the 27 specific event has occurred, the insurer's certificate of authority shall be reinstated 28 unless the director finds that the insurer is not in compliance with the requirements of 29 this title. The director shall promptly notify the insurer of any reinstatement, and the 30 insurer may not consider its certificate of authority reinstated until notified by the 31 director. If satisfactory evidence as to the occurrence of the specific event has not
01 been presented to the director within five years after the date of suspension, the 02 certificate of authority expires five years from the date of suspension or upon failure 03 of the insurer to continue the certificate during the suspension period under (b) of this 04 section, whichever occurs first. 05 (e) The authority of the agents in this state to represent the insurer is reinstated 06 upon reinstatement of the insurer's certificate of authority. 07 (f) The director shall promptly notify an insurer's agents in this state, as shown 08 by records of the director, of any reinstatement. 09 * Sec. 7. AS 21.09.210(a) is amended to read: 10 (a) Each authorized insurer, and each formerly authorized insurer with respect 11 to premiums written [RECEIVED] while an authorized insurer in this state, shall file 12 with the director, on or before March 1 in each year, a report of all insurance business 13 written or contracted in the state, with proper proportionate allocation of premium for 14 the property, subjects, or risks in the state insured under policies or contracts covering 15 property, subjects, or risks located or resident in more than one state, during the 16 preceding year ending December 31. The report must show 17 (1) the amounts paid policyholders on losses; 18 (2) the total direct premium income including policy membership and 19 other fees, premiums paid by application of dividends, refunds, savings coupon, and 20 similar returns or credits to payment of premiums for new or additional or extended or 21 renewed insurance, charges for payment of premium in installments, and all other 22 consideration for insurance from all kinds and classes of insurance whether designated 23 a premium or otherwise; 24 (3) the amounts paid policyholders as returned premiums; 25 (4) the amounts paid policyholders as dividends. 26 * Sec. 8. AS 21.09.210(b) is amended to read: 27 (b) Each insurer, and each formerly authorized insurer with respect to 28 premiums written [RECEIVED] while an authorized insurer in this state, shall pay a 29 tax on the total direct premium written [INCOME RECEIVED] during the year 30 ending on the preceding December 31 and paid for the insurance of property or risks 31 resident or located in the state, other than wet marine and transportation insurance,
01 after deducting from the total direct premium income the applicable cancellations, 02 returned premiums, the unabsorbed portion of any deposit premium, all policy 03 dividends, unabsorbed premiums refunded to policyholders, refunds, savings, savings 04 coupons, and other similar returns paid or credited to policyholders with respect to 05 their policies. Deductions may not be made of cash surrender value of policies. 06 Considerations received on annuity contracts are not included in the direct premium 07 income and are not subject to tax. The tax shall be paid to the director at least 08 annually but not more often than once each quarter on the dates specified by the 09 director. The method of payment must be by the electronic or other payment method 10 specified by the director. Except as provided under (m) of this section, the tax is 11 computed at the rate of 12 (1) for domestic and foreign insurers, except hospital and medical 13 service corporations, 2.7 percent; 14 (2) for hospital and medical service corporations, six percent of their 15 gross premiums less claims paid. 16 * Sec. 9. AS 21.09.210(g) is repealed and reenacted to read: 17 (g) An insurer shall pay to the division a late payment fee of $50 a month plus 18 five percent of the tax due each calendar month or part of a month during which the 19 insurer fails to pay the full amount of the tax, or a portion of the tax, and interest at the 20 rate of one percent of the tax due each calendar month or part of a month for the 21 period the insurer fails to pay the premium tax in this section or in AS 21.09.270. The 22 late payment fee, not including interest, may not exceed $250 plus 25 percent of the 23 tax due. The tax payment shall be made in the form required by the director, or a 24 penalty shall be added to the tax of 25 percent of the tax due, not to exceed $2,000, 25 with a minimum penalty of $100. In addition to any other penalty provided by law, a 26 civil penalty may be assessed of not more than $10,000 if an insurer wilfully violates 27 this section. The director may suspend or revoke the certificate of authority of an 28 insurer that fails to pay taxes, a penalty, or a late payment fee as required under this 29 section. 30 * Sec. 10. AS 21.09.210(m) is amended to read: 31 (m) The tax imposed under this section for an individual [POLICY OF] life
01 insurance policy shall be computed at the rate of 02 (1) 2.7 percent of policy year premium up to $100,000; and 03 (2) one-tenth of one percent of policy year premium exceeding 04 $100,000. 05 * Sec. 11. AS 21.09.210 is amended by adding a new subsection to read: 06 (o) Premiums on which taxes are paid under (m)(2) of this section are not 07 subject to AS 21.09.270. 08 * Sec. 12. AS 21.09.310(b) is amended to read: 09 (b) An alien insurer may apply for a certificate of authority to use this state as 10 a state of entry to transact the business of insurance in the United States by 11 (1) qualifying as an insurer licensed to do business in this state; 12 (2) establishing a trust under a trust agreement approved in writing by 13 the director with a United States bank acceptable to the director in an amount not less 14 than the greater of 15 (A) the minimum basic capital or basic guarantee surplus and 16 additional maintained surplus required under AS 21.09.070; or 17 (B) the authorized control level risk based capital under 18 AS 21.14; 19 (3) submitting a copy of its charter and bylaws, if any, currently in 20 force, and other documents necessary to show the kind of business it is authorized to 21 transact in its domiciliary jurisdiction; documents submitted under this paragraph must 22 be attested to as accurate and complete by the insurance supervisory official in the 23 domiciliary jurisdiction, and must include an English translation, if in a language other 24 than English; 25 (4) submitting a full statement, subscribed and affirmed as true by two 26 officers or equivalent responsible representatives in a manner that the director 27 prescribes, of its financial condition as of the close of its latest fiscal year, showing its 28 assets, liabilities, income disbursements, business transacted, and other facts required 29 to be shown in its annual statement, as reported to the insurance supervisory official in 30 its domiciliary jurisdiction; all documents submitted under this paragraph must include 31 an English translation if in a language other than English;
01 (5) submitting to an examination under AS 21.06.120(b) at its 02 principal office within the United States, and elsewhere if necessary, unless the 03 director accepts a report of the insurer's recent examination and the report has been 04 issued [CERTIFIED] by the insurance supervisory official of the insurer's domiciliary 05 jurisdiction; and 06 (6) payment of fees established under AS 21.06.250. 07 * Sec. 13. AS 21.12.020(a) is amended to read: 08 (a) Credit for reinsurance transactions shall be allowed a domestic ceding 09 insurer as either an asset or a deduction from liability on account of reinsurance ceded 10 only with respect to cessions of a kind or class of business that the assuming 11 insurer is licensed or permitted to write or assume in its state of domicile or, in 12 the case of a United States branch of an alien assuming insurer, in the state 13 through which it is entered and licensed to transact insurance or reinsurance and 14 only if the reinsurance is ceded to an 15 (1) assuming insurer that is licensed to transact insurance or 16 reinsurance in this state; 17 (2) assuming insurer that is accredited as a reinsurer in this state; an 18 accredited reinsurer is one that 19 (A) files evidence of submission to this state's jurisdiction, 20 submits to this state's authority to examine its books and records under 21 AS 21.06.120, is licensed to transact insurance or reinsurance in at least one 22 state that is accredited by the National Association of Insurance 23 Commissioners, or, in the case of a United States branch of an alien admitted 24 insurer, is entered through and licensed to transact insurance or reinsurance in 25 at least one state that is accredited by the National Association of Insurance 26 Commissioners; 27 (B) maintains at least $20,000,000 in policyholder surplus and 28 whose accreditation has not been denied by the director within 90 days after 29 [OF] application to the director, or maintains less than $20,000,000 in 30 policyholder surplus and whose application for accreditation has been 31 approved by the director; and
01 (C) files annually with the director a copy of the reinsurer's 02 annual financial statement filed with the insurance department of the 03 reinsurer's state of domicile or state of entry and a copy of the reinsurer's most 04 recent audited financial statement; 05 (3) assuming insurer that is domiciled in a state, or, in the case of a 06 United States branch of an alien assuming insurer, is entered through a state accredited 07 by the National Association of Insurance Commissioners that employs standards 08 regarding credit for reinsurance ceded substantially similar to those applicable under 09 (1) and (2) of this subsection, the assuming insurer maintains a policyholder surplus of 10 at least $20,000,000, and the assuming insurer submits to the authority of this state to 11 examine its books and records; the surplus requirements in this paragraph do not apply 12 to reinsurance ceded and assumed under a pooling arrangement among insurers in the 13 same holding company system; 14 (4) assuming alien insurer that 15 (A) maintains a trust fund in a qualified United States financial 16 institution for the payment of the valid claims of its United States 17 policyholders and ceding insurers, and their assigns and successors in interest, 18 that conforms to the following requirements: 19 (i) the trust and each amendment to the trust shall be 20 established in a form approved by the insurance supervisory official 21 of the state where the trust is domiciled or the insurance 22 supervisory official of another state who, under the terms of the 23 trust instrument, has accepted responsibility for regulatory 24 oversight of the trust; the form of the trust and each trust 25 amendment shall be filed with the insurance supervisory official of 26 every state in which the beneficiaries of the trust are domiciled 27 [THE DIRECTOR]; the trust instrument must provide that contested 28 claims are valid and enforceable upon the final order of any court of 29 competent jurisdiction in the United States; the trust shall vest legal 30 title to its assets in the trustees of the trust for its United States 31 policyholders and ceding insurers, their assigns, and successors in
01 interest; the trust and the assuming insurer are subject to examination as 02 determined by the director, and the assuming insurer shall submit to 03 examination of its books and records by the director and bear the 04 expense of examination; the trust must remain in effect for so long as 05 the assuming insurer has outstanding liabilities due under the 06 reinsurance agreements subject to the trust; 07 (ii) on or before March 1 of each year the trustees shall 08 report in writing to the director on the balance of the trust and list the 09 trust's investments at the end of the preceding year, and shall certify the 10 date of termination of the trust, if so planned, or certify that the trust 11 does not expire before the following December 31; 12 (iii) in the case of a single assuming insurer, the trust 13 shall consist of trust money representing the assuming insurer's 14 liabilities attributable to business written in the United States and, in 15 addition, include a trust surplus of not less than $20,000,000; the single 16 assuming insurer shall make available to the director an annual 17 certification of the insurer's solvency by an independent certified public 18 accountant or an accountant holding a substantially equivalent 19 designation as determined by the director; 20 (iv) in the case of a group, including incorporated and 21 individual unincorporated insurers, the trust shall consist of trust money 22 representing the group's liabilities attributable to business ceded by the 23 United States domiciled ceding insurers [WRITTEN IN THE 24 UNITED STATES] and, in addition, include a trust surplus not less 25 than $100,000,000 held jointly for the benefit of the United States 26 domiciled ceding insurers or any member of the group for all years 27 of account; the incorporated members of the group may not be engaged 28 in any business other than underwriting as a member of the group and 29 are subject to the same level of solvency regulation and control by the 30 group's domiciliary regulator as are the unincorporated members; 31 within 90 days after its financial statements are due to be filed with
01 the group's domiciliary regulator, the group shall make available to 02 the director an annual certification of the solvency of each insurer by 03 the group's domiciliary regulator or, if the certification is unavailable, 04 financial statements, prepared [AND] by an independent certified 05 public accountant, or an accountant holding a substantially equivalent 06 designation as determined by the director, for each underwriter 07 member of the group; 08 (v) in the case of a group of incorporated insurers under 09 common administration that complies with the reporting requirements 10 contained in (ii) of this subparagraph, that has continuously transacted 11 an insurance business outside the United States for at least three years 12 immediately before making application for accreditation, that submits 13 to this state's authority to examine its books and records and bears the 14 expense of the examination, and that has aggregate policyholders' 15 surplus of $10,000,000,000, the trust shall be in an amount equal to the 16 group's several liabilities attributable to business ceded by United 17 States domiciled ceding insurers to a member of the group under 18 reinsurance contracts issued in the name of the group, and the group 19 shall maintain a joint trustee surplus, of which $100,000,000 shall be 20 held jointly for the benefit of United States domiciled ceding insurers 21 of a member of the group as additional security for the group's 22 liabilities, and, within 90 days after its financial statements are due 23 to be filed with the group's domiciliary regulator, each member of 24 the group shall make available to the director an annual certification of 25 the underwriter member's solvency by the member's domiciliary 26 regulator and financial statement of each underwriter member 27 prepared by its [THE MEMBER'S] independent certified public 28 accountant, or an accountant holding a substantially equivalent 29 designation as determined by the director; and 30 (B) reports annually to the director information substantially 31 the same as that required to be reported on the National Association of
01 Insurance Commissioners' annual statement form by licensed insurers to 02 enable the director to determine the sufficiency of the trust fund; 03 (5) assuming insurer that does not meet the requirements of (1) - (4) of 04 this subsection, but only with respect to the insurance of risks located in jurisdictions 05 where the reinsurance is required by applicable law or regulation of that jurisdiction. 06 * Sec. 14. AS 21.12.020(c) is amended to read: 07 (c) A reduction from liability, for reinsurance ceded to an assuming insurer 08 not meeting the requirements of (a) of this section, shall be allowed in an amount not 09 exceeding the liabilities carried by the ceding insurer. The reduction shall be equal to 10 the amount of money held by or on behalf of the ceding insurer, including money held 11 in trust for the ceding insurer, under a reinsurance contract with the assuming insurer 12 as security for the payment of obligations under it, if the security is held in the United 13 States subject to withdrawal solely by, and under the exclusive control of, the ceding 14 insurer, or, in the case of a trust, held in a qualified United States financial institution. 15 The security must be in the form of 16 (1) cash; 17 (2) securities listed by the Securities Valuation Office of the National 18 Association of Insurance Commissioners that qualify as admitted assets under 19 AS 21.21; 20 (3) clean, irrevocable, unconditional letters of credit that contain an 21 evergreen clause issued or confirmed by a qualified United States financial institution 22 not later than December 31 in the year for which filing is made, and in the possession 23 of, or in trust for, the ceding insurer on or before the filing date of the ceding 24 insurer's annual statement; letters of credit meeting applicable standards of issuer 25 acceptability as of the dates of their issuance or confirmation shall, notwithstanding 26 the issuing or confirming institution's subsequent failure to meet applicable standards 27 of issuer acceptability, continue to be acceptable as security until their expiration, 28 extension, renewal, modification, or amendment, whichever occurs first; or 29 (4) other security acceptable to and approved in advance by the 30 director. 31 * Sec. 15. AS 21.12 is amended by adding a new section to read:
01 Sec. 21.12.025. Assumption reinsurance. (a) A nondomestic admitted 02 insurer may not carry out an agreement of assumption reinsurance with a nonadmitted 03 insurer that would transfer Alaska policyholders unless 04 (1) the nonadmitted insurer applies for and obtains a certificate of 05 authority from the director; or 06 (2) the admitted insurer files the assumption agreement with the 07 director and obtains approval to apply the assumption agreement to Alaska policies or 08 certificates. 09 (b) The director shall approve an assumption agreement involving the 10 assumption of Alaska insurance business by a nonadmitted insurer if 11 (1) the ceding insurer is in supervision, conservation, or liquidation 12 and the assuming insurer is in good standing in its state of domicile; or 13 (2) approval would be in the public interest of the Alaska 14 policyholders. 15 * Sec. 16. AS 21.14.010 is amended by adding a new subsection to read: 16 (f) The requirements of this chapter supplement other provisions of this title 17 and do not preclude or limit other powers or duties of the director. 18 * Sec. 17. AS 21.22.030(a) is amended to read: 19 (a) The director shall approve a merger or other acquisition of control referred 20 to in AS 21.22.010 unless, after a public hearing, the director finds that 21 (1) after the change of control, the domestic insurer referred to in 22 AS 21.22.010 would not be able to satisfy the requirements for the issuance of a 23 license to write the line or lines of insurance for which it is presently licensed; 24 (2) the effect of the merger or other acquisitions of control would be 25 substantially to lessen competition in insurance in this state or tend to create a 26 monopoly in this state; 27 (3) the financial condition of an acquiring party is such that it might 28 jeopardize the financial stability of the insurer or prejudice the interest of its 29 policyholders or the interests of any remaining securityholders who are unaffiliated 30 with the acquiring party; 31 (4) the terms of the offer, request, invitation, agreement, or acquisition
01 referred to in AS 21.22.010 are unfair and unreasonable to the securityholders of the 02 insurer; 03 (5) the plans or proposals that the acquiring party has to liquidate the 04 insurer, sell its assets, or consolidate or merge it with any person, or to make any other 05 material change in its business or corporate structure or management, are unfair and 06 unreasonable to policyholders of the insurer and not in the public interest; [OR] 07 (6) the competence, experience, and integrity of those persons who 08 would control the operation of the insurer are such that it would not be in the interest 09 of policyholders of the insurer and of the public to permit the merger or other 10 acquisition of control; or 11 (7) the acquisition is likely to be hazardous or prejudicial to the 12 insurance-buying public. 13 * Sec. 18. AS 21.27.060(d) is amended to read: 14 (d) This section does not apply to an applicant 15 (1) for a limited license under AS 21.27.150(a)(1), (4), or (5) 16 [AS 21.27.150(a)(1), (5), OR (6)]; or 17 (2) who, at any time within the one-year period immediately preceding 18 the date the current pending application is received by the division, had been licensed 19 in good standing in this state under a license requiring substantially similar 20 qualifications as required by the license applied for. 21 * Sec. 19. AS 21.27.115 is amended to read: 22 Sec. 21.27.115. Lines of authority. If a person has met the applicable 23 requirements of AS 21.27.020 and 21.27.270, the director shall issue a license for one 24 or more of the following lines of authority: 25 (1) life insurance coverage on natural persons; in this paragraph, "life 26 insurance coverage" 27 (A) includes benefits of endowment and annuities; and 28 (B) may include benefits in the event of death or 29 dismemberment by accident and benefits for disability income; 30 (2) health insurance coverage for sickness, bodily injury, or accidental 31 death; in this paragraph, "health insurance coverage" may include benefits for
01 disability income; 02 (3) property insurance coverage for the direct or consequential loss for 03 damage to property of every kind; 04 (4) casualty insurance coverage against legal liability, including that 05 for death, injury, or disability or damage to real or personal property; in this 06 paragraph, "casualty insurance" includes surety insurance as defined in AS 21.12.080; 07 (5) variable life and variable annuity products insurance coverage; 08 (6) personal lines property and casualty insurance coverage sold to 09 individuals and families for primarily noncommercial purposes; 10 (7) limited lines credit insurance; 11 (8) crop insurance coverage for damage to crops from unfavorable 12 weather conditions, fire or lightning, flood, hail, insect infestation, disease, or 13 other yield-reducing conditions or perils provided by the private insurance 14 market, or that is subsidized by the Federal Crop Insurance Corporation, 15 including multiperil crop insurance; 16 (9) surety insurance as defined in AS 21.12.080; 17 (10) any insurance for which a limited lines license may be issued 18 under AS 21.27.150. 19 * Sec. 20. AS 21.27.140(b) is amended to read: 20 (b) A firm may not be licensed as an insurance producer, managing general 21 agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus 22 lines broker, or independent adjuster, or transact insurance unless each individual 23 employed as an insurance producer, managing general agent, surplus lines broker, 24 [TRAINEE INSURANCE PRODUCER,] trainee independent adjuster, or independent 25 adjuster by the firm is licensed as an individual in the firm. Each compliance officer 26 of the firm shall be licensed as an individual in the firm for a specific line and class of 27 authority. If there is more than one compliance officer, the combined authority of all 28 compliance officers shall cover all the powers conferred by the firm's license. 29 * Sec. 21. AS 21.27.150(a) is amended to read: 30 (a) The director may issue a 31 (1) travel insurance limited producer license to a person who sells
01 transportation tickets of a common carrier of persons or property, who is appointed 02 under AS 21.27.100 [, AND WHOSE SOLE PURPOSE IS TO BE APPOINTED BY 03 AND ACT AS AN AGENT] for transportation ticket policies of health insurance, 04 baggage insurance on personal effects, and trip cancellation or trip interruption 05 insurance; 06 (2) title insurance limited producer license to a person whose place of 07 business is located in this state and whose sole purpose is to be appointed by and act 08 on behalf of a title insurer; 09 (3) bail bond limited producer license to a person who is [WHOSE 10 SOLE PURPOSE IS TO BE] appointed by and acts [ACT] on behalf of a surety 11 insurer pertaining to bail bonds; 12 (4) [FRATERNAL BENEFIT SOCIETY LIMITED PRODUCER 13 LICENSE TO A PERSON WHOSE SOLE PURPOSE IS TO BE APPOINTED BY 14 AND ACT ON BEHALF OF A FRATERNAL BENEFIT SOCIETY LICENSED 15 UNDER AS 21.84; 16 (5)] motor vehicle rental agency limited producer license to a person 17 and, subject to the approval of the director, to employees of the person licensed that 18 the licensee authorizes to transact the business of insurance on the licensee's behalf if, 19 as to an employee, the licensee complies with (D) of this paragraph and if the licensee 20 (A) rents to others, without operators, 21 (i) private passenger motor vehicles, including 22 passenger vans, minivans, and sport utility vehicles; or 23 (ii) cargo motor vehicles, including cargo vans, pickup 24 trucks, and trucks with a gross vehicle weight of less than 26,000 25 pounds that do not require the operator to possess a commercial driver's 26 license; 27 (B) rents motor vehicles only to persons under rental 28 agreements that do not exceed a term of 90 days; 29 (C) transacts only the following kinds of insurance: 30 (i) motor vehicle liability insurance with respect to 31 liability arising out of the use of a vehicle rented from the licensee
01 during the term of the rental agreement; 02 (ii) uninsured or underinsured motorist coverage, with 03 minimum limits described in AS 21.89.020(c) and (d) arising out of the 04 use of a vehicle rented from the licensee during the term of the rental 05 agreement; 06 (iii) insurance against medical, hospital, surgical, and 07 disability benefits to an injured person and funeral and death benefits to 08 dependents, beneficiaries, or personal representatives of a deceased 09 person if the insurance is issued as incidental coverage with or 10 supplemental to liability insurance and arises out of the use of a vehicle 11 rented from the licensee during the term of the rental agreement; 12 (iv) personal effects insurance, including loss of use, 13 with respect to damage to or loss of personal property of a person 14 renting the vehicle and other vehicle occupants while that property is 15 being loaded into, transported by, or unloaded from a vehicle rented 16 from the licensee during the term of the rental agreement; 17 (v) towing and roadside assistance with respect to 18 vehicles rented from the licensee during the term of the rental 19 agreement; and 20 (vi) other insurance as may be authorized by regulation 21 by the director; 22 (D) notifies the director in writing, within 30 days of 23 employment, of the name, date of birth, social security number, location of 24 employment, and home address of an employee authorized by the licensee to 25 transact insurance on the licensee's behalf; and 26 (E) provides other information as required by the director; 27 (5) [(6)] nonresident limited producer license to a person; a license that 28 the director issues under this paragraph grants the same scope of authority as a limited 29 lines producer license issued to the person by the person's home state; 30 (6) [(7)] credit insurance limited producer license to a person who sells 31 limited lines credit insurance;
01 (7) [(8)] miscellaneous limited producer license to a person who 02 transacts insurance in this state that restricts the person's authority to less than the total 03 authority for a line of authority described in AS 21.27.115(1) - (6), (8), and (9). 04 * Sec. 22. AS 21.27.360(h) is amended to read: 05 (h) A licensee who transacts the business of insurance under a motor vehicle 06 rental agency limited producer license under AS 21.27.150(a)(4) [AS 21.27.150(a)(7)] 07 is not required to hold money collected from a person for the purchase of rental motor 08 vehicle insurance coverage in a separate fiduciary account if 09 (1) the fees for the rental insurance coverage are itemized and are a 10 part of a rental motor vehicle transaction; and 11 (2) the insurer has given written consent that the money need not be 12 segregated from other money received by the licensee and the consent is signed by an 13 officer of the insurer. 14 * Sec. 23. AS 21.27.380(e) is amended to read: 15 (e) A trainee license issued to an [INSURANCE PRODUCER OR AN] 16 independent adjuster shall be for a term not to exceed 12 months and may not be 17 renewed. 18 * Sec. 24. AS 21.27.590 is repealed and reenacted to read: 19 Sec. 21.27.590. Managing general agents qualifications. In addition to the 20 general qualifications under AS 21.27.020, the director may require that a managing 21 general agent maintain 22 (1) a bond in an amount acceptable to the director and that requires the 23 managing general agent to conduct business under this title; and 24 (2) an errors and omissions insurance policy acceptable to the director. 25 * Sec. 25. AS 21.27.670 is repealed and reenacted to read: 26 Sec. 21.27.670. Reinsurance intermediary broker qualifications. In 27 addition to the general qualifications under AS 21.27.020, the director may require 28 that a reinsurance intermediary broker maintain 29 (1) a bond in an amount acceptable to the director in favor of insurers 30 and this state that requires the reinsurance intermediary broker to conduct business 31 under this title; and
01 (2) an errors and omissions insurance policy acceptable to the director. 02 * Sec. 26. AS 21.27.730 is repealed and reenacted to read: 03 Sec. 21.27.730. Reinsurance intermediary manager qualifications. In 04 addition to the general qualifications under AS 21.27.020, the director may require 05 that a reinsurance intermediary manager maintain 06 (1) a bond in an amount acceptable to the director that requires the 07 reinsurance intermediary manager to conduct business under this title; and 08 (2) an errors and omissions insurance policy acceptable to the director. 09 * Sec. 27. AS 21.27.790 is amended to read: 10 Sec. 21.27.790. Surplus lines broker qualifications. In addition to the 11 general qualifications under AS 21.27.020, to qualify for issuance or for renewal of a 12 surplus lines broker license, an applicant or licensee shall 13 (1) be licensed as either an insurance producer or managing 14 general agent for property and casualty lines of authority [HAVE A MINIMUM 15 TWO YEARS ACTIVE WORKING EXPERIENCE WITHIN THE PREVIOUS 16 FIVE CALENDAR YEARS AS AN INSURANCE PRODUCER, MANAGING 17 GENERAL AGENT, REINSURANCE INTERMEDIARY BROKER, 18 REINSURANCE INTERMEDIARY MANAGER, INDEPENDENT ADJUSTER, OR 19 UNDERWRITER OR CLAIMS ADJUSTER EMPLOYEE OF AN INSURER AND, 20 IN THE DIRECTOR'S OPINION, EXHIBIT THE ABILITY TO COMPETENTLY 21 PERFORM THE RESPONSIBILITIES OF THE LICENSE APPLIED FOR]; 22 (2) if required by the director by regulation, maintain a bond as 23 described in AS 21.27.190 in an amount acceptable to the director [WITH THE 24 CONDITIONS] that requires the surplus lines broker to conduct business under [THE 25 PROVISIONS OF] this title, promptly remit the taxes and fees required 26 [PROVIDED] by law, return premiums promptly when due, and pay proper losses 27 promptly; 28 (3) if the director requires, maintain an errors and omissions insurance 29 policy acceptable to the director. 30 * Sec. 28. AS 21.34.020 is amended to read: 31 Sec. 21.34.020. Placement of surplus lines insurance. Insurance other than
01 reinsurance, wet marine and transportation insurance, insurance independently 02 procured, life insurance, health insurance except as provided in AS 21.34.035, and 03 annuity contracts may be procured through a surplus lines broker licensed under 04 AS 21.27 from nonadmitted insurers if 05 (1) the insurer is an eligible surplus lines insurer; 06 (2) the full amount, kind, or class of insurance cannot be obtained from 07 insurers who are admitted to do business in this state; 08 (3) the producing broker has conducted and documented a diligent 09 search among insurers who are admitted to transact business in this state and are 10 actually writing the particular kind or class of insurance required by the client in this 11 state; 12 (4) the director authorizes an exception to (2) of this section by 13 regulation or by written authorization for an individual placement upon written request 14 by the broker; and 15 (5) all other requirements of this chapter are met. 16 * Sec. 29. AS 21.34.020 is amended by adding a new subsection to read: 17 (b) In this section, 18 (1) "amount" means limit, sublimit, retention, and broadening or 19 restrictive endorsement; 20 (2) "class" means rating class; 21 (3) "kind" means one or more kinds of insurance as defined in 22 AS 21.12. 23 * Sec. 30. AS 21.34 is amended by adding a new section to read: 24 Sec. 21.34.035. Health care insurance. (a) Except for a multiple employer 25 welfare arrangement, health care insurance may be placed in and written by a 26 nonadmitted insurer if 27 (1) the director finds it is in the best interest of the public and issues an 28 order to that effect; and 29 (2) the insurance is in compliance with this chapter. 30 (b) The rates and rating methods for health care insurance placed and written 31 under this section are subject to AS 21.87.190. The surplus lines broker shall make
01 the filings required under AS 21.87.190 and maintain the records and accounts as 02 required under AS 21.87.230. 03 (c) Health care insurance may not be procured under this chapter 04 (1) for the purpose of obtaining a lower premium rate than acceptable 05 by an authorized insurer; or 06 (2) for obtaining a competitive advantage. 07 (d) Insurance placed in or written by a nonadmitted insurer and the activities 08 of the surplus lines broker relating to that transaction are subject to this title. 09 (e) In this section, "health care insurance" has the meaning given in 10 AS 21.12.050(b). 11 * Sec. 31. AS 21.34.050 is amended to read: 12 Sec. 21.34.050. Listing eligible surplus lines insurers. In addition to 13 meeting the requirements of AS 21.34.040, a nonadmitted insurer shall be an eligible 14 surplus lines insurer if it pays to the division or surplus lines association any fee 15 required by regulation and appears on the most recent list of eligible surplus lines 16 insurers published by the director or by the surplus lines association when approved by 17 the director. The list is to be published at least semi-annually. Nothing in this section 18 requires the director or the surplus lines association to place or maintain the name of a 19 nonadmitted insurer on the list of eligible surplus lines insurers. An annual fee 20 required under this section and adopted by regulation shall be paid before July 1 21 of each year. 22 * Sec. 32. AS 21.34.080 is amended by adding a new subsection to read: 23 (d) A transaction, as used in this section, is any placement of coverage as well 24 as changes in coverage that result in an increase or decrease of premiums, taxes, or 25 fees. 26 * Sec. 33. AS 21.34.100 is repealed and reenacted to read: 27 Sec. 21.34.100. Evidence of insurance. (a) When surplus lines insurance is 28 placed, the surplus lines broker shall promptly deliver to the named insured or the 29 producing broker the policy or, if the policy is not then available, a certificate, cover 30 note, binder, or other evidence of insurance. The certificate, cover note, binder, or 31 other evidence of insurance for the named insured shall be executed by the surplus
01 lines broker and must contain a summary of all material facts that would regularly be 02 included in the policy, the description and location of the subject of insurance, a 03 general description of the coverages of the insurance, the premium and rate charged 04 and taxes to be collected from the insured, the name and address of the insured, the 05 name of each surplus lines insurer and the percentage of the entire risk assumed by 06 each, the name of the surplus lines broker, and the license number of the surplus lines 07 broker. 08 (b) A surplus lines broker may not issue or deliver evidence of insurance or 09 purport to insure or represent that insurance will be or has been written by an eligible 10 surplus lines insurer, or a nonadmitted insurer under AS 21.34.060, unless the surplus 11 lines broker has authority from the insurer to cause the risk to be insured or has 12 received information from the insurer in the regular course of business that the 13 insurance has been granted. 14 (c) If, after delivery of evidence of insurance, there is a change in the identity 15 of the insurers or the percentage of the risk assumed by an insurer or another material 16 change in coverage from that stated in the surplus lines broker's original evidence of 17 insurance or in other material concerning the evidenced insurance, the surplus lines 18 broker shall promptly issue and deliver to the insured or the producing broker an 19 appropriate substitute for or endorsement of the original document, accurately 20 showing the current status of the coverage and the insurer's responsibility. 21 (d) A surplus lines broker who fails to comply with this section is subject to 22 the penalties in AS 21.34.230. 23 (e) Every evidence of insurance negotiated, placed, or procured under this 24 chapter issued by a surplus lines broker must bear the name of the surplus lines broker, 25 which may not be covered, concealed, or obscured by the producing broker, and the 26 following legend in at least 10-point type: "This is evidence of insurance procured 27 and developed under the Alaska Surplus Lines Law, AS 21.34. It is not covered by 28 the Alaska Insurance Guaranty Association Act, AS 21.80." 29 (f) Every certificate issued by the producing broker or other licensee as 30 evidence of insurance negotiated, placed, or procured under this chapter must bear the 31 name of the surplus lines broker, which may not be covered, concealed, or obscured
01 by the producing broker, and the following legend in at least 10-point type: "This is 02 evidence of insurance procured and developed under the Alaska Surplus Lines Law, 03 AS 21.34. It is not covered by the Alaska Insurance Guaranty Association Act, 04 AS 21.80." 05 * Sec. 34. AS 21.34.110(a) is repealed and reenacted to read: 06 (a) A contract of insurance placed by a surplus lines broker under this chapter 07 is not binding upon the insured and a premium charged is not due and payable until 08 (1) the surplus lines broker has notified the insured in writing, a copy 09 of which shall be maintained by the surplus lines broker with the records of the 10 contract, available for examination, that the insurer with whom the surplus lines 11 broker places the insurance does not hold a certificate of authority issued by this state 12 and is not subject to its supervision, and, in the event of the insolvency of the surplus 13 lines insurer, losses will not be covered under AS 21.80 (Alaska Insurance Guaranty 14 Association Act); or 15 (2) the producing broker has notified the insured and the surplus lines 16 broker in writing, a copy of which shall be maintained by the producing broker and the 17 surplus lines broker with the records of the contract, available for examination, that the 18 insurer with whom the surplus lines is placed does not hold a certificate of authority 19 issued by this state and is not subject to this state's supervision, and, in the event of the 20 insolvency of the surplus lines insurer, losses will not be covered under AS 21.80 21 (Alaska Insurance Guaranty Association Act). 22 * Sec. 35. AS 21.34.170(a) is amended to read: 23 (a) A surplus lines broker shall file with the director on or before the end of 24 each month, on forms prescribed by the director, a verified report [IN DUPLICATE] 25 of all surplus lines insurance, by type of insurance as required to be reported in the 26 annual statement that must be filed with the director by admitted insurers. The report 27 must include all surplus lines insurance transactions during the preceding calendar 28 month showing the aggregate gross premiums written, the aggregate return premiums, 29 the amount of aggregate tax remitted to this state, and the amount of aggregate tax 30 remitted to each other state for which an allocation is made under AS 21.34.150. 31 * Sec. 36. AS 21.34.170 is amended by adding a new subsection to read:
01 (c) The surplus lines broker shall pay a penalty for late filing of the report, 02 according to the rate established in regulations adopted by the director. 03 * Sec. 37. AS 21.34.180(a) is amended to read: 04 (a) Gross premiums written [CHARGED], less any return premium, for 05 surplus lines insurance are subject to a premium receipts tax as outlined in 06 AS 21.09.210, which shall be collected by the surplus lines broker as specified by the 07 director, in addition to the full amount of the gross premium written [CHARGED] by 08 the insurer for the insurance. The tax on any portion of the premium unearned at 09 termination of insurance having been credited by the state to the surplus lines broker 10 shall be returned to the policy holder directly by the surplus lines broker or through the 11 producing broker, if any. The surplus lines broker may not absorb the tax or any part 12 of it, and may not rebate for any reason the tax or any part of it. However, if, under 13 AS 21.09.210, an admitted insurer is required to collect and pay premium tax on a 14 portion of a subscription policy, the surplus lines broker is not required to collect any 15 amount that would constitute double taxation of that portion of the insurance. 16 * Sec. 38. AS 21.34.180(f) is repealed and reenacted to read: 17 (f) A surplus lines broker shall pay to the division a late payment fee of $50 a 18 month plus five percent of the tax due each calendar month or part of a month during 19 which the broker fails to pay the full amount of the tax or a portion of the tax and 20 interest at the rate of one percent of the tax due each calendar month or part of a 21 month for the period the broker fails to pay the tax. The late payment fee, not 22 including interest, may not exceed $250 plus 25 percent of the tax due. The tax 23 payment shall be made in the form required by the director, or a penalty shall be added 24 to the tax equal to 25 percent of the tax due, not to exceed $2,000, with a minimum 25 penalty of $100. In addition to any other penalty provided by law, if the provisions of 26 this section are wilfully violated, a civil penalty may be assessed of not more than 27 $10,000. The director may suspend or revoke the license of a broker that fails to pay 28 its taxes, a penalty, or a late payment fee required under this section. 29 * Sec. 39. AS 21.36.235(c) is amended to read: 30 (c) This section does not apply to workers' compensation insurance or to 31 business or commercial policies issued under AS 21.34.
01 * Sec. 40. AS 21.36.240 is amended to read: 02 Sec. 21.36.240. Failure to renew. An insurer may only fail to renew a 03 personal insurance policy on the policy's annual anniversary. An insurer may not fail 04 to renew a policy unless a written notice of nonrenewal is mailed to the named insured 05 as required by AS 21.36.260 at least 20 days for a personal insurance policy, and at 06 least 45 days for a business or commercial insurance policy, before the expiration date 07 of the policy or of the anniversary date of a policy written for a term longer than one 08 year or with no fixed expiration date. If notice of nonrenewal is not given as required 09 by this section, the existing policy shall continue until the insurer provides notice for 10 the time period required by this section for that policy. This section does not apply 11 (1) if the insurer has in good faith manifested its willingness to renew; 12 (2) in case of nonpayment of premium for the expiring policy; [OR] 13 (3) if the insured fails to pay the premium as required by the insurer for 14 renewal; or 15 (4) to business or commercial policies placed under AS 21.34. 16 * Sec. 41. AS 21.36.365(a) is amended to read: 17 (a) A person is not liable for civil damages for filing a report with or 18 furnishing other information whether written or oral, concerning suspected, 19 anticipated, or completed fraudulent acts to 20 (1) law enforcement officials, their agents, and employees; 21 (2) the National Association of Insurance Commissioners, the division 22 of insurance, an agency in a state that regulates insurance, or an organization 23 established to detect and prevent fraudulent insurance acts, their agents, employees, or 24 designees; 25 (3) a person involved in the prevention and detection of fraudulent 26 insurance acts or that person's employees, agents, or representatives. 27 * Sec. 42. AS 21.39.020(b) is amended to read: 28 (b) This chapter does not apply to 29 (1) reinsurance, other than joint reinsurance to the extent stated in 30 AS 21.39.110; 31 (2) health insurance;
01 (3) insurance of vessels or craft, their cargoes, marine builders' risks, 02 marine protection and indemnity, or other risks commonly insured under marine, as 03 distinguished from inland marine insurance policies; 04 (4) insurance against loss of or damage to aircraft or against liability, 05 other than workers' compensation and employer's liability, arising out of the 06 ownership, maintenance, or use of aircraft; or, to insurance of hulls of aircraft, 07 including their accessories and equipment; 08 (5) insurance written under AS 21.34, except as provided in 09 AS 21.34.030(b). 10 * Sec. 43. AS 21.42.120(f) is amended to read: 11 (f) This section does not apply to a type of insurance subject to AS 21.57 or to 12 policies issued under AS 21.34. 13 * Sec. 44. AS 21.66.020 is amended to read: 14 Sec. 21.66.020. Deposits in guaranty fund. In addition to the deposit 15 required in AS 21.66.010(b), within [WITHIN] 30 days after the filing of each 16 annual statement, the title insurance company shall deposit with the director a sum 17 equal to 10 percent of the premiums written [RECEIVED BY IT] during the 18 preceding year covering property in this state, as shown by the annual statement, until 19 the accumulated deposits, added to the sums originally deposited with the director, as 20 provided in this chapter, total $750,000, but the title insurance company may not be 21 required to deposit more than $50,000 in any one year. The purpose of this deposit 22 is to provide a guaranty fund for payment of claims under title guaranties and 23 policies issued in Alaska in the event of the insolvency of the title insurer. 24 * Sec. 45. AS 21.66.110(c) is repealed and reenacted to read: 25 (c) A title insurance company shall pay to the division a late payment fee of 26 $50 a month plus five percent of tax due each calendar month or part of a month 27 during which the insurer fails to pay the full amount of the tax or a portion of the tax 28 and interest at the rate of one percent of the tax due each calendar month or part of a 29 month for the period the insurer fails to pay the premium tax. The late payment fee, 30 not including interest, may not exceed $250 plus 25 percent of the tax due. The tax 31 payment shall be made in the form required by the director, or a penalty shall be added
01 to the tax equal to 25 percent of the tax due, not to exceed $2,000, with a minimum 02 penalty of $100. In addition to any other penalty provided by law, if the provisions of 03 this section are wilfully violated, then a civil penalty may be assessed of not more than 04 $10,000. The director may suspend or revoke the certificate of authority of a title 05 insurance company that fails to pay its taxes, a penalty, or a late payment fee as 06 required under this section. 07 * Sec. 46. AS 21.69.390(b) is amended to read: 08 (b) A person determined by the director, following an appropriate hearing as 09 provided in AS 21.06.170 - 21.06.230, to have removed or attempted to remove any 10 records from the place where they are required to be kept under (a) or (d) of this 11 section with the intent to wrongfully remove them, or to have concealed or attempted 12 to conceal them from the director, is subject to a civil penalty of not more than 13 $25,000. If a domestic insurer violates a provision of this section the director may 14 institute delinquency proceedings against the insurer under the provisions of AS 21.78. 15 * Sec. 47. AS 21.69.390 is amended by adding a new subsection to read: 16 (e) A domestic insurer may change the place of business or the location of 17 records with the written approval of the director. The domestic insurer must submit a 18 list of the records and the locations of the records that will be maintained outside of 19 this state when requesting approval. Any change in place of business, the approved 20 list of records, and the location of the records maintained outside of this state shall be 21 submitted 60 days before relocation and is considered approved if not disapproved by 22 the director within 30 days after receipt. The director shall approve the change in 23 place of business or location of records outside of this state subject to the following 24 standards: 25 (1) the place of business is readily accessible by the general public by 26 visit and telephone; 27 (2) the records are immediately available to examiners representing the 28 director in an examination; 29 (3) the domestic insurer agrees to ship the records to the state if the 30 insurer is ordered to do so under AS 21.78; 31 (4) the location of the place of business and records outside of the state
01 has a valid business purpose that is not satisfied by maintaining a place of business or 02 the records in the state; 03 (5) the list of records and location is of sufficient detail to readily 04 locate specific records. 05 * Sec. 48. AS 21.69.610 is repealed and reenacted to read: 06 Sec. 21.69.610. Reinsurance for stock insurers. (a) Notwithstanding (b) of 07 this section, a domestic stock insurer may reinsure a portion or all of its insurance in 08 force or a major class of its insurance with another insurer by a reinsurance agreement. 09 A reinsurance agreement shall be filed with the director within 30 days after all parties 10 have signed the agreement. A reinsurance agreement is designated as confidential for 11 purposes of AS 21.06.060. 12 (b) A domestic stock insurer may reinsure a portion or all of its insurance in 13 force or a major class of its insurance with another insurer by an agreement of 14 assumption reinsurance, but an agreement of assumption reinsurance is not effective 15 unless filed with and approved in writing by the director after a hearing. 16 (c) The director shall approve the agreement within a reasonable time after the 17 filing unless the director finds that it is inequitable to the stockholders of the domestic 18 insurer or would substantially reduce the protection or service to its policyholders. If 19 the director does not approve the agreement, the director shall notify the insurer in 20 writing specifying the reasons. 21 (d) This section does not apply to a facultative reinsurance contract. In this 22 subsection, "facultative reinsurance contract" means an agreement whereby individual 23 risk is offered by an insurer for acceptance or rejection by a reinsurer. Under a 24 facultative reinsurance contract, both parties are free to act in their own best interest, 25 regardless of any prior contractual arrangement. 26 * Sec. 49. AS 21.69.620(a) is amended to read: 27 (a) A domestic mutual insurer may reinsure a portion or all of [OR 28 SUBSTANTIALLY ALL] its business in force [,] or a portion or all [OR 29 SUBSTANTIALLY ALL] of a major class of its business [,] with another insurer, 30 stock or mutual, by a reinsurance [AN] agreement [OR BULK REINSURANCE 31 AFTER COMPLIANCE WITH THIS SECTION]. A reinsurance [AN] agreement
01 shall be [IS NOT EFFECTIVE UNLESS] filed with [AND APPROVED IN 02 WRITING BY] the director within 30 days after all parties have signed the 03 agreement. The agreement filed with the director is designated as confidential 04 for the purposes of AS 21.06.060. A domestic mutual insurer may reinsure a 05 portion or all of its insurance in force or a major class of its insurance with 06 another insurer by an agreement of assumption reinsurance. An agreement of 07 assumption reinsurance is not effective unless filed with and approved in writing 08 by the director after a hearing [AFTER A HEARING]. 09 * Sec. 50. AS 21.89.080 is amended to read: 10 Sec. 21.89.080. Electronic transactions [SUBMISSIONS]. 11 Notwithstanding any contrary provision of this title, the [THE] director may, by 12 regulation or by order, provide for the electronic transaction [SUBMISSION] of any 13 information or written communication under [SUBMISSION REQUIRED BY] this 14 title [AND FOR AN ELECTRONIC CONFIRMATION OF A REQUIRED 15 SUBMISSION]. 16 * Sec. 51. AS 21.89.080 is amended by adding a new subsection to read: 17 (b) An electronic transaction under this section must comply with 18 AS 09.25.500 - 09.25.520. 19 * Sec. 52. AS 21.90.900 is amended by adding new paragraphs to read: 20 (43) "assumption reinsurance" means a form of reinsurance that 21 includes the transfer of all contractual obligations to the assuming insurer with no 22 recourse to the ceding insurer; 23 (44) "reinsurance" means an insurance transaction by which the 24 assuming insurer agrees to indemnify the ceding insurer in whole or in part against 25 liability or losses that the ceding insurer might incur under a separate contract of 26 insurance with its insured. 27 * Sec. 53. AS 21.18.090; AS 21.27.530(3), 21.27.540, 21.27.600, 21.27.680, 21.27.740, 28 21.27.800, 21.27.900(22); AS 21.34.080(c); and AS 21.86.280 are repealed. 29 * Sec. 54. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 TRANSITION: REGULATIONS. The director of insurance in the Department of
01 Community and Economic Development may proceed to adopt regulations necessary to 02 implement the changes made by this Act. The regulations take effect under AS 44.62 03 (Administrative Procedure Act), but not before the effective date of the respective statutory 04 change. 05 * Sec. 55. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 REVISOR'S INSTRUCTIONS. The revisor of statutes is instructed to change the 08 catchline of AS 21.69.620 from "Bulk reinsurance, mutual insurers" to "Reinsurance for 09 mutual insurers." 10 * Sec. 56. Section 54 of this Act takes effect immediately under AS 01.10.070(c). 11 * Sec. 57. Except as provided in sec. 56 of this Act, this Act takes effect July 1, 2004.