Enrolled HB 372: Relating to insurance; relating to the annual report by the director of 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.
00Enrolled HB 372 01 Relating to insurance; relating to the annual report by the director of insurance; relating to 02 expenses for insurance examinations; relating to regulations for insurance utilization review, 03 benefits determination, health care insurance grievance resolution procedures, independent 04 review of adverse determinations or final adverse determinations, independent review 05 organizations, and continuing education providers; relating to required provisions for health 06 care insurance contracts and policies, including health care provider choice; establishing civil 07 penalties for insurers for failure to provide requested records; amending the definition of "wet 08 marine and transportation" insurance; amending provisions on limited licenses to include crop 09 insurance; relating to third-party administrator notification requirements; relating to 10 certification filing by reinsurance intermediary brokers; relating to rate filings, delivery of 11 insurance policies or endorsements; relating to refunds of variable life insurance policies and
01 variable annuities; establishing limitations on issuance of long-term care insurance; relating to 02 requirements for group health insurance policies; amending the definition of "group health 03 insurance"; relating to motor vehicle service contracts; relating to notice requirements for 04 meetings of stockholders or members of a domestic insurer; establishing a definition of "bona 05 fide association"; relating to requirements and penalties for committing a fraudulent or 06 criminal insurance act; updating criteria for examinations; relating to rate filing deviations; 07 establishing civil penalties for certain wilful violations; and providing for an effective date. 08 _______________ 09 * Section 1. AS 21.06.110 is amended to read: 10 Sec. 21.06.110. Director's annual report. As early in each calendar year as is 11 reasonably possible, the director shall prepare and deliver an annual report to the 12 commissioner, who shall notify the legislature that the report is available, showing, 13 with respect to the preceding calendar year, 14 (1) a list of the authorized insurers transacting insurance in this state, 15 with a summary of their financial statement as the director considers appropriate; 16 (2) the name of each insurer whose certificate of authority was 17 surrendered, suspended, or revoked during the year and the cause of surrender, 18 suspension, or revocation; 19 (3) the name of each insurer authorized to do business in this state 20 against which delinquency or similar proceedings were instituted and, if against an 21 insurer domiciled in this state, a concise statement of the facts with respect to each 22 proceeding and its present status; 23 (4) a statement in regard to examination of rating organizations, 24 advisory organizations, joint underwriters, and joint reinsurers as required by 25 AS 21.39.120; 26 (5) the receipt and expenses of the division for the year; 27 (6) recommendations of the director as to amendments or 28 supplementation of laws affecting insurance or the office of director;
01 (7) statistical information regarding health insurance, including the 02 number of individual and group policies sold or terminated in the state; this paragraph 03 does not authorize the director to require an insurer to release proprietary information; 04 (8) the annual percentage of health claims paid in the state that meets 05 the requirements of AS 21.36.495(a) and (d); 06 (9) the total amount of contributions reported and the total amount of 07 credit claimed under AS 21.96.070 and 21.96.075; [AND] 08 (10) the total number of public comments received and the 09 director's efforts, to the extent allowable by law, to improve or maintain public 10 access to information on individual health insurance rate filings before they 11 become effective; and 12 (11) other pertinent information and matters the director considers 13 proper. 14 * Sec. 2. AS 21.06.120(a) is amended to read: 15 (a) The director may examine the affairs, transactions, accounts, records, and 16 assets of each authorized and formerly authorized insurer and each licensed and 17 formerly licensed managing general agent, reinsurance intermediary broker, 18 reinsurance intermediary manager, surplus lines broker, and surplus lines association 19 as often as the director considers advisable. In scheduling and determining the nature, 20 scope, and frequency of examinations, the director may consider any factor or material 21 that the director determines is appropriate, including the results of financial statement 22 analysis and ratios, competency of management or change of ownership, actuarial 23 opinions, reports of independent certified public accountants, number and nature of 24 consumer complaints, results of prior examinations, frequency of prior violations of 25 statute and regulation, and criteria set out in the most recent edition of the Financial 26 Condition Examiners [EXAMINERS'] Handbook and the Market Regulation 27 Handbook [MOST RECENTLY] approved by the National Association of Insurance 28 Commissioners and in effect when the director conducts an examination. Examination 29 of an alien insurer may be limited to its insurance transactions and affairs in the United 30 States. Examination of a reciprocal insurer may also include examination of its 31 attorney-in-fact to the extent that the transactions of the attorney-in-fact relate to the
01 insurer. 02 * Sec. 3. AS 21.06.140(f) is amended to read: 03 (f) In conducting an examination under this section, the examiner shall 04 observe at a minimum those guidelines and procedures set out in the most recent 05 edition of the Financial Condition Examiners [EXAMINERS'] Handbook and the 06 Market Regulation Handbook [CURRENTLY] approved by the National 07 Association of Insurance Commissioners that are consistent with this title. 08 * Sec. 4. AS 21.06.160(a) is amended to read: 09 (a) Each person examined, other than examinations under AS 21.06.130 and 10 examinations of managing general agents, third-party administrators, 11 reinsurance intermediary managers, motor vehicle service contract providers, or 12 surplus lines brokers, shall pay a reasonable rate calculated on salary, benefit costs, 13 and estimated division overhead for time spent directly or indirectly related to the 14 examination. Each person examined, other than examinations under AS 21.06.130, 15 shall pay actual out-of-pocket business expenses, including travel expenses, incurred 16 by division staff examiners and shall pay the compensation of a contract examiner, to 17 be set at a reasonable customary rate, for conducting the examination upon 18 presentation of a detailed account of the charges and expenses by the director or under 19 an order of the director. The director may waive payment of all or part of the 20 actual out-of-pocket business expenses incurred by division staff examiners, or 21 the compensation of a contract examiner, if the director determines that payment 22 of the expenses or compensation creates a financial hardship for a managing 23 general agent, third-party administrator, reinsurance intermediary manager, 24 motor vehicle service contract provider, or surplus lines broker. The accounting 25 may either be presented periodically during the course of the examination or at the 26 termination of the examination. A person may not pay and an examiner may not 27 accept additional compensation for an examination. A person shall pay examination 28 expenses to the division under this subsection using an electronic payment method 29 specified by the director. 30 * Sec. 5. AS 21.07 is amended by adding a new section to read: 31 Sec. 21.07.005. Regulations relating to health care insurance policies. (a)
01 The director shall adopt regulations to provide standards and criteria for 02 (1) the structure and operation of utilization review and benefit 03 determination processes; 04 (2) the establishment and maintenance of procedures by health care 05 insurers to ensure that a covered individual has the opportunity for appropriate 06 resolution of grievances; and 07 (3) an independent review of an adverse determination or final adverse 08 determination. 09 (b) The regulations under (a) of this section must be at least as restrictive as 10 the Utilization Review and Benefit Determination Model Act adopted by the National 11 Association of Insurance Commissioners on June 22, 2003, the Health Carrier 12 Grievance Procedure Model Act adopted by the National Association of Insurance 13 Commissioners on June 22, 2003, and the Uniform Health Carrier External Review 14 Model Act adopted by the National Association of Insurance Commissioners on 15 June 2, 2008. 16 (c) The director may adopt regulations for the registration and regulation of 17 independent review organizations, including the establishment of fees in an amount 18 the director determines to be sufficient to reimburse the state for actual expenses 19 incurred in providing a service. 20 * Sec. 6. AS 21.07.020 is amended to read: 21 Sec. 21.07.020. Required contract provisions for health care insurance 22 policy. A health care insurance policy must contain a provision 23 (1) [A PROVISION] that preauthorization for a covered medical 24 procedure on the basis of medical necessity may not be retroactively denied unless the 25 preauthorization is based on materially incomplete or inaccurate information provided 26 by or on behalf of the provider; 27 (2) [A PROVISION] for emergency [ROOM] services that meet the 28 requirements under 42 U.S.C. 300gg-19a(b) if any coverage is provided for 29 treatment of an [A MEDICAL] emergency medical condition; 30 (3) [A PROVISION] that covered medical care services be reasonably 31 available in the community in which a covered person resides or that, if referrals are
01 required by the policy, adequate referrals outside the community be available if the 02 medical care service is not available in the community; 03 (4) [A PROVISION THAT ANY UTILIZATION REVIEW 04 DECISION 05 (A) MUST BE MADE WITHIN 72 HOURS AFTER 06 RECEIVING THE REQUEST FOR PREAPPROVAL FOR 07 NONEMERGENCY SITUATIONS; FOR EMERGENCY SITUATIONS, 08 UTILIZATION REVIEW DECISIONS FOR CARE FOLLOWING 09 EMERGENCY SERVICES MUST BE MADE AS SOON AS IS 10 PRACTICABLE BUT IN ANY EVENT NOT LATER THAN 24 HOURS 11 AFTER RECEIVING THE REQUEST FOR PREAPPROVAL OR FOR 12 COVERAGE DETERMINATION; AND 13 (B) TO DENY, REDUCE, OR TERMINATE A HEALTH 14 CARE BENEFIT OR TO DENY PAYMENT FOR A MEDICAL CARE 15 SERVICE BECAUSE THAT SERVICE IS NOT MEDICALLY 16 NECESSARY SHALL BE MADE BY AN EMPLOYEE OR AGENT OF 17 THE HEALTH CARE INSURER WHO IS A LICENSED HEALTH CARE 18 PROVIDER; 19 (5) A PROVISION THAT PROVIDES FOR AN INTERNAL 20 APPEAL MECHANISM FOR A COVERED PERSON WHO DISAGREES WITH A 21 UTILIZATION REVIEW DECISION MADE BY A HEALTH CARE INSURER; 22 EXCEPT AS PROVIDED UNDER (6) OF THIS SECTION, THIS APPEAL 23 MECHANISM MUST PROVIDE FOR A WRITTEN DECISION 24 (A) FROM THE HEALTH CARE INSURER WITHIN 18 25 WORKING DAYS AFTER THE DATE WRITTEN NOTICE OF AN 26 APPEAL IS RECEIVED; AND 27 (B) ON THE APPEAL BY AN EMPLOYEE OR AGENT OF 28 THE HEALTH CARE INSURER WHO HOLDS THE SAME 29 PROFESSIONAL LICENSE AS THE HEALTH CARE PROVIDER WHO IS 30 TREATING THE COVERED PERSON; 31 (6) A PROVISION THAT PROVIDES FOR AN INTERNAL
01 APPEAL MECHANISM FOR A COVERED PERSON WHO DISAGREES WITH A 02 UTILIZATION REVIEW DECISION MADE BY A HEALTH CARE INSURER IN 03 ANY CASE IN WHICH DELAY WOULD, IN THE WRITTEN OPINION OF THE 04 TREATING PROVIDER, JEOPARDIZE THE COVERED PERSON'S LIFE OR 05 MATERIALLY JEOPARDIZE THE COVERED PERSON'S HEALTH; THE 06 HEALTH CARE INSURER SHALL 07 (A) DECIDE AN APPEAL DESCRIBED IN THIS 08 PARAGRAPH WITHIN 72 HOURS AFTER RECEIVING THE APPEAL; 09 AND 10 (B) PROVIDE FOR A WRITTEN DECISION ON THE 11 APPEAL BY AN EMPLOYEE OR AGENT OF THE HEALTH CARE 12 INSURER WHO HOLDS THE SAME PROFESSIONAL LICENSE AS THE 13 HEALTH CARE PROVIDER WHO IS TREATING THE COVERED 14 PERSON; 15 (7) A PROVISION THAT DISCLOSES THE EXISTENCE OF THE 16 RIGHT TO AN EXTERNAL APPEAL OF A UTILIZATION REVIEW DECISION 17 MADE BY A HEALTH CARE INSURER; THE EXTERNAL APPEAL SHALL BE 18 CONDUCTED IN ACCORDANCE WITH AS 21.07.050; 19 (8) A PROVISION] that discloses covered benefits, optional 20 supplemental benefits, and benefits relating to and restrictions on nonparticipating 21 provider services; 22 (5) [(9) A PROVISION THAT DESCRIBES THE PREAPPROVAL 23 REQUIREMENTS AND WHETHER CLINICAL TRIALS OR EXPERIMENTAL 24 OR INVESTIGATIONAL TREATMENT ARE COVERED; 25 (10) A PROVISION] describing a mechanism for assignment of 26 benefits for health care providers and payment of benefits; 27 (6) [(11) A PROVISION] describing the availability of prescription 28 medications or a formulary guide, and whether medications not listed are excluded; if 29 a formulary guide is made available, the guide must be updated annually; and 30 (7) [(12) A PROVISION] describing available translation or interpreter 31 services, including audiotape or braille information.
01 * Sec. 7. AS 21.07.030(d) is amended to read: 02 (d) If a health care insurer that offers a health care insurance policy requires or 03 provides for a designation by a covered person of a participating primary care 04 provider, the health care insurer shall permit the covered person to designate any 05 participating primary care provider, including a pediatrician, that is available to 06 accept the covered person. 07 * Sec. 8. AS 21.07.030(e) is amended to read: 08 (e) Except as provided in this subsection and (h) of this section, a health care 09 insurer that offers a health care insurance policy shall permit a covered person to 10 receive medically necessary or appropriate specialty care, subject to appropriate 11 referral procedures, from any qualified participating health care provider that is 12 available to accept the individual for medical care. This subsection does not apply to 13 specialty care if the health care insurer clearly informs covered persons of the 14 limitations on choice of participating health care providers with respect to medical 15 care. In this subsection, 16 (1) "appropriate referral procedures" means procedures for referring 17 patients to other health care providers as set out in the applicable member policy and 18 as described under (a) of this section; 19 (2) "specialty care" means care provided by a health care provider with 20 training and experience in treating a particular injury, illness, or condition. 21 * Sec. 9. AS 21.07.030 is amended by adding a new subsection to read: 22 (h) A health care insurer that offers a health care insurance policy that 23 provides coverage for obstetrical and gynecological care and that requires designation 24 by a covered person of a participating primary care provider may not require 25 authorization or referral by any person, including a primary care provider, for a female 26 patient to receive obstetrical and gynecological care from a participating health care 27 professional who specializes in obstetrics or gynecology. A participating health care 28 professional who specializes in obstetrics or gynecology shall agree to adhere to the 29 health care insurer's policies and procedures, including procedures regarding referrals, 30 obtaining prior authorization, and providing services under a treatment plan, if any, 31 approved by the health care insurer. A health care insurer shall treat authorizations by
01 a health care professional who specializes in obstetrical or gynecological care as the 02 authorization of the primary care provider. This subsection may not be construed to 03 (1) waive any exclusions of coverage under the terms and conditions 04 of the health care insurance policy with respect to coverage of obstetrical and 05 gynecological care; or 06 (2) preclude a health care insurer from requiring that the health care 07 provider who specializes in obstetrical or gynecological care to notify the primary care 08 provider or the health care insurer of treatment decisions. 09 * Sec. 10. AS 21.07.250(3) is repealed and reenacted to read: 10 (3) "emergency services" means medical care services or items 11 furnished or required to evaluate and treat an emergency medical condition; 12 * Sec. 11. AS 21.07.250(14) is repealed and reenacted to read: 13 (14) "utilization review" means a set of techniques designed to monitor 14 the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of, 15 health care services, procedures, or settings; techniques may include ambulatory 16 review, prospective review, second opinion certification, concurrent review, case 17 management, discharge planning, or retrospective review. 18 * Sec. 12. AS 21.07.250 is amended by adding a new paragraph to read: 19 (15) "emergency medical condition" means a medical condition 20 manifesting itself by acute symptoms of sufficient severity, including severe pain, that 21 a prudent person who possesses an average knowledge of health and medicine could 22 reasonably expect that the absence of immediate medical attention would result in 23 serious impairment of bodily functions, serious dysfunction of a bodily organ or part, 24 or would place the person's health or, with respect to a pregnant woman, the health of 25 the woman or her unborn child, in serious jeopardy. 26 * Sec. 13. AS 21.09.320(b) is amended to read: 27 (b) To meet the requirements of (a) of this section, the insurer shall keep the 28 records [AS REQUIRED IN AS 21.69.390(d) OR] as required by the record 29 maintenance requirements of the insurer's domicile jurisdiction [, WHICHEVER IS 30 LONGER]. 31 * Sec. 14. AS 21.09.320 is amended by adding new subsections to read:
01 (c) The director may make a request in writing to review records under (a) of 02 this section. An insurer shall, not later than 10 business days after the date of the 03 request, provide the requested records to the director or make the records available for 04 inspection and copying. All records inspected or examined under this subsection are 05 confidential, but may be used by the director in a proceeding against the insurer. 06 (d) Failure by an insurer to provide information required in this section may 07 result in a civil penalty of up to $1,000 for each violation and an additional civil 08 penalty of up to $50 for each day the information requested is not provided. 09 * Sec. 15. AS 21.12.090(b) is amended to read: 10 (b) For the purposes of this title, "wet marine and transportation" insurance is 11 that part of marine insurance that includes only 12 (1) insurance on [UPON] vessels, crafts, and hulls, and insurance of 13 interests in or with relation to vessels, crafts, and hulls; 14 (2) insurance of marine builder's risks, marine war risks, and contracts 15 of marine protection and indemnity insurance; 16 (3) insurance of freights and disbursements pertaining to a subject of 17 insurance coming within this section; or [AND] 18 (4) insurance of personal property and interests in personal property, in 19 the course of exportation from or importation into any country, and in the course of 20 transportation coastwise or on inland waters, including transportation by land, water, 21 or air from point of origin to final destination, in respect to, appertaining to, or in 22 connection with, any and all risks or perils of navigation, transit, or transportation, and 23 while being prepared for and while awaiting shipment, and during delays, storage, 24 transshipment, or reshipment incident thereto. 25 * Sec. 16. AS 21.27.020(c) is amended to read: 26 (c) To qualify for issuance or renewal of a license as a firm insurance 27 producer, a firm managing general agent, a firm reinsurance intermediary broker, a 28 firm reinsurance intermediary manager, a firm surplus lines broker, or a firm 29 independent adjuster, an applicant or licensee shall 30 (1) comply with (b)(4) and (5) of this section; 31 (2) maintain a lawfully established place of business in this state,
01 except when licensed as a nonresident under AS 21.27.270; 02 (3) designate one or more compliance officers for the firm, except that 03 not more than one compliance officer may be designated for each class of 04 authority; 05 (4) provide to the director documents necessary to verify the 06 information contained in or made in connection with the application; and 07 (5) notify the director, in writing, not later than [WITHIN] 30 days 08 after [OF] a change in the firm's compliance officer. 09 * Sec. 17. AS 21.27.020(f) is amended to read: 10 (f) The director may adopt regulations establishing additional education or 11 experience requirements for applicants, [OR] licensees, and continuing education 12 providers under this chapter upon due consideration of the availability and 13 accessibility of education and training opportunities in rural areas of the state. 14 Regulations adopted under this subsection are subject to the following provisions: 15 (1) additional educational or experience requirements may not apply to 16 a licensee who has been licensed by the division of insurance before January 1, 1980; 17 (2) a licensee shall complete at least 24 credit hours of approved 18 continuing education courses during each two-year license period; 19 (3) if a licensee has accumulated more credit hours than required under 20 (2) of this subsection by the end of the license period, a maximum of eight hours may 21 be carried over to meet the requirements of (2) of this subsection in the next license 22 period; 23 (4) a program or seminar may not be approved as an acceptable 24 continuing education program unless it is a formal program of learning that 25 contributes to the professional competence of the licensee; individual study programs 26 or correspondence courses may be used to fulfill continuing education requirements if 27 approved by the director; 28 (5) a nonresident licensee is exempt from the requirements of this 29 subsection. 30 * Sec. 18. AS 21.27.025(a) is amended to read: 31 (a) A licensee shall notify the director in writing not later than [WITHIN] 30
01 days after a change in residence, place of business, legal name, fictitious name or 02 alias, mailing address, electronic mailing address, [OR] telephone number, or 03 compliance officer. A licensee shall report to the director in writing any 04 administrative action taken against the licensee by a governmental agency of another 05 state, [OR] by a governmental agency of another jurisdiction, or by a financial 06 industry regulatory authority sanction or arbitration proceeding not later than 07 [WITHIN] 30 days after the final disposition of the action. A licensee shall submit to 08 the director the final order and other relevant legal documents in the action. A licensee 09 shall report to the director any criminal prosecution of the licensee in this or another 10 state or jurisdiction not later than [WITHIN] 30 days after the date of filing of the 11 criminal complaint, indictment, information, or citation in the prosecution. The 12 licensee shall submit to the director a copy of the criminal complaint, calendaring 13 order, and other relevant legal documents in the prosecution. 14 * Sec. 19. AS 21.27.150(a) is amended to read: 15 (a) The director may issue a 16 (1) travel insurance limited producer license to a person who is 17 appointed under AS 21.27.100 and who sells travel insurance; in this paragraph, 18 "travel insurance" has the meaning given in AS 21.27.152; 19 (2) title insurance limited producer license to a person whose place of 20 business is located in this state and whose sole purpose is to be appointed by and act 21 on behalf of a title insurer; 22 (3) bail bond limited producer license to a person who is appointed by 23 and acts on behalf of a surety insurer pertaining to bail bonds; 24 (4) motor vehicle rental agency limited producer license to a person 25 and, subject to the approval of the director, to employees of the person licensed that 26 the licensee authorizes to transact the business of insurance on the licensee's behalf if, 27 as to an employee, the licensee complies with (D) of this paragraph and if the licensee 28 (A) rents to others, without operators, 29 (i) private passenger motor vehicles, including 30 passenger vans, minivans, and sport utility vehicles; or 31 (ii) cargo motor vehicles, including cargo vans, pickup
01 trucks, and trucks with a gross vehicle weight of less than 26,000 02 pounds that do not require the operator to possess a commercial driver's 03 license; 04 (B) rents motor vehicles only to persons under rental 05 agreements that do not exceed a term of 90 days; 06 (C) transacts only the following kinds of insurance: 07 (i) motor vehicle liability insurance with respect to 08 liability arising out of the use of a vehicle rented from the licensee 09 during the term of the rental agreement; 10 (ii) uninsured or underinsured motorist coverage, with 11 minimum limits described in AS 21.96.020(c) and (d) arising from the 12 use of a vehicle rented from the licensee during the term of the rental 13 agreement; 14 (iii) insurance against medical, hospital, surgical, and 15 disability benefits to an injured person and funeral and death benefits to 16 dependents, beneficiaries, or personal representatives of a deceased 17 person if the insurance is issued as incidental coverage with or 18 supplemental to liability insurance and arises out of the use of a vehicle 19 rented from the licensee during the term of the rental agreement; 20 (iv) personal effects insurance, including loss of use, 21 with respect to damage to or loss of personal property of a person 22 renting the vehicle and other vehicle occupants while that property is 23 being loaded into, transported by, or unloaded from a vehicle rented 24 from the licensee during the term of the rental agreement; 25 (v) towing and roadside assistance with respect to 26 vehicles rented from the licensee during the term of the rental 27 agreement; and 28 (vi) other insurance as may be authorized by regulation 29 by the director; 30 (D) notifies the director in writing, not later than [WITHIN] 31 30 days after [OF] employment, of the name, date of birth, social security
01 number, location of employment, and home address of an employee authorized 02 by the licensee to transact insurance on the licensee's behalf; and 03 (E) provides other information as required by the director; 04 (5) nonresident limited producer license to a person; a license that the 05 director issues under this paragraph grants the same scope of authority as a limited 06 lines producer license issued to the person by the person's home state; 07 (6) credit insurance limited producer license to a person who sells 08 limited lines credit insurance; 09 (7) miscellaneous limited producer license to a person who transacts 10 insurance in this state that restricts the person's authority to less than the total authority 11 for a line of authority described in AS 21.27.115(1) - (6) [, (8), AND (9)]; 12 (8) portable electronics limited producer license to a vendor that sells 13 or offers portable electronics insurance as defined in AS 21.36.515; the following 14 provisions apply to a license issued under this paragraph: 15 (A) a vendor shall file with the director a sworn application for 16 a license under this paragraph on a form prescribed and furnished by the 17 director; the vendor shall provide the name, residence address, location of the 18 vendor's home office, and other information required by the director for an 19 employee or officer that is designated by the vendor as the person responsible 20 for the vendor's compliance with the requirements of this chapter; however, if 21 the vendor derives more than 50 percent of its revenue from the sale of 22 portable electronics insurance, the vendor shall provide the information 23 required under this subparagraph for all officers, directors, and shareholders of 24 record having beneficial ownership of 10 percent or more of any class of 25 securities registered under the federal securities law; 26 (B) a portable electronics limited producer license issued under 27 this paragraph must authorize the employees or authorized representatives of a 28 vendor to transact portable electronics insurance at each location at which a 29 vendor offers portable electronics to customers in this state; and 30 (C) the employees or authorized representatives of the vendor 31 may transact portable electronics insurance and are not required to obtain a
01 limited producer license if 02 (i) the employees or authorized representatives are not 03 compensated based primarily on the number of customers enrolled for 04 coverage; however, an employee or authorized representative may 05 receive compensation for activities under the license that is incidental 06 to the employee's or authorized representative's overall compensation; 07 (ii) the insurer issuing the portable electronics insurance 08 provides a training program for employees and authorized 09 representatives of the portable electronics limited producer licensee that 10 includes instruction about the portable electronics insurance offered to 11 customers and the disclosures required under AS 21.36.515; and 12 (iii) the vendor maintains a register of each location in 13 the state where the vendor offers portable electronics insurance and 14 submits the register to the director not later than [WITHIN] 30 days 15 after the director requests the register; 16 (9) crop insurance limited producer license to a person who sells or 17 offers crop insurance coverage for damage to crops from unfavorable weather 18 conditions, fire or lightning, flood, hail, insect infestation, disease, or other yield- 19 reducing conditions or perils provided by the private insurance market or that is 20 subsidized by the Federal Crop Insurance Corporation, including multi-peril 21 crop insurance. 22 * Sec. 20. AS 21.27.380(a) is amended to read: 23 (a) Except as provided in this title, the director may renew a license biennially 24 on a date set by the director if the licensee continues to be qualified under this chapter 25 and, on or before [THE CLOSE OF BUSINESS OF] the license expiration 26 [RENEWAL] date, meets all renewal requirements established by regulation, submits 27 a renewal application, and pays the renewal license fees set under AS 21.06.250 for 28 each license authority to the director. A licensee is responsible for knowing the date 29 that a license expires [LAPSES] and for renewing a license before expiration. The 30 director shall notify the licensee of the license renewal 30 days before the renewal 31 date.
01 * Sec. 21. AS 21.27.380(b) is amended to read: 02 (b) If a license is not renewed on or before the renewal date set by the director, 03 the license expires [LAPSES]. A licensee may not act as or represent to be an 04 insurance producer, managing general agent, reinsurance intermediary broker, 05 reinsurance intermediary manager, surplus lines broker, or independent adjuster during 06 the time a license has expired [LAPSED]. The director may reinstate an expired [A 07 LAPSED] license if the person continues to qualify for the license and [,] pays 08 renewal license fees [,] and a delayed renewal penalty. Reinstatement does not exempt 09 a person from a penalty provided by law for transacting business while unlicensed. A 10 license may not be renewed if it has expired [LAPSED] for two years or longer. 11 * Sec. 22. AS 21.27.380(d) is amended to read: 12 (d) The director shall mail a notice [NOTICE] of expiration [LAPSE 13 FROM THE DIRECTOR] stating the reason for the expiration [LAPSE SHALL BE 14 MAILED] to a licensee at the licensee's last address on record with the director. The 15 director shall obtain a certificate of mailing from the United States Postal Service. 16 * Sec. 23. AS 21.27.640(b) is amended to read: 17 (b) To qualify for issuance or renewal of a registration, an applicant or 18 registrant shall comply with this title, regulations adopted under AS 21.06.090, and 19 (1) be a trustworthy person; 20 (2) have active working experience in administrative functions that, in 21 the director's opinion, exhibits the ability to competently perform the administrative 22 functions of a third-party administrator; 23 (3) not have committed an act that is a cause for denial, nonrenewal, 24 suspension, or revocation of a registration or license in this state or another 25 jurisdiction; 26 (4) maintain a lawfully established place of business as described in 27 AS 21.27.330 in this state, unless licensed as a nonresident under AS 21.27.270; 28 (5) disclose to the director all owners, officers, directors, or partners, if 29 any; 30 (6) designate a compliance officer for the firm; 31 (7) provide in or with its application
01 (A) all basic organizational documents of the third-party 02 administrator, including articles of incorporation, articles of association, 03 partnership agreement, trade name certificate, trust agreement, shareholder 04 agreement, and other applicable documents and all endorsements to the 05 required documents; 06 (B) the bylaws, rules, regulations, or similar documents 07 regulating the internal affairs of the administrator; 08 (C) the names, mailing addresses, physical addresses, official 09 positions, and professional qualifications of persons who are responsible for 10 the conduct of affairs of the third-party administrator, including the members 11 of the board of directors, board of trustees, executive committee, or other 12 governing board or committee; the principal officers in the case of a 13 corporation, or the partners or members in the case of a partnership, limited 14 liability company, limited liability partnership, or association; shareholders 15 holding directly or indirectly 10 percent or more of the voting securities of the 16 third-party administrator; and any other person who exercises control or 17 influence over the affairs of the third-party administrator; 18 (D) certified financial statements for the preceding two years, 19 or for each year and partial year that the applicant has been in business if less 20 than two years, prepared by an independent certified public accountant 21 establishing that the applicant is solvent, that the applicant's system of 22 accounting, internal control, and procedure is operating effectively to provide 23 reasonable assurance that money is promptly accounted for and paid to the 24 person entitled to the money, and any other information that the director may 25 require to review the current financial condition of the applicant; and 26 (E) a statement describing the business plan, including 27 information on staffing levels and activities proposed in this state and in other 28 jurisdictions and providing details establishing the third-party administrator's 29 capability for providing a sufficient number of experienced and qualified 30 personnel in the areas of claims handling, underwriting, and record keeping; 31 (8) provide to the director documents necessary to verify the
01 statements contained in or in connection with the application; and 02 (9) notify the director, in writing, not later than [WITHIN] 30 days 03 after [OF] 04 (A) a change in compliance officer, residence, place of 05 business, mailing address, or phone number; 06 (B) the final disposition of an administrative action taken 07 against the registrant by a governmental agency of another state, by a 08 governmental agency of another jurisdiction, or by a financial industry 09 regulatory authority sanction or arbitration proceeding; in addition, a 10 registrant shall submit to the director documents relating to the final 11 disposition on, including the final order and other relevant legal 12 documents in, the action [THE SUSPENSION OR REVOCATION OF AN 13 INSURANCE LICENSE OR REGISTRATION BY ANOTHER STATE OR 14 JURISDICTION]; or 15 (C) a conviction of a misdemeanor or felony of the third-party 16 administrator, its officers, directors, partners, owners, or employees. 17 * Sec. 24. AS 21.27.650 is amended by adding a new subsection to read: 18 (r) An insurer shall review its books and records quarterly to determine 19 whether a person or insurance producer has acted as the insurer's third-party 20 administrator. If an insurer determines that a person or insurance producer has acted as 21 the insurer's third-party administrator, the insurer shall promptly notify the person or 22 insurance producer and the director of this determination. The insurer and the person 23 or insurance producer must fully comply with the provisions of this chapter not later 24 than 30 days after notification. 25 * Sec. 25. AS 21.27.690(b) is amended to read: 26 (b) An insurer may use a nonresident reinsurance intermediary broker who is 27 not licensed under this chapter if the reinsurance intermediary broker has filed a 28 certification with the director that the reinsurance intermediary broker is 29 operating only for a foreign insurer and the person is licensed in good standing as a 30 resident reinsurance intermediary broker by an insurance regulator of another state that 31 is accredited by the National Association of Insurance Commissioners. Upon written
01 request, the director may grant written permission for a domestic insurer to use an 02 alien reinsurance intermediary broker not licensed by and without a place of business 03 in a jurisdiction subject to accreditation by the National Association of Insurance 04 Commissioners if the alien reinsurance intermediary broker has filed a certification 05 with the director that the reinsurance intermediary broker is operating only for a 06 domestic insurer and is licensed in good standing by its domiciliary insurance 07 regulator. The domestic insurer and unlicensed reinsurance intermediary broker are 08 subject to all other requirements of this section. 09 * Sec. 26. AS 21.34.035(b) is amended to read: 10 (b) The rates and rating methods for health care insurance placed and written 11 under this section are subject to AS 21.51.405 and AS 21.54.015 [AS 21.87.190]. The 12 surplus lines broker shall make the filings required under AS 21.51.405 and 13 AS 21.54.015 [AS 21.87.190] and maintain the records and accounts as required under 14 AS 21.87.230. 15 * Sec. 27. AS 21.34.050(a) is amended to read: 16 (a) In addition to meeting the requirements of AS 21.34.040, a nonadmitted 17 insurer shall be considered an eligible surplus lines insurer if it [PAYS FEES 18 REQUIRED BY REGULATION AND] appears on the most recent list of eligible 19 surplus lines insurers published by the director. The list is to be published at least 20 semiannually by 21 (1) posting the list on the division's Internet website; and 22 (2) providing a copy of the list to a person on request to the division. 23 * Sec. 28. AS 21.34.050(c) is amended to read: 24 (c) A nonadmitted insurer shall be removed from the list of eligible surplus 25 lines insurers if the nonadmitted insurer [FAILS TO PAY, BEFORE JULY 1 OF 26 EACH YEAR, THE FEE AUTHORIZED UNDER THIS SECTION OR] fails to meet 27 the requirement under AS 21.34.040(d). However, the director may reinstate a 28 nonadmitted insurer on the list of eligible surplus lines insurers if 29 [(1) THE NONADMITTED INSURER INADVERTENTLY FAILED 30 TO PAY THE FEE OR MEET THE REQUIREMENT UNDER AS 21.34.040(d); 31 (2)] the nonadmitted insurer has remedied the reason for removal from
01 the list [; AND 02 (3) THE NONADMITTED INSURER PAYS A LATE FEE AS 03 ESTABLISHED BY REGULATION]. 04 * Sec. 29. AS 21.34.180(a) is amended to read: 05 (a) In addition to collecting the full amount of gross premiums written by an 06 insurer for surplus lines insurance, the surplus lines broker shall collect and pay to the 07 director a tax of 2.7 percent on the net premium, which is the total gross premiums 08 written, less any return premiums, for the insurance. Where the home state of the 09 insured is this state and the insurance covers properties, risks, or exposures located 10 or to be performed both in and out of this state, the tax payable shall be computed 11 based on an amount equal to 2.7 percent on that portion of the net premiums allocated 12 under (f) of this section to this state, plus an amount equal to the portion of the 13 premiums allocated under (f) of this section to other states or territories based on the 14 tax rates and fees applicable to other properties, risks, or exposures located or to be 15 performed outside of this state. 16 * Sec. 30. AS 21.36.025 is amended by adding new subsections to read: 17 (b) A person may not sell a membership in an association or labor union for 18 the purpose of qualifying an individual for group insurance. 19 (c) A person that sells a membership in an association may not offer group 20 insurance for purposes of selling membership in an association or labor union. 21 * Sec. 31. AS 21.36.185 is amended to read: 22 Sec. 21.36.185. Maintenance of complaint handling records. Except for 23 records subject to health carrier grievance reporting and record keeping 24 requirements established under AS 21.07.005, an [AN] insurer shall maintain a 25 complete record of all the complaints received by the insurer since the date of the 26 insurer's last market conduct examination under AS 21.06.120 or for four years, 27 whichever occurs first. This record must indicate the total number of complaints, the 28 classification of each complaint by line of insurance, the nature of each complaint, the 29 disposition of each complaint, and the time it took to process each complaint. For 30 purposes of this section, "complaint" means any written communication primarily 31 expressing a grievance.
01 * Sec. 32. AS 21.36.225 is amended to read: 02 Sec. 21.36.225. Notice of health insurance coverage cancellation, coverage 03 change, or premium change. (a) Except for a health care insurance policy subject to 04 AS 21.51.400 or AS 21.54.130, an insurer may not cancel a health insurance policy 05 unless the insurer provides written notice to a policyholder [COVERED 06 INDIVIDUAL] at least 45 days before the effective date of the cancellation. 07 (b) An insurer shall provide written notice to a policyholder [COVERED 08 INDIVIDUAL] of the specific changes in coverage or the exact change in premium 09 at least 45 days before the effective date of the change in coverage or premium. 10 * Sec. 33. AS 21.36.360(b) is amended to read: 11 (b) A fraudulent insurance act is committed by a person who, with intent to 12 injure, defraud, or deceive, 13 (1) collects a sum as premium or charge for insurance if the insurance 14 has not been provided or is not in due course to be provided, subject to acceptance of 15 the risk by the insurer, by an insurance policy authorized under this title; 16 (2) presents to an insurer a written or oral statement in support of a 17 claim for payment or other benefit under an insurance policy, knowing that the 18 statement contains false, incomplete, or misleading information or omits information 19 concerning a matter material to the claim; 20 (3) assists or conspires with another to prepare or make a written or 21 oral statement that is presented to an insurer in support of a claim for a benefit under 22 an insurance policy, knowing that the statement contains false, incomplete, or 23 misleading information or omits information concerning a matter material to the 24 claim; 25 (4) wilfully collects as premium or charge for insurance a sum in 26 excess of the premium or charge applicable to the insurance as specified in the policy 27 by the insurer in accordance with the applicable classifications and rates approved by 28 the director, or in cases where classifications and rates are not subject to approval, the 29 premiums and charges applicable to the insurance as specified in the policy and fixed 30 by the insurer; 31 (5) fails to make disposition of funds received or held or
01 misappropriates funds received or held representing premiums or return premiums; 02 [OR] 03 (6) fails to pay its tax liability under this title when due; or 04 (7) makes a written or oral statement in response to an insurer's 05 inquiries related to another person's claim for payment or other benefit under an 06 insurance policy, knowing that the statement contains false, incomplete, or 07 misleading information or omits information concerning a matter material to the 08 claim. 09 * Sec. 34. AS 21.36.360(q) is amended to read: 10 (q) A fraudulent or criminal insurance act described in 11 (1) (b) of this section that is committed to obtain $10,000 or more is a 12 class B felony; 13 (2) (c), (d), or (p)(4) of this section is a class B felony; 14 (3) (b) of this section that is committed to obtain $500 or more but less 15 than $10,000 is a class C felony; 16 (4) (e), (f), [OR] (g), or (p)(2) or (3) of this section is a class C felony; 17 (5) (b) of this section that is committed to obtain less than $500 is a 18 class A misdemeanor; 19 (6) (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor; 20 (7) (o) of this section is a class B misdemeanor; and 21 (8) (p)(1) of this section is a class B misdemeanor unless another 22 specific penalty is provided for the violation of the provision [; AND 23 (9) (p)(2) AND (3) OF THIS SECTION MAY BE PROSECUTED 24 UNDER AS 11.46]. 25 * Sec. 35. AS 21.36.390(b) is amended to read: 26 (b) An insurer or licensee that has reason to believe that an insurance producer 27 with which it is doing business is involved in a defalcation, embezzlement, or 28 violation of the provisions of AS 21.36.030, 21.36.050, or 21.36.360 [AS 21.36.360] 29 shall immediately send the director a report disclosing the basis for that belief and any 30 other information that the director may require. 31 * Sec. 36. AS 21.39.040(a) is amended to read:
01 (a) Each insurer shall file with the director, except as to inland marine risks, 02 which, by general custom of the business, are not written according to manual rates or 03 rating plans, and except for rates for commercial insurance for which the director, by 04 regulation authorizes an informational filing as set out in (k) of this section, every 05 manual, minimum, class rate, rating schedule, loss cost adjustment, or rating plan and 06 every other rating rule, and each modification of any of them that it proposes to use. 07 Each filing 08 (1) shall be made under the applicable filing procedures in 09 AS 21.39.041, 21.39.210, or 21.39.220; 10 (2) must state the proposed effective date; the effective date may be 11 (A) a specific date; 12 (B) the date the filing is approved by the director; or 13 (C) a date conditioned on some other event when approved 14 by the director; and 15 (3) must indicate the character and extent of the coverage 16 contemplated. 17 * Sec. 37. AS 21.39.070(a) is repealed and reenacted to read: 18 (a) Each member of or subscriber to a rating organization shall adhere to the 19 filings made on its behalf by the organization except that an insurer may file with the 20 director, in accordance with AS 21.39.040(a), a deviation from the class rates, 21 schedules, rating plans, or rules respecting a kind of insurance, or class of risk within a 22 kind of insurance, or a combination of them. 23 * Sec. 38. AS 21.42.160(d) is amended to read: 24 (d) Each policy and annuity contract issued by an insurer, and the forms 25 thereof filed with the director, must have printed on them an appropriate designating 26 letter or figure, or combination of letters or figures, or terms identifying the respective 27 forms of policies or contracts [, TOGETHER WITH THE YEAR OF ADOPTION OF 28 THE FORM]. When a change is made in the form, the designating letters, figures, or 29 terms [AND YEAR OF ADOPTION] must be correspondingly changed. 30 * Sec. 39. AS 21.42.250(c) is amended to read: 31 (c) An insurer may provide an [A PROPERTY AND CASUALTY] insurance
01 policy or endorsement [ENDORSEMENTS] by posting the policy or endorsement on 02 the insurer's Internet website and clearly identifying the posted policy or endorsement 03 [ENDORSEMENTS] purchased by the insured in the declaration page provided to the 04 insured. An [A PROPERTY AND CASUALTY] insurance policy or endorsement 05 posted under this subsection 06 (1) must contain the standard or uniform provisions [FOR PROPERTY 07 AND CASUALTY INSURANCE] required by AS 21.42.140; 08 (2) must be in a form approved by the director under AS 21.42.120; 09 (3) must be posted in a manner that reasonably allows the insured to 10 retrieve and print or save the policy or endorsement from the website without paying a 11 fee; 12 (4) must remain posted on the insurer's Internet website during the 13 time that the policy or endorsement is in effect, be retained by the insurer for not less 14 than three years after the policy or endorsement is no longer in effect, and be made 15 available to the insured on request; and 16 (5) may not include personally identifiable information. 17 * Sec. 40. AS 21.45.020(d) is amended to read: 18 (d) For a variable life insurance policy or variable annuity contract, the refund 19 under (c) of this section must equal the sum of 20 (1) the difference between the premiums paid, including any policy or 21 contract fees or other charges and the amounts allocated to any separate accounts 22 under the policy or contract; and 23 (2) the value of amounts allocated to any separate accounts [UNDER 24 THE POLICY OR CONTRACT] on the date the returned policy is received by the 25 insurer or its insurance producer. 26 * Sec. 41. AS 21.48.010(a) is amended to read: 27 (a) A group life insurance policy may not be issued for delivery 28 [DELIVERED] in this state [INSURING THE LIVES OF MORE THAN ONE 29 INDIVIDUAL] unless the group is a bona fide association or 30 [(1)] the group [POLICYHOLDER] was formed for purposes other 31 than obtaining insurance or is a trust established, adopted, or participated in by one
01 or more employers or labor unions or by one or more employers and labor unions, and 02 (1) [; (2)] the policy covers at least two individuals at the date of issue; 03 (2) [(3)] an individual eligible for coverage is subject to uniformly 04 applied standards of insurability as may be imposed by the insurer; 05 (3) [(4)] amounts of group life insurance are determined based on 06 some plan that will preclude individual selection; 07 (4) [AND (5)] the group life insurance policy [CONTRACT] is in 08 compliance with the other applicable provisions of this chapter; and 09 (5) the group meets other requirements established by the director 10 in regulation. 11 * Sec. 42. AS 21.48.010(b) is amended to read: 12 (b) This [THE PROVISIONS OF (a) OF THIS] section does [DO] not apply 13 to life insurance policies 14 (1) insuring only individuals related by blood, marriage, or legal 15 adoption; 16 (2) insuring only individuals having a common interest through 17 ownership of a business enterprise, or a substantial legal interest or equity in a 18 business enterprise, and who are actively engaged in its management; or 19 (3) insuring only individuals otherwise having an insurable interest in 20 each other's lives. 21 * Sec. 43. AS 21.48.010 is amended by adding new subsections to read: 22 (e) A group life insurance policy may be issued to a group that does not meet 23 one or more of the requirements under (a) of this section only if the director finds that 24 issuance 25 (1) is in the best interests of the public; 26 (2) results in economies of acquisition or administration; and 27 (3) meets other requirements established by the director in regulation. 28 (f) An insurer shall submit to the director information satisfactory to the 29 director that the group meets the requirements of (a) or (e) of this section, and the 30 director must affirmatively approve of the group before an insurer may issue a group 31 life policy to a group under (a) or (e) of this section.
01 * Sec. 44. AS 21.51.020 is amended to read: 02 Sec. 21.51.020. Scope, format of policy. A policy of health insurance may not 03 be delivered or issued for delivery to a person in this state unless it otherwise complies 04 with this title, and complies with the following: 05 (1) the entire money and other considerations must be expressed in the 06 policy; 07 (2) the time the insurance takes effect and terminates must be 08 expressed in the policy; 09 (3) it must insure only one person, except that a policy may insure, 10 originally or by subsequent amendment, upon the application of an adult member of a 11 family, who shall be considered the policyholder, any two or more eligible members 12 of that family, including husband, wife, dependent children, or any children under a 13 specified age, which may [SHALL] not exceed 25  years, and any other person 14 dependent on [UPON] the policyholder; 15 (4) the style, arrangement, and over-all appearance of the policy must 16 give no undue prominence to any portion of the text, and every printed portion of the 17 text of the policy and of endorsements or attached papers must be plainly printed in 18 light-faced type of a style in general use, the size of which must be uniform and not 19 less than 10 point with a lower case unspaced alphabet length not less than 120 point; 20 in this paragraph, text includes all printed matter except the name and address of the 21 insurer, name or title of the policy, the brief description, if any, and captions and 22 subcaptions; 23 (5) the exceptions and reductions of indemnity must be set out in the 24 policy and, other than those contained in AS 21.51.040 - 21.51.260, must be printed, at 25 the insurer's option, either included with the benefit provision to which they apply, or 26 under an appropriate caption such as "Exceptions," or "Exceptions and Reductions," 27 except that if an exception or reduction specifically applies only to a particular benefit 28 of the policy, a statement of the exception or reduction must be included with the 29 benefit provision to which it applies; 30 (6) each form, including riders and endorsements, must be identified 31 by a form number in the lower left-hand corner of the first page;
01 (7) the policy may not contain a provision making a portion of the 02 charter, rules, constitution, or bylaws of the insurer a part of the policy unless the 03 portion is set out in full in the policy; this paragraph does not apply to the 04 incorporation of, or reference to, a statement of rates or classification of risks, or short- 05 rate table filed with the director. 06 * Sec. 45. AS 21.51.070(a) is amended to read: 07 (a) Except for a policy offered or renewed in this state on a health care 08 exchange and subject to federal regulations on reinstatement, there [THERE] 09 shall be a provision as follows: 10 "Reinstatement: If (1) a renewal premium is not paid within the time 11 granted the insured for payment, (2) a subsequent acceptance of premium by 12 the insurer or by an agent authorized by the insurer to accept the premium 13 occurs, without requiring in connection therewith an application for 14 reinstatement, and (3) the insurer issues a conditional receipt for the premium 15 tendered, the policy will be reinstated upon approval of the application by the 16 insurer or, lacking approval, upon the 45th day following the date of the 17 conditional receipt unless the insurer has previously notified the insured in 18 writing of its disapproval of the application. The reinstated policy shall cover 19 only loss resulting from the accidental injury that may be sustained after the 20 date of reinstatement and loss due to the sickness that may begin more than 10 21 days after that date. In all other respects, the insured and insurer shall have the 22 same rights thereunder as they had under the policy immediately before the 23 due date of the defaulted premium, subject to any provisions endorsed hereon 24 or attached hereto in connection with the reinstatement. A premium accepted 25 in connection with a reinstatement shall be applied to a period for which 26 premium has not been previously paid, but not to a period more than 60 days 27 before the date of reinstatement." 28 * Sec. 46. AS 21.51.500 is amended by adding a new paragraph to read: 29 (4) "health care exchange" means an American Health Benefit 30 Exchange established under 42 U.S.C. 18031. 31 * Sec. 47. AS 21.53.068 is amended to read:
01 Sec. 21.53.068. Limitations related to producers and third-party 02 administrators. An insurer that authorizes issuance of a long-term care insurance 03 policy by a producer or a third-party administrator under the underwriting authority of 04 the insurer granted to the producer or [A] third-party administrator using the insurer's 05 underwriting guidelines may issue a long-term care insurance policy through the 06 producer or [A] third-party administrator only if the insurer does not compensate 07 [COMPENSATES] the issuer based on the number of policies issued. 08 * Sec. 48. AS 21.54.015(b) is amended to read: 09 (b) A health care insurer may decline to cover or may restrict the coverage 10 offered to a self-employed individual under an association plan authorized under 11 AS 21.54.060(a)(6) [AS 21.54.060(7)]. 12 * Sec. 49. AS 21.54.060 is amended to read: 13 Sec. 21.54.060. Group health insurance defined. Group health insurance is 14 that form of health insurance covering groups of persons as defined below, with or 15 without one or more members of their families or one or more of their dependents, or 16 covering one or more members of the families or one or more dependents of the 17 groups of persons and issued on [UPON] the following basis: 18 (1) under a policy issued to an employer or trustees of a fund 19 established by an employer, who shall be considered the policyholder, insuring 20 employees of the employer for the benefit of persons other than the employer; in this 21 paragraph the term "employees" includes the officers, managers, and employees of the 22 employer, the individual proprietor or partner if the employer is an individual 23 proprietor or partnership, the officers, managers, and employees of subsidiary or 24 affiliated corporations, the individual proprietors, partners, and employees of 25 individuals and firms if the business of the employer and the individual or firm is 26 under common control through stock ownership, contract, or otherwise; in this 27 paragraph, "employees" may include retired employees; a policy issued to insure 28 employees of a public body may provide that the term "employees" includes elected or 29 appointed officials; the policy may provide that the term "employees" includes the 30 trustees or their employees, or both, if their duties are principally connected with the 31 trusteeship; a policy issued to insure employees of a corporation may provide that the
01 term "employees" includes directors of the corporation, whether or not the directors 02 receive compensation; 03 (2) under a policy issued to an association, including a labor union, 04 that is a bona fide association that has a constitution and bylaws and that insures 05 [HAS BEEN ORGANIZED AND IS MAINTAINED IN GOOD FAITH FOR 06 PURPOSES OTHER THAN THAT OF OBTAINING INSURANCE, INSURING] 07 members, employees, or employees of members of the association for the benefit of 08 persons other than the association or its officers or trustees; in this paragraph, the term 09 "employees" may include retired employees; 10 (3) under a policy issued to the trustees of a fund established, adopted, 11 or participated in by two or more employers [IN THE SAME OR RELATED 12 INDUSTRY] or by one or more labor unions or by one or more employers and one or 13 more labor unions or by an association as defined in (2) of this section, which trustees 14 shall be considered the policyholder, to insure employees of the employers or 15 members of the unions or of the association, or employees of members of the 16 association, for the benefit of persons other than the employers or the unions or the 17 association; in this paragraph, the term "employees" may include the officers, 18 managers, and employees of the employer, and the individual proprietor or partners if 19 the employer is an individual proprietor or partnership; in this paragraph, the term 20 "employees" may include retired employees; the policy may provide that the term 21 "employees" includes the trustees or their employees, or both, if their duties are 22 principally connected with the trusteeship; 23 (4) under a policy issued to a person or organization to which a policy 24 of group life insurance may be issued or delivered in this state to insure a class or 25 classes of individuals that could be insured under the group life policy; 26 (5) [UNDER A POLICY ISSUED TO COVER ANY OTHER 27 SUBSTANTIALLY SIMILAR GROUP THAT, IN THE DISCRETION OF THE 28 DIRECTOR, MAY BE SUBJECT TO THE ISSUANCE OF A GROUP HEALTH 29 INSURANCE POLICY OR CONTRACT; 30 (6)] a group health insurance policy that contains provisions for the 31 payment by the insurer of benefits for expenses incurred on account of hospital,
01 nursing, medical, or surgical services for members of the family or dependents of a 02 person in the insured group may provide for the continuation of the benefit provisions, 03 or a part or parts of them, after the death of the person in the insured group; 04 (6) [(7)] under a policy issued to an association of employers covering 05 the employees and dependents of the employees, or issued to an association of self- 06 employed individuals covering self-employed individuals and dependents of the self- 07 employed individuals, or issued to an association that includes a combination of 08 employers and self-employed individuals; for purposes of this paragraph, 09 (A) an association described under this paragraph shall comply 10 with the following requirements: 11 (i) the association shall have a constitution and bylaws; 12 (ii) the association shall be maintained in good faith for 13 the benefit of persons other than the association or its officers or 14 trustees; 15 (iii) membership in the association shall be restricted to 16 large or small employers, or self-employed individuals, who are 17 residents of the state; however, an employer domiciled in another state 18 may become a member of the association for purposes of obtaining 19 coverage through the association only for the employees and 20 dependents of the employees of that employer who are residents of this 21 state; 22 (iv) except as provided under AS 21.54.015, the 23 association may not condition membership in the association or 24 coverage under a health insurance policy issued to the association on 25 any of the factors listed under AS 21.54.100(a); 26 (B) "self-employed individual" means an individual who 27 derives a substantial portion of the individual's income from a trade or business 28 through which the individual has attempted to earn taxable income and for 29 which the individual has filed the appropriate Internal Revenue Service form 30 and schedule for the previous taxable year. 31 * Sec. 50. AS 21.54.060 is amended by adding new subsections to read:
01 (b) An insurer may issue a group health insurance policy to a group that does 02 not meet one or more of the requirements under (a)(1) - (4) and (6) of this section on a 03 finding by the director that issuance of a group policy to the group 04 (1) is in the best interests of the public; 05 (2) results in economies of acquisition or administration; and 06 (3) meets other requirements adopted by the director by regulation. 07 (c) An insurer must submit to the director information satisfactory to the 08 director that the group meets the requirements of (b) of this section and the director 09 must affirmatively approve of the group before an insurer may issue a group health 10 insurance policy under (b) of this section. 11 * Sec. 51. 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. 52. 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(a)(6) 18 [AS 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. 53. AS 21.59.150 is amended to read: 24 Sec. 21.59.150. Provider license renewal, expiration [LAPSE], 25 reinstatement. (a) A provider may renew a license issued under AS 21.59.110 - 26 21.59.290 biennially on a date set by the director if the licensee continues to be 27 qualified under AS 21.59.110 - 21.59.290 and, on or before the close of business of 28 the renewal date, meets all renewal requirements established by regulation, and pays 29 the renewal license fees set by the director. A licensee is responsible for knowing the 30 date that a license will expire [LAPSE] and for renewing a license on or before that 31 date. The director shall notify the licensee of the impending expiration [LAPSE] 30
01 days before the expiration [LAPSE] date. The director may not renew a license 02 except in compliance with AS 21.59.110 - 21.59.290 and may not renew the license of 03 a person, or to be exercised by a person, found by the director to be untrustworthy, 04 incompetent, or financially irresponsible, or who has not established to the satisfaction 05 of the director that the person is qualified under AS 21.59.110 - 21.59.290. 06 (b) If a provider's license is not renewed on or before the expiration [LAPSE] 07 date set by the director, the license expires [LAPSES]. A licensee may not act as or 08 represent to be a provider during the time a license has expired [LAPSED]. The 09 director may reinstate an expired [A LAPSED] license if the person continues to 10 qualify for the license and pays license renewal fees and a delayed renewal penalty. 11 Reinstatement does not exempt a person from a penalty provided by law for 12 transacting business while unlicensed. A license that has expired [LAPSED] for two 13 years or longer may not be renewed. 14 * Sec. 54. AS 21.59.170(a) is amended to read: 15 (a) A motor vehicle service contract must allow the service contract holder to 16 cancel the motor vehicle service contract not later than [WITHIN] 30 days after the 17 date that the motor vehicle service contract was delivered to the service contract 18 holder, not later than [WITHIN] 10 days after the date of delivery if the motor 19 vehicle service contract is delivered to the service contract holder at the time of sale, 20 or within a longer period, as set out in the motor vehicle service contract. If the service 21 contract holder returns the motor vehicle service contract to the provider within the 22 applicable time period and a claim has not been made under the motor vehicle service 23 contract before the contract is returned to the provider, the motor vehicle service 24 contract is void, and the provider shall refund the full amount of the provider fee to the 25 service contract holder or credit the account of the service contract holder not later 26 than [WITHIN] 45 days after the return of the contract to the provider. If the provider 27 does not pay or credit a refund owed under this subsection not later than [WITHIN] 28 45 days after a service contract holder returns a motor vehicle service contract, a 29 penalty in the amount of 10 percent of the [UNEARNED] provider fee paid by the 30 service contract holder for each month the refund remains unpaid shall be added to the 31 refund. The right to void the motor vehicle service contract provided in this subsection
01 is not transferable and applies only to the original service contract holder for a contract 02 under which a claim is not made before the contract is returned to the provider. 03 * Sec. 55. AS 21.59.170(b) is amended to read: 04 (b) After the time specified in (a) of this section, or if a claim has been made 05 under the motor vehicle service contract within that time, a service contract holder 06 may cancel the motor vehicle service contract, and the provider shall refund to or 07 credit the account of the contract holder the prorated amount of the unearned provider 08 fee, less any claims paid, not later than [WITHIN] 45 days after the return of the 09 service contract to the provider. If the provider does not pay or credit a refund owed 10 under this subsection not later than [WITHIN] 45 days after a service contract holder 11 returns a motor vehicle service contract, a penalty in the amount of 10 percent of the 12 unearned provider fee paid by the service contract holder for each month the refund 13 remains unpaid shall be added to the refund. A provider may charge a reasonable 14 cancellation fee not to exceed 7.5 percent of the unearned provider fee paid by the 15 service contract holder. 16 * Sec. 56. AS 21.59.180(a) is amended to read: 17 (a) To ensure the faithful performance of a provider's obligations to its service 18 contract holders, a provider shall either 19 (1) obtain from an insurer or risk retention group authorized to transact 20 the business of insurance in the state insurance that either reimburses the provider for 21 obligations arising from a provider's motor vehicle service contract issued in the state 22 or, if the provider fails to perform its obligations under a motor vehicle service 23 contract issued in the state, pays to the service contract holder the provider's covered 24 contractual obligations under the terms of the service contract on behalf of the 25 provider; an [A PROVIDER] insurer issuing a policy under this paragraph must 26 satisfy one of the following: 27 (A) maintain surplus as to policyholders and paid-in capital of 28 at least $15,000,000 and annually file with the director copies of the provider's 29 financial statements, its annual statement to the National Association of 30 Insurance Commissioners, and the statement of actuarial opinion and opinion 31 summary required by and filed in the provider's state of domicile; or
01 (B) maintain surplus as to policyholders and paid-in capital at 02 least equal to $10,000,000, but not more than $15,000,000, and demonstrate to 03 the satisfaction of the director that the company maintains a ratio of net written 04 premiums, wherever written, to surplus as to policyholders and paid-in capital 05 of not greater than 3 to 1 and annually files with the director copies of the 06 provider's audited financial statements, its annual statement to the National 07 Association of Insurance Commissioners, and the statement of actuarial 08 opinion and opinion summary required by and filed in the provider's state of 09 domicile; or 10 (2) maintain, solely or together with the parent company, a net worth 11 or stockholders' equity of $100,000,000 and, upon request by the director, provide the 12 director with a copy of the provider's or the parent company's most recent annual 13 report filed with the United States Securities and Exchange Commission within the 14 last calendar year or, if the company does not file with the United States Securities and 15 Exchange Commission, a copy of the company's audited financial statements, which 16 show a net worth of the provider or its parent company of at least $100,000,000; if the 17 parent company's annual report or financial statements are filed to meet the provider's 18 financial stability requirement, then the parent company shall agree to guarantee the 19 obligations of the provider relating to motor vehicle service contracts sold by the 20 provider in this state. 21 * Sec. 57. AS 21.69.310(a) is amended to read: 22 (a) Meetings of stockholders or members of a domestic insurer shall be held in 23 the city or town of its principal office or place of business [IN THIS STATE]. The 24 meetings may be held, for good cause, in another location [WITHIN THE STATE] 25 upon approval of the director. 26 * Sec. 58. AS 21.69.310(c) is amended to read: 27 (c) Each insurer shall, during the first six months of each calendar year, hold 28 the annual meeting of its stockholders or members to fill vacancies existing or 29 occurring in the board of directors, receive and consider reports of the insurer's 30 officers as to its affairs, and transact other business that [WHICH] may properly be 31 brought before it. The director may approve a later date for the annual meeting
01 upon written request by the insurer and with good cause shown. The request for 02 a later annual meeting date shall be made in writing to the director at least 30 03 days before the end of the six-month requirement. Not [NO] less than 20 days' 04 notice shall be given of the meeting in the manner provided in the bylaws, except 05 where notice of the annual meeting of a mutual insurer is contained in its policies. 06 * Sec. 59. AS 21.69.390(b) is amended to read: 07 (b) A person determined by the director, following an appropriate hearing as 08 provided in AS 21.06.170 - 21.06.230, to have removed or attempted to remove any 09 records from the place where they are required to be kept under (a) [OR (d)] of this 10 section with the intent to wrongfully remove them, or to have concealed or attempted 11 to conceal them from the director, is subject to a civil penalty of not more than 12 $25,000. If a domestic insurer violates a provision of this section the director may 13 institute delinquency proceedings against the insurer under the provisions of AS 21.78. 14 * Sec. 60. AS 21.85.500(5) is amended to read: 15 (5) "multiple employer welfare arrangement" has the meaning given in 16 29 U.S.C. 1002; ["MULTIPLE EMPLOYER WELFARE ARRANGEMENT" DOES 17 NOT INCLUDE A GROUP THAT THE DIRECTOR DESIGNATES UNDER 18 AS 21.54.060(5) AS SUBJECT TO ISSUANCE OF A GROUP HEALTH 19 INSURANCE POLICY;] 20 * Sec. 61. AS 21.97.020 is amended to read: 21 Sec. 21.97.020. General penalty. A person determined by the director, 22 following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have 23 wilfully violated a provision of this title or a regulation adopted under it [, FOR 24 WHICH VIOLATION A GREATER PENALTY IS NOT PROVIDED IN THIS 25 TITLE,] is subject to a civil penalty of not more than $25,000 [$2,500]. 26 * Sec. 62. AS 21.97.900 is amended by adding a new paragraph to read: 27 (47) "bona fide association" means an association 28 (A) that has actively been in existence for at least five years; 29 (B) that has been formed and maintained in good faith for 30 purposes other than obtaining insurance; 31 (C) for which insurance is not required to become a member of
01 the association; 02 (D) in which members of the association share a common 03 enterprise or economic social affinity or relationship; 04 (E) that does not condition membership in the association on a 05 health status factor relating to an individual; 06 (F) that makes insurance available to all members and 07 dependents of members regardless of a health status factor in relation to the 08 member or dependent; 09 (G) in which an individual eligible for coverage is subject to 10 uniformly applied standards of insurability as may be imposed by the insurer; 11 (H) in which premiums for the group insurance policy are 12 actuarially sound; 13 (I) that does not offer an insurance policy to an individual other 14 than in connection with a member of the association; and 15 (J) that meets other requirements established by the director in 16 regulations. 17 * Sec. 63. AS 28.20.445 is amended by adding a new subsection to read: 18 (i) The director of the division of insurance shall ensure that policies that 19 provide the uninsured and underinsured motorists coverage required under this chapter 20 clearly state that the uninsured and underinsured motorists coverage provides coverage 21 for the insured for injuries sustained as a pedestrian or bicyclist by a motor vehicle. 22 * Sec. 64. AS 21.06.087; AS 21.07.250(9); AS 21.54.500(4); AS 21.56.250(6); and 23 AS 21.69.390(d) are repealed. 24 * Sec. 65. AS 21.07.050, 21.07.060, 21.07.070, 21.07.250(1), 21.07.250(2), and 25 21.07.250(7) are repealed. 26 * Sec. 66. AS 21.27.115(8) and 21.27.115(9) are repealed. 27 * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 30 Economic Development may adopt regulations necessary to implement this Act, except that 31 the effective date of the regulations may not be earlier than the effective date of the statutes
01 being implemented. 02 * Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 REVISOR'S INSTRUCTION. The revisor of statutes is requested to change the catch 05 line of AS 21.27.380 from "License renewal, lapse, and reinstatement" to "License renewal, 06 expiration, and reinstatement." 07 * Sec. 69. Section 67 of this Act takes effect immediately under AS 01.10.070(c). 08 * Sec. 70. Section 65 of this Act takes effect January 1, 2017. 09 * Sec. 71. AS 21.27.150(a)(9), enacted by sec. 19 of this Act, and sec. 66 of this Act take 10 effect March 1, 2017. 11 * Sec. 72. Section 63 of this Act takes effect January 1, 2019.