03/30/2000 03:07 PM House HES

HB 303 - MISC. INSURANCE PROVISIONS                                                                                           
                                                                                                                                
Number 799                                                                                                                      
                                                                                                                                
CHAIRMAN DYSON announced the next  order of business as House Bill                                                              
No. 303,  "An Act relating  to the method  of payment of  fees and                                                              
adoption of regulations  under AS 21; relating to  orders under AS                                                              
21  regarding   risk  based  capital  instructions;   relating  to                                                              
accounting  standards   for  insurance  companies;   amending  the                                                              
definitions of  'creditable coverage'  and 'late enrollees'  in AS                                                              
21.54;  relating  to requirements  for  small  employer  insurers;                                                              
relating to requirements for issuance  of new voting securities by                                                              
an insurance  company;  requiring health  care insurance  coverage                                                              
for  reconstructive   surgery   following  mastectomy;   requiring                                                              
guaranteed   renewability  of   and   certification  of   coverage                                                              
regarding  certain  individual  health   insurance  policies;  and                                                              
providing for an effective date."                                                                                               
                                                                                                                                
Number 0815                                                                                                                     
                                                                                                                                
BOB  LOHR,   Director,  Division   of  Insurance,  Department   of                                                              
Community  & Economic  Development,  testified via  teleconference                                                              
from  Anchorage.    He  told  the  committee  that  Representative                                                              
Rokeberg,  Chairman,  House Labor  and  Commerce  Committee did  a                                                              
search of representatives  of each insurance  related organization                                                              
in  the  state  that  might  have  concerns  about  the  bill  and                                                              
responded  to questions,  and there  was no  adverse testimony  in                                                              
House Labor and Commerce Committee concerning this bill.                                                                        
                                                                                                                                
MR. LOHR explained  what HB 303 does.   It allows the  Director of                                                              
the Division of  Insurance to require electronic  payment of fees.                                                              
That is  not controversial  at this stage  and would  put deposits                                                              
into the  general fund.   It updates  and moves obsolete  language                                                              
from  the statutes  related to  the accounting  procedures.   When                                                              
insurance companies  file their  annual financial statements  with                                                              
the division,  there specific procedures  that they follow.   This                                                              
bill  would conform  the statutes  to  national model  regulations                                                              
developed  by the  National Association  of Insurance  Commission.                                                              
These  are  regulations  that most  multi-national  companies  are                                                              
comfortable with and aware of and  expect to go into force January                                                              
1, 2001.  The  division has already adopted regulations  for that.                                                              
However, there are  a few accounting provisions in  state law that                                                              
are not  consistent with those rules,  and this bill  will conform                                                              
them to the national model rules.                                                                                               
                                                                                                                                
MR. LOHR  explained the  third major  area involves HIPAA  [Health                                                              
Insurance  Portability  and Accountability  Act  of  1996].   Most                                                              
state law changes that were required  for conforming to HIPAA were                                                              
made  in 1997  by the  legislature.   However, several  provisions                                                              
have been identified  that were not  caught at the time.   One has                                                              
led to  the federal Health  Care Financing Administration  writing                                                              
to the  Governor and asking  what the  intention of the  state was                                                              
with respect  to that provision,  because if it were  not enforced                                                              
by the state, then  there would be the risk of  preemption by this                                                              
federal agency.   At this point,  the division is  enforcing those                                                              
provisions  in  policy  language under  current  state  authority.                                                              
However, there is a specific change  there that would be required.                                                              
There are  additional specific requirements  there, but  there are                                                              
no  mandates beyond  those required  by federal  law contained  in                                                              
these changes.                                                                                                                  
                                                                                                                                
Number 0998                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL referred to  page 8, line 24, and asked Mr.                                                              
Lohr explain "or other state high-risk pool."                                                                                   
                                                                                                                                
MR. LOHR answered  that there are two state high-risk  pools.  One                                                              
is the Comprehensive Health Insurance  Association (CHIA), and the                                                              
other is the Small Employer Health Insurance Association.                                                                       
                                                                                                                                
REPRESENTATIVE  BRICE  made  a  motion  to  move  HB  303  out  of                                                              
committee with  individual recommendations  and zero  fiscal note.                                                              
There being  no objection,  HB 303  moved from  the House  Health,                                                              
Education and Social Services Standing Committee.