Legislature(2019 - 2020)

2019-03-04 House Journal

Full Journal pdf

2019-03-04                     House Journal                      Page 0250
HB 78                                                                                                                         
HOUSE BILL NO. 78 by the House Rules Committee by request of                                                                    
the Governor, entitled:                                                                                                         

2019-03-04                     House Journal                      Page 0251
    "An Act relating to insurance; relating to an insurer's corporate                                                           
    annual disclosure; relating to insurance company holding systems;                                                           
    and providing for an effective date."                                                                                       
was read the first time and referred to the Labor & Commerce                                                                    
The following fiscal note(s) apply:                                                                                             
1.  Zero, Dept. of Commerce, Community, & Economic Development                                                                  
The Governor's transmittal letter dated February 28 follows:                                                                    
"Dear Speaker Edgmon:                                                                                                           
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to updates to the                                                               
insurance code and adding new sections providing for a corporate                                                                
governance annual disclosure. The changes to the insurance code,                                                                
under this bill, conform to changes in model laws adopted by the                                                                
National Association of Insurance Commissioners (NAIC) and will                                                                 
assist the state in maintaining its accredited status with the NAIC and                                                         
improve uniformity nationwide in the regulation of insurance.                                                                   
Specifically, this bill makes changes to the insurance code relating to                                                         
AS 21.22 (insurance holding companies), and adds new sections to AS                                                             
21.09 (authorization of insurers and general requirements) requiring                                                            
domestic insurers to provide a corporate governance annual disclosure                                                           
to the director. These changes conform the insurance code to changes                                                            
in NAIC model laws and add the new NAIC model law on corporate                                                                  
governance annual disclosure. The bill is described in more detail                                                              
Section 1 of the bill adds new sections to AS 21.09 requiring domestic                                                          
insurers to file a corporate governance annual disclosure with the                                                              
director. Corporate governance is the system under which a company                                                              
is directed and controlled. The corporate governance annual disclosure                                                          
will summarize a domestic insurer's corporate governance structure,                                                             
policies and practices, and is intended to give the director a means of                                                         
understanding the insurer's corporate governance.                                                                               

2019-03-04                     House Journal                      Page 0252
The bill describes the scope and required contents of the corporate                                                             
annual disclosure, authorizes the director to promulgate regulations,                                                           
and retain independent consultants. Under the bill the corporate                                                                
governance annual disclosure and related information will be                                                                    
confidential, as they may contain trade secrets and proprietary                                                                 
information. The bill also provides for penalties to be imposed on an                                                           
insurer that fails to timely file a corporate governance annual                                                                 
Sections 2 - 4 of the bill make changes to AS 21.22 relating to                                                                 
insurance holding companies. AS 21.22 is based on a NAIC model                                                                  
law. This bill amends AS 21.22 to clarify when a domestic insurer is                                                            
required to notify the director of a transaction between the domestic                                                           
insurer and a person in its insurance holding company holding system                                                            
and makes documents and information obtained by the director, in the                                                            
course of an investigation or examination under AS 21.22,                                                                       
Section 5 of the bill adds a new section to AS 21.22 giving the director                                                        
the authority to act as the group-wide supervisor of an internationally                                                         
active insurer or acknowledge another insurance regulatory official as                                                          
the group-wide supervisor.                                                                                                      
Section 6 of the bill adds two new definitions to AS 21.22 defining                                                             
terms added to the insurance code in Section 5 of the bill.                                                                     
By conforming to the changes to the NAIC model laws and adding the                                                              
new sections, Alaska will remain current with the national standard                                                             
and maintain its accredited status.                                                                                             
I urge your prompt and favorable action on this measure.                                                                        
Michael J. Dunleavy