HB 372: "An Act relating to insurance; relating to expenses for insurance examinations; relating to regulations for insurance utilization review, benefits determination, health care insurance grievance resolution procedures, independent review of adverse determinations or final adverse determinations, independent review organizations, and continuing education providers; relating to required provisions for health care insurance contracts and policies, including health care provider choice; establishing civil penalties for insurers for failure to provide requested records; amending the definition of 'wet marine and transportation' insurance; amending provisions on limited licenses to include crop insurance; relating to third-party administrator notification requirements; relating to certification filing by reinsurance intermediary brokers; relating to rate filings, delivery of insurance policies or endorsements; relating to refunds of variable life insurance policies and variable annuities; establishing limitations on issuance of long-term care insurance; relating to requirements for group health insurance policies; amending the definition of 'group health insurance'; relating to motor vehicle service contracts; relating to notice requirements for meetings of stockholders or members of a domestic insurer; establishing a definition of 'bona fide association'; relating to requirements and penalties for committing a fraudulent or criminal insurance act; updating criteria for examinations; relating to rate filing deviations; establishing civil penalties for certain wilful violations; and providing for an effective date."
00 HOUSE BILL NO. 372 01 "An Act relating to insurance; relating to expenses for insurance examinations; relating 02 to regulations for insurance utilization review, benefits determination, health care 03 insurance grievance resolution procedures, independent review of adverse 04 determinations or final adverse determinations, independent review organizations, and 05 continuing education providers; relating to required provisions for health care 06 insurance contracts and policies, including health care provider choice; establishing civil 07 penalties for insurers for failure to provide requested records; amending the definition 08 of 'wet marine and transportation' insurance; amending provisions on limited licenses to 09 include crop insurance; relating to third-party administrator notification requirements; 10 relating to certification filing by reinsurance intermediary brokers; relating to rate 11 filings, delivery of insurance policies or endorsements; relating to refunds of variable life 12 insurance policies and variable annuities; establishing limitations on issuance of long-
01 term care insurance; relating to requirements for group health insurance policies; 02 amending the definition of 'group health insurance'; relating to motor vehicle service 03 contracts; relating to notice requirements for meetings of stockholders or members of a 04 domestic insurer; establishing a definition of 'bona fide association'; relating to 05 requirements and penalties for committing a fraudulent or criminal insurance act; 06 updating criteria for examinations; relating to rate filing deviations; establishing civil 07 penalties for certain wilful violations; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 21.06.120(a) is amended to read: 10 (a) The director may examine the affairs, transactions, accounts, records, and 11 assets of each authorized and formerly authorized insurer and each licensed and 12 formerly licensed managing general agent, reinsurance intermediary broker, 13 reinsurance intermediary manager, surplus lines broker, and surplus lines association 14 as often as the director considers advisable. In scheduling and determining the nature, 15 scope, and frequency of examinations, the director may consider any factor or material 16 that the director determines is appropriate, including the results of financial statement 17 analysis and ratios, competency of management or change of ownership, actuarial 18 opinions, reports of independent certified public accountants, number and nature of 19 consumer complaints, results of prior examinations, frequency of prior violations of 20 statute and regulation, and criteria set out in the most recent edition of the Financial 21 Condition Examiners [EXAMINERS'] Handbook and the Market Regulation 22 Handbook [MOST RECENTLY] approved by the National Association of Insurance 23 Commissioners and in effect when the director conducts an examination. Examination 24 of an alien insurer may be limited to its insurance transactions and affairs in the United 25 States. Examination of a reciprocal insurer may also include examination of its 26 attorney-in-fact to the extent that the transactions of the attorney-in-fact relate to the 27 insurer. 28 * Sec. 2. AS 21.06.140(f) is amended to read:
01 (f) In conducting an examination under this section, the examiner shall 02 observe at a minimum those guidelines and procedures set out in the most recent 03 edition of the Financial Condition Examiners [EXAMINERS'] Handbook and the 04 Market Regulation Handbook [CURRENTLY] approved by the National 05 Association of Insurance Commissioners that are consistent with this title. 06 * Sec. 3. AS 21.06.160(a) is amended to read: 07 (a) Each person examined, other than examinations under AS 21.06.130 and 08 examinations of managing general agents, third-party administrators, 09 reinsurance intermediary managers, motor vehicle service contract providers, or 10 surplus lines brokers, shall pay a reasonable rate calculated on salary, benefit costs, 11 and estimated division overhead for time spent directly or indirectly related to the 12 examination. Each person examined, other than examinations under AS 21.06.130, 13 shall pay actual out-of-pocket business expenses, including travel expenses, incurred 14 by division staff examiners and shall pay the compensation of a contract examiner, to 15 be set at a reasonable customary rate, for conducting the examination upon 16 presentation of a detailed account of the charges and expenses by the director or under 17 an order of the director. The director may waive payment of all or part of the 18 actual out-of-pocket business expenses incurred by division staff examiners, or 19 the compensation of a contract examiner, if the director determines that payment 20 of the expenses or compensation creates a financial hardship for a managing 21 general agent, third-party administrator, reinsurance intermediary manager, 22 motor vehicle service contract provider, or surplus line broker. The accounting 23 may either be presented periodically during the course of the examination or at the 24 termination of the examination. A person may not pay and an examiner may not 25 accept additional compensation for an examination. A person shall pay examination 26 expenses to the division under this subsection using an electronic payment method 27 specified by the director. 28 * Sec. 4. AS 21.07 is amended by adding a new section to read: 29 Sec. 21.07.005. Regulations. (a) The director shall adopt regulations to 30 provide standards and criteria for 31 (1) the structure and operation of utilization review and benefit
01 determination processes; 02 (2) the establishment and maintenance of procedures by health care 03 insurers to ensure that a covered individual has the opportunity for appropriate 04 resolution of grievances; and 05 (3) an independent review of an adverse determination or final adverse 06 determination. 07 (b) The regulations under (a) of this section must be at least as restrictive as 08 the Utilization Review and Benefit Determination Model Act adopted by the National 09 Association of Insurance Commissioners on June 22, 2003, the Health Carrier 10 Grievance Procedure Model Act adopted by the National Association of Insurance 11 Commissioners on June 22, 2003, and the Uniform Health Carrier External Review 12 Model Act adopted by the National Association of Insurance Carriers on June 2, 2008. 13 (c) The director may adopt regulations for the registration and regulation of 14 independent review organizations, including the establishment of fees in an amount 15 the director determines to be sufficient to reimburse the state for actual expenses 16 incurred in providing a service. 17 * Sec. 5. AS 21.07.010(a) is amended to read: 18 (a) A contract between a participating health care provider and a health care 19 insurer must contain a provision that 20 (1) provides for a reasonable mechanism to identify all medical care 21 services to be provided by the health care insurer; 22 (2) clearly states that the health care provider will adhere to the 23 health care insurer's policies and procedures, including procedures regarding 24 referrals, obtaining prior authorization, and providing services under a 25 treatment plan approved by the health care insurer; 26 (3) clearly states or references an attachment that states the health care 27 provider's rate of compensation; 28 (4) [(3)] clearly states all ways in which the contract between the 29 health care provider and health care insurer may be terminated; a provision that 30 provides for discretionary termination by either party must apply equitably to both 31 parties;
01 (5) [(4)] provides that, in the event of a dispute between the parties to 02 the contract, a fair, prompt, and mutual dispute resolution process must be used; at a 03 minimum, the process must provide 04 (A) for an initial meeting at which all parties are present or 05 represented by individuals with authority regarding the matters in dispute; the 06 meeting shall be held not later than [WITHIN] 10 working days after the 07 health care insurer receives written notice of the dispute or gives written notice 08 to the provider, unless the parties otherwise agree in writing to a different 09 schedule; 10 (B) that if, not later than [WITHIN] 30 days after 11 [FOLLOWING] the initial meeting, the parties have not resolved the dispute, 12 the dispute shall be submitted to mediation directed by a mediator who is 13 mutually agreeable to the parties and who is not regularly under contract to or 14 employed by either of the parties; each party shall bear its proportionate share 15 of the cost of mediation, including the mediator fees; 16 (C) that if, after a period of 60 days following commencement 17 of mediation, the parties are unable to resolve the dispute, either party may 18 seek other relief allowed by law; 19 (D) that the parties shall agree to negotiate in good faith in the 20 initial meeting and in mediation; 21 (6) [(5)] states that a health care provider may not be penalized or the 22 health care provider's contract terminated by the health care insurer because the health 23 care provider acts as an advocate for a covered person in seeking appropriate, 24 medically necessary medical care services; 25 (7) [(6)] protects the ability of a health care provider to communicate 26 openly with a covered person about all appropriate diagnostic testing and treatment 27 options; and 28 (8) [(7)] defines words in a clear and concise manner. 29 * Sec. 6. AS 21.07.020 is amended to read: 30 Sec. 21.07.020. Required contract provisions for health care insurance 31 policy. A health care insurance policy must contain a provision
01 (1) [A PROVISION] that preauthorization for a covered medical 02 procedure on the basis of medical necessity may not be retroactively denied unless the 03 preauthorization is based on materially incomplete or inaccurate information provided 04 by or on behalf of the provider; 05 (2) [A PROVISION] for emergency [ROOM] services that meet the 06 requirements under 42 U.S.C. 300gg-19a(b) if any coverage is provided for 07 treatment of an [A MEDICAL] emergency medical condition; 08 (3) [A PROVISION] that covered medical care services be reasonably 09 available in the community in which a covered person resides or that, if referrals are 10 required by the policy, adequate referrals outside the community be available if the 11 medical care service is not available in the community; 12 (4) [A PROVISION THAT ANY UTILIZATION REVIEW 13 DECISION 14 (A) MUST BE MADE WITHIN 72 HOURS AFTER 15 RECEIVING THE REQUEST FOR PREAPPROVAL FOR 16 NONEMERGENCY SITUATIONS; FOR EMERGENCY SITUATIONS, 17 UTILIZATION REVIEW DECISIONS FOR CARE FOLLOWING 18 EMERGENCY SERVICES MUST BE MADE AS SOON AS IS 19 PRACTICABLE BUT IN ANY EVENT NOT LATER THAN 24 HOURS 20 AFTER RECEIVING THE REQUEST FOR PREAPPROVAL OR FOR 21 COVERAGE DETERMINATION; AND 22 (B) TO DENY, REDUCE, OR TERMINATE A HEALTH 23 CARE BENEFIT OR TO DENY PAYMENT FOR A MEDICAL CARE 24 SERVICE BECAUSE THAT SERVICE IS NOT MEDICALLY 25 NECESSARY SHALL BE MADE BY AN EMPLOYEE OR AGENT OF 26 THE HEALTH CARE INSURER WHO IS A LICENSED HEALTH CARE 27 PROVIDER; 28 (5) A PROVISION THAT PROVIDES FOR AN INTERNAL 29 APPEAL MECHANISM FOR A COVERED PERSON WHO DISAGREES WITH A 30 UTILIZATION REVIEW DECISION MADE BY A HEALTH CARE INSURER; 31 EXCEPT AS PROVIDED UNDER (6) OF THIS SECTION, THIS APPEAL
01 MECHANISM MUST PROVIDE FOR A WRITTEN DECISION 02 (A) FROM THE HEALTH CARE INSURER WITHIN 18 03 WORKING DAYS AFTER THE DATE WRITTEN NOTICE OF AN 04 APPEAL IS RECEIVED; AND 05 (B) ON THE APPEAL BY AN EMPLOYEE OR AGENT OF 06 THE HEALTH CARE INSURER WHO HOLDS THE SAME 07 PROFESSIONAL LICENSE AS THE HEALTH CARE PROVIDER WHO IS 08 TREATING THE COVERED PERSON; 09 (6) A PROVISION THAT PROVIDES FOR AN INTERNAL 10 APPEAL MECHANISM FOR A COVERED PERSON WHO DISAGREES WITH A 11 UTILIZATION REVIEW DECISION MADE BY A HEALTH CARE INSURER IN 12 ANY CASE IN WHICH DELAY WOULD, IN THE WRITTEN OPINION OF THE 13 TREATING PROVIDER, JEOPARDIZE THE COVERED PERSON'S LIFE OR 14 MATERIALLY JEOPARDIZE THE COVERED PERSON'S HEALTH; THE 15 HEALTH CARE INSURER SHALL 16 (A) DECIDE AN APPEAL DESCRIBED IN THIS 17 PARAGRAPH WITHIN 72 HOURS AFTER RECEIVING THE APPEAL; 18 AND 19 (B) PROVIDE FOR A WRITTEN DECISION ON THE 20 APPEAL BY AN EMPLOYEE OR AGENT OF THE HEALTH CARE 21 INSURER WHO HOLDS THE SAME PROFESSIONAL LICENSE AS THE 22 HEALTH CARE PROVIDER WHO IS TREATING THE COVERED 23 PERSON; 24 (7) A PROVISION THAT DISCLOSES THE EXISTENCE OF THE 25 RIGHT TO AN EXTERNAL APPEAL OF A UTILIZATION REVIEW DECISION 26 MADE BY A HEALTH CARE INSURER; THE EXTERNAL APPEAL SHALL BE 27 CONDUCTED IN ACCORDANCE WITH AS 21.07.050; 28 (8) A PROVISION] that discloses covered benefits, optional 29 supplemental benefits, and benefits relating to and restrictions on nonparticipating 30 provider services; 31 (5) [(9) A PROVISION THAT DESCRIBES THE PREAPPROVAL
01 REQUIREMENTS AND WHETHER CLINICAL TRIALS OR EXPERIMENTAL 02 OR INVESTIGATIONAL TREATMENT ARE COVERED; 03 (10) A PROVISION] describing a mechanism for assignment of 04 benefits for health care providers and payment of benefits; 05 (6) [(11) A PROVISION] describing the availability of prescription 06 medications or a formulary guide, and whether medications not listed are excluded; if 07 a formulary guide is made available, the guide must be updated annually; and 08 (7) [(12) A PROVISION] describing available translation or interpreter 09 services, including audiotape or braille information. 10 * Sec. 7. AS 21.07.030(d) is amended to read: 11 (d) If a health care insurer that offers a health care insurance policy requires or 12 provides for a designation by a covered person of a participating primary care 13 provider, the health care insurer shall permit the covered person to designate any 14 participating primary care provider, including a pediatrician, that is available to 15 accept the covered person. 16 * Sec. 8. AS 21.07.030(e) is amended to read: 17 (e) Except as provided in this subsection and (h) of this section, a health care 18 insurer that offers a health care insurance policy shall permit a covered person to 19 receive medically necessary or appropriate specialty care, subject to appropriate 20 referral procedures, from any qualified participating health care provider that is 21 available to accept the individual for medical care. This subsection does not apply to 22 specialty care if the health care insurer clearly informs covered persons of the 23 limitations on choice of participating health care providers with respect to medical 24 care. In this subsection, 25 (1) "appropriate referral procedures" means procedures for referring 26 patients to other health care providers as set out in the applicable member policy and 27 as described under (a) of this section; 28 (2) "specialty care" means care provided by a health care provider with 29 training and experience in treating a particular injury, illness, or condition. 30 * Sec. 9. AS 21.07.030 is amended by adding a new subsection to read: 31 (h) A health care insurer that offers a health care insurance policy that
01 provides coverage for obstetrical and gynecological care and that requires designation 02 by a covered person of a participating primary care provider may not require 03 authorization or referral for a female patient to receive obstetrical and gynecological 04 care from a participating provider and shall treat authorizations by a health care 05 provider who specializes in obstetrical or gynecological care as the authorization of 06 the primary care provider. This section may not be construed to 07 (1) waive any exclusions of coverage under the terms and conditions 08 of the health care insurance policy with respect to coverage of obstetrical and 09 gynecological care; or 10 (2) preclude a health care insurer from requiring that the health care 11 provider who specializes in obstetrical or gynecological care to notify the primary care 12 provider or the health care insurer of treatment decisions. 13 * Sec. 10. AS 21.07.250(3) is repealed and reenacted to read: 14 (3) "emergency services" means medical care services or items 15 furnished or required to evaluate and treat an emergency medical condition; 16 * Sec. 11. AS 21.07.250(14) is repealed and reenacted to read: 17 (14) "utilization review" means a set of techniques designed to monitor 18 the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of, 19 health care services, procedures, or settings; techniques may include ambulatory 20 review, prospective review, second opinion certification, concurrent review, case 21 management, discharge planning, or retrospective review. 22 * Sec. 12. AS 21.07.250 is amended by adding a new paragraph to read: 23 (15) "emergency medical condition" means the sudden and, at the 24 time, unexpected onset of a medical condition or illness that requires immediate 25 medical attention and where failure to provide immediate medical attention would 26 result in 27 (A) the placing of the person's health in serious jeopardy; 28 (B) a serious impairment to bodily functions; or 29 (C) a serious dysfunction of any bodily organ or part. 30 * Sec. 13. AS 21.09.320(b) is amended to read: 31 (b) To meet the requirements of (a) of this section, the insurer shall keep the
01 records [AS REQUIRED IN AS 21.69.390(d) OR] as required by the record 02 maintenance requirements of the insurer's domicile jurisdiction[, WHICHEVER IS 03 LONGER]. 04 * Sec. 14. AS 21.09.320 is amended by adding new subsections to read: 05 (c) The director may make a request in writing to review records under (a) of 06 this section. An insurer shall, not later than 10 business days after the date of the 07 request, provide the requested records to the director or make the records available for 08 inspection and copying. All records inspected or examined under this subsection are 09 confidential, but may be used by the director in a proceeding against the insurer. 10 (d) Failure by an insurer to provide information required in this section may 11 result in a civil penalty of up to $1,000 for each violation and an additional civil 12 penalty of up to $50 for each day the information requested is not provided. 13 * Sec. 15. AS 21.12.090(b) is amended to read: 14 (b) For the purposes of this title, "wet marine and transportation" insurance is 15 that part of marine insurance that includes only 16 (1) insurance on [UPON] vessels, crafts, and hulls, and insurance of 17 interests in or with relation to vessels, crafts, and hulls; 18 (2) insurance of marine builder's risks, marine war risks, and contracts 19 of marine protection and indemnity insurance; 20 (3) insurance of freights and disbursements pertaining to a subject of 21 insurance coming within this section; or [AND] 22 (4) insurance of personal property and interests in personal property, in 23 the course of exportation from or importation into any country, and in the course of 24 transportation coastwise or on inland waters, including transportation by land, water, 25 or air from point of origin to final destination, in respect to, appertaining to, or in 26 connection with, any and all risks or perils of navigation, transit, or transportation, and 27 while being prepared for and while awaiting shipment, and during delays, storage, 28 transshipment, or reshipment incident thereto. 29 * Sec. 16. AS 21.27.020(c) is amended to read: 30 (c) To qualify for issuance or renewal of a license as a firm insurance 31 producer, a firm managing general agent, a firm reinsurance intermediary broker, a
01 firm reinsurance intermediary manager, a firm surplus lines broker, or a firm 02 independent adjuster, an applicant or licensee shall 03 (1) comply with (b)(4) and (5) of this section; 04 (2) maintain a lawfully established place of business in this state, 05 except when licensed as a nonresident under AS 21.27.270; 06 (3) designate one or more compliance officers for the firm, except that 07 not more than one compliance officer may be designated for each class of 08 authority; 09 (4) provide to the director documents necessary to verify the 10 information contained in or made in connection with the application; and 11 (5) notify the director, in writing, not later than [WITHIN] 30 days 12 after [OF] a change in the firm's compliance officer. 13 * Sec. 17. AS 21.27.020(f) is amended to read: 14 (f) The director may adopt regulations establishing additional education or 15 experience requirements for applicants, [OR] licensees, and continuing education 16 providers under this chapter upon due consideration of the availability and 17 accessibility of education and training opportunities in rural areas of the state. 18 Regulations adopted under this subsection are subject to the following provisions: 19 (1) additional educational or experience requirements may not apply to 20 a licensee who has been licensed by the division of insurance before January 1, 1980; 21 (2) a licensee shall complete at least 24 credit hours of approved 22 continuing education courses during each two-year license period; 23 (3) if a licensee has accumulated more credit hours than required under 24 (2) of this subsection by the end of the license period, a maximum of eight hours may 25 be carried over to meet the requirements of (2) of this subsection in the next license 26 period; 27 (4) a program or seminar may not be approved as an acceptable 28 continuing education program unless it is a formal program of learning that 29 contributes to the professional competence of the licensee; individual study programs 30 or correspondence courses may be used to fulfill continuing education requirements if 31 approved by the director;
01 (5) a nonresident licensee is exempt from the requirements of this 02 subsection. 03 * Sec. 18. AS 21.27.025(a) is amended to read: 04 (a) A licensee shall notify the director in writing not later than [WITHIN] 30 05 days after a change in residence, place of business, legal name, fictitious name or 06 alias, mailing address, electronic mailing address, [OR] telephone number, or 07 compliance officer. A licensee shall report to the director in writing any 08 administrative action taken against the licensee by a governmental agency of another 09 state, [OR] by a governmental agency of another jurisdiction, or by a financial 10 industry regulatory authority sanction or arbitration proceeding not later than 11 [WITHIN] 30 days after the final disposition of the action. A licensee shall submit to 12 the director the final order and other relevant legal documents in the action. A licensee 13 shall report to the director any criminal prosecution of the licensee in this or another 14 state or jurisdiction not later than [WITHIN] 30 days after the date of filing of the 15 criminal complaint, indictment, information, or citation in the prosecution. The 16 licensee shall submit to the director a copy of the criminal complaint, calendaring 17 order, and other relevant legal documents in the prosecution. 18 * Sec. 19. AS 21.27.150(a) is amended to read: 19 (a) The director may issue a 20 (1) travel insurance limited producer license to a person who is 21 appointed under AS 21.27.100 and who sells travel insurance; in this paragraph, 22 "travel insurance" has the meaning given in AS 21.27.152; 23 (2) title insurance limited producer license to a person whose place of 24 business is located in this state and whose sole purpose is to be appointed by and act 25 on behalf of a title insurer; 26 (3) bail bond limited producer license to a person who is appointed by 27 and acts on behalf of a surety insurer pertaining to bail bonds; 28 (4) motor vehicle rental agency limited producer license to a person 29 and, subject to the approval of the director, to employees of the person licensed that 30 the licensee authorizes to transact the business of insurance on the licensee's behalf if, 31 as to an employee, the licensee complies with (D) of this paragraph and if the licensee
01 (A) rents to others, without operators, 02 (i) private passenger motor vehicles, including 03 passenger vans, minivans, and sport utility vehicles; or 04 (ii) cargo motor vehicles, including cargo vans, pickup 05 trucks, and trucks with a gross vehicle weight of less than 26,000 06 pounds that do not require the operator to possess a commercial driver's 07 license; 08 (B) rents motor vehicles only to persons under rental 09 agreements that do not exceed a term of 90 days; 10 (C) transacts only the following kinds of insurance: 11 (i) motor vehicle liability insurance with respect to 12 liability arising out of the use of a vehicle rented from the licensee 13 during the term of the rental agreement; 14 (ii) uninsured or underinsured motorist coverage, with 15 minimum limits described in AS 21.96.020(c) and (d) arising from the 16 use of a vehicle rented from the licensee during the term of the rental 17 agreement; 18 (iii) insurance against medical, hospital, surgical, and 19 disability benefits to an injured person and funeral and death benefits to 20 dependents, beneficiaries, or personal representatives of a deceased 21 person if the insurance is issued as incidental coverage with or 22 supplemental to liability insurance and arises out of the use of a vehicle 23 rented from the licensee during the term of the rental agreement; 24 (iv) personal effects insurance, including loss of use, 25 with respect to damage to or loss of personal property of a person 26 renting the vehicle and other vehicle occupants while that property is 27 being loaded into, transported by, or unloaded from a vehicle rented 28 from the licensee during the term of the rental agreement; 29 (v) towing and roadside assistance with respect to 30 vehicles rented from the licensee during the term of the rental 31 agreement; and
01 (vi) other insurance as may be authorized by regulation 02 by the director; 03 (D) notifies the director in writing, not later than [WITHIN] 04 30 days after [OF] employment, of the name, date of birth, social security 05 number, location of employment, and home address of an employee authorized 06 by the licensee to transact insurance on the licensee's behalf; and 07 (E) provides other information as required by the director; 08 (5) nonresident limited producer license to a person; a license that the 09 director issues under this paragraph grants the same scope of authority as a limited 10 lines producer license issued to the person by the person's home state; 11 (6) credit insurance limited producer license to a person who sells 12 limited lines credit insurance; 13 (7) miscellaneous limited producer license to a person who transacts 14 insurance in this state that restricts the person's authority to less than the total authority 15 for a line of authority described in AS 21.27.115(1) - (6) [, (8), AND (9)]; 16 (8) portable electronics limited producer license to a vendor that sells 17 or offers portable electronics insurance as defined in AS 21.36.515; the following 18 provisions apply to a license issued under this paragraph: 19 (A) a vendor shall file with the director a sworn application for 20 a license under this paragraph on a form prescribed and furnished by the 21 director; the vendor shall provide the name, residence address, location of the 22 vendor's home office, and other information required by the director for an 23 employee or officer that is designated by the vendor as the person responsible 24 for the vendor's compliance with the requirements of this chapter; however, if 25 the vendor derives more than 50 percent of its revenue from the sale of 26 portable electronics insurance, the vendor shall provide the information 27 required under this subparagraph for all officers, directors, and shareholders of 28 record having beneficial ownership of 10 percent or more of any class of 29 securities registered under the federal securities law; 30 (B) a portable electronics limited producer license issued under 31 this paragraph must authorize the employees or authorized representatives of a
01 vendor to transact portable electronics insurance at each location at which a 02 vendor offers portable electronics to customers in this state; and 03 (C) the employees or authorized representatives of the vendor 04 may transact portable electronics insurance and are not required to obtain a 05 limited producer license if 06 (i) the employees or authorized representatives are not 07 compensated based primarily on the number of customers enrolled for 08 coverage; however, an employee or authorized representative may 09 receive compensation for activities under the license that is incidental 10 to the employee's or authorized representative's overall compensation; 11 (ii) the insurer issuing the portable electronics insurance 12 provides a training program for employees and authorized 13 representatives of the portable electronics limited producer licensee that 14 includes instruction about the portable electronics insurance offered to 15 customers and the disclosures required under AS 21.36.515; and 16 (iii) the vendor maintains a register of each location in 17 the state where the vendor offers portable electronics insurance and 18 submits the register to the director not later than [WITHIN] 30 days 19 after the director requests the register; 20 (9) crop insurance limited producer license to a person who sells or 21 offers crop insurance coverage for damage to crops from unfavorable weather 22 conditions, fire or lightning, flood, hail, insect infestation, disease, or other yield- 23 reducing conditions or perils provided by the private insurance market or that is 24 subsidized by the Federal Crop Insurance Corporation, including multi-peril 25 crop insurance. 26 * Sec. 20. AS 21.27.380(a) is amended to read: 27 (a) Except as provided in this title, the director may renew a license biennially 28 on a date set by the director if the licensee continues to be qualified under this chapter 29 and, on or before [THE CLOSE OF BUSINESS OF] the license expiration 30 [RENEWAL] date, meets all renewal requirements established by regulation, submits 31 a renewal application, and pays the renewal license fees set under AS 21.06.250 for
01 each license authority to the director. A licensee is responsible for knowing the date 02 that a license expires [LAPSES] and for renewing a license before expiration. The 03 director shall notify the licensee of the license renewal 30 days before the renewal 04 date. 05 * Sec. 21. AS 21.27.380(b) is amended to read: 06 (b) If a license is not renewed on or before the renewal date set by the director, 07 the license expires [LAPSES]. A licensee may not act as or represent to be an 08 insurance producer, managing general agent, reinsurance intermediary broker, 09 reinsurance intermediary manager, surplus lines broker, or independent adjuster during 10 the time a license has expired [LAPSED]. The director may reinstate an expired [A 11 LAPSED] license if the person continues to qualify for the license and [,] pays 12 renewal license fees [,] and a delayed renewal penalty. Reinstatement does not exempt 13 a person from a penalty provided by law for transacting business while unlicensed. A 14 license may not be renewed if it has expired [LAPSED] for two years or longer. 15 * Sec. 22. AS 21.27.380(d) is amended to read: 16 (d) The director shall mail a notice [NOTICE] of expiration [LAPSE 17 FROM THE DIRECTOR] stating the reason for the expiration [LAPSE SHALL BE 18 MAILED] to a licensee at the licensee's last address on record with the director. The 19 director shall obtain a certificate of mailing from the United States Postal Service. 20 * Sec. 23. AS 21.27.640(b) is amended to read: 21 (b) To qualify for issuance or renewal of a registration, an applicant or 22 registrant shall comply with this title, regulations adopted under AS 21.06.090, and 23 (1) be a trustworthy person; 24 (2) have active working experience in administrative functions that, in 25 the director's opinion, exhibits the ability to competently perform the administrative 26 functions of a third-party administrator; 27 (3) not have committed an act that is a cause for denial, nonrenewal, 28 suspension, or revocation of a registration or license in this state or another 29 jurisdiction; 30 (4) maintain a lawfully established place of business as described in 31 AS 21.27.330 in this state, unless licensed as a nonresident under AS 21.27.270;
01 (5) disclose to the director all owners, officers, directors, or partners, if 02 any; 03 (6) designate a compliance officer for the firm; 04 (7) provide in or with its application 05 (A) all basic organizational documents of the third-party 06 administrator, including articles of incorporation, articles of association, 07 partnership agreement, trade name certificate, trust agreement, shareholder 08 agreement, and other applicable documents and all endorsements to the 09 required documents; 10 (B) the bylaws, rules, regulations, or similar documents 11 regulating the internal affairs of the administrator; 12 (C) the names, mailing addresses, physical addresses, official 13 positions, and professional qualifications of persons who are responsible for 14 the conduct of affairs of the third-party administrator, including the members 15 of the board of directors, board of trustees, executive committee, or other 16 governing board or committee; the principal officers in the case of a 17 corporation, or the partners or members in the case of a partnership, limited 18 liability company, limited liability partnership, or association; shareholders 19 holding directly or indirectly 10 percent or more of the voting securities of the 20 third-party administrator; and any other person who exercises control or 21 influence over the affairs of the third-party administrator; 22 (D) certified financial statements for the preceding two years, 23 or for each year and partial year that the applicant has been in business if less 24 than two years, prepared by an independent certified public accountant 25 establishing that the applicant is solvent, that the applicant's system of 26 accounting, internal control, and procedure is operating effectively to provide 27 reasonable assurance that money is promptly accounted for and paid to the 28 person entitled to the money, and any other information that the director may 29 require to review the current financial condition of the applicant; and 30 (E) a statement describing the business plan, including 31 information on staffing levels and activities proposed in this state and in other
01 jurisdictions and providing details establishing the third-party administrator's 02 capability for providing a sufficient number of experienced and qualified 03 personnel in the areas of claims handling, underwriting, and record keeping; 04 (8) provide to the director documents necessary to verify the 05 statements contained in or in connection with the application; and 06 (9) notify the director, in writing, not later than [WITHIN] 30 days 07 after [OF] 08 (A) a change in compliance officer, residence, place of 09 business, mailing address, or phone number; 10 (B) the final disposition of an administrative action taken 11 against the registrant by a governmental agency of another state, by a 12 governmental agency of another jurisdiction, or by a financial industry 13 regulatory authority sanction or arbitration proceeding; in addition, a 14 registrant shall submit to the director documents relating to the final 15 disposition on, including the final order and other relevant legal 16 documents in the action [THE SUSPENSION OR REVOCATION OF AN 17 INSURANCE LICENSE OR REGISTRATION BY ANOTHER STATE OR 18 JURISDICTION]; or 19 (C) a conviction of a misdemeanor or felony of the third-party 20 administrator, its officers, directors, partners, owners, or employees. 21 * Sec. 24. AS 21.27.650 is amended by adding a new subsection to read: 22 (r) An insurer shall review its books and records quarterly to determine 23 whether a person or insurance producer has acted as the insurer's third-party 24 administrator. If an insurer determines that a person or insurance producer has acted as 25 the insurer's third-party administrator, the insurer shall promptly notify the person or 26 insurance producer and the director of this determination. The insurer and the person 27 or insurance producer must fully comply with the provisions of this chapter not later 28 than 30 days after notification. 29 * Sec. 25. AS 21.27.690(b) is amended to read: 30 (b) An insurer may use a nonresident reinsurance intermediary broker who is 31 not licensed under this chapter if the reinsurance intermediary broker has filed a
01 certification with the director that the reinsurance intermediary broker is 02 operating only for a foreign insurer and the person is licensed in good standing as a 03 resident reinsurance intermediary broker by an insurance regulator of another state that 04 is accredited by the National Association of Insurance Commissioners. Upon written 05 request, the director may grant written permission for a domestic insurer to use an 06 alien reinsurance intermediary broker not licensed by and without a place of business 07 in a jurisdiction subject to accreditation by the National Association of Insurance 08 Commissioners if the alien reinsurance intermediary broker has filed a certification 09 with the director that the reinsurance intermediary broker is operating only for a 10 domestic insurer and is licensed in good standing by its domiciliary insurance 11 regulator. The domestic insurer and unlicensed reinsurance intermediary broker are 12 subject to all other requirements of this section. 13 * Sec. 26. AS 21.34.035(b) is amended to read: 14 (b) The rates and rating methods for health care insurance placed and written 15 under this section are subject to AS 21.51.405 and AS 21.54.015 [AS 21.87.190]. The 16 surplus lines broker shall make the filings required under AS 21.51.405 and AS 17 21.54.015 [AS 21.87.190] and maintain the records and accounts as required under AS 18 21.87.230. 19 * Sec. 27. AS 21.34.050(a) is amended to read: 20 (a) In addition to meeting the requirements of AS 21.34.040, a nonadmitted 21 insurer shall be considered an eligible surplus lines insurer if it [PAYS FEES 22 REQUIRED BY REGULATION AND] appears on the most recent list of eligible 23 surplus lines insurers published by the director. The list is to be published at least 24 semiannually by 25 (1) posting the list on the division's Internet website; and 26 (2) providing a copy of the list to a person on request to the division. 27 * Sec. 28. AS 21.34.050(c) is amended to read: 28 (c) A nonadmitted insurer shall be removed from the list of eligible surplus 29 lines insurers if the nonadmitted insurer [FAILS TO PAY, BEFORE JULY 1 OF 30 EACH YEAR, THE FEE AUTHORIZED UNDER THIS SECTION OR] fails to meet 31 the requirement under AS 21.34.040(d). However, the director may reinstate a
01 nonadmitted insurer on the list of eligible surplus lines insurers if 02 [(1) THE NONADMITTED INSURER INADVERTENTLY FAILED 03 TO PAY THE FEE OR MEET THE REQUIREMENT UNDER AS 21.34.040(d); 04 (2)] the nonadmitted insurer has remedied the reason for removal from 05 the list [; AND 06 (3) THE NONADMITTED INSURER PAYS A LATE FEE AS 07 ESTABLISHED BY REGULATION]. 08 * Sec. 29. AS 21.34.180(a) is amended to read: 09 (a) In addition to collecting the full amount of gross premiums written by an 10 insurer for surplus lines insurance, the surplus lines broker shall collect and pay to the 11 director a tax of 2.7 percent on the net premium, which is the total gross premiums 12 written, less any return premiums, for the insurance. Where the home state of the 13 insured is this state and the insurance covers properties, risks, or exposures located 14 or to be performed both in and out of this state, the tax payable shall be computed 15 based on an amount equal to 2.7 percent on that portion of the net premiums allocated 16 under (f) of this section to this state, plus an amount equal to the portion of the 17 premiums allocated under (f) of this section to other states or territories based on the 18 tax rates and fees applicable to other properties, risks, or exposures located or to be 19 performed outside of this state. 20 * Sec. 30. AS 21.36.025 is amended by adding new subsections to read: 21 (b) A person may not sell a membership in an association or labor union for 22 the purpose of qualifying an individual for group insurance. 23 (c) A person that sells a membership in an association may not offer group 24 insurance for purposes of selling membership in an association or labor union. 25 * Sec. 31. AS 21.36.185 is amended to read: 26 Sec. 21.36.185. Maintenance of complaint handling records. Except for 27 records subject to health carrier grievance reporting and recordkeeping 28 requirements established under AS 21.07.005, an [AN] insurer shall maintain a 29 complete record of all the complaints received by the insurer since the date of the 30 insurer's last market conduct examination under AS 21.06.120 or for four years, 31 whichever occurs first. This record must indicate the total number of complaints, the
01 classification of each complaint by line of insurance, the nature of each complaint, the 02 disposition of each complaint, and the time it took to process each complaint. For 03 purposes of this section, "complaint" means any written communication primarily 04 expressing a grievance. 05 * Sec. 32. AS 21.36.225 is amended to read: 06 Sec. 21.36.225. Notice of health insurance coverage cancellation, coverage 07 change, or premium change. (a) Except for a health care insurance policy subject to 08 AS 21.51.400 or AS 21.54.130, an insurer may not cancel a health insurance policy 09 unless the insurer provides written notice to a policyholder [COVERED 10 INDIVIDUAL] at least 45 days before the effective date of the cancellation. 11 (b) An insurer shall provide written notice to a policyholder [COVERED 12 INDIVIDUAL] of changes in coverage or premium at least 45 days before the 13 effective date of the change in coverage or premium. 14 * Sec. 33. AS 21.36.360(b) is amended to read: 15 (b) A fraudulent insurance act is committed by a person who, with intent to 16 injure, defraud, or deceive 17 (1) collects a sum as premium or charge for insurance if the insurance 18 has not been provided or is not in due course to be provided, subject to acceptance of 19 the risk by the insurer, by an insurance policy authorized under this title; 20 (2) presents to an insurer a written or oral statement in support of a 21 claim for payment or other benefit under an insurance policy, knowing that the 22 statement contains false, incomplete, or misleading information or omits information 23 concerning a matter material to the claim; 24 (3) assists or conspires with another to prepare or make a written or 25 oral statement that is presented to an insurer in support of a claim for a benefit under 26 an insurance policy, knowing that the statement contains false, incomplete, or 27 misleading information or omits information concerning a matter material to the 28 claim; 29 (4) wilfully collects as premium or charge for insurance a sum in 30 excess of the premium or charge applicable to the insurance as specified in the policy 31 by the insurer in accordance with the applicable classifications and rates approved by
01 the director, or in cases where classifications and rates are not subject to approval, the 02 premiums and charges applicable to the insurance as specified in the policy and fixed 03 by the insurer; 04 (5) fails to make disposition of funds received or held or 05 misappropriates funds received or held representing premiums or return premiums; 06 [OR] 07 (6) fails to pay its tax liability under this title when due; or 08 (7) makes a written or oral statement in response to an insurer's 09 inquiries related to another person's claim for payment or other benefit under an 10 insurance policy, knowing that the statement contains false, incomplete, or 11 misleading information or omits information concerning a matter material to the 12 claim. 13 * Sec. 34. AS 21.36.360(q) is amended to read: 14 (q) A fraudulent or criminal insurance act described in 15 (1) (b) of this section that is committed to obtain $10,000 or more is a 16 class B felony; 17 (2) (c), (d), or (p)(4) of this section is a class B felony; 18 (3) (b) of this section that is committed to obtain $500 or more but less 19 than $10,000 is a class C felony; 20 (4) (e), (f), [OR] (g), or (p)(2) or (3) of this section is a class C felony; 21 (5) (b) of this section that is committed to obtain less than $500 is a 22 class A misdemeanor; 23 (6) (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor; 24 (7) (o) of this section is a class B misdemeanor; and 25 (8) (p)(1) of this section is a class B misdemeanor unless another 26 specific penalty is provided for the violation of the provision [; AND 27 (9) (p)(2) AND (3) OF THIS SECTION MAY BE PROSECUTED 28 UNDER AS 11.46]. 29 * Sec. 35. AS 21.36.390(b) is amended to read: 30 (b) An insurer or licensee that has reason to believe that an insurance producer 31 with which it is doing business is involved in a defalcation, embezzlement, or
01 violation of the provisions of AS 21.36.030, 21.36.050, or 21.36.360 [AS 21.36.360] 02 shall immediately send the director a report disclosing the basis for that belief and any 03 other information that the director may require. 04 * Sec. 36. AS 21.39.040(a) is amended to read: 05 (a) Each insurer shall file with the director, except as to inland marine risks, 06 which, by general custom of the business, are not written according to manual rates or 07 rating plans, and except for rates for commercial insurance for which the director, by 08 regulation authorizes an informational filing as set out in (k) of this section, every 09 manual, minimum, class rate, rating schedule, loss cost adjustment, or rating plan and 10 every other rating rule, and each modification of any of them that it proposes to use. 11 Each filing 12 (1) shall be made under the applicable filing procedures in AS 13 21.39.041, 21.39.210, or 21.39.220; 14 (2) must state the proposed effective date; the effective date may be 15 (A) a specific date; 16 (B) the date the filing is approved by the director; or 17 (C) a date conditioned on some other event when approved 18 by the director; and 19 (3) must indicate the character and extent of the coverage 20 contemplated. 21 * Sec. 37. AS 21.39.070(a) is repealed and reenacted to read: 22 (a) Each member of or subscriber to a rating organization shall adhere to the 23 filings made on its behalf by the organization except that an insurer may file with the 24 director, in accordance with AS 21.39.040(a), a deviation from the class rates, 25 schedules, rating plans, or rules respecting a kind of insurance, or class of risk within a 26 kind of insurance, or a combination of them. 27 * Sec. 38. AS 21.42.160(d) is amended to read: 28 (d) Each policy and annuity contract issued by an insurer, and the forms 29 thereof filed with the director, must have printed on them an appropriate designating 30 letter or figure, or combination of letters or figures, or terms identifying the respective 31 forms of policies or contracts [, TOGETHER WITH THE YEAR OF ADOPTION OF
01 THE FORM]. When a change is made in the form, the designating letters, figures, or 02 terms [AND YEAR OF ADOPTION] must be correspondingly changed. 03 * Sec. 39. AS 21.42.250(c) is amended to read: 04 (c) An insurer may provide an [A PROPERTY AND CASUALTY] insurance 05 policy or endorsement [ENDORSEMENTS] by posting the policy or endorsement on 06 the insurer's Internet website and clearly identifying the posted policy or endorsement 07 [ENDORSEMENTS] purchased by the insured in the declaration page provided to the 08 insured. An [A PROPERTY AND CASUALTY] insurance policy or endorsement 09 posted under this subsection 10 (1) must contain the standard or uniform provisions [FOR PROPERTY 11 AND CASUALTY INSURANCE] required by AS 21.42.140; 12 (2) must be in a form approved by the director under AS 21.42.120; 13 (3) must be posted in a manner that reasonably allows the insured to 14 retrieve and print or save the policy or endorsement from the website without paying a 15 fee; 16 (4) must remain posted on the insurer's Internet website during the 17 time that the policy or endorsement is in effect, be retained by the insurer for not less 18 than three years after the policy or endorsement is no longer in effect, and be made 19 available to the insured on request; and 20 (5) may not include personally identifiable information. 21 * Sec. 40. AS 21.45.020(d) is amended to read: 22 (d) For a variable life insurance policy or variable annuity contract, the refund 23 under (c) of this section must equal the sum of 24 (1) the difference between the premiums paid, including any policy or 25 contract fees or other charges and the amounts allocated to any separate accounts 26 under the policy or contract; and 27 (2) the value of amounts allocated to any separate accounts [UNDER 28 THE POLICY OR CONTRACT] on the date the returned policy is received by the 29 insurer or its insurance producer. 30 * Sec. 41. AS 21.48.010(a) is amended to read: 31 (a) A group life insurance policy may not be issued for delivery
01 [DELIVERED] in this state [INSURING THE LIVES OF MORE THAN ONE 02 INDIVIDUAL] unless the group is a bona fide association as defined in AS 03 21.97.900 or 04 [(1)] the group [POLICYHOLDER] was formed for purposes other 05 than obtaining insurance or is a trust established, adopted, or participated in by one 06 or more employers or labor unions or by one or more employers and labor unions, and 07 (1) [; (2)] the policy covers at least two individuals at the date of issue; 08 (2) [(3)] an individual eligible for coverage is subject to uniformly 09 applied standards of insurability as may be imposed by the insurer; 10 (3) [(4)] amounts of group life insurance are determined based on 11 some plan that will preclude individual selection; 12 (4) [AND (5)] the group life insurance policy [CONTRACT] is in 13 compliance with the other applicable provisions of this chapter; and 14 (5) the group meets other requirements established by the director 15 in regulation. 16 * Sec. 42. AS 21.48.010(b) is amended to read: 17 (b) This [THE PROVISIONS OF (a) OF THIS] section does [DO] not apply 18 to life insurance policies 19 (1) insuring only individuals related by blood, marriage, or legal 20 adoption; 21 (2) insuring only individuals having a common interest through 22 ownership of a business enterprise, or a substantial legal interest or equity in a 23 business enterprise, and who are actively engaged in its management; or 24 (3) insuring only individuals otherwise having an insurable interest in 25 each other's lives. 26 * Sec. 43. AS 21.48.010 is amended by adding new subsections to read: 27 (e) A group life insurance policy may be issued to a group that does not meet 28 one or more of the requirements under (a) of this section only if the director finds that 29 issuance 30 (1) is in the best interests of the public; 31 (2) results in economies of acquisition or administration; and
01 (3) meets other requirements established by the director in regulation. 02 (f) An insurer shall submit to the director information satisfactory to the 03 director that the group meets the requirements of (a) or (e) of this section, and the 04 director must affirmatively approve of the group before an insurer may issue a group 05 life policy to a group under (a) or (e) of this section. 06 * Sec. 44. AS 21.51.020 is amended to read: 07 Sec. 21.51.020. Scope, format of policy. A policy of health insurance may not 08 be delivered or issued for delivery to a person in this state unless it otherwise complies 09 with this title, and complies with the following: 10 (1) the entire money and other considerations must be expressed in the 11 policy; 12 (2) the time the insurance takes effect and terminates must be 13 expressed in the policy; 14 (3) it must insure only one person, except that a policy may insure, 15 originally or by subsequent amendment, upon the application of an adult member of a 16 family, who shall be considered the policyholder, any two or more eligible members 17 of that family, including husband, wife, dependent children, or any children under a 18 specified age, which may [SHALL] not exceed 25 [23] years, and any other person 19 dependent on [UPON] the policyholder; 20 (4) the style, arrangement, and over-all appearance of the policy must 21 give no undue prominence to any portion of the text, and every printed portion of the 22 text of the policy and of endorsements or attached papers must be plainly printed in 23 light-faced type of a style in general use, the size of which must be uniform and not 24 less than 10 point with a lower case unspaced alphabet length not less than 120 point; 25 in this paragraph, text includes all printed matter except the name and address of the 26 insurer, name or title of the policy, the brief description, if any, and captions and 27 subcaptions; 28 (5) the exceptions and reductions of indemnity must be set out in the 29 policy and, other than those contained in AS 21.51.040 - 21.51.260, must be printed, at 30 the insurer's option, either included with the benefit provision to which they apply, or 31 under an appropriate caption such as "Exceptions," or "Exceptions and Reductions,"
01 except that if an exception or reduction specifically applies only to a particular benefit 02 of the policy, a statement of the exception or reduction must be included with the 03 benefit provision to which it applies; 04 (6) each form, including riders and endorsements, must be identified 05 by a form number in the lower left-hand corner of the first page; 06 (7) the policy may not contain a provision making a portion of the 07 charter, rules, constitution, or bylaws of the insurer a part of the policy unless the 08 portion is set out in full in the policy; this paragraph does not apply to the 09 incorporation of, or reference to, a statement of rates or classification of risks, or short- 10 rate table filed with the director. 11 * Sec. 45. AS 21.51.070(a) is amended to read: 12 (a) Except for a policy offered or renewed in this state on a health care 13 exchange and subject to federal regulations on reinstatement, there [THERE] 14 shall be a provision as follows: 15 "Reinstatement: If (1) a renewal premium is not paid within the time 16 granted the insured for payment, (2) a subsequent acceptance of premium by 17 the insurer or by an agent authorized by the insurer to accept the premium 18 occurs, without requiring in connection therewith an application for 19 reinstatement, and (3) the insurer issues a conditional receipt for the premium 20 tendered, the policy will be reinstated upon approval of the application by the 21 insurer or, lacking approval, upon the 45th day following the date of the 22 conditional receipt unless the insurer has previously notified the insured in 23 writing of its disapproval of the application. The reinstated policy shall cover 24 only loss resulting from the accidental injury that may be sustained after the 25 date of reinstatement and loss due to the sickness that may begin more than 10 26 days after that date. In all other respects, the insured and insurer shall have the 27 same rights thereunder as they had under the policy immediately before the 28 due date of the defaulted premium, subject to any provisions endorsed hereon 29 or attached hereto in connection with the reinstatement. A premium accepted 30 in connection with a reinstatement shall be applied to a period for which 31 premium has not been previously paid, but not to a period more than 60 days
01 before the date of reinstatement." 02 * Sec. 46. AS 21.51.405(b) is amended to read: 03 (b) An insurer shall file with the director the premium rates charged for an 04 individual health care insurance plan before using them. A premium rate or premium 05 rate change must be on file with the director for a waiting period of at least 90 [45] 06 days before the effective date of the premium rate. That period may be extended by 07 the director or the insurer for an additional 15 days if, during the initial 90-day [45- 08 DAY] waiting period, notice is given stating that additional time for consideration of 09 the filing is needed. A filing may become effective at the end of the waiting period 10 unless disapproved by the director during the waiting period. If an insurer fails to 11 provide information requested by the director during the waiting period, the filing is 12 considered withdrawn by the insurer, and the premium rate does not become effective. 13 * Sec. 47. AS 21.51.500 is amended by adding a new paragraph to read: 14 (4) "health care exchange" means an American Health Benefit 15 Exchange established under 42 U.S.C. 18031. 16 * Sec. 48. AS 21.53.068 is amended to read: 17 Sec. 21.53.068. Limitations related to producers and third-party 18 administrators. An insurer that authorizes issuance of a long-term care insurance 19 policy by a producer or a third-party administrator under the underwriting authority of 20 the insurer granted to the producer or [A] third-party administrator using the insurer's 21 underwriting guidelines may issue a long-term care insurance policy through the 22 producer or [A] third-party administrator only if the insurer does not compensate 23 [COMPENSATES] the issuer based on the number of policies issued. 24 * Sec. 49. AS 21.54.015(b) is amended to read: 25 (b) A health care insurer may decline to cover or may restrict the coverage 26 offered to a self-employed individual under an association plan authorized under AS 27 21.54.060(6) [AS 21.54.060(7)]. 28 * Sec. 50. AS 21.54.015(c) is amended to read: 29 (c) Except for large employer health care insurance plan premium rates 30 exempted by the director by regulation under (d) of this section, an insurer shall file 31 with the director the premium rates charged for each health care insurance plan before
01 using them. A premium rate or premium rate change must be on file with the director 02 for a waiting period of at least 90 [45] days before the effective date of the premium 03 rate. That period may be extended by the director or the insurer for an additional 15 04 days if, during the initial 90-day [45-DAY] waiting period, notice is given stating that 05 additional time for consideration of the filing is needed. A filing may become effective 06 at the end of the waiting period unless disapproved by the director during the waiting 07 period. If an insurer fails to provide information requested by the director during the 08 waiting period, the filing is considered withdrawn by the insurer, and the premium rate 09 does not become effective. 10 * Sec. 51. AS 21.54.060 is amended to read: 11 Sec. 21.54.060. Group health insurance defined. Group health insurance is 12 that form of health insurance covering groups of persons as defined below, with or 13 without one or more members of their families or one or more of their dependents, or 14 covering one or more members of the families or one or more dependents of the 15 groups of persons and issued on [UPON] the following basis: 16 (1) under a policy issued to an employer or trustees of a fund 17 established by an employer, who shall be considered the policyholder, insuring 18 employees of the employer for the benefit of persons other than the employer; in this 19 paragraph the term "employees" includes the officers, managers, and employees of the 20 employer, the individual proprietor or partner if the employer is an individual 21 proprietor or partnership, the officers, managers, and employees of subsidiary or 22 affiliated corporations, the individual proprietors, partners, and employees of 23 individuals and firms if the business of the employer and the individual or firm is 24 under common control through stock ownership, contract, or otherwise; in this 25 paragraph, "employees" may include retired employees; a policy issued to insure 26 employees of a public body may provide that the term "employees" includes elected or 27 appointed officials; the policy may provide that the term "employees" includes the 28 trustees or their employees, or both, if their duties are principally connected with the 29 trusteeship; a policy issued to insure employees of a corporation may provide that the 30 term "employees" includes directors of the corporation, whether or not the directors 31 receive compensation;
01 (2) under a policy issued to an association, including a labor union, 02 that is a bona fide association that has a constitution and bylaws and that insures 03 [HAS BEEN ORGANIZED AND IS MAINTAINED IN GOOD FAITH FOR 04 PURPOSES OTHER THAN THAT OF OBTAINING INSURANCE, INSURING] 05 members, employees, or employees of members of the association for the benefit of 06 persons other than the association or its officers or trustees; in this paragraph, the term 07 "employees" may include retired employees; 08 (3) under a policy issued to the trustees of a fund established, adopted, 09 or participated in by two or more employers [IN THE SAME OR RELATED 10 INDUSTRY] or by one or more labor unions or by one or more employers and one or 11 more labor unions or by an association as defined in (2) of this section, which trustees 12 shall be considered the policyholder, to insure employees of the employers or 13 members of the unions or of the association, or employees of members of the 14 association, for the benefit of persons other than the employers or the unions or the 15 association; in this paragraph, the term "employees" may include the officers, 16 managers, and employees of the employer, and the individual proprietor or partners if 17 the employer is an individual proprietor or partnership; in this paragraph, the term 18 "employees" may include retired employees; the policy may provide that the term 19 "employees" includes the trustees or their employees, or both, if their duties are 20 principally connected with the trusteeship; 21 (4) under a policy issued to a person or organization to which a policy 22 of group life insurance may be issued or delivered in this state to insure a class or 23 classes of individuals that could be insured under the group life policy; 24 (5) [UNDER A POLICY ISSUED TO COVER ANY OTHER 25 SUBSTANTIALLY SIMILAR GROUP THAT, IN THE DISCRETION OF THE 26 DIRECTOR, MAY BE SUBJECT TO THE ISSUANCE OF A GROUP HEALTH 27 INSURANCE POLICY OR CONTRACT; 28 (6)] a group health insurance policy that contains provisions for the 29 payment by the insurer of benefits for expenses incurred on account of hospital, 30 nursing, medical, or surgical services for members of the family or dependents of a 31 person in the insured group may provide for the continuation of the benefit provisions,
01 or a part or parts of them, after the death of the person in the insured group; 02 (6) [(7)] under a policy issued to an association of employers covering 03 the employees and dependents of the employees, or issued to an association of self- 04 employed individuals covering self-employed individuals and dependents of the self- 05 employed individuals, or issued to an association that includes a combination of 06 employers and self-employed individuals; for purposes of this paragraph, 07 (A) an association described under this paragraph shall comply 08 with the following requirements: 09 (i) the association shall have a constitution and bylaws; 10 (ii) the association shall be maintained in good faith for 11 the benefit of persons other than the association or its officers or 12 trustees; 13 (iii) membership in the association shall be restricted to 14 large or small employers, or self-employed individuals, who are 15 residents of the state; however, an employer domiciled in another state 16 may become a member of the association for purposes of obtaining 17 coverage through the association only for the employees and 18 dependents of the employees of that employer who are residents of this 19 state; 20 (iv) except as provided under AS 21.54.015, the 21 association may not condition membership in the association or 22 coverage under a health insurance policy issued to the association on 23 any of the factors listed under AS 21.54.100(a); 24 (B) "self-employed individual" means an individual who 25 derives a substantial portion of the individual's income from a trade or business 26 through which the individual has attempted to earn taxable income and for 27 which the individual has filed the appropriate Internal Revenue Service form 28 and schedule for the previous taxable year. 29 * Sec. 52. AS 21.54.060 is amended by adding new subsections to read: 30 (b) An insurer may issue a group health insurance policy to a group that does 31 not meet one or more of the requirements under (a)(1) - (4) and (6) of this section on a
01 finding by the director that issuance of a group policy to the group 02 (1) is in the best interests of the public; 03 (2) results in economies of acquisition or administration; and 04 (3) meets other requirements adopted by the director by regulation. 05 (c) An insurer must submit to the director information satisfactory to the 06 director that the group meets the requirements of (b) of this section and the director 07 must affirmatively approve of the group before an insurer may issue a group health 08 insurance policy under (b) of this section. 09 * Sec. 53. AS 21.54.500(4) is repealed and reenacted to read: 10 (4) "bona fide association" has the meaning given in AS 21.97.900; 11 * Sec. 54. AS 21.56.110(a) is amended to read: 12 (a) A health care insurance plan offered, issued for delivery, delivered, or 13 renewed to small employers in this state is subject to the provisions of this chapter, 14 except as prohibited under federal law. 15 * Sec. 55. AS 21.56.120(e) is amended to read: 16 (e) In determining the premium rates for a small employer covered under an 17 association health insurance policy authorized under AS 21.54.060(6) [AS 18 21.54.060(7)], a small employer insurer may not use the claims experience of the 19 small employer while the employer was covered under another health insurance policy 20 and may use only that underwriting information obtained through the insurer's normal 21 application process for new small employer groups that are not written under the 22 association plan. 23 * Sec. 56. AS 21.56.250(6) is amended to read: 24 (6) "bona fide association" has the meaning given in AS 21.97.900 25 [AS 21.54.500]; 26 * Sec. 57. AS 21.59.150 is amended to read: 27 Sec. 21.59.150. Provider license renewal, expiration [LAPSE], 28 reinstatement. (a) A provider may renew a license issued under AS 21.59.110 - 29 21.59.290 biennially on a date set by the director if the licensee continues to be 30 qualified under AS 21.59.110 - 21.59.290 and, on or before the close of business of 31 the renewal date, meets all renewal requirements established by regulation, and pays
01 the renewal license fees set by the director. A licensee is responsible for knowing the 02 date that a license will expire [LAPSE] and for renewing a license on or before that 03 date. The director shall notify the licensee of the impending expiration [LAPSE] 30 04 days before the expiration [LAPSE] date. The director may not renew a license 05 except in compliance with AS 21.59.110 - 21.59.290 and may not renew the license of 06 a person, or to be exercised by a person, found by the director to be untrustworthy, 07 incompetent, or financially irresponsible, or who has not established to the satisfaction 08 of the director that the person is qualified under AS 21.59.110 - 21.59.290. 09 (b) If a provider's license is not renewed on or before the expiration [LAPSE] 10 date set by the director, the license expires [LAPSES]. A licensee may not act as or 11 represent to be a provider during the time a license has expired [LAPSED]. The 12 director may reinstate an expired [A LAPSED] license if the person continues to 13 qualify for the license and pays license renewal fees and a delayed renewal penalty. 14 Reinstatement does not exempt a person from a penalty provided by law for 15 transacting business while unlicensed. A license that has expired [LAPSED] for two 16 years or longer may not be renewed. 17 * Sec. 58. AS 21.59.170(a) is amended to read: 18 (a) A motor vehicle service contract must allow the service contract holder to 19 cancel the motor vehicle service contract not later than [WITHIN] 30 days after the 20 date that the motor vehicle service contract was delivered to the service contract 21 holder, not later than [WITHIN] 10 days after the date of delivery if the motor 22 vehicle service contract is delivered to the service contract holder at the time of sale, 23 or within a longer period, as set out in the motor vehicle service contract. If the service 24 contract holder returns the motor vehicle service contract to the provider within the 25 applicable time period and a claim has not been made under the motor vehicle service 26 contract before the contract is returned to the provider, the motor vehicle service 27 contract is void, and the provider shall refund the full amount of the provider fee to the 28 service contract holder or credit the account of the service contract holder not later 29 than [WITHIN] 45 days after the return of the contract to the provider. If the provider 30 does not pay or credit a refund owed under this subsection not later than [WITHIN] 31 45 days after a service contract holder returns a motor vehicle service contract, a
01 penalty in the amount of 10 percent of the [UNEARNED] provider fee paid by the 02 service contract holder for each month the refund remains unpaid shall be added to the 03 refund. The right to void the motor vehicle service contract provided in this subsection 04 is not transferable and applies only to the original service contract holder for a contract 05 under which a claim is not made before the contract is returned to the provider. 06 * Sec. 59. AS 21.59.170(b) is amended to read: 07 (b) After the time specified in (a) of this section, or if a claim has been made 08 under the motor vehicle service contract within that time, a service contract holder 09 may cancel the motor vehicle service contract, and the provider shall refund to or 10 credit the account of the contract holder the prorated amount of the unearned provider 11 fee, less any claims paid, not later than [WITHIN] 45 days after the return of the 12 service contract to the provider. If the provider does not pay or credit a refund owed 13 under this subsection not later than [WITHIN] 45 days after a service contract holder 14 returns a motor vehicle service contract, a penalty in the amount of 10 percent of the 15 unearned provider fee paid by the service contract holder for each month the refund 16 remains unpaid shall be added to the refund. A provider may charge a reasonable 17 cancellation fee not to exceed 7.5 percent of the unearned provider fee paid by the 18 service contract holder. 19 * Sec. 60. AS 21.59.180(a) is amended to read: 20 (a) To ensure the faithful performance of a provider's obligations to its service 21 contract holders, a provider shall either 22 (1) obtain from an insurer or risk retention group authorized to transact 23 the business of insurance in the state insurance that either reimburses the provider for 24 obligations arising from a provider's motor vehicle service contract issued in the state 25 or, if the provider fails to perform its obligations under a motor vehicle service 26 contract issued in the state, pays to the service contract holder the provider's covered 27 contractual obligations under the terms of the service contract on behalf of the 28 provider; an [A PROVIDER] insurer issuing a policy under this paragraph must 29 satisfy one of the following: 30 (A) maintain surplus as to policyholders and paid-in capital of 31 at least $15,000,000 and annually file with the director copies of the provider's
01 financial statements, its annual statement to the National Association of 02 Insurance Commissioners, and the statement of actuarial opinion and opinion 03 summary required by and filed in the provider's state of domicile; or 04 (B) maintain surplus as to policyholders and paid-in capital at 05 least equal to $10,000,000, but not more than $15,000,000, and demonstrate to 06 the satisfaction of the director that the company maintains a ratio of net written 07 premiums, wherever written, to surplus as to policyholders and paid-in capital 08 of not greater than 3 to 1 and annually files with the director copies of the 09 provider's audited financial statements, its annual statement to the National 10 Association of Insurance Commissioners, and the statement of actuarial 11 opinion and opinion summary required by and filed in the provider's state of 12 domicile; or 13 (2) maintain, solely or together with the parent company, a net worth 14 or stockholders' equity of $100,000,000 and, upon request by the director, provide the 15 director with a copy of the provider's or the parent company's most recent annual 16 report filed with the United States Securities and Exchange Commission within the 17 last calendar year or, if the company does not file with the United States Securities and 18 Exchange Commission, a copy of the company's audited financial statements, which 19 show a net worth of the provider or its parent company of at least $100,000,000; if the 20 parent company's annual report or financial statements are filed to meet the provider's 21 financial stability requirement, then the parent company shall agree to guarantee the 22 obligations of the provider relating to motor vehicle service contracts sold by the 23 provider in this state. 24 * Sec. 61. AS 21.69.310(a) is amended to read: 25 (a) Meetings of stockholders or members of a domestic insurer shall be held in 26 the city or town of its principal office or place of business [IN THIS STATE]. The 27 meetings may be held, for good cause, in another location [WITHIN THE STATE] 28 upon approval of the director. 29 * Sec. 62. AS 21.69.310(c) is amended to read: 30 (c) Each insurer shall, during the first six months of each calendar year, hold 31 the annual meeting of its stockholders or members to fill vacancies existing or
01 occurring in the board of directors, receive and consider reports of the insurer's 02 officers as to its affairs, and transact other business which may properly be brought 03 before it. The director may approve a later date for the annual meeting upon 04 written request by the insurer and with good cause shown. The request for a later 05 annual meeting date shall be made in writing to the director at least 30 days 06 before the end of the six-month requirement. Not [NO] less than 20 days' notice 07 shall be given of the meeting in the manner provided in the bylaws, except where 08 notice of the annual meeting of a mutual insurer is contained in its policies. 09 * Sec. 63. AS 21.69.390(b) is amended to read: 10 (b) A person determined by the director, following an appropriate hearing as 11 provided in AS 21.06.170 - 21.06.230, to have removed or attempted to remove any 12 records from the place where they are required to be kept under (a) [OR (d)] of this 13 section with the intent to wrongfully remove them, or to have concealed or attempted 14 to conceal them from the director, is subject to a civil penalty of not more than 15 $25,000. If a domestic insurer violates a provision of this section the director may 16 institute delinquency proceedings against the insurer under the provisions of AS 21.78. 17 * Sec. 64. AS 21.85.500(5) is amended to read: 18 (5) "multiple employer welfare arrangement" has the meaning given in 19 29 U.S.C. 1002; ["MULTIPLE EMPLOYER WELFARE ARRANGEMENT" DOES 20 NOT INCLUDE A GROUP THAT THE DIRECTOR DESIGNATES UNDER AS 21 21.54.060(5) AS SUBJECT TO ISSUANCE OF A GROUP HEALTH INSURANCE 22 POLICY;] 23 * Sec. 65. AS 21.97.020 is amended to read: 24 Sec. 21.97.020. General penalty. A person determined by the director, 25 following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have 26 wilfully violated a provision of this title or a regulation adopted under it [, FOR 27 WHICH VIOLATION A GREATER PENALTY IS NOT PROVIDED IN THIS 28 TITLE,] is subject to a civil penalty of not more than $25,000 [$2,500]. 29 * Sec. 66. AS 21.97.900 is amended by adding a new paragraph to read: 30 (47) "bona fide association" means an association 31 (A) that has actively been in existence for five years;
01 (B) that has been formed and maintained in good faith for 02 purposes other than obtaining insurance; 03 (C) for which insurance is not required to become a member of 04 the association; 05 (D) in which members of the association share a common 06 enterprise or economic social affinity or relationship; 07 (E) that does not condition membership in the association on a 08 health status factor relating to an individual; 09 (F) that makes insurance available to all members and 10 dependents of members regardless of a health status factor in relation to the 11 member or dependent; 12 (G) in which an individual eligible for coverage is subject to 13 uniformly applied standards of insurability as may be imposed by the insurer; 14 (H) in which premiums for the group insurance policy are 15 actuarially sound; 16 (I) that does not offer an insurance policy to an individual other 17 than in connection with a member of the association; and 18 (J) that meets other requirements established by the director in 19 regulations. 20 * Sec. 67. AS 21.06.087; AS 21.07.250(9); AS 21.54.500(4); and AS 21.69.390(d) are 21 repealed. 22 * Sec. 68. AS 21.07.050, 21.07.060, 21.07.070, 21.07.250(1), 21.07.250(2), and 23 21.07.250(7) are repealed. 24 * Sec. 69. AS 21.27.115(8) and 21.27.115(9) are repealed. 25 * Sec. 70. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 28 Economic Development may adopt regulations necessary to implement this Act, except that 29 the effective date of the regulations may not be earlier than the effective date of the statutes 30 being implemented. 31 * Sec. 71. The uncodified law of the State of Alaska is amended by adding a new section to
01 read: 02 REVISOR'S INSTRUCTION. The revisor of statutes is requested to change the catch 03 line of AS 21.27.380 from "License renewal, lapse, and reinstatement" to "License renewal, 04 expiration, and reinstatement." 05 * Sec. 72. Section 70 of this Act takes effect immediately under AS 01.10.070(c). 06 * Sec. 73. Section 68 of this Act takes effect January 1, 2017. 07 * Sec. 74. AS 21.27.150(a)(9), enacted by sec. 19 of this Act, and sec. 69 of this Act take 08 effect March 1, 2017.