03/30/2009 03:15 PM House LABOR & COMMERCE

HB 175-INSURANCE                                                                                                              
                                                                                                                                
3:17:26 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE  BILL NO.  175, "An  Act relating  to insurance,  including                                                               
treating  as confidential  certain information  submitted to  the                                                               
director of  insurance by the  National Association  of Insurance                                                               
Commissioners; clarifying  conditions for the release  of insurer                                                               
deposits;  defining travel  insurance that  may be  sold under  a                                                               
travel insurance limited  producer license; establishing criteria                                                               
for licensing  of nonresident  independent adjusters  as resident                                                               
adjusters;  exempting  rewards  under  a  wellness  program  from                                                               
treatment  as   insurance  discrimination  or   rebating;  making                                                               
certain insurance required of  the Comprehensive Health Insurance                                                               
Association permissive  rather than mandatory; providing  for the                                                               
administration  of loss  reimbursement policies  and payments  to                                                               
guaranty  associations  during   insolvency  proceedings;  making                                                               
certain  provisions relating  to statements  on applications  and                                                               
guaranteed   renewability   for   individual   health   insurance                                                               
applicable to  hospital and medical service  corporations; making                                                               
public certain forms and related  documents filed for approval by                                                               
a  hospital  or  medical  service corporation  after  the  filing                                                               
becomes effective;  relating to deposits of  self-funded multiple                                                               
employer  welfare   arrangements;  repealing  reasons   that  the                                                               
director of  insurance may use to  deny or revoke a  license; and                                                               
providing for an effective date."   [Before the committee was the                                                               
Version S.]                                                                                                                     
                                                                                                                                
3:18:16 PM                                                                                                                    
                                                                                                                                
LINDA HALL,  Director, Division  of Insurance,  Anchorage Office,                                                               
Department of  Community &  Economic Development  (DCCED), stated                                                               
that  the   committee  substitute  Version  S   removes  previous                                                               
Sections 25  and 26  relating to insolvencies.   She  pointed out                                                               
that Section  11 of  the bill permits  the Division  of Insurance                                                               
director  to order  a  summary  suspension of  a  license if  the                                                               
director finds  that protection of the  public requires emergency                                                               
action and incorporates  the finding in an order.   She indicated                                                               
that  she   asked  for  this   authority  in  cases   of  extreme                                                               
emergencies.    She  stated  that is  the  only  provision  which                                                               
represents a policy change.                                                                                                     
                                                                                                                                
3:19:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL indicated  that he  spent some  time with                                                               
the  director  of  the  Division of  Insurance  and  agrees  that                                                               
additional  statutory authority  is needed.   He  stated that  he                                                               
tried to imagine a different  director and circumstances in which                                                               
someone might misuse this authority.   He offered his belief that                                                               
enough  safeguards  are   in  the  bill  to   prevent  misuse  of                                                               
authority.                                                                                                                      
                                                                                                                                
3:20:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN referred to the  bill title and asked which                                                               
information is confidential information.                                                                                        
                                                                                                                                
MS.  HALL referred  to Section  1 of  Version S.   She  stated AS                                                               
21.06.060  lists records  that must  be kept  confidential.   She                                                               
indicated  AS  21.06.060(f)(2)  adds   to  the  list  proprietary                                                               
information or  records established by a  showing satisfactory to                                                               
the   director.      Thus,  the   new   paragraph   would   allow                                                               
confidentiality for proprietary or  trade secrets.  Additionally,                                                               
a change  was made to  paragraph (4)  that would remove  the term                                                               
"financial"  from the  analysis  rations and  examinations.   She                                                               
explained  that   the  division  receives  analysis   ratios  and                                                               
examination  synopses  from  the National  Association  Insurance                                                               
Commissioners,  which   is  other   states'  information.     She                                                               
mentioned the Division of Insurance  has signed a confidentiality                                                               
statement  that it  will not  release other  states' information.                                                               
Thus,  this change  would  allow the  division  to obtain  market                                                               
conduct information.                                                                                                            
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  what the  insurance term  is for  a                                                               
record check examining home insurance claims.                                                                                   
                                                                                                                                
3:23:34 PM                                                                                                                    
                                                                                                                                
MS. HALL answered that Representative  Neuman is referring to the                                                               
[Comprehensive Loss Underwriting Exchange]  C.L.U.E. report.  She                                                               
explained  that  would   be  considered  personally  identifiable                                                               
consumer information.  She offered  her belief the division would                                                               
not release to the public  confidential consumer information that                                                               
was collected in the course  of conducting business.  She related                                                               
that those types  of reports would generally be  in the insurance                                                               
company records and not in the division's records.                                                                              
                                                                                                                                
3:24:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  asked whether  the consumer's  identity is                                                               
protected.                                                                                                                      
                                                                                                                                
MS.  HALL  answered  that  the  division  does  not  perform  any                                                               
profiling.   She explained that  the division would  perform some                                                               
rating underwriting through the use  of credit scoring.  However,                                                               
the  division does  not  receive  detailed consumer  information,                                                               
which  by statute  is  confidential.   She  related the  division                                                               
reviews standards.   She stated that the  rating and underwriting                                                               
laws prohibit unfair discrimination.                                                                                            
                                                                                                                                
3:25:07 PM                                                                                                                    
                                                                                                                                
MS. HALL,  in response to  Representative Neuman,  explained that                                                               
the Division  of Insurance does not  collect personal information                                                               
so it  would not have the  ability to disseminate it.   She added                                                               
that under  public records  laws, the division  does not  have to                                                               
collect  and create  reports that  it does  not already  collect.                                                               
She opined the division does not collect personal information.                                                                  
                                                                                                                                
CHAIR OLSON  offered his  belief that  the problem  was corrected                                                               
last year and  pertained to a different department  that had been                                                               
releasing confidential information.                                                                                             
                                                                                                                                
3:26:16 PM                                                                                                                    
                                                                                                                                
MS.  HALL, in  response to  Representative Neuman,  explained the                                                               
only opposition  received on  HB 175  related to  provisions that                                                               
have been removed from the bill.                                                                                                
                                                                                                                                
3:26:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH  commented that the committee  held extensive                                                               
discussions on  HB 175  a month  ago and  his concerns  have been                                                               
addressed.   He  inquired as  to  whether any  other issues  have                                                               
arisen that would need to be addressed before next session.                                                                     
                                                                                                                                
MS.  HALL  related  her  understanding   that  only  three  weeks                                                               
remained of  the legislative  session.  She  answered she  had no                                                               
additional matters with respect to HB 175.                                                                                      
                                                                                                                                
3:28:14 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on HB 175.                                                                                     
                                                                                                                                
REPRESENTATIVE NEUMAN moved to report  the CS for HB 175, Version                                                               
26-LS0579\S, Bailey,  3/16/09, out  of committee  with individual                                                               
recommendations and  the accompanying  fiscal note.   There being                                                               
no  objection, the  CSHB  175(L&C) was  reported  from the  House                                                               
Labor and Commerce Standing Committee.                                                                                          
                                                                                                                                
3:29:23 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:29 p.m. to 3:31 p.m.