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Enrolled HB 147: Relating to notice of suspension or revocation of an insurer's certificate of authority and the effect of the suspension or revocation upon the authority of agents and managing general agents of the insurer; relating to certain deposits under AS 21; relating to the yielding of assets and securities held on deposit; relating to third-party administrators under AS 21; relating to insurance agents, managing general agents, reinsurance intermediary managers, and insurance producers; requiring the director of insurance to notify a licensee of a license renewal before the renewal date; defining the term "appointment" as used in part of AS 21; relating to the eligibility to provide coverage by a nonadmitted insurer and alien insurer; relating to surplus lines insurance and brokers; relating to misrepresentations and false advertising concerning insurance; relating to health discount plans; providing for limitations on owner controlled and contractor controlled insurance programs and limiting the coverage of those programs; prohibiting excessive, inadequate, or unfairly discriminatory rate charges for health insurance; defining the term "plan administrator" as used in part of AS 21; defining the term "transact" as used in AS 21; authorizing the director of insurance to designate a person to receive annual reports from companies; reducing the period for filing a quarterly financial statement; and providing for an effective date.

00 Enrolled HB 147                                                                                                         
01 Relating to notice of suspension or revocation of an insurer's certificate of authority and the                         
02 effect of the suspension or revocation upon the authority of agents and managing general                                
03 agents of the insurer; relating to certain deposits under AS 21; relating to the yielding of                            
04 assets and securities held on deposit; relating to third-party administrators under AS 21;                              
05 relating to insurance agents, managing general agents, reinsurance intermediary managers,                               
06 and insurance producers; requiring the director of insurance to notify a licensee of a license                          
07 renewal before the renewal date; defining the term "appointment" as used in part of AS 21;                              
08 relating to the eligibility to provide coverage by a nonadmitted insurer and alien insurer;                             
09 relating to surplus lines insurance and brokers; relating to misrepresentations and false                               
10 advertising concerning insurance; relating to health discount plans; providing for limitations                          
11 on owner controlled and contractor controlled insurance programs and limiting the coverage                              
01 of those programs; prohibiting excessive, inadequate, or unfairly discriminatory rate charges                           
02 for health insurance; defining the term "plan administrator" as used in part of AS 21; defining                         
03 the term "transact" as used in AS 21; authorizing the director of insurance to designate a                              
04 person to receive annual reports from companies; reducing the period for filing a quarterly                             
05 financial statement; and providing for an effective date.                                                               
06                           _______________                                                                               
07    * Section 1.  AS 21.06.130(a) is amended to read:                                                                  
08            (a)  To determine compliance with this title, the director may, as often as the                          
09       director has reasonable cause, [CONSIDERS ADVISABLE] examine or require a                                     
10       written report from a person of the accounts, records, documents, and transactions                                
11       pertaining to or affecting the insurance affairs or proposed insurance affairs of                                 
12                 (1)  an insurance producer or independent adjuster; or                                                  
13                 (2)  a person engaged in or proposing to be engaged in or assisting in                                  
14       the promotion or formation of a domestic insurer or insurance holding corporation, or                             
15       corporation to finance a domestic insurer or the production of its business.                                      
16    * Sec. 2.  AS 21.09.160 is amended to read:                                                                        
17            Sec. 21.09.160.  Notice of suspension or revocation and effect upon agent's                                
18       authority.  (a)  Upon suspending or revoking an insurer's certificate of authority, the                     
19       director shall immediately give notice to the insurer and [TO ITS AGENTS OF                                       
20       RECORD IN THIS STATE IN THE DIRECTOR'S OFFICE.  THE DIRECTOR] shall                                               
21       also publish notice of the revocation in one or more newspapers of general circulation                            
22       in this state.                                                                                                    
23            (b)  The suspension or revocation shall automatically suspend or revoke, as the                              
24       case may be, the authority of all its agents and managing general agents to act as                            
25       agents or managing general agents of the insurer in this state, and the insurer                           
26       [DIRECTOR] shall so state in the notice to agents and managing general agents                                 
27       provided for in (c) [(a)] of this section.                                                                    
28    * Sec. 3.  AS 21.09.160 is amended by adding a new subsection to read:                                             
29            (c)  Upon notification of suspension or revocation of an insurer's certificate of                            
01       authority, the insurer shall immediately give notice of the suspension or revocation to                           
02       its agents and managing general agents operating in this state.                                                   
03    * Sec. 4.  AS 21.24.040(a) is amended to read:                                                                     
04            (a)  Deposits made in this state under this title shall be made through the office                           
05       of the director [IN SAFE DEPOSIT OR] under custodial arrangements as required or                                  
06       approved by the director consistent with the purposes of the deposit, with an                                     
07       established safe deposit institution, bank, or trust company located in this state                                
08       selected by the insurer with the director's approval.                                                             
09    * Sec. 5.  AS 21.24.040(c) is amended to read:                                                                     
10            (c)  If of convenience to the insurer in the buying, selling, and exchange of                                
11       securities making up [COMPRISING] its deposit, and in the collection of interest and                          
12       other income currently accruing on the securities [THEREON], the insurer may, with                            
13       the director's advance written approval, deposit a portion of the securities under                                
14       custodial arrangements with an established bank or trust company located outside this                             
15       state, if receipts representing all the securities are issued by the custodial bank or trust                      
16       company and are held in [SAFE DEPOSIT OR] custody subject to the requirements of                                  
17       (a) [AND (b)] of this section.                                                                                    
18    * Sec. 6.  AS 21.24.130(d) is amended to read:                                                                     
19            (d)  If the insurer is subject to delinquency proceedings as defined in AS 21.78,                            
20       upon the order of a court of competent jurisdiction, the director shall yield the assets                      
21       and securities held on deposit under AS 21.09.090(b) to the receiver, conservator,                            
22       rehabilitator, or liquidator of the insurer, or to any other properly designated official or                      
23       officials who succeed to the management and control of the insurer's assets.  The                             
24       director may release the deposit directly to the guaranty fund of which the                                   
25       insurer is a member if the right to receive all or a portion of the deposit is                                
26       assigned to the guaranty fund.                                                                                
27    * Sec. 7.  AS 21.27.010(c) is amended to read:                                                                     
28            (c)  A third-party administrator [PERSON WHO FOR A RESIDENT OF                                           
29       THIS STATE, OR FOR A RESIDENT OF ANOTHER JURISDICTION FROM A                                                      
30       PLACE OF BUSINESS IN THIS STATE, PERFORMS ADMINISTRATIVE                                                          
31       FUNCTIONS, INCLUDING CLAIMS ADMINISTRATION AND PAYMENT,                                                           
01       MARKETING ADMINISTRATIVE FUNCTIONS, PREMIUM ACCOUNTING,                                                           
02       PREMIUM BILLING, COVERAGE VERIFICATION, UNDERWRITING                                                              
03       AUTHORITY, OR CERTIFICATE ISSUANCE ONLY IN REGARD TO LIFE                                                         
04       INSURANCE, HEALTH INSURANCE, OR ANNUITIES] is not required to be                                                  
05       licensed as a managing general agent if the third-party administrator [PERSON]                                
06                 (1)  is registered under AS 21.27.630 - 21.27.660 [THIS CHAPTER                                     
07       AS A THIRD-PARTY ADMINISTRATOR]; or                                                                               
08                 (2)  only investigates and adjusts claims and is licensed under this                                    
09       chapter as an independent adjuster.                                                                               
10    * Sec. 8.  AS 21.27.100 is repealed and reenacted to read:                                                         
11            Sec. 21.27.100.  Appointment of insurance producer, managing general                                       
12       agent, and reinsurance intermediary manager; acts of agent.  (a)  An appointment                                
13       is required to be made in accordance with this section when one or more of the                                    
14       following has occurred:                                                                                           
15                 (1)  an admitted insurer appoints a managing general agent in this state                                
16       or relative to a subject resident, located, or to be performed in this state;                                     
17                 (2)  a managing general agent appoints an insurance producer as its                                     
18       subagent in this state or relative to subjects resident, located, or to be performed in this                      
19       state;                                                                                                            
20                 (3)  a domestic reinsurer appoints a reinsurance intermediary manager;                                  
21                 (4)  a reinsurance intermediary manager appoints an insurance producer                                  
22       as its subagent in this state.                                                                                    
23            (b)  An admitted insurer shall appoint an insurance producer as its agent in this                            
24       state or relative to a subject resident, located, or to be performed in this state not later                      
25       than 30 days after the date that a written agency contract is executed or the first                               
26       insurance application is submitted to the admitted insurer by the licensed insurance                              
27       producer.                                                                                                         
28            (c)  An individual in a firm who acts solely on behalf of a firm that is                                     
29       appointed as an agent or a managing general agent on behalf of an admitted insurer                                
30       under this section may not be required to also have an appointment under this section                             
31       if the individual in the firm is licensed with that firm for a specific class of authority.                       
01            (d)  The authorized or apparently authorized acts on behalf of an appointing                                 
02       insurer of an insurance producer appointed under this section are considered the acts                             
03       of that insurer.                                                                                                  
04            (e)  An insurer and managing general agent shall maintain a current list of all                              
05       appointments made or required to be made under this section that identifies the                                   
06       licensee's name, licensee's mailing address, license number, and effective date of                                
07       appointment.                                                                                                      
08            (f)  An insurance producer shall maintain a list of all appointments made or                                 
09       required to be made under this section that identifies the insurer's name, insurer's                              
10       mailing address, and effective date of appointment.                                                               
11            (g)  An insurer, managing general agent, or insurance producer shall reply in                                
12       writing within three working days to an inquiry of the director regarding an                                      
13       appointment.                                                                                                      
14    * Sec. 9.  AS 21.27.110 is repealed and reenacted to read:                                                         
15            Sec. 21.27.110.  Term of appointment.  (a)  An appointment under                                           
16       AS 21.27.100 continues in force until the appointment is terminated in writing.                                   
17            (b)  If an insurer, reinsurer, or authorized representative discovers information                            
18       showing that the appointee whose appointment was terminated has engaged in an                                     
19       activity identified in AS 21.27.410 during the period of the appointment, the insurer,                            
20       reinsurer, or authorized representative shall, on a form or in a format prescribed by the                         
21       director, promptly notify the director.                                                                           
22            (c)  Within 15 days after providing notification in accordance with (b) of this                              
23       section, the insurer, reinsurer, or authorized representative shall mail a copy of the                            
24       notification to the appointee at the last address on record with the insurer, reinsurer, or                       
25       authorized representative.  The notice must be provided by certified mail, return                                 
26       receipt requested, postage prepaid, or by overnight delivery using a nationally                                   
27       recognized mail carrier.                                                                                          
28            (d)  Within 30 days after the appointee receives notification in accordance with                             
29       (c) of this section, the appointee may file written comments concerning the substance                             
30       of the notification with the director and shall provide a copy of the written comments                            
31       to the insurer, reinsurer, or authorized representative.  The written comments filed                              
01       with the director must be included with each report distributed or disclosed concerning                           
02       a reason about the termination of the appointment.                                                                
03            (e)  If requested by the director, an insurer, a reinsurer, or an authorized                                 
04       representative shall provide to the director additional information, documents, records,                          
05       or other data pertaining to a termination or activity of a licensee under this title.                             
06            (f)  A notice of termination submitted to the director under this section must                               
07       include a statement of the reasons for the termination.  A statement of the reasons for                           
08       termination is confidential and not subject to inspection and copying under                                       
09       AS 40.25.110.  A statement of reasons for the termination may not be admitted as                                  
10       evidence in a civil action or an administrative proceeding against an insurer, reinsurer,                         
11       or authorized representative by or on behalf of a person affected by the termination,                             
12       except when the action or proceeding involves perjury, unsworn falsification, fraud, or                           
13       failure to comply with this subsection.                                                                           
14            (g)  If an insurer, a reinsurer, or an authorized representative fails to report as                          
15       required under this section or is found by a court to have knowingly or intentionally                             
16       falsely made that report, the director may, after notice and hearing, suspend or revoke                           
17       the license or certificate of authority of the insurer, reinsurer, or authorized                                  
18       representative and may impose a penalty in accordance with AS 21.27.440.                                          
19    * Sec. 10.  AS 21.27.380(a) is amended to read:                                                                    
20            (a)  Except as provided in this title, the director may renew a license biennially                           
21       on a date set by the director if the licensee continues to be qualified under this chapter                        
22       and, on or before the close of business of the renewal date, meets all renewal                                
23       requirements established by regulation and pays the renewal license fees set under                                
24       AS 21.06.250 for each license to the director.  A licensee is responsible for knowing                             
25       the date that a license lapses and for renewing a license before expiration.  The                                 
26       director shall notify the licensee of the license renewal [MAIL A RENEWAL                                     
27       NOTICE TO THE LICENSEE'S CURRENT ADDRESS ON FILE WITH THE                                                         
28       DIRECTOR] 30 days before the renewal date.                                                                        
29    * Sec. 11.  AS 21.27.630(b) is amended to read:                                                                    
30            (b)  A third-party administrator may not transact business for a kind or class of                            
31       authority [INSURANCE] for which the person is not registered.                                                 
01    * Sec. 12.  AS 21.27.630(c) is amended to read:                                                                    
02            (c)  Except as otherwise provided in this chapter, a third-party                                         
03       administrator [A PERSON WHO PERFORMS ADMINISTRATIVE FUNCTIONS,                                                
04       INCLUDING CLAIMS ADMINISTRATION AND PAYMENT, MARKETING                                                            
05       ADMINISTRATIVE FUNCTIONS, PREMIUM ACCOUNTING, PREMIUM                                                             
06       BILLING, COVERAGE VERIFICATION, UNDERWRITING AUTHORITY, OR                                                        
07       CERTIFICATE ISSUANCE IN REGARD TO INSURANCE AS A THIRD-PARTY                                                      
08       ADMINISTRATOR] shall be registered under AS 21.27.630 - 21.27.660 [AS A                                       
09       THIRD-PARTY ADMINISTRATOR] unless the third-party administrator                                               
10       [PERSON] only investigates and adjusts claims and is licensed under this chapter as                               
11       an independent adjuster.                                                                                          
12    * Sec. 13.  AS 21.27.630 is amended by adding new subsections to read:                                             
13            (k)  An insurer that holds a certificate of authority issued by the director and is                          
14       in good standing under this title is not required to be registered as a third-party                               
15       administrator in this state.                                                                                      
16            (l)  A person that is not required to be registered as a third-party administrator                           
17       under (e) - (k) of this section must file a certification with the director that the person                       
18       meets the requirements for exemption.                                                                             
19    * Sec. 14.  AS 21.27.650(a) is amended to read:                                                                    
20            (a)  An insurer may not transact business with a third-party administrator                                   
21       unless                                                                                                            
22                 (1)  the insurer holds a certificate of authority in this state if required                         
23       under this title;                                                                                             
24                 (2)  the third-party administrator is registered under this chapter or the                          
25       third-party administrator has filed a certification with the director certifying that                         
26       [, WHEN] the third-party administrator is operating only for a foreign insurer other                          
27       than a self-funded multiple employer welfare arrangement regulated under                                      
28       AS 21.85 and [,] is registered as a third-party administrator by the third-party                              
29       administrator's resident insurance regulator in a state that the director has determined                          
30       has enacted provisions substantially similar to those contained in AS 21.27.630 -                                 
31       21.27.650 and that is accredited by the National Association of Insurance                                         
01       Commissioners;                                                                                                    
02                 (3)  the third-party administrator provides the director on January 1,                                  
03       April 1, July 1, and October 1 of each year                                                                       
04                      (A)  a list of current employees, identifying those transacting                                    
05            business in this state or upon a subject resident, located or to be performed in                             
06            this state;                                                                                                  
07                      (B)  a list of current insurers under contract; and                                                
08                      (C)  other information the director may require;                                                   
09                 (4)  a written contract is in effect between the parties that establishes                               
10       the responsibilities of each party, indicates both parties' share of responsibility for a                         
11       particular function, and specifies the division of responsibilities;                                              
12                 (5)  there is in effect a written contract between the insurer and third-                               
13       party administrator that contains the following provisions:                                                       
14                      (A)  the insurer may terminate the contract for cause upon                                         
15            written notice sent by certified mail to the third-party administrator and may                               
16            suspend the underwriting authority of the third-party administrator during a                                 
17            dispute regarding the cause for termination; but the insurer must fulfill all                                
18            lawful obligations with respect to policies affected by the written agreement,                               
19            regardless of any dispute between the insurer and the third-party administrator;                             
20                      (B)  the third-party administrator shall render accounts to the                                    
21            insurer detailing all transactions and remit all money due under the contract to                             
22            the insurer at least monthly;                                                                                
23                      (C)  all money collected for the account of an insurer shall be                                    
24            held by the third-party administrator as a fiduciary;                                                        
25                      (D)  all payments on behalf of the insurer shall be held by the                                    
26            third-party administrator as a fiduciary;                                                                    
27                      (E)  the third-party administrator may not retain more than three                                  
28            months estimated claims payments and allocated loss adjustment expenses;                                     
29                      (F)  the third-party administrator shall maintain separate records                                 
30            for each insurer in a form usable by the insurer; the insurer or its authorized                              
31            representative shall have the right to audit and the right to copy all accounts                              
01            and records related to the insurer's business; the director, in addition to other                            
02            authority granted in this title, shall have access to all books, bank accounts, and                          
03            records of the third-party administrator in a form usable to the director; any                               
04            trade secrets contained in books and records reviewed by the director,                                       
05            including the identity and addresses of policyholders and certificate holders,                               
06            shall be kept confidential, except that the director may use the information in a                            
07            proceeding instituted against the third-party administrator or the insurer;                                  
08                      (G)  the contract may not be assigned in whole or in part by the                                   
09            third-party administrator;                                                                                   
10                      (H)  if the contract permits the third-party administrator to do                                   
11            underwriting, the contract must include the following:                                                       
12                           (i)  the third-party administrator's maximum annual                                           
13                 premium volume;                                                                                         
14                           (ii)  the rating system and basis of the rates to be                                          
15                 charged;                                                                                                
16                           (iii)  the types of risks that may be written;                                                
17                           (iv)  maximum limits of liability;                                                            
18                           (v)  applicable exclusions;                                                                   
19                           (vi)  territorial limitations;                                                                
20                           (vii)  policy cancellation provisions;                                                        
21                           (viii)  the maximum policy term; and                                                          
22                           (ix)  that the insurer shall have the right to cancel or not                                  
23                 renew a policy of insurance subject to applicable state law;                                            
24                      (I)  if the contract permits the third-party administrator to                                      
25            administer claims on behalf of the insurer, the contract must include the                                    
26            following:                                                                                                   
27                           (i)  written settlement authority must be provided by the                                     
28                 insurer and may be terminated for cause upon the insurer's written                                      
29                 notice sent by certified mail to the third-party administrator or upon the                              
30                 termination of the contract, but the insurer may suspend the settlement                                 
31                 authority during a dispute regarding the cause of termination;                                          
01                           (ii)  claims shall be reported to the insurer within 30                                       
02                 days;                                                                                                   
03                           (iii)  a copy of the claim file shall be sent to the insurer                                  
04                 upon request or as soon as it becomes known that the claim has the                                      
05                 potential to exceed an amount determined by the director or exceeds the                                 
06                 limit set by the insurer, whichever is less, involves a coverage dispute,                               
07                 may exceed the third-party administrator's claims settlement authority,                                 
08                 is open for more than six months, involves extra contractual                                            
09                 allegations, or is closed by payment in excess of an amount set by the                                  
10                 director or an amount set by the insurer, whichever is less;                                            
11                           (iv)  each party to the contract shall comply with unfair                                     
12                 claims settlement statutes and regulations;                                                             
13                           (v)  transmission of electronic data must occur at least                                      
14                 monthly if electronic claim files are in existence; and                                                 
15                           (vi)  claim files shall be the sole property of the insurer;                                  
16                 upon an order of liquidation of the insurer, the third-party administrator                              
17                 shall have reasonable access to and the right to copy the files on a                                    
18                 timely basis; and                                                                                       
19                      (J)  the contract may not provide for commissions, fees, or                                        
20            charges contingent upon savings obtained in the adjustment, settlement, and                                  
21            payment of losses covered by the insurer's obligations; but a third-party                                    
22            administrator may receive performance-based compensation for providing                                       
23            hospital or other auditing services or may receive compensation based on                                     
24            premiums or charges collected or the number of claims paid or processed.                                     
25    * Sec. 15.  AS 21.27.650 is amended by adding a new subsection to read:                                            
26            (q)  The director may, without advance notice or hearing, immediately suspend                                
27       by order the registration of a third-party administrator if the director finds that one or                        
28       more of the following circumstances exist:                                                                        
29                 (1)  the third-party administrator is insolvent or impaired;                                            
30                 (2)  a proceeding for bankruptcy, receivership, conservatorship, or                                     
31       rehabilitation, or another delinquency proceeding regarding the third-party                                       
01       administrator has been commenced in any state or by a governmental agency of                                      
02       another jurisdiction;                                                                                             
03                 (3)  the third-party administrator is in an unsound condition, or is in a                               
04       condition or using methods or practices that render its further transaction of insurance                          
05       injurious to policy holders or the public.                                                                        
06    * Sec. 16.  AS 21.27 is amended by adding a new section to article 4 to read:                                      
07            Sec. 21.27.660.  Definitions.  In AS 21.27.630 - 21.27.660,                                                
08                 (1)  "insurer" includes the Comprehensive Health Insurance                                              
09       Association created under AS 21.55.010 and any person issued or required to obtain a                              
10       certificate of authority under this title to transact life insurance, annuities, and health                       
11       insurance or to provide coverage for the cost of medical care;                                                    
12                 (2)  "transact" has the meaning given in AS 21.90.900.                                                  
13    * Sec. 17.  AS 21.27.900 is amended by adding a new paragraph to read:                                             
14                 (33)  "appointment" means an act by a person evidencing a grant of                                      
15       authority to another to act on the grantor's behalf.                                                              
16    * Sec. 18.  AS 21.34.040(d) is amended to read:                                                                    
17            (d)  A nonadmitted insurer may be eligible to provide coverage in this state if it                           
18       furnishes to the director a copy of its current annual statement that has been certified                          
19       by the insurer.  Except in the case of an alien insurer, the [THE] statement shall be                       
20       provided not [NO] more than six months after the close of the period reported upon                            
21       and that is either filed with and approved by the regulatory authority in the domicile of                         
22       the nonadmitted insurer, or certified by an accounting or auditing firm licensed in the                           
23       jurisdiction of the insurer's domicile.  An alien insurer shall provide the statement                         
24       not later than nine months after the close of the reporting period.  In the case of                           
25       an insurance exchange, the statement may be an aggregate combined statement of all                                
26       underwriting syndicates operating during the period reported upon.                                                
27    * Sec. 19.  AS 21.34.100(a) is amended to read:                                                                    
28            (a)  When surplus lines insurance is placed, the surplus lines broker shall                                  
29       promptly deliver to the named insured or the producing broker the policy or, if the                               
30       policy is not then available, a [CERTIFICATE,] cover note, binder, or other evidence                              
31       of insurance.  The [CERTIFICATE,] cover note, binder, or other evidence of                                        
01       insurance for the named insured shall be executed by the surplus lines broker and must                            
02       contain a summary of all material facts that would regularly be included in the policy,                           
03       the description and location of the subject of insurance, a general description of the                            
04       coverages of the insurance, the premium and rate charged and taxes to be collected                                
05       from the insured, the name and address of the insured, the name of each surplus lines                             
06       insurer and the percentage of the entire risk assumed by each, the name of the surplus                            
07       lines broker, and the license number of the surplus lines broker.                                                 
08    * Sec. 20.  AS 21.34.100(f) is amended to read:                                                                    
09            (f)  A producing broker or other licensee may issue to a person, other than                              
10       the named insured, a certificate [EVERY CERTIFICATE ISSUED BY THE                                             
11       PRODUCING BROKER OR OTHER LICENSEE] as evidence of insurance                                                      
12       negotiated, placed, or procured under this chapter.  The certificate must bear the                            
13       name of the surplus lines broker, which may not be covered, concealed, or obscured                                
14       by the producing broker, and the following legend in at least 10-point type: "This is                             
15       evidence of insurance procured and developed under the Alaska Surplus Lines Law,                                  
16       AS 21.34. It is not covered by the Alaska Insurance Guaranty Association Act,                                     
17       AS 21.80."                                                                                                        
18    * Sec. 21.  AS 21.36.030(a) is amended to read:                                                                    
19            (a)  A person may not make, issue, circulate, broadcast, or have made, issued,                               
20       circulated, or broadcast an estimate, circular, statement, illustration, comparison,                              
21       assertion, or other written, electronic, or oral presentation that                                        
22                 (1)  misrepresents the benefits, advantages, conditions, sponsorship,                                   
23       source, or terms of an insurance policy;                                                                          
24                 (2)  misrepresents the dividends or share of the surplus to be received                                 
25       on an insurance policy;                                                                                           
26                 (3)  misrepresents an insurance policy as being a share or shares of                                    
27       stock;                                                                                                            
28                 (4)  makes a false or misleading statement as to the dividends or shares                                
29       of the surplus previously paid on an insurance policy;                                                            
30                 (5)  misrepresents or makes a misleading statement as to the financial                                  
31       condition of an insurer or as to the legal reserve system upon which a life insurer                               
01       operates;                                                                                                         
02                 (6)  uses a name or title of an insurance policy or class of insurance                                  
03       policies misrepresenting its true nature;                                                                         
04                 (7)  is a misrepresentation for the purpose of inducing, or that tends to                               
05       induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy;                          
06                 (8)  is a misrepresentation for the purpose of effecting or tending to                                  
07       effect a pledge or assignment of or loan against an insurance policy;                                             
08                 (9)  appears to be an actual policy for a named individual when it is                                   
09       merely an advertisement;                                                                                          
10                 (10)  does not clearly designate the name of the insurer providing the                                  
11       coverage or about which the statements are made; or                                                               
12                 (11)  is in any other way misleading, false, or deceptive.                                              
13    * Sec. 22.  AS 21.36.030(a) is amended to read:                                                                    
14            (a)  A person may not make, issue, circulate, broadcast, or have made, issued,                               
15       circulated, or broadcast an estimate, circular, statement, illustration, comparison,                              
16       assertion, or other written, electronic, or oral presentation that                                                
17                 (1)  misrepresents the benefits, advantages, conditions, sponsorship,                                   
18       source, or terms of an insurance policy or a health discount plan;                                            
19                 (2)  misrepresents the dividends or share of the surplus to be received                                 
20       on an insurance policy;                                                                                           
21                 (3)  misrepresents an insurance policy as being a share or shares of                                    
22       stock;                                                                                                            
23                 (4)  makes a false or misleading statement as to the dividends or shares                                
24       of the surplus previously paid on an insurance policy;                                                            
25                 (5)  misrepresents or makes a misleading statement as to the financial                                  
26       condition of an insurer or as to the legal reserve system upon which a life insurer                               
27       operates;                                                                                                         
28                 (6)  uses a name or title of an insurance policy or class of insurance                                  
29       policies misrepresenting its true nature;                                                                         
30                 (7)  is a misrepresentation for the purpose of inducing, or that tends to                               
31       induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy;                          
01                 (8)  is a misrepresentation for the purpose of effecting or tending to                                  
02       effect a pledge or assignment of or loan against an insurance policy;                                             
03                 (9)  appears to be an actual policy for a named individual when it is                                   
04       merely an advertisement;                                                                                          
05                 (10)  does not clearly designate the name of the insurer providing the                                  
06       coverage or about which the statements are made; [OR]                                                             
07                 (11)  is in any other way misleading, false, or deceptive;                                          
08                 (12)  misrepresents a health discount plan as a form or type of                                     
09       insurance;                                                                                                    
10                 (13)  describes a health discount plan using common insurance                                       
11       terminology; or                                                                                               
12                 (14)  misrepresents that a health discount plan is underwritten by                                  
13       or associated with an insurer.                                                                                
14    * Sec. 23.  AS 21.36 is amended by adding a new section to read:                                                   
15            Sec. 21.36.065.  Limitation on owner controlled and contractor controlled                                  
16       insurance programs.  (a)  An owner controlled insurance program or a contractor                                 
17       controlled insurance program is subject to both AS 21.39 and AS 21.42, must be                                    
18       approved by the director, and shall be allowed only for a major construction project.                             
19       Owner controlled and contractor controlled insurance programs are limited to property                             
20       insurance as defined in AS 21.12.060 and casualty insurance as defined in                                         
21       AS 21.12.070.                                                                                                     
22            (b)  In this section, an owner controlled or contractor controlled insured                                   
23       program does not include                                                                                          
24                 (1)  builder's risk or course of construction insurance;                                                
25                 (2)  insurance relating to the transportation of cargo or other property;                               
26                 (3)  insurance covering one or more affiliates, subsidiaries, partners, or                              
27       joint venture partners of a person; or                                                                            
28                 (4)  insurance policies endorsed to name one or more persons as                                         
29       additional insureds.                                                                                              
30            (c)  In this section,                                                                                        
31                 (1)  "contractor" means a person who meets the definition of                                            
01       "contractor" in AS 08.18.171 and who undertakes the performance of a construction                                 
02       project for a project owner, its agent, or its representative;                                                    
03                 (2)  "contractor controlled insurance program" means an insurance                                       
04       program where one or more insurance policies are procured on behalf of a contractor,                              
05       its agent, or its representative, by its insurance producer, as defined in AS 21.27.900,                          
06       for the purpose of insuring the contractor and one or more of the following:                                      
07                      (A)  the project owner;                                                                            
08                      (B)  a subcontractor;                                                                              
09                      (C)  an architect;                                                                                 
10                      (D)  an engineer; or                                                                               
11                      (E)  a person performing professional services;                                                    
12                 (3)  "major construction project" means the process of constructing a                                   
13       structure, building, facility, or roadway or major renovation of more than 50 percent of                          
14       an existing structure, building, facility, or roadway having a contract cost of more than                         
15       $50,000,000 of a definite term at a geographically defined project site;                                          
16                 (4)  "owner controlled insurance program" means an insurance program                                    
17       where one or more insurance policies are procured on behalf of a project owner, its                               
18       agent, or its representative, by its insurance producer, as defined in AS 21.27.900, for                          
19       the purpose of insuring the project owner and one or more of the following:                                       
20                      (A)  the contractor;                                                                               
21                      (B)  a subcontractor;                                                                              
22                      (C)  an architect;                                                                                 
23                      (D)  an engineer; or                                                                               
24                      (E)  a person performing professional services;                                                    
25                 (5)  "project owner" means a person who, in the course of the person's                                  
26       business, engages the service of a contractor for the purpose of working on a                                     
27       construction project;                                                                                             
28                 (6)  "subcontractor" means a person to whom a contractor sublets all or                                 
29       part of a contractor's initial undertaking.                                                                       
30    * Sec. 24.  AS 21.36 is amended by adding a new section to read:                                                   
31            Sec. 21.36.155.  Health discount plans.  (a)  A person may not sell, market,                               
01       promote, advertise, or otherwise distribute a health discount plan unless                                         
02                 (1)  each advertisement, policy, document, information, statement, or                                   
03       other communication regarding the health discount plan and the plan itself contain a                              
04       statement, in bold and prominent type, that the health discount plan is not insurance;                            
05                 (2)  the discounts offered under the health discount plan are specifically                              
06       authorized by a contract with each provider of the services or supplies listed in                                 
07       conjunction with the plan;                                                                                        
08                 (3)  the health discount plan states the name, address, and telephone                                   
09       number of the administrator of the plan;                                                                          
10                 (4)  the person makes readily available to the consumer a complete,                                     
11       accurate, and up-to-date list of providers participating in the plan that offer discounted                        
12       health care services or supplies in the consumer's local area and the discounts offered                           
13       by the providers;                                                                                                 
14                 (5)  the person provides the consumer the right to cancel the health                                    
15       discount plan within 30 days after purchase of the plan; and                                                      
16                 (6)  the person provides the consumer with a full refund of all payments                                
17       made, except for a nominal processing fee, within 30 days after notification of                                   
18       cancellation of the plan under (5) of this subsection.                                                            
19            (b)  The director may adopt regulations to implement this section and to                                     
20       establish additional requirements intended to prohibit unfair or deceptive practices                              
21       relating to health discount plans.                                                                                
22    * Sec. 25.  AS 21.36.190 is amended by adding a new subsection to read:                                            
23            (f)  Except as provided in AS 21.36.065, an insurer, whether authorized or                                   
24       unauthorized, may not underwrite an owner controlled insurance program or                                         
25       contractor controlled insurance program.  In this subsection, "owner controlled                                   
26       insurance program" and "contractor controlled insurance program" have the meanings                                
27       given in AS 21.36.065.                                                                                            
28    * Sec. 26.  AS 21.36.195 is amended to read:                                                                       
29            Sec. 21.36.195.  Surplus lines brokers and insurance producers; prohibited                                 
30       acts.  A surplus lines broker or an insurance producer may not fail to provide evidence                         
31       of insurance, [AFFIDAVITS,] filings, or reports, or fail to maintain the records, or fail                         
01       to pay the taxes and fees, required under AS 21.34.                                                               
02    * Sec. 27.  AS 21.51 is amended by adding a new section to read:                                                   
03            Sec. 21.51.405.  Rate requirements.  Rates charged for a health insurance                                  
04       policy may not be excessive, inadequate, or unfairly discriminatory.                                              
05    * Sec. 28.  AS 21.55.500(16) is amended to read:                                                                   
06                 (16)  "plan administrator" means an [THE] eligible entity that is                               
07       licensed as a third-party administrator under AS 21.27 and is selected by the                                 
08       board and approved by the director to administer a state plan;                                                    
09    * Sec. 29.  AS 21.66.080(a) is amended to read:                                                                    
10            (a)  Every company, on or before March 1 of each year, shall furnish the                                     
11       director or the director's designee a sworn statement of assets and liabilities, and of                       
12       all title premiums received by it during the preceding calendar year, setting out, among                      
13       other things, the amounts that have been set aside and held by it in an account required                      
14       under AS 21.18.073.  The reporting format for a given year is the most recently                                   
15       approved National Association of Insurance Commissioners Annual Financial                                         
16       Statement blank form and instructions, supplemented for additional information as                                 
17       required by the director.  The director may require the statement to be filed on                                  
18       electronic media.  The statement must also show all unpaid losses and claims upon                                 
19       title insurance policies of which the title insurance company has received due notice in                          
20       writing from or on behalf of the insured.  With the filing of the statement, the title                        
21       insurance company shall pay a filing fee set under AS 21.06.250.                                                  
22    * Sec. 30.  AS 21.66.085(b) is amended to read:                                                                    
23            (b)  A quarterly financial statement, if required, is due 45 [60] days after the                         
24       end of the quarter to which it applies.                                                                           
25    * Sec. 31.  AS 21.90.900(42) is amended to read:                                                                   
26                 (42)  "third-party administrator" means a person who, for residents of                              
27       this state, or for residents of another jurisdiction from a place of business in this state,                      
28       performs administrative functions including claims administration and payment,                                    
29       marketing administrative functions, premium accounting, premium billing, coverage                                 
30       verification, underwriting authority, or certificate issuance in connection with life                         
31       insurance, annuities, health insurance, or the provision of coverage for the cost of                          
01       medical care [REGARD TO LIFE INSURANCE, HEALTH INSURANCE, OR                                                  
02       ANNUITIES];                                                                                                       
03    * Sec. 32.  AS 21.90.900(43) is amended to read:                                                                   
04                 (43)  "transact," with respect to insurance or the provision of coverage                        
05       for medical care, includes                                                                                    
06                      (A)  solicitation and inducement;                                                                  
07                      (B)  preliminary negotiations;                                                                     
08                      (C)  effectuation of a contract of insurance or the provision of                               
09            coverage for medical care;                                                                               
10                      (D)  transaction of matters subsequent to effectuation of the                                      
11            contract of insurance or the provision of coverage for medical care and                                  
12            arising out of it;                                                                                           
13    * Sec. 33.  AS 21.90.900 is amended by adding a new paragraph to read:                                             
14                 (45)  "health discount plan" means a card, program, device,                                             
15       arrangement, contract, or mechanism that purports to offer discounts or access to                                 
16       discounts on health care services or supplies and that is not insurance or that does not                          
17       provide coverage for services or benefits regulated under AS 21.86 or AS 21.87.                                   
18    * Sec. 34.  AS 21.24.040(b); AS 21.27.330(b), and 21.27.650(p) are repealed.                                       
19    * Sec. 35.  The uncodified law of the State of Alaska is amended by adding a new section to                        
20 read:                                                                                                                   
21       TRANSITION:  REGULATIONS.  The director of insurance may proceed to adopt                                         
22 regulations to implement the changes made by secs. 22, 24, and 33 of this Act.  The                                     
23 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the                               
24 effective date of secs. 22, 24, and 33 of this Act.                                                                     
25    * Sec. 36.  Sections 22, 24, and 33 of this Act take effect July 1, 2005.                                          
26    * Sec. 37.  Except as provided in sec. 36 of this Act, this Act takes effect immediately under                     
27 AS 01.10.070(c).