CSHB 164(L&C): "An Act relating to health care insurance, exemption of certain insurers, reporting, notice, and record-keeping requirements for insurers, biographical affidavits, qualifications of alien insurers assuming ceded insurance, risk-based capital for insurers, insurance holding companies, licensing, federal requirements for nonadmitted insurers, surplus lines insurance, insurance fraud, life insurance policies and annuity contracts, rate filings by health care insurers, long-term care insurance, automobile service corporations, guaranty fund deposits of a title insurer, joint title plants, fraternal benefit societies, multiple employer welfare arrangements, hospital and medical service corporations, health maintenance organizations, and alternate forms of payment to policyholders; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 164(L&C) 01 "An Act relating to health care insurance, exemption of certain insurers, reporting, 02 notice, and record-keeping requirements for insurers, biographical affidavits, 03 qualifications of alien insurers assuming ceded insurance, risk-based capital for 04 insurers, insurance holding companies, licensing, federal requirements for nonadmitted 05 insurers, surplus lines insurance, insurance fraud, life insurance policies and annuity 06 contracts, rate filings by health care insurers, long-term care insurance, automobile 07 service corporations, guaranty fund deposits of a title insurer, joint title plants, fraternal 08 benefit societies, multiple employer welfare arrangements, hospital and medical service 09 corporations, health maintenance organizations, and alternate forms of payment to 10 policyholders; and providing for an effective date." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. AS 21.03.021 is amended by adding a new subsection to read:
01 (f) If an insurer is not required to obtain a certificate of authority in this state 02 under AS 21.09.020(5), the provisions of the title do not apply to policies or contracts 03 issued by the insurer. 04 * Sec. 2. AS 21.07.010 is amended to read: 05 Sec. 21.07.010. Patient and health care provider protection. (a) A contract 06 between a participating health care provider and a health care insurer [MANAGED 07 CARE ENTITY THAT OFFERS A MANAGED CARE PLAN] must contain a 08 provision that 09 (1) provides for a reasonable mechanism to identify all medical care 10 services to be provided by the health care insurer [MANAGED CARE ENTITY]; 11 (2) clearly states or references an attachment that states the health care 12 provider's rate of compensation; 13 (3) clearly states all ways in which the contract between the health care 14 provider and health care insurer [MANAGED CARE ENTITY] may be terminated; 15 a provision that provides for discretionary termination by either party must apply 16 equitably to both parties; 17 (4) provides that, in the event of a dispute between the parties to the 18 contract, a fair, prompt, and mutual dispute resolution process must be used; at a 19 minimum, the process must provide 20 (A) for an initial meeting at which all parties are present or 21 represented by individuals with authority regarding the matters in dispute; the 22 meeting shall be held within 10 working days after the health care insurer 23 [PLAN] receives written notice of the dispute or gives written notice to the 24 provider, unless the parties otherwise agree in writing to a different schedule; 25 (B) that if, within 30 days following the initial meeting, the 26 parties have not resolved the dispute, the dispute shall be submitted to 27 mediation directed by a mediator who is mutually agreeable to the parties and 28 who is not regularly under contract to or employed by either of the parties; 29 each party shall bear its proportionate share of the cost of mediation, including 30 the mediator fees; 31 (C) that if, after a period of 60 days following commencement
01 of mediation, the parties are unable to resolve the dispute, either party may 02 seek other relief allowed by law; 03 (D) that the parties shall agree to negotiate in good faith in the 04 initial meeting and in mediation; 05 (5) states that a health care provider may not be penalized or the health 06 care provider's contract terminated by the health care insurer [MANAGED CARE 07 ENTITY] because the health care provider acts as an advocate for a covered person in 08 seeking appropriate, medically necessary medical care services; 09 (6) protects the ability of a health care provider to communicate openly 10 with a covered person about all appropriate diagnostic testing and treatment options; 11 and 12 (7) defines words in a clear and concise manner. 13 (b) A contract between a participating health care provider and a health care 14 insurer [MANAGED CARE ENTITY] that offers a health care insurance policy 15 [MANAGED CARE PLAN] may not contain a provision that 16 (1) has as its predominant purpose the creation of direct financial 17 incentives to the health care provider for withholding covered medical care services 18 that are medically necessary; nothing in this paragraph shall be construed to prohibit a 19 contract between a participating health care provider and a health care insurer 20 [MANAGED CARE ENTITY] from containing incentives for efficient management 21 of the utilization and cost of covered medical care services; 22 (2) requires the provider to contract for all products that are currently 23 offered or that may be offered in the future by the health care insurer [MANAGED 24 CARE ENTITY]; or 25 (3) requires the health care provider to be compensated for medical 26 care services performed at the same rate as the health care provider has contracted 27 with another health care insurer [MANAGED CARE ENTITY]. 28 (c) A health care insurer [MANAGED CARE ENTITY] may not enter into a 29 contract with a health care provider that requires the provider to indemnify or hold 30 harmless the health care insurer [MANAGED CARE ENTITY] for the acts or 31 conduct of the health care insurer [MANAGED CARE ENTITY]. An
01 indemnification or hold harmless clause entered into in violation of this subsection is 02 void. 03 * Sec. 3. AS 21.07.020 is amended to read: 04 Sec. 21.07.020. Required contract provisions for health care insurance 05 policy [MANAGED CARE PLANS]. A health care insurance policy [MANAGED 06 CARE PLAN] must contain 07 (1) a provision that preauthorization for a covered medical procedure 08 on the basis of medical necessity may not be retroactively denied unless the 09 preauthorization is based on materially incomplete or inaccurate information provided 10 by or on behalf of the provider; 11 (2) a provision for emergency room services if any coverage is 12 provided for treatment of a medical emergency; 13 (3) a provision that covered medical care services be reasonably 14 available in the community in which a covered person resides or that, if referrals are 15 required by the policy [PLAN], adequate referrals outside the community be available 16 if the medical care service is not available in the community; 17 (4) a provision that any utilization review decision 18 (A) must be made within 72 hours after receiving the request 19 for preapproval for nonemergency situations; for emergency situations, 20 utilization review decisions for care following emergency services must be 21 made as soon as is practicable but in any event not later than 24 hours after 22 receiving the request for preapproval or for coverage determination; and 23 (B) to deny, reduce, or terminate a health care benefit or to 24 deny payment for a medical care service because that service is not medically 25 necessary shall be made by an employee or agent of the health care insurer 26 [MANAGED CARE ENTITY] who is a licensed health care provider; 27 (5) a provision that provides for an internal appeal mechanism for a 28 covered person who disagrees with a utilization review decision made by a health 29 care insurer [MANAGED CARE ENTITY]; except as provided under (6) of this 30 section, this appeal mechanism must provide for a written decision 31 (A) from the health care insurer [MANAGED CARE
01 ENTITY] within 18 working days after the date written notice of an appeal is 02 received; and 03 (B) on the appeal by an employee or agent of the health care 04 insurer [MANAGED CARE ENTITY] who holds the same professional 05 license as the health care provider who is treating the covered person; 06 (6) a provision that provides for an internal appeal mechanism for a 07 covered person who disagrees with a utilization review decision made by a health 08 care insurer [MANAGED CARE ENTITY] in any case in which delay would, in the 09 written opinion of the treating provider, jeopardize the covered person's life or 10 materially jeopardize the covered person's health; the health care insurer 11 [MANAGED CARE ENTITY] shall 12 (A) decide an appeal described in this paragraph within 72 13 hours after receiving the appeal; and 14 (B) provide for a written decision on the appeal by an 15 employee or agent of the health care insurer [MANAGED CARE ENTITY] 16 who holds the same professional license as the health care provider who is 17 treating the covered person; 18 (7) a provision that discloses the existence of the right to an external 19 appeal of a utilization review decision made by a health care insurer [MANAGED 20 CARE ENTITY]; the external appeal shall be [AS] conducted in accordance with 21 AS 21.07.050; 22 (8) a provision that discloses covered benefits, optional supplemental 23 benefits, and benefits relating to and restrictions on nonparticipating provider services; 24 (9) a provision that describes the preapproval requirements and 25 whether clinical trials or experimental or investigational treatment are covered; 26 (10) a provision describing a mechanism for assignment of benefits for 27 health care providers and payment of benefits; 28 (11) a provision describing availability of prescription medications or a 29 formulary guide, and whether medications not listed are excluded; if a formulary guide 30 is made available, the guide must be updated annually; and 31 (12) a provision describing available translation or interpreter services,
01 including audiotape or braille information. 02 * Sec. 4. AS 21.07.030(a) is amended to read: 03 (a) If a health care insurer [MANAGED CARE ENTITY] offers a health 04 care insurance policy [MANAGED CARE PLAN] that provides for coverage of 05 medical care services only if the services are furnished through a network of health 06 care providers that have entered into a contract with the health care insurer 07 [MANAGED CARE ENTITY], the health care insurer [MANAGED CARE 08 ENTITY] shall also offer a non-network option to covered persons at initial 09 enrollment, as provided under (c) of this section. The non-network option may require 10 that a covered person pay a higher deductible, copayment, or premium for the plan if 11 the higher deductible, copayment, or premium results from increased costs caused by 12 the use of a non-network provider. [THE MANAGED CARE ENTITY SHALL 13 PROVIDE AN ACTUARIAL DEMONSTRATION OF THE INCREASED COSTS 14 TO THE DIRECTOR AT THE DIRECTOR'S REQUEST. IF THE INCREASED 15 COSTS ARE NOT JUSTIFIED, THE DIRECTOR SHALL REQUIRE THE 16 MANAGED CARE ENTITY TO RECALCULATE THE APPROPRIATE COSTS 17 ALLOWED AND RESUBMIT THE APPROPRIATE DEDUCTIBLE, 18 COPAYMENT, OR PREMIUM TO THE DIRECTOR.] This subsection does not 19 apply to a covered person who is offered non-network coverage through another 20 health care insurance policy [MANAGED CARE PLAN] or through another health 21 care insurer [MANAGED CARE ENTITY]. 22 * Sec. 5. AS 21.07.030(b) is amended to read: 23 (b) The amount of any additional premium charged by the health care 24 insurer [MANAGED CARE ENTITY] for the additional cost of the creation and 25 maintenance of the option described in (a) of this section and the amount of any 26 additional cost sharing imposed under this option shall be paid by the covered person 27 unless it is paid by an employer or other person through agreement with the health 28 care insurer [MANAGED CARE ENTITY]. 29 * Sec. 6. AS 21.07.030(c) is amended to read: 30 (c) A covered person may make a change to the medical care coverage option 31 provided under this section only during a time period determined by the health care
01 insurer [MANAGED CARE ENTITY]. The time period described in this subsection 02 must occur at least annually and last for at least 15 working days. 03 * Sec. 7. AS 21.07.030(d) is amended to read: 04 (d) If a health care insurer [MANAGED CARE ENTITY] that offers a 05 health care insurance policy [MANAGED CARE PLAN] requires or provides for a 06 designation by a covered person of a participating primary care provider, the health 07 care insurer [MANAGED CARE ENTITY] shall permit the covered person to 08 designate any participating primary care provider that is available to accept the 09 covered person. 10 * Sec. 8. AS 21.07.030(e) is amended to read: 11 (e) Except as provided in this subsection, a health care insurer [MANAGED 12 CARE ENTITY] that offers a health care insurance policy [MANAGED CARE 13 PLAN] shall permit a covered person to receive medically necessary or appropriate 14 specialty care, subject to appropriate referral procedures, from any qualified 15 participating health care provider that is available to accept the individual for medical 16 care. This subsection does not apply to specialty care if the health care insurer 17 [MANAGED CARE ENTITY] clearly informs covered persons of the limitations on 18 choice of participating health care providers with respect to medical care. In this 19 subsection, 20 (1) "appropriate referral procedures" means procedures for referring 21 patients to other health care providers as set out in the applicable member policy 22 [CONTRACT] and as described under (a) of this section; 23 (2) "specialty care" means care provided by a health care provider with 24 training and experience in treating a particular injury, illness, or condition. 25 * Sec. 9. AS 21.07.030(f) is amended to read: 26 (f) If a contract between a health care provider and a health care insurer 27 [MANAGED CARE ENTITY] is terminated, a covered person may continue to be 28 treated by that health care provider as provided in this subsection. If a covered person 29 is pregnant or being actively treated by a provider on the date of the termination of the 30 contract between that provider and the health care insurer [MANAGED CARE 31 ENTITY], the covered person may continue to receive medical care services from that
01 provider as provided in this subsection, and the contract between the health care 02 insurer [MANAGED CARE ENTITY] and the provider shall remain in force with 03 respect to the continuing treatment. The covered person shall be treated for the 04 purposes of benefit determination or claim payment as if the provider were still under 05 contract with the health care insurer [MANAGED CARE ENTITY]. However, 06 treatment is required to continue only while the health care insurance policy 07 [MANAGED CARE PLAN] remains in effect and 08 (1) for the period that is the longest of the following: 09 (A) the end of the current policy or plan year; 10 (B) up to 90 days after the termination date, if the event 11 triggering the right to continuing treatment is part of an ongoing course of 12 treatment; 13 (C) through completion of postpartum care, if the covered 14 person is pregnant on the date of termination; or 15 (2) until the end of the medically necessary treatment for the condition, 16 disease, illness, or injury if the person has a terminal condition, disease, illness, or 17 injury; in this paragraph, "terminal" means a life expectancy of less than one year. 18 * Sec. 10. AS 21.07.050(a) is amended to read: 19 (a) A health care insurer [MANAGED CARE ENTITY] offering a health 20 care insurance policy [MANAGED CARE PLAN] shall provide for an external 21 appeal process that meets the requirements of this section in the case of an externally 22 appealable decision for which a timely appeal is made in writing either by the health 23 care insurer [MANAGED CARE ENTITY] or by the covered person. 24 * Sec. 11. AS 21.07.050(b) is amended to read: 25 (b) A health care insurer [MANAGED CARE ENTITY] may condition the 26 use of an external appeal process in the case of an externally appealable decision upon 27 a final decision in an internal appeal under AS 21.07.020, but only if the decision is 28 made in a timely basis consistent with the deadlines provided under this chapter. 29 * Sec. 12. AS 21.07.050(c) is amended to read: 30 (c) Except as provided in this subsection, the external appeal process shall be 31 conducted under a contract between the health care insurer [MANAGED CARE
01 ENTITY] and one or more external appeal agencies that are [HAVE] qualified under 02 AS 21.07.060. The health care insurer [MANAGED CARE ENTITY] shall provide 03 (1) that the selection process among external appeal agencies 04 qualifying under AS 21.07.060 does not create any incentives for external appeal 05 agencies to make a decision in a biased manner; 06 (2) for auditing a sample of decisions by external appeal agencies to 07 ensure that decisions are not made in a biased manner; and 08 (3) that all costs of the process, except those incurred by the covered 09 person or treating professional in support of the appeal, shall be paid by the health 10 care insurer [MANAGED CARE ENTITY] and not by the covered person. 11 * Sec. 13. AS 21.07.050(d) is amended to read: 12 (d) An external appeal process must include at least the following: 13 (1) a fair, de novo determination based on coverage provided by the 14 policy [PLAN] and by applying terms as defined by the policy [PLAN]; however, 15 nothing in this paragraph may be construed as providing for coverage of items and 16 services for which benefits are excluded under the policy [PLAN] or coverage; 17 (2) an external appeal agency shall determine whether the health care 18 insurer's [MANAGED CARE ENTITY'S] decision is 19 (A) in accordance with the medical needs of the patient 20 involved, as determined by the health care insurer [MANAGED CARE 21 ENTITY], taking into account, as of the time of the health care insurer's 22 [MANAGED CARE ENTITY'S] decision, the patient's medical needs and any 23 relevant and reliable evidence the agency obtains under (3) of this subsection; 24 [,] and 25 (B) in accordance with the scope of the covered benefits under 26 the policy [PLAN]; if the agency determines the decision complies with this 27 paragraph, the agency shall affirm the decision, and, to the extent that the 28 agency determines the decision is not in accordance with this paragraph, the 29 agency shall reverse or modify the decision; 30 (3) the external appeal agency shall include among the evidence taken 31 into consideration
01 (A) the decision made by the health care insurer 02 [MANAGED CARE ENTITY] upon internal appeal under AS 21.07.020 and 03 any guidelines or standards used by the health care insurer [MANAGED 04 CARE ENTITY] in reaching a decision; 05 (B) any personal health and medical information supplied with 06 respect to the individual whose denial of claim for benefits has been appealed; 07 (C) the opinion of the individual's treating physician or health 08 care provider; and 09 (D) the health care insurance policy [MANAGED CARE 10 PLAN]; 11 (4) the external appeal agency may also take into consideration the 12 following evidence: 13 (A) the results of studies that meet professionally recognized 14 standards of validity and replicability or that have been published in peer- 15 reviewed journals; 16 (B) the results of professional consensus conferences 17 conducted or financed in whole or in part by one or more government 18 agencies; 19 (C) practice and treatment guidelines prepared or financed in 20 whole or in part by government agencies; 21 (D) government-issued coverage and treatment policies; 22 (E) generally accepted principles of professional medical 23 practice; 24 (F) to the extent that the agency determines them [IT] to be 25 free of any conflict of interest, the opinions of individuals who are qualified as 26 experts in one or more fields of health care that are directly related to the 27 matters under appeal; 28 (G) to the extent that the agency determines them [IT] to be 29 free of any conflict of interest, the results of peer reviews conducted by the 30 health care insurer [MANAGED CARE ENTITY] involved; 31 (H) the community standard of care; and
01 (I) anomalous utilization patterns; 02 (5) an external appeal agency shall determine 03 (A) whether a denial of a claim for benefits is an externally 04 appealable decision; 05 (B) whether an externally appealable decision involves an 06 expedited appeal; and 07 (C) for purposes of initiating an external review, whether the 08 internal appeal process has been completed; 09 (6) a party to an externally appealable decision may submit evidence 10 related to the issues in dispute; 11 (7) the health care insurer [MANAGED CARE ENTITY] involved 12 shall provide the external appeal agency with access to information and to provisions 13 of the policy [PLAN OR HEALTH INSURANCE COVERAGE] relating to the 14 matter of the externally appealable decision, as determined by the external appeal 15 agency; and 16 (8) a determination by the external appeal agency on the decision must 17 (A) be made orally or in writing and, if it is made orally, shall 18 be supplied to the parties in writing as soon as possible; 19 (B) be made in accordance with the medical exigencies of the 20 case involved, but in no event later than 21 working days after the appeal is 21 filed, or, in the case of an expedited appeal, 72 hours after the time of 22 requesting an external appeal of the health care insurer's [MANAGED 23 CARE ENTITY'S] decision; 24 (C) state, in layperson's language, the basis for the 25 determination, including, if relevant, any basis in the terms or conditions of the 26 policy [PLAN OR COVERAGE]; and 27 (D) inform the covered person of the individual's rights, 28 including any time limits, to seek further review by the courts of the external 29 appeal determination. 30 * Sec. 14. AS 21.07.050(e) is amended to read: 31 (e) If the external appeal agency reverses or modifies the denial of a claim for
01 benefits, the health care insurer [MANAGED CARE ENTITY] shall 02 (1) upon receipt of the determination, authorize benefits in accordance 03 with that determination; 04 (2) take action as may be necessary to provide benefits, including 05 items or services, in a timely manner consistent with the determination; and 06 (3) submit information to the external appeal agency documenting 07 compliance with the agency's determination. 08 * Sec. 15. AS 21.07.050(h) is amended to read: 09 (h) In this section, "externally appealable decision" 10 (1) means 11 (A) a denial of a claim for benefits that is based in whole or in 12 part on a decision that the item or service is not medically necessary or 13 appropriate or is investigational or experimental, or in which the decision as to 14 whether a benefit is covered involves a medical judgment; or 15 (B) a denial that is based on a failure to meet an applicable 16 deadline for internal appeal under AS 21.07.020; 17 (2) does not include a decision based on specific exclusions or express 18 limitations on the amount, duration, or scope of coverage that do not involve medical 19 judgment, or a decision regarding whether an individual is a participant, beneficiary, 20 or other covered person under the policy [PLAN OR COVERAGE]. 21 * Sec. 16. AS 21.07.060 is amended to read: 22 Sec. 21.07.060. Qualifications of external appeal agencies. (a) An external 23 appeal agency qualifies to consider external appeals if, with respect to a health care 24 insurance policy [MANAGED CARE PLAN], the agency is certified by a qualified 25 private standard-setting organization approved by the director or by a health insurer 26 operating in this state as meeting the requirements imposed under (b) of this section. 27 (b) An external appeal agency is qualified to consider appeals of health care 28 insurance policy [MANAGED CARE PLAN] health care decisions if the agency 29 meets the following requirements: 30 (1) the agency meets the independence requirements of this section; 31 (2) the agency conducts external appeal activities through a panel of
01 two clinical peers, unless otherwise agreed to by both parties; and 02 (3) the agency has sufficient medical, legal, and other expertise and 03 sufficient staffing to conduct external appeal activities for the health care insurer 04 [MANAGED CARE ENTITY] on a timely basis consistent with this chapter. 05 (c) A clinical peer or other entity meets the independence requirements of this 06 section if 07 (1) the peer or entity does not have a familial, financial, or professional 08 relationship with a related party; 09 (2) compensation received by a peer or entity in connection with the 10 external review is reasonable and not contingent on any decision rendered by the peer 11 or entity; 12 (3) the health care insurer has [PLAN AND THE ISSUER HAVE] 13 no recourse against the peer or entity in connection with the external review; and 14 (4) the peer or entity does not otherwise have a conflict of interest with 15 a related party. 16 (d) In this section, "related party" means 17 (1) a health care insurer or, with respect to group health care 18 insurance, a plan sponsor, including any officer, director, management employee, 19 or fiduciary of the health care insurer or the plan sponsor [WITH RESPECT TO 20 (A) A MANAGED CARE PLAN, THE PLAN OR THE 21 INSURER OFFERING THE COVERAGE; OR 22 (B) INDIVIDUAL HEALTH INSURANCE COVERAGE, 23 THE INSURER OFFERING THE COVERAGE, OR ANY PLAN SPONSOR, 24 FIDUCIARY, OFFICER, DIRECTOR, OR MANAGEMENT EMPLOYEE 25 OF THE PLAN OR ISSUER]; 26 (2) the health care professional that provided the health care involved 27 in the coverage decision; 28 (3) the institution at which the health care involved in the coverage 29 decision is provided; 30 (4) the manufacturer of any drug or other item that was included in the 31 health care involved in the coverage decision;
01 (5) the covered person; or 02 (6) any other party that, under the regulations that the director may 03 prescribe, is determined by the director to have a substantial interest in the coverage 04 decision. 05 * Sec. 17. AS 21.07.070 is amended to read: 06 Sec. 21.07.070. Limitation on liability of reviewers. An external appeal 07 agency qualifying under AS 21.07.060 and having a contract with a health care 08 insurer [MANAGED CARE ENTITY], and a person who is employed by the agency 09 or who furnishes professional services to the agency, may not be held by reason of the 10 performance of any duty, function, or activity required or authorized under this 11 chapter to have violated any criminal law, or to be civilly liable if due care was 12 exercised in the performance of the duty, function, or activity and there was no actual 13 malice or gross misconduct in the performance of the duty, function, or activity. 14 * Sec. 18. AS 21.07.080 is amended to read: 15 Sec. 21.07.080. Religious nonmedical providers. This chapter may not be 16 construed to 17 (1) restrict or limit the right of a health care insurer [MANAGED 18 CARE ENTITY] to include services provided by a religious nonmedical provider as 19 medical care services covered by the health care insurance policy [MANAGED 20 CARE PLAN]; 21 (2) require a health care insurer [MANAGED CARE ENTITY], 22 when determining coverage for services provided by a religious nonmedical provider, 23 to 24 (A) apply medically based eligibility standards; 25 (B) use health care providers to determine access by a covered 26 person; 27 (C) use health care providers in making a decision on an 28 internal or external appeal; or 29 (D) require a covered person to be examined by a health care 30 provider as a condition of coverage; or 31 (3) require a health care insurance policy [MANAGED CARE
01 PLAN] to exclude coverage for services provided by a religious nonmedical provider 02 because the religious nonmedical provider is not providing medical or other data 03 required from a health care provider if the medical or other data is inconsistent with 04 the religious nonmedical treatment or nursing care being provided. 05 * Sec. 19. AS 21.07.250(12) is amended to read: 06 (12) "participating health care provider" means a health care provider 07 who has entered into an agreement with a health care insurer [MANAGED CARE 08 ENTITY] to provide services or supplies to a patient covered by a health care 09 insurance policy [MANAGED CARE PLAN]; 10 * Sec. 20. AS 21.07.250(16) is amended to read: 11 (16) "utilization review" means a system of reviewing the medical 12 necessity, appropriateness, or quality of medical care services and supplies provided 13 under a health care insurance policy [MANAGED CARE PLAN] using specified 14 guidelines, including preadmission certification, the application of practice guidelines, 15 continued stay review, discharge planning, preauthorization of ambulatory procedures, 16 and retrospective review. 17 * Sec. 21. AS 21.07.250 is amended by adding a new paragraph to read: 18 (17) "health care insurer" has the meaning given in AS 21.54.500. 19 * Sec. 22. AS 21.09.020 is amended to read: 20 Sec. 21.09.020. Exception from [EXCEPTIONS,] certificate of authority 21 requirement. A certificate of authority is not required of an insurer, not otherwise 22 authorized in this state, with [IN] regard to 23 (1) transactions relative to its policies lawfully written in the state, or 24 liquidation of assets and liabilities of the insurer, [(] other than collection of new 25 premiums, [), ALL AS] resulting from its former authorized operations in the state; 26 (2) related transactions subsequent to issuance of a policy covering 27 only subjects of insurance not resident, located, or expressly to be performed in the 28 state at time of issuance, and which coverage was lawfully solicited, written, and 29 delivered outside the state; 30 (3) transactions under surplus lines coverages lawfully written under 31 AS 21.34; [OR]
01 (4) reinsurance, except as to domestic reinsurers; or 02 (5) transactions relative to policies issued in another state, but only 03 if 04 (A) the insurer does not market insurance in this state; 05 (B) the laws of the state of issue apply to this state's 06 residents covered under the policies; and 07 (C) the insurer complies with other requirements the 08 director adopts by regulation to qualify for an exception under this 09 paragraph. 10 * Sec. 23. AS 21.09.200(e) is amended to read: 11 (e) An insurer shall pay to the division $100 for each day the insurer fails to 12 file a [THE ANNUAL] statement or report in the form and location required and 13 within the time established in [(a) OF] this section. The authority of the insurer to 14 enter into new obligations or issue new or renewal policies of insurance in this state 15 may be suspended by the director if a statement or report required by this section 16 [THE ANNUAL STATEMENT] has not been filed by the due date [MARCH 1]. 17 * Sec. 24. AS 21.09.245(b) is amended to read: 18 (b) If an insurer changes the insurer's articles of incorporation, bylaws, 19 business address, phone number, electronic mailing address, or other information 20 maintained by the director, the insurer shall file a notice of the change with the 21 director not later than 90 days after the effective date of the change. 22 * Sec. 25. AS 21.09 is amended by adding a new section to read: 23 Sec. 21.09.247. Biographical affidavits. A domestic insurer shall file with the 24 director a complete affidavit of biographical information not later than 30 days after 25 the appointment of an officer or director of the insurer. If requested by the director, a 26 foreign insurer shall file with the director an affidavit of biographical information for 27 the appointment of an officer or director of the insurer. A filing under this section 28 must be on a form approved by the director. A filing is not required if a biographical 29 affidavit of the officer or director has been submitted to the director within one year 30 before the date of appointment. A biographical affidavit filed under this section is 31 confidential and not subject to public inspection.
01 * Sec. 26. AS 21.09.320 is amended to read: 02 Sec. 21.09.320. Maintenance of records. (a) A foreign [AN] insurer 03 [DOMICILED IN A JURISDICTION OTHER THAN THIS STATE] shall keep at its 04 principal place of business a complete record of its assets, transactions, and affairs in 05 accordance with the methods and systems that are customary or suitable to the kind of 06 business [INSURANCE] transacted. 07 (b) To meet the requirements of (a) of this section, the insurer shall keep the 08 records as required [SPECIFIED] in AS 21.69.390(d) [FOR FIVE YEARS FROM 09 THE DATE THE RECORD WAS CREATED] or as required by the record 10 maintenance requirements of the insurer's domicile jurisdiction, whichever is longer. 11 * Sec. 27. AS 21.12.020(a) is amended to read: 12 (a) Credit for reinsurance transactions shall be allowed a domestic ceding 13 insurer as either an asset or a deduction from liability on account of reinsurance ceded 14 only with respect to cessions of a kind or class of business that the assuming insurer is 15 licensed or permitted to write or assume in its state of domicile or, in the case of a 16 United States branch of an alien assuming insurer, in the state through which it is 17 entered and licensed to transact insurance or reinsurance and only if the reinsurance is 18 ceded to an 19 (1) assuming insurer that is licensed to transact insurance or 20 reinsurance in this state; 21 (2) assuming insurer that is accredited as a reinsurer in this state; an 22 accredited reinsurer is one that 23 (A) files evidence of submission to this state's jurisdiction, 24 submits to this state's authority to examine its books and records under 25 AS 21.06.120, is licensed to transact insurance or reinsurance in at least one 26 state that is accredited by the National Association of Insurance 27 Commissioners, or, in the case of a United States branch of an alien admitted 28 insurer, is entered through and licensed to transact insurance or reinsurance in 29 at least one state that is accredited by the National Association of Insurance 30 Commissioners; 31 (B) maintains at least $20,000,000 in policyholder surplus and
01 whose accreditation has not been denied by the director within 90 days after 02 application to the director, or maintains less than $20,000,000 in policyholder 03 surplus and whose application for accreditation has been approved by the 04 director; and 05 (C) files annually with the director a copy of the reinsurer's 06 annual financial statement filed with the insurance department of the 07 reinsurer's state of domicile or state of entry and a copy of the reinsurer's most 08 recent audited financial statement; 09 (3) assuming insurer that is domiciled in a state, or, in the case of a 10 United States branch of an alien assuming insurer, is entered through a state accredited 11 by the National Association of Insurance Commissioners that employs standards 12 regarding credit for reinsurance ceded substantially similar to those applicable under 13 (1) and (2) of this subsection, the assuming insurer maintains a policyholder surplus of 14 at least $20,000,000, and the assuming insurer submits to the authority of this state to 15 examine its books and records; the surplus requirements in this paragraph do not apply 16 to reinsurance ceded and assumed under a pooling arrangement among insurers in the 17 same holding company system; 18 (4) assuming alien insurer that 19 (A) maintains a trust fund in a qualified United States financial 20 institution for the payment of the valid claims of its United States domiciled 21 [POLICYHOLDERS AND] ceding insurers, and their assigns and successors 22 in interest, that conforms to the following requirements: 23 (i) the trust and each amendment to the trust shall be 24 established in a form approved by the insurance supervisory official of 25 the state where the trust is domiciled or the insurance supervisory 26 official of another state who, under the terms of the trust instrument, 27 has accepted responsibility for regulatory oversight of the trust; the 28 form of the trust and each trust amendment shall be filed with the 29 insurance supervisory official of every state in which the beneficiaries 30 of the trust are domiciled; the trust instrument must provide that 31 contested claims are valid and enforceable upon the final order of any
01 court of competent jurisdiction in the United States; the trust shall vest 02 legal title to its assets in the trustees of the trust for its United States 03 domiciled [POLICYHOLDERS AND] ceding insurers, their assigns, 04 and successors in interest; the trust and the assuming insurer are subject 05 to examination as determined by the director, and the assuming insurer 06 shall submit to examination of its books and records by the director and 07 bear the expense of examination; the trust must remain in effect for so 08 long as the assuming insurer has outstanding liabilities due under the 09 reinsurance agreements subject to the trust; 10 (ii) on or before March 1 of each year, the trustees shall 11 report in writing to the director on the balance of the trust and list the 12 trust's investments at the end of the preceding year, and shall certify the 13 date of termination of the trust, if so planned, or certify that the trust 14 does not expire before the following December 31; 15 (iii) in the case of a single assuming insurer, the trust 16 shall consist of trust assets not less than [MONEY REPRESENTING] 17 the assuming insurer's liabilities attributable to reinsurance ceded by 18 [BUSINESS WRITTEN IN] the United States domiciled ceding 19 insurers and, in addition, include a trust surplus of not less than 20 $20,000,000 for the benefit of the United States domiciled ceding 21 insurers as additional security for the liabilities covered by the 22 trust; the single assuming insurer shall make available to the director 23 an annual certification of the insurer's solvency by an independent 24 certified public accountant or an accountant holding a substantially 25 equivalent designation as determined by the director; 26 (iv) in the case of a group, including incorporated and 27 individual unincorporated insurers, the trust shall consist of trust assets 28 [MONEY] representing the group's liabilities attributable to business 29 ceded by [THE] United States domiciled ceding insurers and, in 30 addition, include a trust surplus not less than $100,000,000 held jointly 31 for the benefit of the United States domiciled ceding insurers of [OR]
01 any member of the group for all years of account as additional 02 security for the group's liabilities covered by the trust; the 03 incorporated members of the group may not be engaged in any business 04 other than underwriting as a member of the group and are subject to the 05 same level of solvency regulation and control by the group's 06 domiciliary regulator as are the unincorporated members; within 90 07 days after its financial statements are due to be filed with the group's 08 domiciliary regulator, the group shall make available to the director an 09 annual certification of the solvency of each insurer by the group's 10 domiciliary regulator or, if the certification is unavailable, financial 11 statements, prepared by an independent certified public accountant, or 12 an accountant holding a substantially equivalent designation as 13 determined by the director, for each underwriter member of the group; 14 (v) in the case of a group of incorporated insurers under 15 common administration that complies with the reporting requirements 16 contained in (ii) of this subparagraph, that has continuously transacted 17 an insurance business outside the United States for at least three years 18 immediately before making application for accreditation, that submits 19 to this state's authority to examine its books and records and bears the 20 expense of the examination, and that has aggregate policyholders' 21 surplus of $10,000,000,000, the trust shall consist of trust assets [BE] 22 in an amount not less than [EQUAL TO] the group's several liabilities 23 attributable to business ceded by United States domiciled ceding 24 insurers to a member of the group under reinsurance contracts issued in 25 the name of the group, and the group shall maintain a joint trustee 26 surplus, of which $100,000,000 shall be held jointly for the benefit of 27 United States domiciled ceding insurers of a member of the group as 28 additional security for the group's liabilities covered by the trust, and, 29 within 90 days after its financial statements are due to be filed with the 30 group's domiciliary regulator, each member of the group shall make 31 available to the director an annual certification of the underwriter
01 member's solvency by the member's domiciliary regulator and financial 02 statement of each underwriter member prepared by its independent 03 certified public accountant, or an accountant holding a substantially 04 equivalent designation as determined by the director; and 05 (B) reports annually to the director information substantially 06 the same as that required to be reported on the National Association of 07 Insurance Commissioners' annual statement form by licensed insurers to 08 enable the director to determine the sufficiency of the trust fund; 09 (5) assuming insurer that does not meet the requirements of (1) - (4) of 10 this subsection, but only with respect to the insurance of risks located in jurisdictions 11 where the reinsurance is required by applicable law or regulation of that jurisdiction. 12 * Sec. 28. AS 21.12.050(b) is amended to read: 13 (b) Health care insurance means that part of health insurance that provides, 14 delivers, arranges for, pays for, or reimburses any of the costs of [BENEFITS 15 FOR] medical care [WHETHER PROVIDED DIRECTLY, THROUGH 16 REIMBURSEMENT, OR OTHER METHOD]. 17 * Sec. 29. AS 21.14.200(4) is amended to read: 18 (4) "company action level event" means a report, an adjusted report 19 that has not been challenged, or an adjusted report for which a challenge has been 20 rejected [,] that is filed under AS 21.14.010 and that indicates that 21 (A) an insurer's total adjusted capital is greater than or equal to 22 its regulatory action level risk based capital but is less than its company action 23 level risk based capital; [OR] 24 (B) if a life and health insurer, the insurer has total adjusted 25 capital that is greater than or equal to the insurer's company action level risk 26 based capital but is less than 250 percent of the insurer's authorized control 27 level risk based capital and that has a negative trend; or 28 (C) if a property and casualty insurer or health 29 organization, the insurer or organization has total adjusted capital that is 30 greater than or equal to the company action level risk based capital but is 31 less than 300 percent of its authorized control level risk based capital and
01 that has a negative trend; 02 * Sec. 30. AS 21.14.200(9) is amended to read: 03 (9) "life and health insurer" 04 (A) means an insurer who transacts life insurance as defined in 05 AS 21.12.040 or health insurance as defined in AS 21.12.050 and who filed 06 with the director the National Association of Insurance Commissioners 07 Life Risk-Based Capital Report; 08 (B) does not include a benevolent association under AS 21.72, 09 a fraternal benefit society under AS 21.84, a health maintenance organization 10 under AS 21.86, or a hospital or medical service corporation under AS 21.87; 11 * Sec. 31. AS 21.14.200(12) is amended to read: 12 (12) "negative trend" for a life and health insurer, a property and 13 casualty insurer, and a health organization means a negative trend over a period of 14 time, as determined by the "trend test calculation" in the risk based capital 15 instructions; 16 * Sec. 32. AS 21.14.200(13) is amended to read: 17 (13) "property and casualty insurer" means an insurer who transacts 18 health insurance as defined in AS 21.12.050, property insurance as defined in 19 AS 21.12.060, casualty insurance as defined in AS 21.12.070, surety insurance as 20 defined in AS 21.12.080, marine or wet marine and transportation insurance as defined 21 in AS 21.12.090, or mortgage guaranty insurance as defined in AS 21.12.110 and who 22 filed with the director the National Association of Insurance Commissioners 23 Property and Casualty Risk-Based Capital Report; 24 * Sec. 33. AS 21.14.200 is amended by adding a new paragraph to read: 25 (21) "health organization" means a health maintenance organization, 26 limited health service organization, dental or vision plan, hospital, medical and dental 27 indemnity or service corporation, or other managed care organization holding a 28 certificate of authority under AS 21.86 or AS 21.87, or a company that writes 29 primarily health insurance as defined in AS 21.12.050 and filed with the director the 30 National Association of Insurance Commissioners Health Risk-Based Capital Report. 31 * Sec. 34. AS 21.22.060(k) is amended to read:
01 (k) An insurer subject to registration under (a) of this section shall register 02 annually by May 1 [APRIL 1] of each year for the previous calendar year unless, for 03 good cause shown, the director extends the time for registration. The director may 04 require an insurer that is allowed to register as provided under (c) of this section [,] to 05 furnish a copy of 06 (1) the registration statement; 07 (2) the summary specified in (l) of this section; or 08 (3) other information filed by the insurer with the insurance regulatory 09 authority of the insurer's state of domicile. 10 * Sec. 35. AS 21.27.020(b) is amended to read: 11 (b) To qualify for issuance or renewal of an individual [OR INDIVIDUAL IN 12 THE FIRM] license, an applicant or licensee shall comply with this title and 13 regulations adopted under AS 21.06.090 and 14 (1) shall be 18 years of age or older; 15 (2) if for a resident license, shall be a bona fide resident before 16 issuance of the license and actually reside in the state; 17 (3) shall successfully pass an examination required under 18 AS 21.27.060; 19 (4) shall be a trustworthy person; 20 (5) may not use or intend to use the license for the purpose principally 21 of writing controlled business, as defined in AS 21.27.030; 22 (6) may not have committed an act that is a cause for denial, 23 nonrenewal, suspension, or revocation of a license in this state or another jurisdiction. 24 * Sec. 36. AS 21.27.020(c) is amended to read: 25 (c) To qualify for issuance or renewal of a license as a firm insurance 26 producer, a firm managing general agent, a firm reinsurance intermediary broker, a 27 firm reinsurance intermediary manager, a firm surplus lines broker, or a firm 28 independent adjuster, an applicant or licensee shall 29 (1) comply with (b)(4) and (5) of this section; 30 (2) maintain a lawfully established place of business in this state, 31 except when licensed as a nonresident under AS 21.27.270;
01 (3) designate one or more compliance officers for the firm; 02 (4) provide to the director documents necessary to verify the 03 information contained in or made in connection with the application; and 04 (5) notify the director, in writing, within 30 days of a change in the 05 firm's compliance officer [OR OF THE TERMINATION OF EMPLOYMENT OF 06 AN INDIVIDUAL IN THE FIRM LICENSEE]. 07 * Sec. 37. AS 21.27.025 is repealed and reenacted to read: 08 Sec. 21.27.025. Required notice of licensee. (a) A licensee shall notify the 09 director in writing within 30 days after a change in residence, place of business, legal 10 name, fictitious name or alias, mailing address, electronic mailing address, or 11 telephone number. A licensee shall report to the director in writing any administrative 12 action taken against the licensee by a governmental agency of another state or by a 13 governmental agency of another jurisdiction within 30 days after the final disposition 14 of the action. A licensee shall submit to the director the final order and other relevant 15 legal documents in the action. A licensee shall report to the director any criminal 16 prosecution of the licensee in this or another state or jurisdiction within 30 days after 17 the date of filing of the criminal complaint, indictment, information, or citation in the 18 prosecution. The licensee shall submit to the director a copy of the criminal complaint, 19 calendaring order, and other relevant legal documents in the prosecution. 20 (b) In addition to any other penalty provided by law, a failure to notify the 21 director as required by this section is cause for denial, nonrenewal, suspension, or 22 revocation of a license. 23 * Sec. 38. AS 21.27.040(e) is amended to read: 24 (e) As part of the application required by (a) of this section, a resident [AN] 25 applicant shall furnish to the director a full set of fingerprints and the fees required by 26 the Department of Public Safety under AS 12.62.160 for criminal justice information 27 and a national criminal history record check so that the director may obtain criminal 28 justice information as provided under AS 12.62 about the applicant. The director shall 29 submit the completed fingerprint card and fees to the Department of Public Safety for 30 a report of criminal justice information under AS 12.62 and a national criminal history 31 record check under AS 12.62.400.
01 * Sec. 39. AS 21.27.100(c) is amended to read: 02 (c) An individual who has entered into an employment contract with a 03 licensed [IN A FIRM WHO ACTS SOLELY ON BEHALF OF A] firm that is 04 appointed as an agent or a managing general agent on behalf of an admitted insurer 05 under this section may not be required to also have an appointment under this section 06 if the individual has entered into an employment contract [IN THE FIRM IS 07 LICENSED] with that firm for a specific class of authority. 08 * Sec. 40. AS 21.27.140(b) is amended to read: 09 (b) A firm may not be licensed as an insurance producer, managing general 10 agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus 11 lines broker, or independent adjuster, or transact insurance unless each individual 12 employed by the firm as an insurance producer, managing general agent, surplus lines 13 broker, trainee independent adjuster, or independent adjuster [BY THE FIRM] is 14 licensed and has entered into an employment contract with the firm [AS AN 15 INDIVIDUAL IN THE FIRM]. 16 * Sec. 41. AS 21.27 is amended by adding a new section to read: 17 Sec. 21.27.215. Employment contracts. (a) A firm may enter into an 18 employment contract with a licensed individual to conduct business under the 19 supervision of and in the name of the firm. The employment contract must be in 20 writing and must specify the lines and classes of authorities of the individual and the 21 firm. The individual and the firm shall retain a copy of the contract and shall reply in 22 writing within three working days to an inquiry of the director regarding any business 23 transacted by the individual and the firm. 24 (b) The firm shall examine the credentials of the individual to determine that 25 the individual is licensed to conduct the kinds of business described in the contract. 26 (c) A licensed individual may, if authorized by the firm and an insurer for 27 which the firm is an agent, issue on the firm's behalf contracts of insurance in 28 accordance with a written agency employment contract. 29 (d) A firm shall be responsible for the actions of an individual transacting 30 insurance under the firm's employment contracts. In any disciplinary proceeding under 31 this title, the existence of the employment contract shall be prima facie evidence that
01 the firm knew of the activities of the individual. 02 (e) The individual and the firm shall maintain a current list of all of their 03 respective contracts that identifies, for each contract, the parties to the contract, the 04 parties' mailing addresses, electronic mailing addresses, and telephone numbers, and 05 the parties' license numbers, and the effective and termination dates of employment. 06 (f) A licensee shall retain the records of an employment contract and make the 07 records available for examination and inspection by the director, at any business time 08 during the five years immediately following the date of the termination of the 09 employment contract unless the director orders a longer period of retention. If the 10 licensee assumes the business of another licensee or former licensee by merger, 11 purchase, or otherwise, the requirements of AS 21.27.350(c) apply. 12 * Sec. 42. AS 21.27.350(e) is amended to read: 13 (e) A licensee shall reply in writing within 10 working days to a records 14 inquiry of the director. The director may inspect or request summary or detailed copies 15 of records for examination by the division. Accounting and financial records inspected 16 or examined under this section are confidential when in the possession of the division, 17 but may be used by the director in a proceeding against the licensee. For purposes of 18 this section, the records of a firm shall include and be considered the records of an 19 individual licensee who has entered into an employment contract with the firm 20 [ACTING ON BEHALF OF THE FIRM]. 21 * Sec. 43. AS 21.27.360(f) is amended to read: 22 (f) This section does not apply to an individual licensee who has entered into 23 an employment contract with a [IN THE] firm and who acts solely on behalf of a 24 firm that maintains compliance with this section. 25 * Sec. 44. AS 21.27.790 is amended to read: 26 Sec. 21.27.790. Surplus lines broker qualifications. In addition to the general 27 qualifications under AS 21.27.020, to qualify for issuance or for renewal of a resident 28 surplus lines broker license, an applicant or licensee shall 29 (1) be licensed as either an insurance producer or managing general 30 agent for property and casualty lines of authority; 31 (2) if required by the director by regulation, maintain a bond as
01 described in AS 21.27.190 in an amount acceptable to the director that requires the 02 surplus lines broker to conduct business under this title, promptly remit the taxes and 03 fees required by law, return premiums promptly when due, and pay proper losses 04 promptly; 05 (3) if the director requires, maintain an errors and omissions insurance 06 policy acceptable to the director. 07 * Sec. 45. AS 21.27.900(22) is amended to read: 08 (22) "resident" means 09 (A) for an individual [OR AN INDIVIDUAL IN THE FIRM], 10 a natural person who is domiciled in this state, whose principal place of 11 business is in this state, who has a present intent to remain in this state while 12 licensed, and who manifests that intent by establishing an ongoing physical 13 presence in this state; 14 (B) for a firm, a person whose principal place of business is in 15 this state; 16 * Sec. 46. AS 21.33.055(a) is repealed and reenacted to read: 17 (a) Except as to premiums on lawfully procured surplus lines insurance 18 exported under AS 21.34 and premiums on independently procured insurance on 19 which a tax has been paid under AS 21.33.061, every nonadmitted insurer shall pay to 20 the director, on or before March 1 following the calendar year in which the insurance 21 was procured, continued, or renewed, a premium-receipts tax of 3.7 percent of gross 22 premiums written for the insurance other than wet marine and transportation insurance 23 and a premium-receipts tax of three-fourths of one percent of gross premiums charged 24 for the wet marine and transportation insurance if the insured's home state is this state. 25 If the insurance covers properties, risks, or exposures located or to be performed both 26 in and out of this state, the tax payable shall be computed based on an amount equal to 27 that portion of the gross premiums allocated under (b) of this section to this state, plus 28 an amount equal to the portion of the premiums allocated under (b) of this section to 29 other properties, risks, or exposures located or to be performed outside of this state. 30 The insurance on subjects resident, located, or to be performed in this state procured 31 through negotiations or an application, in whole or in part occurring or made in or
01 from in or out of this state, or for which premiums in whole or in part are remitted 02 directly or indirectly from in or out of this state, shall be considered to be insurance 03 procured or continued or renewed in this state. The tax paid by the insurer under this 04 section is in lieu of all insurer taxes and fire department dues. In this subsection, 05 "premium" includes all premiums, membership fees, assessments, dues, and any other 06 consideration for insurance. 07 * Sec. 47. AS 21.33.055 is amended by adding a new subsection to read: 08 (d) On default of a nonadmitted insurer in the payment of the tax, the insured 09 shall pay the tax within 30 days after written notice from the director of the default by 10 the nonadmitted insurer. If the tax prescribed by this section is not paid by the 11 nonadmitted insurer within the time stated or by the insured within the time stated 12 after notice of default by the nonadmitted insurer, the tax may be increased by 13 (1) a late payment fee of $1,000 or 10 percent of the tax due, 14 whichever is greater; 15 (2) interest at the rate of one percent a month or part of a month from 16 the date the payment was originally due to the date paid; and 17 (3) a penalty not to exceed $100 a day or 25 percent of the tax due, 18 whichever is greater, from the date the payment was due to the date paid. 19 * Sec. 48. AS 21.33.061(c) is repealed and reenacted to read: 20 (c) If the insured's home state is this state, the insured shall pay to the director, 21 on or before March 1 following the calendar year in which the insurance was 22 procured, continued, or renewed, a tax of 3.7 percent of the gross premiums paid for 23 the insurance other than wet marine and transportation insurance, less any return 24 premiums. For wet marine and transportation insurance, if the insured's home state is 25 this state, the insured shall pay to the director a tax of three-fourths of one percent of 26 the gross premiums paid for the wet marine and transportation insurance. If the 27 insurance covers properties, risks, or exposures located or to be performed both in and 28 out of this state, the tax payable shall be computed based on an amount equal to that 29 portion of the gross premiums allocated under (d) of this section to this state, plus an 30 amount equal to the portion of the premiums allocated under (d) of this section to 31 other properties, risks, or exposures located or to be performed outside of this state. In
01 the event of cancellation and rewriting of the insurance contract, the additional 02 premium for tax purposes is the premium in excess of the unearned premium of the 03 cancelled insurance contract. In this subsection, "premium" includes all premiums, 04 membership fees, assessments, dues, and any other consideration for insurance. 05 * Sec. 49. AS 21.33.061 is amended by adding a new subsection to read: 06 (j) If the tax payable under (c) of this section is not paid within the time stated, 07 the tax may be increased by 08 (1) a late payment fee of $1,000 or 10 percent of the tax due, 09 whichever is greater; 10 (2) interest at the rate of one percent a month or part of a month from 11 the date the payment was due to the date paid; and 12 (3) a penalty not to exceed $100 a day or 25 percent of the tax due, 13 whichever is greater, from the date the payment was due to the date paid. 14 * Sec. 50. AS 21.33 is amended by adding a new section to read: 15 Sec. 21.33.063. Agreements with other states. The director is authorized to 16 participate in an agreement with another state for the purposes of collecting and 17 disbursing to the other state any premium tax collected under this chapter and payable 18 to the other state and for receiving from the other state premium tax it has collected 19 and is owed to this state. To the extent that another state where a portion of the 20 properties, risks, or exposures reside has failed to enter into an agreement with this 21 state, the director shall retain all of the net premium tax collected by this state. 22 * Sec. 51. AS 21.34.020(b) is repealed and reenacted to read: 23 (b) If a policyholder meets the standards of an exempt commercial purchaser 24 under this title and regulations adopted by the director, insurance may be procured 25 from a surplus lines broker without complying with (a)(2), (3), and (4) of this section 26 if 27 (1) the broker procuring or placing the surplus lines insurance has 28 disclosed to the exempt commercial purchaser that the insurance may or may not be 29 available from the admitted market that may provide greater protection with more 30 regulatory oversight; and 31 (2) the exempt commercial purchaser has subsequently requested in
01 writing that the broker procure or place the insurance from a nonadmitted insurer. 02 * Sec. 52. AS 21.34.040(c) is amended to read: 03 (c) A nonadmitted insurer may be eligible to provide coverage in this state if it 04 qualifies under one of the following: 05 (1) a foreign but nonalien stock insurer may qualify under this 06 subsection if it has the minimum unimpaired basic capital and additional surplus equal 07 to that required in its domiciliary jurisdiction, or maintains [$10,000,000 AS OF 08 DECEMBER 31, 1991, $12,500,000 AS OF DECEMBER 31, 1992, AND] 09 $15,000,000 [AS OF DECEMBER 31, 1993], whichever is greater; 10 (2) a foreign but nonalien mutual insurer, a reciprocal insurer, or a 11 mutual protection and indemnity association may qualify under this subsection if it has 12 the minimum unimpaired basic surplus and additional surplus equal to that required in 13 its domiciliary jurisdiction or maintains [$10,000,000 AS OF DECEMBER 31, 1991, 14 $12,500,000 AS OF DECEMBER 31, 1992, AND] $15,000,000 [AS OF 15 DECEMBER 31, 1993], whichever is greater; 16 (3) an alien insurer other than an alien mutual protection and 17 indemnity association may qualify under this subsection if it meets the minimum 18 requirements in (1) or (2) of this subsection and maintains in the United States an 19 irrevocable trust fund in an amount not less than $2,500,000 in a solvent federally 20 insured bank acceptable to the director, as security to the full amount, for the 21 protection of all its policyholders and creditors of each member of the mutual insurer, 22 reciprocal insurer, or mutual protection and indemnity association in the United States; 23 the trust fund must consist of instruments of substantially the same character and 24 quality as those that are eligible investments for the capital and statutory reserves of 25 admitted insurers authorized to write like kinds of insurance in this state or of 26 irrevocable, clean, and unconditional letters of credit; the trust fund must have an 27 expiration date that at no time is less than five years; 28 (4) a Lloyd's syndicate or an insurer belonging to a similar group, 29 including incorporated and individual unincorporated insurers, may qualify if it 30 maintains a trust fund jointly and severally with the other members of the group in an 31 amount not less than $50,000,000, as security to the full amount, for the protection of
01 all policyholders and creditors of each member of the group in the United States; the 02 incorporated members may not be engaged in any business other than underwriting as 03 a member of the group and shall be subject to the same level of solvency regulation 04 and control by the group's domiciliary regulator as are the unincorporated members; 05 the trust fund must consist of instruments of substantially the same character and 06 quality as those that are eligible investments for the capital and statutory reserves of 07 admitted insurers authorized to write like kinds of insurance in this state or of 08 irrevocable, clean, and unconditional letters of credit; the trust fund must have an 09 expiration date that at no time is less than five years; 10 (5) each syndicate or insurer belonging to an insurance exchange 11 created by the laws of individual states may qualify if the insurance exchange 12 maintains capital and surplus, or the substantial equivalent, of not less than 13 $50,000,000 in the aggregate; for insurance exchanges that maintain funds for the 14 protection of all insurance exchange policyholders, each individual syndicate shall 15 maintain minimum capital and surplus, or the substantial equivalent, of not less than 16 $3,000,000; in the event the insurance exchange does not maintain funds for the 17 protection of all its policyholders, each individual syndicate shall meet the minimum 18 requirements of (1) or (2) of this subsection; 19 (6) an alien mutual protection and indemnity association may qualify 20 under this subsection if it has the minimum unimpaired basic capital and additional 21 surplus equal to that required in its domiciliary jurisdiction or $10,000,000, whichever 22 is greater, and maintains in the United States an irrevocable trust fund in an amount 23 not less than $1,000,000 in a federally insured bank acceptable to the director, as 24 security to the full amount, for the protection of all its policyholders and creditors or 25 each member of the mutual protection and indemnity association in the United States; 26 the trust fund must consist of instruments of substantially the same character and 27 quality as those that are eligible investments for the capital and statutory reserves of 28 admitted insurers authorized to write wet marine and transportation insurance in this 29 state or of irrevocable, clean, and unconditional letters of credit; the trust fund must 30 have an expiration date that at no time is less than five years; 31 (7) an insurer not domiciled in the United States or its territories
01 qualifies under this subsection if it is listed on the Quarterly Listing of Alien 02 Insurers maintained by the National Association of Insurance Commissioners 03 International Insurers Department. 04 * Sec. 53. AS 21.34.040 is amended by adding new subsections to read: 05 (f) If an insurer has less than the minimum capital and surplus required in (c) 06 of this section, the insurer may satisfy the requirements of this section upon an 07 affirmative finding of acceptability by the director. The director's finding must be 08 based on factors including quality of management, capital and surplus of any parent 09 company, company underwriting profit and investment income trends, market 10 availability, and company record and reputation within the industry. The director may 11 not make an affirmative finding of acceptability when the nonadmitted insurer's 12 capital and surplus is less than $4,500,000. 13 (g) The director may participate in interstate agreements formed for the 14 purpose of developing additional and alternative nationwide uniform eligibility 15 requirements that are applicable to nonadmitted insurers domiciled in another state or 16 territory of the United States. 17 * Sec. 54. AS 21.34.080(a) is amended to read: 18 (a) A surplus lines broker shall execute and file with the [MONTHLY] report 19 required by AS 21.34.170 a written report, which shall be kept confidential, regarding 20 each surplus lines insurance transaction occurring in the preceding period 21 [CALENDAR MONTH]. The report must include 22 (1) the name and address of the insured; 23 (2) the identity of each insurer including the National Association of 24 Insurance Commissioners company number and the percentage of coverage provided 25 by each; 26 (3) a complete description of the subject and location of the risk; 27 (4) the amount of gross premium written for the insurance; and 28 (5) other information required by the director. 29 * Sec. 55. AS 21.34.170(a) is amended to read: 30 (a) A surplus lines broker shall file with the director [ON OR BEFORE THE 31 END OF EACH MONTH], on forms prescribed by the director, a report of all surplus
01 lines insurance, by type of insurance as required to be reported in the annual statement 02 that must be filed with the director by admitted insurers. The report must include all 03 surplus lines insurance transactions during the preceding period [CALENDAR 04 MONTH] showing the aggregate gross premiums written, the aggregate return 05 premiums, the amount of aggregate tax remitted to this state, and the amount of 06 aggregate tax remitted to each other state for which an allocation is made under 07 AS 21.34.180. The forms shall be filed quarterly on March 1, June 1, 08 September 1, and December 1 of each year. 09 * Sec. 56. AS 21.34.180 is repealed and reenacted to read: 10 Sec. 21.34.180. Surplus lines tax. (a) In addition to collecting the full amount 11 of gross premiums written by an insurer for surplus lines insurance, the surplus lines 12 broker shall collect and pay to the director a tax of 2.7 percent on the net premium, 13 which is the total gross premiums written, less any return premiums, for the insurance. 14 Where the insurance covers properties, risks, or exposures located or to be performed 15 both in and out of this state, the tax payable shall be computed based on an amount 16 equal to 2.7 percent on that portion of the net premiums allocated under (f) of this 17 section to this state, plus an amount equal to the portion of the premiums allocated 18 under (f) of this section to other states or territories based on the tax rates and fees 19 applicable to other properties, risks, or exposures located or to be performed outside of 20 this state. 21 (b) The surplus lines broker may not absorb the tax or any part of it and may 22 not rebate, for any reason, any part of the tax. 23 (c) If, under AS 21.09.210, an admitted insurer is required to collect and pay 24 premium tax on a portion of a subscription policy, the surplus lines broker is not 25 required to collect any amount that would constitute double taxation of that portion of 26 the insurance. 27 (d) The director may participate in an agreement with another state formed for 28 the purpose of collecting and disbursing to a remitting state any funds collected under 29 (a) of this section applicable to other properties, risks, or exposures located or to be 30 performed outside of this state. To the extent that another state where a portion of the 31 properties, risks, or exposures resides has failed to enter into an agreement with this
01 state, the director shall retain all of the net premium tax collected by this state. 02 (e) At the time of filing the quarterly report as set out in AS 21.34.170, each 03 surplus lines broker shall pay the premium tax due for transactions occurring during 04 the period covered by the report. The tax must be paid by electronic or other means as 05 specified by the director. 06 (f) In determining the amount of premiums taxable in this state, all premiums 07 written, procured, or received in this state shall be considered written on properties, 08 risks, or exposures located or to be performed in this state except premiums that are 09 properly allocated or apportioned and reported as taxable premiums of a remitting 10 state. Allocation of the amount of premiums taxable for surplus lines insurance 11 covering properties, risks, or exposures only partially located or to be performed in 12 this state shall be determined by reference to an allocation schedule established by 13 regulation adopted by the director subject to the following: 14 (1) if a policy covers more than one classification, the following apply: 15 (A) for any portion of the coverage identified by a 16 classification on the allocation schedule, the tax shall be computed by using the 17 allocation schedule for the corresponding portion of the premium; 18 (B) for any portion of the coverage not identified by a 19 classification on the allocation schedule, the tax shall be computed by using an 20 alternative equitable method of allocation for the property or risk; 21 (C) for any portion of the coverage where the premium is 22 indivisible, the tax shall be computed by using the method of allocation that 23 pertains to the classification describing the predominant coverage; 24 (2) if the information provided by the surplus lines broker is 25 insufficient to substantiate the method of allocation used by the surplus lines broker, 26 or if the director determines that the broker's method is incorrect, the director shall 27 determine the equitable and appropriate amount of tax due to this state as follows: 28 (A) by use of the allocation schedule if the risk is appropriately 29 identified in the schedule; 30 (B) if the allocation schedule does not identify a classification 31 appropriate to the coverage, the director may give significant weight to
01 documented evidence of the underwriting bases and other rating criteria used 02 by the insurer; the director may also consider other available information to the 03 extent sufficient and relevant, including the percentage of the insured's 04 physical assets in this state, the percentage of the insured's sales in this state, 05 the percentage of income or resources derived from this state, and the amount 06 of premium tax paid to another jurisdiction for the policy. 07 (g) If the amount of tax due under (a) of this section is less than $50 in any 08 jurisdiction, the tax must be paid in the jurisdiction in which the reports and summary 09 of exported business are filed. 10 (h) The director shall, at least annually, furnish to the commissioner of a 11 remitting state a copy of all filings reporting an allocation of taxes required by this 12 section. 13 (i) This section does not apply to insurance of risks of state government or its 14 political subdivisions, to an agency of state government or its political subdivisions, or 15 to insurance of aircraft primarily engaged in interstate or foreign commerce. 16 (j) A surplus lines broker shall pay to the division a late payment fee of $50 a 17 month plus five percent of the tax due each calendar month or part of a month during 18 which the broker fails to pay the full amount of the tax or a portion of the tax and 19 interest at the rate of one percent of the tax due each calendar month or part of a 20 month for the period the broker fails to pay the tax. The late payment fee, not 21 including interest, may not exceed $250 plus 25 percent of the tax due. The tax 22 payment shall be made in the form required by the director, or a penalty shall be added 23 to the tax equal to 25 percent of the tax due, not to exceed $2,000, with a minimum 24 penalty of $100. In addition to any other penalty provided by law, if the provisions of 25 this section are wilfully violated, a civil penalty may be assessed of not more than 26 $10,000. The director may suspend or revoke the license of a broker that fails to pay 27 its taxes, a penalty, or a late payment fee required under this section. 28 * Sec. 57. AS 21.34.190(a) is amended to read: 29 (a) The fee for filing the statement under AS 21.34.180(e) [AS 21.34.180(b)] 30 is an amount equal to one percent on gross premium charged less any return premiums 31 as reported on the statement. The surplus lines broker shall pay the fee at the time of
01 filing of the statement. 02 * Sec. 58. AS 21.34.900 is amended by adding new paragraphs to read: 03 (10) "affiliate" or "affiliated" means, with respect to an insured, any 04 entity that controls, is controlled by, or is under common control with the insured; 05 (11) "affiliated group" means any group of entities that are all 06 affiliated; 07 (12) "control" means for purposes of an entity having "control" over 08 another entity 09 (A) the entity directly or indirectly or acting through 1 or more 10 other persons owns, controls, or has the power to vote 25 percent or more of 11 any class of voting securities of the other entity; or 12 (B) the entity controls in any manner the election of a majority 13 of the directors or trustees of the other entity; 14 (13) "exempt commercial purchaser" has the meaning given under 15 15 U.S.C. 8206 (Nonadmitted and Reinsurance Reform Act of 2010); 16 (14) "home state" means, for purposes of determining the home state 17 of an insured in a multistate placement of nonadmitted insurance, 18 (A) except as provided in (B) of this paragraph, "home state" 19 means, with respect to an insured: 20 (i) the state in which an insured maintains its principal 21 place of business or, in the case of an individual, the individual's 22 principal residence; or 23 (ii) if 100 percent of the insured risk is located out of 24 the state referred to in (i) of this subparagraph, the state to which the 25 greatest percentage of the insured's taxable premium for that insurance 26 contract is allocated; 27 (B) if two or more insureds from an affiliated group are named 28 insureds on a single policy, "home state" under (A) of this paragraph is based 29 on the member of the affiliated group that has the largest percentage of 30 premium attributed to it under the insurance contract; 31 (C) for purposes of (A) of this paragraph, the principal place of
01 business of an insured is the state where the insured maintains its headquarters 02 and where the insured's high-level officers direct control and coordinate the 03 business activities of the insured; 04 (15) "remitting state" means a state that has entered into an agreement 05 with this state for remitting to this state any premium tax collected by the other state 06 on premiums allocated to properties, risks, or exposures located in this state. 07 * Sec. 59. AS 21.36 is amended by adding a new section to read: 08 Sec. 21.36.225. Notice of health insurance coverage cancellation, coverage 09 change, or premium change. (a) Except for a health care insurance policy subject to 10 AS 21.51.400 or AS 21.54.130, an insurer may not cancel a health insurance policy 11 unless the insurer provides written notice to a covered individual at least 45 days 12 before the effective date of the cancellation. 13 (b) An insurer shall provide written notice to a covered individual of changes 14 in coverage or premium at least 45 days before the effective date of the change in 15 coverage or premium. 16 * Sec. 60. AS 21.36.360(q) is amended to read: 17 (q) A fraudulent or criminal insurance act described in 18 (1) (b) of this section that is committed to obtain $10,000 or more is a 19 class B felony; 20 (2) (c), (d), or (p)(4) [(c) OR (d)] of this section is a class B felony; 21 (3) (b) of this section that is committed to obtain $500 or more but less 22 than $10,000 is a class C felony; 23 (4) (e), (f), (g), or (h), of this section is a class C felony; 24 (5) (b) of this section that is committed to obtain less than $500 is a 25 class A misdemeanor; 26 (6) (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor; 27 (7) (o) of this section is a class B misdemeanor; 28 (8) (p)(1) of this section is a class B misdemeanor unless another 29 specific penalty is provided for the violation of the provision; and 30 (9) (p)(2) and (3) [(p)(2) - (4)] of this section may be prosecuted under 31 AS 11.46.
01 * Sec. 61. AS 21.45.020 is amended by adding new subsections to read: 02 (c) A life insurance policy or annuity contract delivered or issued for delivery 03 in this state and each life insurance policy or annuity contract application must contain 04 a notice prominently printed on or attached to the first page stating 05 (1) on written request, an insurer is required to provide, within a 06 reasonable time, reasonable factual information regarding the benefits and provisions 07 of the policy or contract to the policy or contract holder; and 08 (2) if, for any reason, the policy or contract holder is not satisfied with 09 the policy or contract, the policy or contract holder may return the policy or contract 10 within 10 days after the policy or contract is delivered and, except as provided in (d) 11 of this section, receive a refund of all money paid. 12 (d) For a variable life insurance policy or variable annuity contract, the refund 13 under (c) of this section must equal the difference between the premiums paid, 14 including any policy or contract fees or other charges, and the amounts allocated to 15 any separate accounts under the policy or contract on the date the returned policy is 16 received by the insurer or its insurance producer. 17 * Sec. 62. AS 21.51.405 is amended by adding new subsections to read: 18 (b) An insurer shall file with the director the premium rates charged for an 19 individual health care insurance plan before using them. A premium rate or premium 20 rate change must be on file with the director for a waiting period of at least 45 days 21 before the effective date of the premium rate. That period may be extended by the 22 director or the insurer for an additional 15 days if, during the initial 45-day waiting 23 period, notice is given stating that additional time for consideration of the filing is 24 needed. A filing may become effective at the end of the waiting period unless 25 disapproved by the director during the waiting period. If an insurer fails to provide 26 information requested by the director during the waiting period, the filing is 27 considered withdrawn by the insurer, and the premium rate does not become effective. 28 (c) The director shall adopt regulations 29 (1) establishing procedures for filing and use of rates; and 30 (2) specifying information that must be submitted in a filing required 31 under (b) of this section.
01 * Sec. 63. AS 21.53.020 is amended to read: 02 Sec. 21.53.020. Disclosure and performance standards. An insurer, hospital 03 or medical service corporation, or [A] fraternal benefit society that delivers or issues 04 for delivery a long-term care insurance policy may not 05 (1) cancel, fail to renew, or otherwise terminate the policy on the 06 grounds of age or deterioration of the mental or physical health of the insured [OR 07 CERTIFICATE HOLDER]; 08 (2) include a provision requiring a new waiting period in the event 09 existing coverage is converted to or replaced by a new or another form of health 10 insurance within the same company, unless there is an increase in benefits voluntarily 11 selected by the insured or group policyholder; or 12 (3) provide coverage only for skilled nursing care [,] or provide 13 significantly more coverage for skilled care in a facility than is provided for coverage 14 for lower levels of care [; EVALUATION OF THE COVERAGE PROVIDED 15 UNDER THIS PARAGRAPH MUST BE BASED ON THE NUMBER OF DAYS OF 16 COVERAGE PROVIDED FOR LOWER LEVELS OF CARE, WHEN COMPARED 17 TO THE NUMBER OF DAYS OF COVERAGE PROVIDED FOR SKILLED 18 CARE]. 19 * Sec. 64. AS 21.53.030(a) is amended to read: 20 (a) An insurer, hospital or medical service corporation, or [A] fraternal benefit 21 society may not include, in a long-term care insurance policy or certificate, a 22 definition of "preexisting condition" that is more restrictive than the following: 23 preexisting condition means [THE EXISTENCE OF SYMPTOMS THAT WOULD 24 CAUSE AN ORDINARILY PRUDENT PERSON TO SEEK DIAGNOSIS, CARE, 25 OR TREATMENT, OR] a condition for which medical advice or treatment was 26 recommended by, or received from, a provider of health care services [,] within six 27 months preceding the effective date of coverage of an insured person. 28 * Sec. 65. AS 21.53.030(b) is amended to read: 29 (b) In a long-term care insurance policy, [OR CERTIFICATE] an insurer, 30 hospital or medical service corporation, or [A] fraternal benefit society may not 31 exclude coverage for a loss or confinement that is the result of a preexisting condition,
01 unless the loss or confinement begins within six months following the effective date of 02 coverage of an insured person. 03 * Sec. 66. AS 21.53.030(d) is amended to read: 04 (d) This section does not prohibit an insurer, hospital or medical service 05 corporation, or [A] fraternal benefit society from using an application form designed 06 to elicit the complete health history of an applicant, and, on the basis of the answers on 07 the application, from applying that insurer's, hospital or medical service corporation's, 08 or fraternal benefit society's established underwriting standards. Unless otherwise 09 provided in the policy [OR CERTIFICATE], a preexisting condition, regardless of 10 whether it is disclosed on the application, need not be covered until the waiting period 11 described in (b) of this section expires. A long-term care insurance policy [OR 12 CERTIFICATE] may not exclude, limit, or reduce, or use waivers or riders of any 13 kind to exclude, limit, or reduce coverage or benefits for specifically named or 14 described preexisting diseases or physical conditions after the waiting period 15 described in (b) of this section, unless the waiver or rider has been specifically 16 approved by the director. 17 * Sec. 67. AS 21.53.040 is amended to read: 18 Sec. 21.53.040. Prior hospital or institutional care conditions prohibited. 19 (a) A long-term care insurance policy may not be delivered or issued for delivery in 20 this state if the policy conditions eligibility 21 (1) on a prior hospitalization requirement; 22 (2) on the receipt of a higher level of institutional care, when care is 23 provided in an institutional setting; 24 (3) for noninstitutional benefits on a prior institutional stay of more 25 than 30 days for which benefits are paid; [OR] 26 (4) on admission to an institutional care facility for the same or a 27 related condition within a period of less than 30 days after discharge from the 28 institution, if the policy provides benefits only following institutionalization; or 29 (5) for a benefit, other than a waiver of premium, 30 postconfinement, postacute care, or recuperative benefit, on a prior 31 institutionalization.
01 (b) A long-term care insurance policy containing a postconfinement, 02 postacute care, or recuperative benefit must clearly label the limitations or 03 conditions, including any required number of days of confinement, "Limitations 04 or Conditions on Eligibility for Benefits" [MAY CONTAIN A LIMITATION OR 05 CONDITION ON ELIGIBILITY FOR BENEFITS, NOT PROHIBITED IN (a) OF 06 THIS SECTION, IF THE LIMITATION OR CONDITION IS CLEARLY SET OUT] 07 in a separate paragraph of the policy [OR CERTIFICATE]. 08 * Sec. 68. AS 21.53.050(a) is amended to read: 09 (a) A long-term care insurance applicant may return a policy within 30 days 10 after delivery and have the premium refunded if, after examination of the policy, the 11 applicant is not satisfied with the policy. A long-term care insurance policy must have 12 a notice prominently printed on the first page of the policy or separately attached 13 stating that the applicant has the right to return the policy within 30 days of its 14 delivery and to have the premium refunded if, after examination of the policy, the 15 applicant is not satisfied with the policy for any reason. This subsection also applies 16 to application denials, and any refund must be made within 30 days after return 17 or denial. 18 * Sec. 69. AS 21.53.050(b) is amended to read: 19 (b) An insurer, hospital or medical service corporation, or [A] fraternal benefit 20 society shall deliver an outline of coverage to a prospective applicant for long-term 21 care insurance at the time of initial solicitation by a means that prominently directs the 22 attention of the recipient to the document and its purpose. In the case of agent 23 solicitations, an agent shall deliver the outline of coverage before the presentation of 24 an application or enrollment form. In the case of direct response solicitations, the 25 outline of coverage must be presented in conjunction with an application or enrollment 26 form. The outline of coverage must include 27 (1) a description of the principal benefits and coverage provided in the 28 policy; 29 (2) a statement of the principal exclusions, reductions, and limitations 30 contained in the policy; 31 (3) a statement of the terms under which the policy [OR
01 CERTIFICATE, OR BOTH,] may be continued in force or discontinued, including a 02 reservation in the policy of a right to change the premium; continuation or conversion 03 provisions of group coverage must be specifically described; 04 (4) a statement that the outline of coverage is a summary only, not a 05 contract of insurance, and that the policy or group master policy contains governing 06 contractual provisions; 07 (5) a description of the terms under which the policy [OR 08 CERTIFICATE] may be returned and premium refunded; [AND] 09 (6) a brief description of the relationship between the cost of care and 10 benefits; and 11 (7) a statement that discloses to the policyholder whether the 12 policy is intended to be a federal qualified long-term care insurance contract 13 under 26 U.S.C. 7702B(b) (Internal Revenue Code). 14 * Sec. 70. AS 21.53.050 is amended by adding new subsections to read: 15 (d) For a policy issued to a group defined in AS 21.53.200(3)(A), an insurer, 16 hospital or medical service corporation, or fraternal benefit society is not required to 17 provide an outline of coverage if the information required on the outline of coverage 18 under (b) of this section is contained in other enrollment materials. An insurer, 19 hospital or medical service corporation, and fraternal benefit society shall provide the 20 enrollment materials to the director on request. 21 (e) If an application for a long-term care insurance policy is approved, the 22 insurer shall deliver the policy to the applicant not later than 30 days after the date of 23 approval. 24 * Sec. 71. AS 21.53.060(a) is amended to read: 25 (a) In addition to the requirements of AS 21.45, at the time of policy delivery, 26 a policy summary shall be included with an individual life insurance policy if the 27 policy or policy rider provides long-term care benefits. In the case of direct response 28 solicitations, the insurer shall deliver the policy summary upon the applicant's request 29 [,] but, regardless of request, shall deliver a policy summary not later than the time of 30 policy delivery. The summary must include 31 (1) an explanation of how the long-term care benefits interact with
01 other components of the policy, including deductions from death benefits; 02 (2) an illustration of the amount and length of benefits, and guaranteed 03 lifetime benefits, if any, for each covered person; 04 (3) an explanation of each exclusion, reduction, and limitation on long- 05 term care benefits; [AND] 06 (4) if applicable to the policy type, 07 (A) disclosure of the effects of exercising other rights under the 08 policy; 09 (B) disclosure of guarantees related to the long-term care costs 10 of insurance charges; and 11 (C) current and projected maximum lifetime benefits; and 12 (5) if the director adopts a regulation that permits but does not 13 require inflation protection, and the policy does not provide for inflation 14 protection, a statement that inflation protection is not available under the policy. 15 * Sec. 72. AS 21.53.060 is amended by adding a new subsection to read: 16 (c) If a claim under a long-term care insurance policy is denied by an insurer, 17 the insurer shall, within 60 days after the date of a written request by a policyholder or 18 a representative of a policyholder, 19 (1) provide a written explanation of the reasons for the denial; and 20 (2) make available all information directly related to the denial. 21 * Sec. 73. AS 21.53 is amended by adding new sections to read: 22 Sec. 21.53.062. Incontestability period. (a) If a long-term care insurance 23 policy has been in force for less than six months, an insurer may rescind the policy or 24 deny an otherwise valid long-term care claim under the policy on a showing of 25 misrepresentation that is material to the acceptance for coverage. 26 (b) If a long-term care insurance policy has been in force for at least six 27 months but less than two years, an insurer may rescind the policy or deny an otherwise 28 valid long-term care claim under the policy on a showing of misrepresentation that is 29 both material to the acceptance for coverage and pertains to the condition for which 30 benefits are sought. 31 (c) If a long-term care insurance policy has been in force for two years or
01 more, the policy is not contestable on the grounds of misrepresentation alone and may 02 only be contested on a showing that the insured knowingly and intentionally 03 misrepresented relevant facts relating to the insured's health. 04 (d) If an insurer has paid benefits under a long-term care insurance policy, the 05 insurer may not recover the benefit payments if the policy is rescinded. 06 (e) This section applies to a life insurance policy that accelerates benefits for 07 long-term care. However, if an insured dies, this section does not apply to the 08 remaining death benefit of a life insurance policy that accelerates benefits for long- 09 term care, and the remaining death benefit under the policy is subject to AS 21.45.040. 10 Sec. 21.53.064. Nonforfeiture benefits. (a) Except as provided in (b) of this 11 section, a long-term care insurance policy may not be delivered or issued for delivery 12 in this state unless the policyholder has been offered the option of purchasing a policy 13 including a nonforfeiture benefit. The insurer may offer a nonforfeiture benefit in the 14 form of a rider to the policy. If a policyholder declines the nonforfeiture benefit, the 15 insurer shall provide a contingent benefit upon lapse that is available for a specified 16 period of time following a substantial increase in premium rates. 17 (b) With respect to group long-term care insurance, an insurer shall make the 18 offer required in (a) of this section to the group policyholder. For a policy issued as 19 group long-term care insurance, other than a continuing care retirement community or 20 other similar entity, the insurer shall make the offer required in (a) of this section to 21 each proposed certificate holder. 22 Sec. 21.53.066. Producer training requirements. (a) A person may not sell, 23 solicit, or negotiate long-term care insurance unless the person is licensed as an 24 insurance producer for health or life insurance lines of authority and has completed a 25 one-time training course that meets the requirements in (d) of this section. 26 (b) A person currently licensed and selling, soliciting, or negotiating long-term 27 care insurance may not continue to sell, solicit, or negotiate long-term care insurance 28 unless the person has completed a one-time training course that meets the 29 requirements in (d) of this section. 30 (c) A person who sells, solicits, or negotiates long-term care insurance shall 31 complete ongoing training that meets the requirements in (e) of this section.
01 (d) The one-time training course required under this section 02 (1) must be at least eight credit hours; 03 (2) may not include training that is insurer or company product 04 specific or that includes any sales or marketing information, materials, or training, 05 other than those required by state or federal law; 06 (3) must consist of topics related to long-term care insurance, long- 07 term care services, and, if applicable, qualified long-term care insurance partnership 08 programs, including 09 (A) state and federal requirements and the relationship between 10 qualified state long-term care insurance partnership programs and other public 11 and private coverage of long-term care services; 12 (B) available long-term care services and providers; 13 (C) changes or improvements in long-term care services or 14 providers; 15 (D) alternatives to the purchase of private long-term care 16 insurance; 17 (E) the effect of inflation on benefits and the importance of 18 inflation protections; and 19 (F) consumer suitability standards and guidelines. 20 (e) The ongoing training course required under (c) of this section must be at 21 least four credit hours every 24 months and must comply with the requirements in 22 (d)(2) and (3) of this section. 23 (f) The director may approve the training requirements in (d) and (e) of this 24 section as continuing education courses under AS 21.27.020. 25 (g) An insurer shall 26 (1) obtain verification that a producer received the training required 27 under this section before a producer is permitted to sell, solicit, or negotiate the 28 insurer's long-term care insurance products; 29 (2) maintain records of required training subject to the state's record 30 retention requirements; 31 (3) make the verification required under (1) of this subsection available
01 to the director on request. 02 (h) An insurer shall maintain 03 (1) records with respect to the training of its producers concerning the 04 distribution of its partnership policies that allows the director to provide assurance to 05 the medical assistance program under AS 47.07 that producers have received the 06 training described in (d)(3) of this section and that producers have demonstrated an 07 understanding of the partnership policies and their relationship to public and private 08 coverage of long-term care in this state; and 09 (2) the records described under (1) of this subsection in accordance 10 with the record requirements under AS 21.09.320 and shall make the records available 11 to the director on request. 12 Sec. 21.53.068. Limitations related to producers and third-party 13 administrators. An insurer that authorizes issuance of a long-term care insurance 14 policy by a producer or a third-party administrator under the underwriting authority of 15 the insurer granted to the producer or a third-party administrator using the insurer's 16 underwriting guidelines may issue a long-term care insurance policy through the 17 producer or a third-party administrator only if the insurer compensates the issuer based 18 on the number of policies issued. 19 * Sec. 74. AS 21.53.090 is amended to read: 20 Sec. 21.53.090. Required regulations. The director shall adopt regulations 21 regarding 22 (1) the sale of long-term care insurance that provide minimum 23 standards for 24 (A) terms of renewability; 25 (B) initial and subsequent conditions of eligibility; 26 (C) nonduplication of coverage provisions; 27 (D) coverage of dependents; 28 (E) benefit triggers; 29 (F) preexisting conditions and recurrent conditions; 30 (G) termination of insurance, including incontestability 31 periods;
01 (H) continuation or conversion; 02 (I) probationary periods, limitations, exceptions, reductions, 03 and elimination periods; [AND] 04 (J) requirements for replacement; 05 (K) producer training, education, compensation, and 06 testing; 07 (L) marketing practices; 08 (M) independent review of benefit determinations; 09 (N) penalties and reporting practices; and 10 (O) premium rates, including rate filing requirements; 11 (2) standard definitions of long-term care insurance terms; 12 (3) nonforfeiture or minimum value requirements; [AND] 13 (4) consumer protection standards, including standards for full and fair 14 disclosure setting out the manner and content of required disclosures; and 15 (5) the standard format and content of the outline of coverage 16 required under AS 21.53.050. 17 * Sec. 75. AS 21.53.200(3) is amended to read: 18 (3) "group long-term care insurance" means a long-term care insurance 19 policy, subscriber's contract, or fraternal benefit society certificate that is delivered or 20 issued for delivery in this state and issued to 21 (A) one or more employers or labor organizations, or to a trust 22 or to the trustees of a fund established by one or more employers or labor 23 organizations, or a combination of them, for employees or former employees 24 or a combination of them, or for members or former members or a combination 25 of them, of the labor organization; 26 (B) a professional, trade, or occupational association for its 27 members or former or retired members, or combination of them, if the 28 association is composed of individuals all of whom are or were actively 29 engaged in the same profession, trade, or occupation, and has been maintained 30 in good faith for purposes other than obtaining insurance; 31 (C) an association or a trust or the trustee of a fund established,
01 created, or maintained for the benefit of members of one or more associations 02 that meets the requirements in AS 21.53.080; 03 (D) a group other than described in this paragraph if the 04 director determines that the issuance of the group policy is not contrary to the 05 best interest of the public, would result in economies of acquisition or 06 administration, and the benefits are reasonable in relation to the premiums 07 charged; 08 * Sec. 76. AS 21.53.200(4) is amended to read: 09 (4) "long-term care insurance" 10 (A) means an individual or group insurance policy, including 11 group and individual life insurance or annuities, a subscriber's contract, 12 fraternal benefit society certificate, or rider advertised, marketed, offered, or 13 designed to provide coverage for not less than 12 consecutive months for each 14 covered person on an expense incurred, indemnity, prepaid, or other basis, for 15 one or more necessary or medically necessary diagnostic, preventive, 16 therapeutic, rehabilitative, maintenance, or personal care services that are 17 provided in a setting other than an acute care unit of a hospital, and includes a 18 policy or rider that provides for payment of benefits based on cognitive 19 impairment or loss of functional capacity; 20 (B) ["LONG-TERM CARE INSURANCE"] does not include 21 (i) an insurance policy, subscriber's contract, or 22 fraternal benefit society certificate that is offered primarily to provide 23 basic Medicare supplement coverage, basic hospital expense coverage, 24 basic medical-surgical expense coverage, hospital confinement 25 indemnity coverage, major medical expense coverage, disability 26 insurance and related asset protection coverage, catastrophic coverage, 27 comprehensive coverage, accident only coverage, specified disease or 28 specified accident coverage, or limited benefit health coverage; or 29 (ii) a life insurance policy that accelerates the death 30 benefit specifically for one or more of the qualifying events of 31 terminal illness, medical conditions requiring extraordinary
01 medical intervention, or permanent institutional confinement and 02 that provides the option of a lump-sum payment for that benefit if 03 the benefit and the eligibility for the benefit under the life 04 insurance policy are not conditioned on the receipt of long-term 05 care; 06 * Sec. 77. AS 21.54.015 is amended by adding new subsections to read: 07 (c) Except for large employer health care insurance plan premium rates 08 exempted by the director by regulation under (d) of this section, an insurer shall file 09 with the director the premium rates charged for each health care insurance plan before 10 using them. A premium rate or premium rate change must be on file with the director 11 for a waiting period of at least 45 days before the effective date of the premium rate. 12 That period may be extended by the director or the insurer for an additional 15 days if, 13 during the initial 45-day waiting period, notice is given stating that additional time for 14 consideration of the filing is needed. A filing may become effective at the end of the 15 waiting period unless disapproved by the director during the waiting period. If an 16 insurer fails to provide information requested by the director during the waiting 17 period, the filing is considered withdrawn by the insurer, and the premium rate does 18 not become effective. 19 (d) The director shall adopt regulations 20 (1) establishing procedures for the filing and use of rates; and 21 (2) specifying information that must be submitted in a filing required 22 under (c) of this section. 23 * Sec. 78. AS 21.54.020(a) is amended to read: 24 (a) On the written request of a covered person, a health care insurer shall pay 25 amounts due under a health insurance policy directly to the provider of medical care 26 services. A health insurance policy may not contain a provision that requires services 27 be provided by a particular hospital or person, except as applicable to a [MANAGED 28 CARE PLAN UNDER AS 21.07 OR A] health maintenance organization under 29 AS 21.86. If a health care insurer makes a claim payment to the covered person after 30 the covered person has given written notice electing direct payment to the provider of 31 the service, the health care insurer shall also pay that amount to the provider of the
01 service. 02 * Sec. 79. AS 21.54 is amended by adding a new section to article 2 to read: 03 Sec. 21.54.180. Individual health care insurance policies offered in the 04 group market. (a) Except as provided in (b) of this section, a person may not sell, 05 solicit, or negotiate an individual health care insurance policy to an employer or 06 employee of an employer, and an insurer may not issue an individual health care 07 insurance policy to an employee of an employer. 08 (b) Notwithstanding the definition of "group market" in AS 21.54.500, a 09 person may sell, solicit, or negotiate an individual health care insurance policy to an 10 employer or employee of an employer, and an insurer may issue an individual health 11 care insurance policy to an employee of an employer, only if 12 (1) the employee is not an eligible employee as defined in 13 AS 21.56.250; or 14 (2) the employer does not offer a health benefit plan and has not 15 offered a health benefit plan in the last six months. 16 (c) An individual health care insurance policy offered under (b) of this section 17 is health care insurance offered in the individual market and subject to the 18 requirements of AS 21.51. In this subsection, "individual market" means the market 19 for health care insurance that does not include coverage under a health care insurance 20 plan as defined in AS 21.54.500. 21 * Sec. 80. AS 21.54.500(16) is amended to read: 22 (16) "health care insurance plan" means a health care insurance policy 23 or contract [PROVIDED BY A HEALTH CARE INSURER] but does not include an 24 excepted benefits policy or contract; 25 * Sec. 81. AS 21.59.070 is amended to read: 26 Sec. 21.59.070. Other provisions applicable. In addition to the provisions of 27 this chapter, the following provisions of this title shall apply to automobile service 28 corporations, to the extent applicable and not in conflict with the express provisions of 29 this chapter and the reasonable implications of the express provisions, and, for the 30 purposes of the application, the corporations shall be considered to be stock insurers: 31 (1) AS 21.03;
01 (2) AS 21.06; 02 (3) AS 21.09.050; 03 (4) AS 21.09.100; 04 (5) AS 21.09.120 - 21.09.210; 05 (6) AS 21.09.245; 06 (7) AS 21.09.247; 07 (8) AS 21.12; 08 (9) [(7)] AS 21.36; 09 (10) [(8)] AS 21.69; 10 (11) [(9)] AS 21.78; 11 (12) [(10)] AS 21.97. 12 * Sec. 82. AS 21.66.020 is amended by adding new subsections to read: 13 (b) When a title insurance company holding a certificate of authority under 14 this chapter is found to be insolvent by a proceeding in a court of competent 15 jurisdiction, the director shall take control of deposits made by the title insurance 16 company and held in this state. If the finding of insolvency is from a court in another 17 state, the director shall file for an ancillary receivership under AS 21.78 to administer 18 the deposits and other assets in this state and pay claims in this state. Any funds 19 remaining after payment of all claims under policies in this state shall be forwarded to 20 the receiver. 21 (c) On request of a title insurance company, the director shall return the assets 22 held on deposit when the company is no longer authorized to write insurance in this 23 state, the director is satisfied that there are no risks in the state covered by contracts of 24 the company, and the assets are no longer required to be held by any provision of law. 25 (d) In addition to the provisions of this section, the following provisions of 26 this title also apply with respect to deposits under this section to the extent applicable 27 and not in conflict with the express provisions of this chapter and the reasonable 28 implications of the express provisions: 29 (1) AS 21.24.040(a), (d), and (e); 30 (2) AS 21.24.060. 31 * Sec. 83. AS 21.66.210(a) is amended to read:
01 (a) Two or more title insurance companies or two or more title insurance 02 limited producers, or a combination of title insurance companies and title insurance 03 limited producers, may apply to the director of insurance to form an association, 04 corporation, or other legal entity, for the purpose of engaging in the business of 05 preparing abstracts of title searches from public records or from records to be owned 06 by the entity, upon the basis of which a title insurance limited producer or a title 07 insurance company will issue title policies. The owners or participants are considered 08 to be in compliance with the provisions of this section and AS 21.66.200 if the title 09 plant of the association, corporation, or other legal entity complies with the provisions 10 of this section. The application must contain 11 (1) a copy of the proposed articles of incorporation or association and 12 the bylaws or agreement governing the operation of the entity; 13 (2) a list of the owners or participants; 14 (3) the names and addresses of the persons who will operate the entity, 15 with a description of their experience and qualifications; 16 (4) the conditions under which ownership or participation in the entity 17 may be sold or acquired; 18 (5) a statement of whether or not title information will be compiled and 19 sold to persons other than owners of or participants in the entity; 20 (6) a pro forma balance sheet and other financial information to 21 indicate the sufficiency of financing the entity; and 22 (7) basic information, including the joint title plan name, the 23 physical address, the mailing address, the electronic mailing address, and 24 telephone numbers. 25 * Sec. 84. AS 21.69.390(d) is amended to read: 26 (d) To meet the requirements of (a) of this section, a domestic insurer shall 27 keep at its principal place of business in the state the following records of assets, 28 transactions, and affairs: 29 (1) a general ledger; 30 (2) copies of reports prepared to comply with AS 21.09.200 - 31 21.09.210;
01 (3) if prepared in the normal course of business, financial statements 02 prepared under generally accepted accounting principles on which a licensed certified 03 public accountant has expressed an opinion; 04 (4) filings made by a domestic insurer or affiliates of the domestic 05 insurer with a government agency with which a domestic insurer or affiliates of the 06 domestic insurer's securities may be registered; 07 (5) a state certificate of authority; 08 (6) filings made under AS 21.21; 09 (7) original contract [POLICY] and claim files for insurance and 10 other products sold to consumers [OF PROPERTY OR A RISK RESIDENT OR 11 LOCATED IN THE STATE]; 12 (8) a corporate minutes book; 13 (9) articles of incorporation; 14 (10) corporate bylaws; 15 (11) administrative management contracts; and 16 (12) other records required by the director by regulation. 17 * Sec. 85. AS 21.72.170 is amended to read: 18 Sec. 21.72.170. Other provisions applicable. In addition to the provisions 19 contained in the chapter, other chapters and provisions of this title shall apply to 20 benevolent associations, to the extent applicable, as follows: 21 (1) AS 21.03; 22 (2) AS 21.06; 23 (3) AS 21.09.010, 21.09.050, 21.09.100, and 21.09.130 - 21.09.190; 24 (4) AS 21.09.247; 25 (5) AS 21.18.010 and 21.18.030; 26 (6) [(5)] AS 21.36; 27 (7) [(6)] AS 21.42; 28 (8) [(7)] AS 21.69.370, 21.69.390, 21.69.400, 21.69.630, and 29 21.69.640; 30 (9) [(8)] AS 21.78. 31 * Sec. 86. AS 21.75.060(b) is amended to read:
01 (b) The proposed attorney-in-fact shall fulfill the requirements of and shall 02 execute and file with the director when applying for a certificate of authority, a 03 declaration setting out 04 (1) the name of the insurer; 05 (2) the location of the insurer's principal office, which shall be the 06 same as that of the attorney-in-fact and shall be maintained in this state, and the 07 mailing address, electronic mailing address, and telephone numbers; 08 (3) the kinds of insurance proposed to be transacted; 09 (4) the names and addresses of the original subscribers; 10 (5) the designation and appointment of the proposed attorney-in-fact 11 and a copy of the power of attorney; 12 (6) the names and addresses of the officers and directors of the 13 attorney-in-fact, if a corporation, or its members, if a firm; 14 (7) the powers of the subscribers' advisory committee, and the names 15 and terms of office of the members; 16 (8) that all money paid to the reciprocal insurer shall, after deducting 17 any sum payable to the attorney-in-fact, be held in the name of the insurer and for the 18 purposes specified in the subscribers' agreement; 19 (9) a copy of the subscribers' agreement; 20 (10) a statement that each of the original subscribers has in good faith 21 applied for insurance of a kind proposed to be transacted and that the insurer has 22 received from each subscriber the full premium or premium deposit required for the 23 policy applied for, for a term of not less than six months at an adequate rate filed with 24 and approved by the director; 25 (11) a statement of the financial condition of the insurer, a schedule of 26 its assets, and a statement that the surplus as required by AS 21.75.050 is on hand; 27 (12) a copy of each policy, endorsement, and application form it then 28 proposes to issue or use. 29 * Sec. 87. AS 21.79.025(a) is amended to read: 30 (a) The benefits for which the association may become liable may not exceed 31 the lesser of
01 (1) the contractual obligations for which the insurer is liable or would 02 have been liable if it were not an impaired or insolvent insurer; 03 (2) with respect to any one life, regardless of the number of policies or 04 contracts, 05 (A) $300,000 in life insurance death benefits, but not more than 06 $100,000 in net cash surrender and net cash withdrawal values for life 07 insurance; 08 (B) in health insurance benefits, 09 (i) $100,000 for coverage not defined as disability 10 insurance long-term care insurance, or basic hospital, medical, and 11 surgical insurance or major medical insurance, including any net cash 12 surrender and net cash withdrawal values; 13 (ii) $300,000 for disability insurance as defined in 14 AS 21.12.052 and long-term care insurance as defined in 15 AS 21.53.200; 16 (iii) $500,000 for basic hospital, medical, and surgical 17 insurance or major medical insurance; 18 (C) $250,000 [$100,000] in the present value of annuity 19 benefits, including net cash surrender and net cash withdrawal values; 20 (3) with respect to any one contract holder or plan sponsor whose plan 21 owns directly or in trust one or more unallocated annuity contracts not included in (4) 22 of this subsection, $5,000,000 in unallocated annuity contract benefits, irrespective of 23 the number of contracts held by that contract holder or plan sponsor except that, in the 24 case of one or more unallocated annuity contracts that are covered under this chapter 25 and that are owned by a trust or other entity for the benefit of two or more plan 26 sponsors, coverage shall be provided by the association if the largest interest in the 27 trust or entity owning the contract is held by a plan sponsor whose principal place of 28 business is in this state; however, the association is not liable to cover more than 29 $5,000,000 in benefits with respect to an unallocated annuity contract not included in 30 (4) of this subsection; 31 (4) with respect to an individual participating in a governmental
01 retirement benefit plan established under 26 U.S.C. 401, 26 U.S.C. 403(b), or 26 02 U.S.C. 457 and covered by an unallocated annuity contract, or to a beneficiary of the 03 individual if the individual is deceased, in the aggregate, $100,000 in present-value 04 annuity benefits, including net cash surrender and net cash withdrawal values; or 05 (5) with respect to each payee of a structured settlement annuity, or 06 beneficiary of the payee if the payee is deceased, $100,000 in present-value annuity 07 benefits in the aggregate, including net cash surrender and net cash withdrawal values, 08 if any. 09 * Sec. 88. AS 21.84.335(b) is amended to read: 10 (b) In addition to the provisions of this chapter, the following provisions of 11 this title apply to fraternal benefit societies to the extent applicable and not in conflict 12 with the express provisions of this chapter and the reasonable implications of this 13 chapter: 14 (1) AS 21.03; 15 (2) AS 21.06; 16 (3) AS 21.09.050; 17 (4) AS 21.09.100; 18 (5) AS 21.09.200; 19 (6) AS 21.09.205; 20 (7) AS 21.09.245; 21 (8) AS 21.09.247; 22 (9) AS 21.18; 23 (10) [(8)] AS 21.21; 24 (11) [(9)] AS 21.27; 25 (12) [(10)] AS 21.33; 26 (13) [(11)] AS 21.36; 27 (14) [(12)] AS 21.42.290; 28 (15) [(13)] AS 21.42.355; 29 (16) [(14)] AS 21.53; 30 (17) [(15)] AS 21.54; 31 (18) [(16)] AS 21.56;
01 (19) [(17)] AS 21.69.370; 02 (20) [(18)] AS 21.69.640; 03 (21) [(19)] AS 21.78; and 04 (22) [(20)] AS 21.96.060. 05 * Sec. 89. AS 21.85.030(a) is amended to read: 06 (a) The director may not issue a certificate of authority to a self-funded 07 multiple employer welfare arrangement unless the arrangement establishes to the 08 satisfaction of the director that 09 (1) employers participating in the arrangement are members of a bona 10 fide association or group of two or more businesses in the same or a closely related 11 trade, profession, or industry that provide support, services, or supplies primarily to 12 that trade, profession, or industry; 13 (2) employers or employees participating in the arrangement exercise 14 direct control over the arrangement; as described in this paragraph, 15 (A) subject to (B) of this paragraph, direct control exists if the 16 employers or employees participating in the arrangement have the right to elect 17 at least 75 percent of the individuals designated in the arrangement's 18 organizational documents as having control over the operations of the 19 arrangement and the individuals designated in the arrangement's organizational 20 documents in fact exercise control over the operation of the arrangement; 21 (B) use of a third-party administrator to process claims and to 22 assist in the administration of the arrangement is not evidence of the lack of 23 exercise of control over the operations of the arrangement; 24 (3) the arrangement is a nonprofit organization; 25 (4) the arrangement provides only allowable benefits, except the 26 arrangement may also provide 27 (A) life or disability insurance coverage to its participants if 28 the life or disability insurance coverage is provided under contracts with 29 other insurers that comply with this title; or 30 (B) limited short-term disability insurance coverage, if 31 approved by the director;
01 (5) the arrangement has adequate facilities and competent personnel, as 02 determined by the director, to service the health benefit plan or has contracted with a 03 third-party administrator licensed under AS 21.27 to service the health benefit plan; 04 (6) the arrangement provides allowable benefits to not less than two 05 employers and not less than 75 employees; 06 (7) the arrangement does not solicit participation in the arrangement 07 from the general public, except the arrangement may employ or independently 08 contract with a licensed insurance producer who may be paid a commission or other 09 remuneration to enroll employers in the arrangement; 10 (8) the arrangement is not organized or maintained solely as a conduit 11 for the collection of premiums and the forwarding of premiums to an insurance 12 company, except that the arrangement may act as a conduit for the collection and 13 forwarding of premiums for life insurance coverage under (4) of this subsection; 14 (9) the arrangement 15 (A) has deposited $200,000 with the director to be used for the 16 payment of claims in the event the arrangement becomes insolvent and has 17 submitted to the director a written plan of operation that, in the discretion of 18 the director, ensures the financial integrity of the arrangement; and 19 (B) is able to remain financially solvent; the director may 20 consider the following in determining the ability of the arrangement to remain 21 financially solvent: 22 (i) pro forma financial statements; 23 (ii) types and levels of stop-loss insurance coverage, 24 including attachment points of the coverage; 25 (iii) whether a deposit is required for each employee 26 covered under the arrangement equal to at least one month's cost of 27 providing benefits under the arrangement; 28 (iv) the experience of the individuals who will be 29 involved in the management of the arrangement, including employees, 30 independent contractors, and consultants; and 31 (v) other factors the director considers relevant to
01 determining the ability of the arrangement to remain financially 02 solvent. 03 * Sec. 90. AS 21.85.040 is amended to read: 04 Sec. 21.85.040. Application for a certificate of authority. To apply for an 05 original certificate of authority, a self-funded multiple employer welfare arrangement 06 shall file with the director its application, accompanied by the applicable fees set 07 under AS 21.06.250, showing its name, the location of its home office, its date of 08 organization, its state of domicile, and additional information that the director may 09 reasonably require. The application shall be submitted together with 10 (1) a copy of all articles, bylaws, agreements, trusts, or other 11 documents or instruments describing the rights and obligations of the employers, 12 employees, and beneficiaries of the arrangement; 13 (2) a copy of each summary plan description of the arrangement filed 14 or required to be filed with the United States Department of Labor, including any 15 amendments to each description; 16 (3) evidence of coverage of or letter of intent to participate executed by 17 at least two employers providing allowable benefits to at least 75 employees; 18 (4) a copy of the arrangement's most recent financial statement in 19 compliance with AS 21.85.080 or, if the arrangement has been in existence for less 20 than one year, pro forma financial statements, including a balance sheet, an income 21 statement, a statement of changes in financial condition, and an actuarial opinion that 22 the unpaid claim liability of the arrangement satisfies the standards in AS 21.18.080 - 23 21.18.086; 24 (5) proof that the arrangement maintains and will continue to maintain 25 fidelity bonds required by the United States Department of Labor under 29 U.S.C. 26 1001 - 1461 (Employee Retirement Income Security Act of 1974); 27 (6) a copy of any stop-loss insurance policies maintained or proposed 28 to be maintained by the arrangement; 29 (7) biographical reports, on forms prescribed by the National 30 Association of Insurance Commissioners, evidencing the general trustworthiness and 31 competence of each individual who is serving or who will serve as a managing
01 employee or fiduciary of the arrangement; 02 (8) a notarized statement executed by an officer of the arrangement 03 certifying, to the best knowledge and belief of the officer, that the information 04 provided in the application is true and correct and that the arrangement is in 05 compliance with the requirements in 06 (A) AS 21.85.020; 07 (B) 29 U.S.C. 1001 - 1461 (Employee Retirement Income 08 Security Act of 1974) or a statement of any requirements with which the 09 arrangement is not in compliance and a statement of proposed corrective 10 action; and 11 (C) AS 21.85.050; 12 (9) base contribution rates for participation under the arrangement for 13 its initial year of operations; and 14 (10) for a foreign multiple employer welfare arrangement, 15 (A) a certificate of the public official having supervision of 16 insurance in its state or country of domicile or state of entry into the 17 United States, showing that it is authorized to transact the kinds of 18 insurance proposed to be transacted in this state or an affidavit attesting 19 to the reasons why a certificate is not available; 20 (B) a copy of the arrangement's most recent financial 21 statement filed with its state of domicile, if any, with an actuarial opinion 22 on reported unpaid claims; 23 (C) a copy of a management discussion and analysis filed 24 with its state of domicile, if any; and 25 (D) a copy of the report of last examination, if any, made of 26 the insurer, issued by the insurance supervisory official of its state of 27 domicile or state of entry into the United States. 28 * Sec. 91. AS 21.86 is amended by adding a new section to read: 29 Sec. 21.86.045. Biographical affidavits. A domestic health maintenance 30 organization shall file with the director a complete affidavit of biographical 31 information not later than 30 days after the appointment of an officer or member of the
01 governing body of the organization. If requested by the director, a foreign health 02 maintenance organization shall file with the director an affidavit of biographical 03 information for the appointment of an officer or member of the governing body of that 04 organization. A filing under this section must be on a form approved by the director. A 05 filing is not required if a biographical affidavit of the officer or director has been 06 submitted to the director within one year before the date of appointment. A 07 biographical affidavit filed under this section is confidential and not subject to public 08 inspection. 09 * Sec. 92. AS 21.87.340 is amended to read: 10 Sec. 21.87.340. Other provisions applicable. In addition to the provisions 11 contained or referred to previously in this chapter, the following chapters and 12 provisions of this title also apply with respect to service corporations to the extent 13 applicable and not in conflict with the express provisions of this chapter and the 14 reasonable implications of the express provisions, and, for the purposes of the 15 application, the corporations shall be considered to be mutual "insurers": 16 (1) AS 21.03; 17 (2) AS 21.06; 18 (3) AS 21.07; 19 (4) AS 21.09, except AS 21.09.090; 20 (5) AS 21.18.010; 21 (6) AS 21.18.030; 22 (7) AS 21.18.040; 23 (8) AS 21.18.080 - 21.18.086; 24 (9) AS 21.36; 25 (10) AS 21.42.110, 21.42.345 - 21.42.395 [AS 21.42.345 - 21.42.395]; 26 (11) AS 21.51.120 and 21.51.400; 27 (12) AS 21.51.405; 28 (13) AS 21.53; 29 (14) [(13)] AS 21.54; 30 (15) [(14)] AS 21.56; 31 (16) [(15)] AS 21.69.400;
01 (17) [(16)] AS 21.69.520; 02 (18) [(17)] AS 21.69.600, 21.69.620, and 21.69.630; 03 (19) [(18)] AS 21.78; 04 (20) [(19)] AS 21.96.060; 05 (21) [(20)] AS 21.97. 06 * Sec. 93. AS 21.96.030 is amended to read: 07 Sec. 21.96.030. Payment. Unless another form of payment is agreed to by 08 the policy holder or beneficiary, an [AN] insurance company doing business in this 09 state may not pay a judgment or settlement of a claim in this state for a loss incurred in 10 this state with an instrument other than a negotiable bank check payable on demand 11 and bearing even date with the date of writing or by electronic funds transfer. 12 * Sec. 94. AS 21.07.040, 21.07.250(7), 21.07.250(8), 21.07.250(9); AS 21.27.020(e), 13 21.27.025(b), 21.27.340, 21.27.900(14); AS 21.53.200(5); and AS 21.87.190(b) are repealed. 14 * Sec. 95. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 TRANSITION: LONG-TERM CARE INSURANCE LICENSEES COURSE 17 REQUIREMENT. A person licensed and selling, soliciting, or negotiating long-term care 18 insurance on the effective date of this section may not continue to sell, solicit, or negotiate 19 long-term care insurance beginning one year after the effective date of this section unless the 20 person has successfully completed a one-time course, as required by AS 21.53.066, enacted 21 by sec. 73 of this Act. 22 * Sec. 96. The uncodified law of the State of Alaska is amended by adding a new section to 23 read: 24 TRANSITION: REGULATION ADOPTION. The director of insurance may adopt 25 regulations necessary to implement the changes made by this Act. The regulations take effect 26 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 27 implemented by the regulation. 28 * Sec. 97. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 REVISOR'S INSTRUCTIONS. The revisor of statutes is instructed to change the 31 following:
01 (1) the chapter heading of AS 21.07 from "Regulation of Managed Care 02 Insurance Plans" to "Patient Protections under Health Care Insurance Policies"; 03 (2) the catch line of AS 21.34.170 from "Monthly reports, summary of 04 exported business" to "Quarterly reports, summary of exported business." 05 * Sec. 98. Section 96 of this Act takes effect immediately under AS 01.10.070(c). 06 * Sec. 99. Sections 46 - 58 of this Act take effect July 21, 2011. 07 * Sec. 100. Sections 62 and 77 of this Act take effect January 1, 2012. 08 * Sec. 101. Except as provided in secs. 98 - 100 of this Act, this Act takes effect July 1, 09 2011.