Legislature(1995 - 1996)
04/25/1996 01:50 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL 197
"An Act prohibiting increases in health insurance
premiums if the insured is a victim of domestic
violence."
AMBER ALA, STAFF, SENATOR DAVE DONLEY, testified in support
of SB 197. She noted that the bill would protect victims of
domestic violence from insurance company discrimination such
as refusing to provide coverage, concealing a policy, or
increasing premiums on the basis of domestic violence. SB
197 would require the insurer to disclose the reason
insurance coverage was denied or cancelled.
Ms. Ala reported that SB 197 was drafted with the advise and
support of the Division of Insurance. She continued, the
statutory provisions contained in SB 197 were necessary to
protect victims of domestic violence. Eight states have
passed legislation similar to SB 197. Alaska's pro-active
measures follow the nation-wide trend by adopting
legislation that protects innocent victims of domestic
violence from insurance discrimination.
Ms. Ala continued, currently, there is no protection in
Alaska for victims of domestic violence against insurance
premium increases, cancellation, or denial. SB 197 would
protect innocent victims of domestic violence from being
unfairly discriminated against by insurance companies.
Insurers discriminating against domestic violence victims
has been a serious problem in the "lower 48"; SB 197 would
prevent similar occurrences in Alaska.
In response to Representative Martin, Ms. Ala stated that an
insurance company could identify a person as a victim of
domestic violence through medical records which specifically
indicate that person was abused. Records can be released
through court orders which an insurance company has access
to. Representative Martin pointed out that most medical
records are confidential. Ms. Ala advised that insurance
companies do check out medical records. Representative
Brown pointed out that medical records are maintained by
large credit reporting firms; they have risk factors
checked. People who apply for medical insurance often have
to reveal or give permission to get their medical records as
a condition of obtaining insurance.
JOHN GEORGE, AMERICAN COUNCIL OF LIFE INSURANCE, NATIONAL
ASSOCIATION OF INDEPENDENT INSURERS, JUNEAU, stated that
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insurance companies support passage of a bill which protects
victims of domestic violence from discrimination by
insurance companies. He elaborated, there are no known
cases of discrimination in the State of Alaska, adding that
the legislation is trying to "fix" something which is not
"broken".
Mr. George stated that insurance companies support the
current version of the bill, although would request that
property and casualty insurance be removed. Representative
Brown asked if it was possible that someone was denied
insurance because a portion of that decision took into
account the domestic violence risk factor. She suggested
that the bill had become "inoperative" by changes made in
the House Labor and Commerce Committee, which deleted
"only". Mr. George interjected that change had been
proposed by Senator Donley.
SENATOR DAVE DONLEY replied that language had been
recommended by the Division of Insurance in order to
guarantee that the legislation would not unfairly impact
them. Mr. George clarified that a person is underwritten
depending on their condition, not how their condition
originated.
Representative Brown asked if everyone living in a violent
household had the same rate. Mr. George stated that the
bill as currently written would not allow that
consideration. A person is underwritten depending on their
condition, from information provided from their medical
records.
Representative Parnell asked the problem with including
property casualties. Mr. George responded, allegations are
based on the frequency of claims. He reiterated that the
insurance industry would like to support the bill. He
recommended removing "property casualty"; to date there have
no cases in Alaska.
Representative Martin voiced concern with the insurance
companies becoming the "goat" of domestic violence
situations. Mr. George reiterated that it would be
difficult for an individual to receive information from an
insurance company. Insurance companies do not ask if the
party has been a victim of abuse, although, there could be
an inadvertent disclosure. He reiterated that the actual
condition could not be used against a client.
Representative Martin maintained that the legislation would
place the insurance company in a vulnerable position.
Senator Donley stressed that the legislation only specifies
that if there is discrimination against someone because they
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are a victim of domestic violence, that act is against the
law. It would be essential that a reason other than
domestic violence be shown indicating why the insurance had
been cancelled or raised. Mr. George reiterated that the
bill as proposed is supported by insurance companies.
Discussion followed between Representative Martin and
Senator Donley regarding potential suits to insurance
companies. Senator Donley reminded Representative Martin
that the bill allows to rate for actual injuries and not the
circumstances leading to the injury. The bill had been
drafted to address inappropriate underwriting in the
insurance industry.
(Tape Change, HFC 96-139, Side 2).
Senator Donley responded to Representative Therriault,
noting that it was inappropriate to use domestic violence as
a classification of people. Insurance companies should be
allowed factual reasons for their rating determinations.
Representative Brown asked how the language in Subsection
(b) would be applied. She understood that language would
allow discrimination against the abused party based on
medical conditions. There could be assigned a risk factor.
Senator Donley agreed that it would if those people were
treated differently than anyone else. He stressed that
domestic violence is not an appropriate reason to be
discriminated against.
Representative Parnell suggested that Subsection (b) would
modify Subsection (a), stating that the provision of (a) may
not prevent an insurer from underwriting a rating for
medical conditions. It would not be the domestic violence
relationship that would be underwritten but rather the
medical condition.
TERI FRONSEN, (TESTIFIED VIA TELECONFERENCE), ATTORNEY,
WOMEN'S LAW PROJECT, PHILADELPHIA, PENNSYLVANIA, testified
as a consumer representative for the legal and economic
status of women. She pointed out that she had represented a
woman in Pennsylvania who was denied insurance from two
different insurance companies because of a "so-called"
history of domestic violence. She was denied life
insurance, health insurance and mortgage disability
insurance.
In a 1994 survey, the Commonwealth Fund reported four
million battered women. Calls to sixteen major insurance
companies in the United States revealed that eight
considered domestic violence an underwriting standard in
both issuance and reading of policies. Some of those
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insurance companies have modified their policy following
Congressman Shumer's efforts, although, they still consider
domestic violence a factor to be considered. Companies are
behaving on misperceptions about what domestic violence is.
Ms. Fronsen pointed out that women are confined to these
circumstances for all sorts of reasons, including economics,
housing, children, and fear of retaliation. Violence does
not leave when you leave the household. Domestic violence
advocates have worked hard to educate people to the fact
that domestic violence is a crime. Law enforcement
personnel have treated it as a private matter. She stressed
that it is a crime; and, under the law, it should be treated
that way. With respect to insurance companies, they also
need to know that it is a crime. It is not a medical
condition. She reiterated that it is a crime and should not
be used as a basis for denying or treating victims
differently.
Ms. Fronsen urged the Committee to move forward with the
proposed model legislation and support the bill. [Testimony
on file].
In response to Representative Martin's comment, Ms. Fronsen
noted her concern regarding confidentiality, and that
information not be disseminated by the insurance company in
a way to cause harm to a victim. In some situations,
information has been provided to the batterer. Insurers
also provide information to data bases that collect risk
information.
Ms. Fronsen noted that it was not in the clients best
interest to not record the violence. She pointed out that
the abused person may need to seek legal help. The purpose
of the legislation is to clarify that insurance companies
can not use information on domestic violence to take adverse
insurance action.
Discussion followed between Representative Therriault and
Ms. Fronsen regarding the application of when violence
occurs within the home. The law stipulates when there is
abuse.
LAUREE HUGONIN, EXECUTIVE DIRECTOR, ALASKA NETWORK ON
DOMESTIC VIOLENCE AND SEXUAL ASSAULT, JUNEAU, explained that
advocates working to end violence against women, encourage
battered women to document their injuries by seeking medical
care and by requesting that violent incidents be noted in
their medical records.
Identification of abused women through routine screening and
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accurate diagnosis can break the cycle of violence. Early
intervention can prevent or ameliorate many of the long-term
health and social consequences associated with
victimization.
Ms. Hugonin continued, national health initiatives require
medical institutions to develop domestic violence protocols,
plans for training and improving their facilities response
to domestic violence. Surveys indicate that insurance
discrimination against victims of domestic violence is
widespread. An informal survey by the staff of the
Subcommittee on Crime and Criminal Justice of the U.S. House
Judiciary Committee in 1994, found that eight out of sixteen
of the largest insurers in the country were using domestic
violence as a factor when deciding whether to issue a policy
and how much to charge for that policy.
She concluded, it seems that the industry as a whole is not
interested or willing to look at medical conditions without
regard to cause. The reality is that every woman is at risk
of becoming a victim of domestic violence. Just as their is
no excuse for domestic violence, there is no excuse, legal
or otherwise, for the insurance industry to justify and
continue the discriminatory practice.
MARCIA MCKENZIE, PROGRAM COORDINATOR, COUNCIL ON DOMESTIC
VIOLENCE AND SEXUAL ASSAULT, JUNEAU, spoke to the concerns
that the Council on Domestic Violence and Sexual Assault has
regarding the current version of the legislation. She
advised that the confidentiality protection for domestic
violence victims had been removed. A provision should be
added for coverage and rating based on a medical condition
as long as there is no discrimination. Ms. McKenzie
stressed that violent behavior was criminal and deliberate
and that abuse received was not the result of a medical
condition.
(Tape Change, HFC 96-140, Side 1).
She added, the Council was concerned that insurance
companies would not be responsible to inform the applicant
why they had been denied coverage. Ms. McKenzie urged
Committee members to amend the bill to reinstate the
provisions of confidentiality, prohibiting the "so-called"
non-discriminatory consideration of medical conditions and
requiring the insurers to inform applicants of the reason
coverage would be denied.
CS SB 197 (L&C) was HELD in Committee for further
consideration.
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