Legislature(2005 - 2006)CAPITOL 17
04/01/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB211 | |
| HB216 | |
| HB180 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 211 | TELECONFERENCED | |
| += | HB 216 | TELECONFERENCED | |
| *+ | HB 227 | TELECONFERENCED | |
| = | HB 180 | ||
HB 216-PROPERTY/CASUALTY INSURANCE REGULATION
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 216, "An Act relating to insurance rate-making
and form filing."
The committee took an at-ease from 4:01:24 to 4:01:54.
[REPRESENTATIVE ROKEBERG moved to adopt version CS HB 216
version 24-LS0349\Y, Bullock, 3/31/05.]
CHAIR ANDERSON announced that the Version Y was before the
committee.
4:02:18 PM
LINDA HALL, Director, Division of Insurance, stated that the CS
has some changes and that she would like to talk about the
process that led to the CS and the original bill. She said that
the end goal was to come up with more efficient means of rate
and form review to enhance market place and make it more
attractive to other companies. She revealed that the changes
made by the CS were met through the same process of meetings and
online discussions with the industry and Division members.
MS. HALL stated that the major changes are found in a chart that
the committee has. Predominately things that were redundant
were changed. None of these changes were substantive. Self-
certification language was probably the most substantive in
nature. It is now clear that we want clear complete and
accurate filings. She indicated that she is fully in support of
the bill and thinks that it is an improvement of the regulatory
environment as it maintains consumer protections and allows for
flexibility that we did not have before. She then directed the
committee's attention to a letter that was filed with the
committee that answered some of the questions that
Representative Rokeberg has concerning the bill. There is also
a chart of bills that other states have adopted file and use
systems, and it also gives information concerning about filings
over the years and what did and did not qualify for filing under
the flex rating system. It also included information concerning
the number of days that it took to post a file.
4:06:01 PM
REPRESENTATIVE GUTTENBERG referring to page 4 section 8,
suggested that if someone raised their rates and then repeated
the process 12 months later. He asked if this were something
that was approved of by the Division.
4:06:43 PM
MS. HALL stipulated that she would have to look at those. She
stated that this would send up flags but that this situation
could be allowed given certain circumstances. She said that it
would get some scrutiny.
REPRESENTATIVE GUTTENBERG asked that if a company protested and
said that they fulfilled the requirements of the statute, would
the bill allow one to pursue this.
4:07:38 PM
MS. HALL indicated that it would have to be done with
jurisprudence and there has to be substantial proof that they
are in violation of the statute.
4:08:01 PM
REPRESENTATIVE GUTTENBERG asked how long it would take to
examine the documents and mitigate the violation.
4:08:17 PM
MS. HALL answered that different filings have different number
of days. The thing that slows filings down is when things get
bogged down due to back and forth exchanges that need to
thoroughly addressed. Typically it takes three or four days
depending on the complexity.
4:08:57 PM
REPRESENTATIVE ROKEBERG stated that in one example, the recent
77 rate filings that were received and most of them took an
average time of 40 days to be dealt with by the Division. He
then stated that 24 of these 77 rate filings took from 50 days
to around 100 days. This time period consisted of two months to
do almost a third of the work. It is obvious that the flex rate
would allow the industry market the ability to adapt and change
without having to go through the approval process. He then
asked if her division still controlled the oversight and if they
still took corrective action on any problem that might occur in
the self-governing flex rate system.
4:09:53 PM
MS. HALL answered that this was indeed the case.
4:10:02 PM
REPRESENTATIVE ROKEBERG indicated that one of the concerns was
that with the granting of the flex rate system, the department
would be diminished in their authority and oversight. He then
asked if the rate examples in the letter were actual examples
from the state.
4:10:27 PM
MS. HALL said that they were real examples, minus their
identity. She then went on to say that these are typical rate
filings.
4:10:39 PM
REPRESENTATIVE ROKEBERG pointed out, in reference to the
examples that there were numerous times that the rates do go
down. He then said that rates really do go down, as evidenced
by a 20 point rate band.
4:11:04 PM
MS. HALL said that part of the responsibility of the division
was to look at not only inadequate rates that can lead to
insolvency but to also look at excessive rates and decide if
they can be lower. She believes that the intent of the bill is
to speed up the process and make it more responsiveness to the
market. It allows an immediate response to conditions.
Insurers will know that they can now file a rate decrease and
increase with ease. This bill allows the rate to go both ways.
4:12:10 PM
REPRESENTATIVE ROKEBERG agreed and said this was a very positive
thing for the state. He then reemphasized that the Division
still maintains the rate setting requirements of new producers.
4:12:36 PM
MR. HALL said that this was correct.
4:12:44 PM
CHAIR ANDERSON asked how would you categorize the support for
this bill by industry.
4:13:05 PM
MS. HALL indicated that in her two-year experience that the
agent community approached her about the idea so that it would
enhance the market and make it more responsive. She stated that
industry had worked hard to modernize the way that business is
conducted in Alaska. One of the things I hear regularly is that
at some companies, the agents have to schedule computer time,
and if you miss the appointment, the agent has to wait another 6
months to input their data. There is a stability here and that
if all standards of the title the division knows its rate will
be effective and the division can plan for its effective use,
regardless if it is up or down.
4:14:51 PM
CHAIR ANDERSON stated that ENCOIL is very supportive of
modernization.
4:15:07 PM
MS. HALL stated that ENCOIL supports this bill and the National
Agent Association encourages support for this concept.
CHAIR ANDERSON asked for a motion to move the bill.
4:15:21 PM
REPRESENTATIVE ROKEBERG stated that this is one of the rare
moments that we can actually keep our campaign promises to
deregulating government. This is really a good thing and
positive.
4:16:29 PM
REPRESENTATIVE ROKEBERG moved to report CSHB 216 [version 24-
LS0349\Y, Bullock, 3/31/05] out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 216(L&C) was reported from the House Labor
and Commerce Standing Committee.
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