Legislature(2021 - 2022)
2021-02-18 House Journal
Full Journal pdf2021-02-18 House Journal Page 0160 HB 102 HOUSE BILL NO. 102 by the House Rules Committee by request of the Governor, entitled: 2021-02-18 House Journal Page 0161 "An Act relating to the state insurance catastrophe reserve account; and providing for an effective date." was read the first time and referred to the State Affairs and Finance Committees. The following fiscal note(s) apply: 1. Fiscal, Dept. of Administration The Governor's transmittal letter dated February 17 follows: "Dear Speaker Stutes: Under the authority of Article III, Section 18, of the Alaska Constitution, I am transmitting a bill relating to the State Insurance Catastrophe Reserve Account. The State of Alaska, through its self-insurance program, maintains insurance coverage to protect state assets and operations, and adequate reserves to satisfy all foreseeable claims or judgements. The State Insurance Catastrophe Reserve Account was established in 1987 to obtain insurance, establish a self-insurance reserve, and to satisfy ongoing claims and judgments. When it was originally established, the account was primarily intended as a reserve against large catastrophic losses. However, because the reserve balance is capped at $5,000,000, the State has been acquiring excess coverage on the market to adequately protect against catastrophic losses. Market forces have changed, insurance rates continue to increase, and it is no longer cost effective for the state to purchase excess insurance. The Reserve’s balance is typically capitalized through lapsing appropriations at the end of the fiscal year. By increasing the statutory cap to $50,000,000 and slowly increasing the Reserve balance, the State will once again be able to fully self-insure against property losses. This change is estimated to save $3 million the first year and up to $6 million annually within four years. This measure will provide the State flexibility, control, and cost savings in its self-insurance program. 2021-02-18 House Journal Page 0162 I urge your prompt and favorable action on this measure. Sincerely, /s/ Mike Dunleavy Governor"