Legislature(2019 - 2020)

2019-03-01 Senate Journal

Full Journal pdf

2019-03-01                     Senate Journal                      Page 0430
SB 72                                                                                                                         
SENATE BILL NO. 72 BY THE SENATE RULES COMMITTEE                                                                                
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
          "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 and Commerce                                                                  
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, zero, Department of Commerce, Community,                                                                    
  and Economic Development                                                                                                      
Governor's transmittal letter dated February 28:                                                                                
Dear President Giessel:                                                                                                         
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.                                                                   

2019-03-01                     Senate Journal                      Page 0431
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 below.                                                                                                                   
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.                                                                               
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.                                                                                                      

2019-03-01                     Senate Journal                      Page 0432
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