Legislature(2017 - 2018)BARNES 124

03/14/2018 03:15 PM LABOR & COMMERCE

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Audio Topic
03:19:55 PM Start
03:20:54 PM SB126
03:24:56 PM SB80
03:50:29 PM HB403
04:14:52 PM HB401
04:29:18 PM Presentation: Update of the 2020 Census Operations
04:55:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 403 LIFE & HEALTH INSURANCE GUARANTY ASSN. TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 401 INSURANCE; REINSURANCE;VALUATION; CREDITS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Presentation: Update of the 2020 Census TELECONFERENCED
Operations by Julie Lam, Assistant Regional
Director and Jamey Christy, Regional Director,
Los Angeles Regional Office, US Census Bureau
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 80 TELECOMMUNICATIONS: DISABLED SUBSCRIBERS TELECONFERENCED
Moved HCS CSSB 80(L&C) Out of Committee
-- Public Testimony --
+= SB 126 VISITING PHYSICIANS WITH SPORTS TEAMS TELECONFERENCED
Moved SB 126 Out of Committee
-- Public Testimony --
         HB 403-LIFE & HEALTH INSURANCE GUARANTY ASSN.                                                                      
                                                                                                                                
3:50:31 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO announced  that the  next order of  business would  be                                                              
HOUSE  BILL NO.  403,  "An Act  relating to  the  Alaska Life  and                                                              
Health  Insurance  Guaranty  Association;  and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
3:50:29 PM                                                                                                                    
                                                                                                                                
SORCHA  HAZELTON, Staff,  Representative  Sam  Kito, presented  HB                                                              
403  on behalf  of House  Labor and  Commerce Standing  Committee,                                                              
prime  sponsor.    She  gave  some background  on  HB  403.    She                                                              
paraphrased   the  sponsor   statement   [included  in   committee                                                              
packet], which reads as follows  [original punctuation provided]:                                                               
                                                                                                                                
     House  Bill  403  updates the  Alaska  Life  and  Health                                                                   
     Insurance  Guaranty  Act  to  conform  to  the  National                                                                   
     Association of Insurance Commissioners Life and Health                                                                     
     Guaranty  Model Act.  These changes  update the Act  and                                                                   
     improve uniformity  nationwide in the  administration of                                                                   
     life and health guarantee associations.                                                                                    
                                                                                                                                
     House  Bill   403  incorporates  changes  made   by  the                                                                   
     National Association  of Insurance Commissioners  to the                                                                   
     Life  &  Health Insurance  Guarantee  Association  Model                                                                   
     Act (MDL  520) in  December 2017,  after House Bill  157                                                                   
     had  been   introduced.  These   changes  added   health                                                                   
     maintenance  organizations  (HMOs)  as  members  of  the                                                                   
     association,  providing  HMO  coverage,  and  addressing                                                                   
     long-term  care   insolvencies.  With  the   substantial                                                                   
     number of changes made, HB 403 was introduced to help                                                                      
     explain these changes, though few are substantive.                                                                         
                                                                                                                                
     Throughout, numerous  conforming changes are made  to AS                                                                   
     21.79 consistent  with the model  law, most of  which do                                                                   
     not substantively change the bill.                                                                                         
                                                                                                                                
     The   Alaska  Life   and  Health   Insurance   Guarantee                                                                   
     Association  (Association) is  composed of insurers  who                                                                   
     transact   life   insurance,    health   insurance,   or                                                                   
     annuities in  Alaska. The purpose of the  Association is                                                                   
     to  guarantee that  residents  and certain  nonresidents                                                                   
     will continue  to receive benefits  in the event  one of                                                                   
     the members  becomes impaired or insolvent.  In order to                                                                   
     accomplish  this, the Act directs  the insurers  to form                                                                   
     a  board and  collect assessments  from  members to  pay                                                                   
     for the  operations of  the Association and  obligations                                                                   
     of insolvent or impaired members.                                                                                          
                                                                                                                                
     House  Bill 403 amends  terms for  consistency with  the                                                                   
     model   act,  raises  payment   limits,  adds   language                                                                   
     clarifying  what  products  are  included  and  excluded                                                                   
     from the  protections under  the Act, and adds  language                                                                   
     clarifying   that    medical   and   hospital    service                                                                   
     corporations  and  their  products are  subject  to  the                                                                   
     provisions  of  the  Act.  House  Bill  403  amends  the                                                                   
     powers  and  duties  section   for  the  Association  to                                                                   
     follow the model  act, authorizes the board  to increase                                                                   
     assessments,  grants  the  Association  the  ability  to                                                                   
     develop  procedures to  remove  an Association  governor                                                                   
     for cause, and adds new definitions.                                                                                       
                                                                                                                                
3:52:09 PM                                                                                                                    
                                                                                                                                
LORI WING-HEIER,  Director, Division  of Insurance,  Department of                                                              
Commerce, Community  & Economic Development (DCCED),  testified in                                                              
the hearing  on HB  403.  She  said long  term care insurance  has                                                              
been around  for many years,  but there  has been a  concern about                                                              
the   solvency  of   insurers.     She   explained  the   National                                                              
Association  of  Insurance  Commissioners  (NAIC) took  action  to                                                              
address  those insurers.    Previously, those  insolvencies  would                                                              
have  been covered  only by  healthcare insurers.   She  indicated                                                              
the  bill  would  bring  in  life  insurers  and  split  potential                                                              
insolvencies  evenly.  She  stated the  division was still  asking                                                              
hospital  services   medical  associations  to   participate.  She                                                              
mentioned Primera  is the only provider  and they have  not been a                                                              
member  before.   She  added the  update to  the  NAIC model  also                                                              
brought  in   health  maintenance   organizations  (HMOs).     She                                                              
remarked the  cost of  health care  is being discussed  throughout                                                              
the legislature.                                                                                                                
                                                                                                                                
3:54:33 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER summarized  the  sectional  analysis [included  in                                                              
committee packet],  which reads  as follows [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     Sec. 1  AS 21.79.010 is  amended to conform  to National                                                                   
     Association  of  Insurance  Commissioners'  (NAIC)  Life                                                                   
     and  Health  Insurance Guaranty  Association  Model  Act                                                                   
     (MDL  520)  model  language  and  clarifies  protections                                                                   
     that   apply   to   the  failure   in   performance   of                                                                   
     contractual  obligation  because  of the  impairment  or                                                                   
     insolvency of the member insurer.                                                                                          
                                                                                                                                
     Sec.  2  AS  21.79.020(a) is  amended  to  clarify  that                                                                   
     applicability   includes  a   nonresident  who  is   not                                                                   
     eligible  for  coverage  by a  guaranty  association  in                                                                   
     another state  because the  insurer was not  licensed at                                                                   
     the time  specified in the  guaranty association  law of                                                                   
     that state.                                                                                                                
                                                                                                                                
     Sec.  3 AS  21.79.020(b)  is amended  to  have AS  21.79                                                                   
     apply  to a  contract issued  by a  hospital or  medical                                                                   
     service  corporation  and  defines  the  terms  "annuity                                                                   
     policy  or contract"  and  "certificate  under a  direct                                                                   
     group life  health, annuity,  or supplemental policy  or                                                                   
     contract".   This    section   also   includes    health                                                                   
     maintenance  organizations (HMOs)  in the definition  of                                                                   
     "health insurance," for the purposes of AS 21.79.                                                                          
                                                                                                                                
     Sec.  4 AS  21.79.020(c)  is amended  to  make AS  21.79                                                                   
     inapplicable to:                                                                                                           
          1.  a  policy  or contract  providing  a  hospital,                                                                   
          medical,  prescription drug,  or other health  care                                                                   
          benefit  in   accordance  with  42   U.S.C.  1395w-                                                                   
          211395- w154  or federal regulations  adopted under                                                                   
          those  sections;   (Medicare  Choice   Program  and                                                                   
          Voluntary Prescription Drug Benefit Program)                                                                          
          2.  a   person  who  acquires  rights   to  receive                                                                   
          payments    through    a   structured    settlement                                                                   
          factoring transaction as defined in 26  U.S.C.                                                                        
          5891(c)(3)(A),    regardless    of   whether    the                                                                   
          transaction occurred      before  or   after   such                                                                   
          section became effective.                                                                                             
          3.  structured   settlement  annuity   benefits  to                                                                   
          which  a payee or  beneficiary has transferred  the                                                                   
          payee or beneficiary's  rights in   a    structured                                                                   
          settlement factoring  transaction as defined  in 26                                                                   
          U.S.C.  5891(c)(3)(A),  regardless  of whether  the                                                                   
          transaction  occurred  before  or after  26  U.S.C.                                                                   
          5891(c)(3)(A)                                                                                                         
          became effective.                                                                                                     
        • Subsection (c) is also amended to add clarifying                                                                      
          language consistent with the model language and                                                                       
          provide exceptions to the above inapplicability.                                                                      
                                                                                                                                
     Sec.  5  AS  21.79.020(d)  Non-substantive  changes  are                                                                   
     made  for either  consistency  with  the NAIC  Model  or                                                                   
     drafting conventions.                                                                                                      
                                                                                                                                
     Sec.  6  AS 21.79.020(e)  Non-substantive  changes  made                                                                   
     are  for  either  consistency  with the  NAIC  Model  or                                                                   
     drafting  conventions,  with  a citation  correction  in                                                                   
     paragraph (9).                                                                                                             
                                                                                                                                
     Sec. 7 AS 21.79.025(a)                                                                                                     
        • AS 21.79.025(a)(2)(B)(ii) is amended to clarify                                                                       
          that  the benefits  for which  the association  may                                                                   
          become  liable may  not exceed  $300,000 for  long-                                                                   
          term   care   insurance   as   defined   under   AS                                                                   
          21.53.200.   Conforms    to   model   language   by                                                                   
          replacing  "basic hospital,  medical, and  surgical                                                                   
          insurance  or  major medical  insurance"  with  the                                                                   
          term "health benefit plans."                                                                                          
        • AS 21.79.025(a)(3) is amended to change "contract                                                                     
          holder" to  "contract owner" to be  consistent with                                                                   
          the  NAIC  Model,  to  clarify  that  the  contract                                                                   
          refers  to an unallocated  annuity contract  issued                                                                   
          to or in  conjunction with a government  lottery if                                                                   
          the owner  is a resident,  and to clarify  that the                                                                   
          association  is not  liable to  cover more than  $5                                                                   
          million  in benefits  regardless of  the number  of                                                                   
          policies and contracts held by the owner.                                                                             
        • AS 21.79.025(a)(4) is amended to increase the                                                                         
          coverage  limit  for  net cash  surrender  and  net                                                                   
          cash withdrawal  values of annuities  from $100,000                                                                   
          to  $250,000  for individuals  participating  in  a                                                                   
          governmental  retirement benefit plans  established                                                                   
          under  26  U.S.C.  401,  26  U.S.C.  403(b)  or  26                                                                   
          U.S.C.  457 and covered  by an unallocated  annuity                                                                   
          contract                                                                                                              
        • AS 21.79.025(a)(5) is amended to increase the                                                                         
          coverage  limit  for  net cash  surrender  and  net                                                                   
          cash  withdrawal values, if  any, from $100,000  to                                                                   
          $250,000 to  each payee of a structured  settlement                                                                   
          annuity, or  beneficiary of the payee if  the payee                                                                   
          is deceased, in the aggregate.                                                                                        
                                                                                                                                
     Sec. 8  AS 21.79.025(c)  is amended  to not require  the                                                                   
     association  to reissue the  contractual obligations  of                                                                   
     an  insolvent  or  impaired   insurer  under  a  covered                                                                   
     policy  or   contract  when   the  obligations   do  not                                                                   
     materially  affect  the  economic   values  or  economic                                                                   
     benefits of the covered policy or contract.                                                                                
                                                                                                                                
     Sec.  9  AS   21.79.025(d)  is  amended  to   correct  a                                                                   
     typographical   error,  to   replace  "basic   hospital,                                                                   
     medical,  and   surgical  insurance  or   major  medical                                                                   
     insurance"  with the  term "health  benefit plans,"  and                                                                   
     to add  the word  "contract" as  is consistent with  the                                                                   
     model language.                                                                                                            
                                                                                                                                
     Sec.  10   AS  21.79.025  is   amended  to  add   a  new                                                                   
     subsection:  long-term  care rider  benefits  to a  life                                                                   
     insurance policy  or contract  are considered to  be the                                                                   
     same  type  of  benefits as  the  basic  life  insurance                                                                   
     policy or contract to which it relates.                                                                                    
                                                                                                                                
     Sec.  11  AS  21.79.040(a)   is  amended  to  require  a                                                                   
     hospital  or medical  service  corporation business  and                                                                   
     an HMO business to become members of an association.                                                                       
                                                                                                                                
     Sec.  12 AS  21.79.050(a)  is  amended to  increase  the                                                                   
     number of representatives  on the Board of  Governors of                                                                   
     a guaranty association to 7-11 from 5-9.                                                                                   
                                                                                                                                
     Sec.  13  AS  21.79.060(a)   is  amended  to  allow  the                                                                   
     association to provide loans to assure payment of the                                                                      
     contractual  obligations of  the impaired insurer  until                                                                   
     those   obligations   are  guaranteed,   reinsured,   or                                                                   
     assumed;  also gives  authority to  reissue policies  or                                                                   
     contracts if the member insurer is impaired.                                                                               
                                                                                                                                
     Sec. 14  AS 21.79.060(d)  AS 21.79.060(d)(1) is  amended                                                                   
     to  better   track  the  model  language   by  combining                                                                   
     existing  paragraphs  1      3  under  AS  21.79.060(d).                                                                   
     Tracking NAIC models and language promotes national                                                                        
     uniformity  and  state-based  regulation,  and  ease  of                                                                   
     interpretation,       compliance,        administration,                                                                   
     enforcement, and amendment.                                                                                                
        • AS 21.79.060(d)(1), consistent with the addition                                                                      
          of  loans under  AS 21.79.060(a)(2)  under  Section                                                                   
          13 above,  is amended to authorize  the association                                                                   
          to  utilize   loans  necessary  to   discharge  the                                                                   
          association's duties under AS 21.79.060.                                                                              
        • AS 21.79.060(d)(2) is amended to better track the                                                                     
          model  language  by  placing  existing  subsections                                                                   
          (e)   (j)  in this paragraph. This  subsection also                                                                   
          adds  the terms "contract,"  "enrollee," and  HMOs,                                                                   
          as is consistent with the model language.                                                                             
                                                                                                                                
     Sec. 15 AS  21.79.060(k) is amended to conform  with the                                                                   
     model language by adding the word "contract."                                                                              
                                                                                                                                
     Sec.  16  AS  21.79.060(l)  is amended  to  require  the                                                                   
     association  to  provide  a  report  to  the  liquidator                                                                   
     regarding  the premium collected  by the association  if                                                                   
     requested by the liquidator of an insolvent insurer.                                                                       
                                                                                                                                
     Sec.  17 AS  21.79.060(n) is  amended  to authorize  the                                                                   
     association  to impose  a permanent  policy or  contract                                                                   
     lien  under  a  guarantee,  assumption,  or  reinsurance                                                                   
     agreement  if approved  by a court  and the  association                                                                   
     finds  that the  amount  that may  be  assessed is  less                                                                   
     than  the  amount  needed  to  assure  full  and  prompt                                                                   
     performance of the association's duties.                                                                                   
                                                                                                                                
     Sec. 18  AS 21.79.060(o)  is amended  to conform  to the                                                                   
     model language and change a subsection citation to                                                                         
     conform with amendments being made.                                                                                        
     Sec.  19  AS   21.79.060(p)  is  amended  to   change  a                                                                   
     subsection  citation  to  conform  to  amendments  being                                                                   
     made to the section.                                                                                                       
                                                                                                                                
     Sec. 20  AS 21.79.060(s)  is amended  to conform  to the                                                                   
     model   language  by   adding   the  words   "policies,"                                                                   
     "contracts," and "enrollee."                                                                                               
                                                                                                                                
     Sec. 21 AS  21.79.060(t) is amended to conform  to model                                                                   
     language and to allow the association to file rate and                                                                     
     premium  increases  with the  director  for policies  or                                                                   
     contracts.                                                                                                                 
                                                                                                                                
     Sec.  22 AS  21.79.060  adds a  new  subsection (aa)  to                                                                   
     better track the model language by incorporating the                                                                       
     provisions in existing AS 21.79.060(u)  (x).                                                                               
                                                                                                                                
     Sec. 23 AS  21.79.070(a) is amended to require  that any                                                                   
     assessment of association members by the association                                                                       
     board must be adopted by a resolution of the board.                                                                        
                                                                                                                                
     Sec.  24 AS  21.79.070(c)  is  amended to  increase  the                                                                   
     amount of a non-pro-rata assessment of from $250 per                                                                       
     calendar  year  to  $500  per  calendar  year.  It  also                                                                   
     amends  the  class  B  assessment  to  include  pro-rata                                                                   
     assessments  related  to long-term  care  insurance,  as                                                                   
     well as changing  the manner in which Class  A and Class                                                                   
     B assessments are made.                                                                                                    
                                                                                                                                
     Sec. 25  AS 21.79.070(f)  is amended  to conform  to the                                                                   
     model language by adding the term "member insurer" in                                                                      
     place of "insurer."                                                                                                        
                                                                                                                                
     Sec. 26  AS 21.79.070(j)  is amended  to conform  to the                                                                   
     model language by adding the term "member insurer" in                                                                      
     place of "insurer."                                                                                                        
                                                                                                                                
     Sec.  27 AS 21.79.070(k)  is amended  to allow  hospital                                                                   
     and medical service corporations and HMOs to consider                                                                      
     the   amount   necessary    to   meet   its   assessment                                                                   
     obligations  when  determining  its  premium  rates  and                                                                   
     policy owner dividends.                                                                                                    
                                                                                                                                
     Sec. 28 AS  21.79.070(l) is amended to conform  to model                                                                   
     language by adding the term "member insurer."                                                                              
     Sec.  29  AS  21.79.080(c)  is amended  to  require  the                                                                   
     association  board to  adopt  a plan  of operation  that                                                                   
     includes                                                                                                                   
     (1) procedures  for removing a  member of the  board for                                                                   
     cause,  including procedures  for removing  a member  of                                                                   
     the board  who becomes an  impair or insolvent  insurer,                                                                   
     and   (2)  policies   and   procedures  for   addressing                                                                   
     conflicts of interest.                                                                                                     
                                                                                                                                
     Sec. 30  AS 21.79.090(b)  is amended  to conform  to the                                                                   
     model language by replacing the term "insurance" with                                                                      
     the term "business."                                                                                                       
                                                                                                                                
     Sec. 31 AS  21.79.090(c) is amended to (1)  clarify that                                                                   
     only a  final action of the  board may be  appealed, and                                                                   
     (2) increase  the time by which  an appeal may  be taken                                                                   
     from 30  days to 60  days after the  date the notice  of                                                                   
     the board's action is mailed.                                                                                              
                                                                                                                                
     Sec. 32 AS  21.79.090(d) is amended to clarify  that the                                                                   
     liquidator,   rehabilitator,   or  conservator   of   an                                                                   
     insolvent insurer  may notify all interested  persons of                                                                   
     the effect of AS 21.79.                                                                                                    
                                                                                                                                
     Sec.  33  AS  21.79.100(a)  is amended  to  require  the                                                                   
     director   to   notify   other    insurance   regulatory                                                                   
     officials  in the country  when issuing  orders for  the                                                                   
     security of contract owners and certificate holders.                                                                       
                                                                                                                                
     Sec.  34  AS  21.79.100(e)   is  amended  to  allow  the                                                                   
     director to seek the association board's advice and                                                                        
     recommendations   as  to  the  financial   condition  of                                                                   
     hospital and medical service corporations and HMOs.                                                                        
                                                                                                                                
     Sec.  35  AS  21.79.100(f)  is  amended  to  enable  the                                                                   
     association  board to make  reports and  recommendations                                                                   
     to the  director relating  to the  solvency of  hospital                                                                   
     and medical service corporations and HMOs.                                                                                 
                                                                                                                                
     Sec. 36 AS  21.79.100(h) is amended to conform  to model                                                                   
     language by using the term "member insurer."                                                                               
                                                                                                                                
     Sec.  37 AS  21.79.110(c) is  amended to  add the  words                                                                   
     "or  contract,"   as  is   consistent  with  the   model                                                                   
     language.                                                                                                                  
     Sec. 38  AS 21.79.110(d) is  amended to expand  the list                                                                   
     of  those  situations  where   the  court  may  or  must                                                                   
     consider   the  contributions   of   the  parties   when                                                                   
     distributing ownership rights.                                                                                             
                                                                                                                                
     Sec. 39 AS  21.79.110(e) is amended to conform  to model                                                                   
     language by using the term "member insurer."                                                                               
                                                                                                                                
     Sec. 40 AS  21.79.110(f) is amended to conform  to model                                                                   
     language  by  using  the  term   "member  insurer,"  and                                                                   
     adding the words "or contract" after "policy."                                                                             
                                                                                                                                
     Sec. 41  AS 21.79.140 is amended  to (1) clarify  that a                                                                   
     cause  of  action  may  not   arise  for  an  action  or                                                                   
     omission   of  the  association   and  its  agents   and                                                                   
     employees,  members of  the Board  of Governors,  member                                                                   
     insurers, and  agents and employees of  member insurers,                                                                   
     and the  director of the  division of insurance  and the                                                                   
     director's  representatives in  performing their  duties                                                                   
     under  AS 21.79,  and (2)  extend the  immunity to  such                                                                   
     entities'  participation in  an organization  of one  or                                                                   
     more  state  associations  of similar  purposes  and  to                                                                   
     that organization and its agents or employees.                                                                             
                                                                                                                                
     Sec. 42  AS 21.79.150  is amended to  extend the  time a                                                                   
     proceeding  involving   an  insolvent  insurer   may  be                                                                   
     stayed  from 60 days  to 180  days after  the date  of a                                                                   
     final   order   of   liquidation,   rehabilitation,   or                                                                   
     conservation   in  order   to   allow  the   association                                                                   
     additional time  to exercise a power or  duty authorized                                                                   
     under AS 21.79.                                                                                                            
                                                                                                                                
     Sec. 43 AS  21.79.160(a) is amended to clarify  that the                                                                   
     section does not apply to entities that do not sell or                                                                     
     solicit  coverage  by  a  hospital  or  medical  service                                                                   
     corporation or coverage by an HMO; conforms to model                                                                       
     language  by replacing the  term "insurer" with  "member                                                                   
     insurer."                                                                                                                  
                                                                                                                                
     Sec. 44 AS  21.79.160(b) is amended to conform  to model                                                                   
     language  by  including  the   terms  "member,"  "policy                                                                   
     owner,"  "contract  owner,"  "certificate  holder,"  and                                                                   
     "enrollee."                                                                                                                
                                                                                                                                
     Sec. 45 AS  21.79.160(c) is amended to conform  to model                                                                   
     language  by  including  the   words  "member,"  "policy                                                                   
     owner,"  "contract  owner,"   and  "certificate  owner."                                                                   
     Prohibits  hospital or medical  service corporations  or                                                                   
     HMOs  from using the  existence of  the association  for                                                                   
     sales,   solicitation,   or   inducement   to   purchase                                                                   
     insurance.                                                                                                                 
                                                                                                                                
     Sec.  46 AS  21.79.900(5) amends  the  term "called"  to                                                                   
     (1) mean  a notice  has been  mailed by the  association                                                                   
     to  member   insurers  requiring   that  an   authorized                                                                   
     assessment  be  paid within  the  time  set out  in  the                                                                   
     notice, and  (2) include  that an authorized  assessment                                                                   
     becomes   "called"  when   notice  is   mailed  by   the                                                                   
     association.                                                                                                               
                                                                                                                                
     Sec.  47 AS  21.79.900(6) amends  the term  "contractual                                                                   
     obligation"  to clarify  that the term  only applies  to                                                                   
     an obligation  for which coverage  is provided  under AS                                                                   
     21.79.020(a), (b), (d), and (e).                                                                                           
                                                                                                                                
     Sec.  48  AS  21.79.900(7)   amends  the  term  "covered                                                                   
     policy" to include "covered contract."                                                                                     
                                                                                                                                
     Sec.  49  AS  21.79.900(10)   amends  the  term  "member                                                                   
     insurer" to include a hospital or medical service                                                                          
     corporation licensed  under AS 21.87, and  includes even                                                                   
     those  whose license  or  certificate  of authority  has                                                                   
     been suspended,  revoked, not  reviewed, or  voluntarily                                                                   
     withdrawn.                                                                                                                 
                                                                                                                                
     Sec.  50  AS  21.79.900(12)  is amended  to  conform  to                                                                   
     model language  by changing  the term "owner"  in regard                                                                   
     to  a  policy or  contract  to  "policyholder,"  "policy                                                                   
     owner," and "contract owner."                                                                                              
                                                                                                                                
     Sec.  51   AS  21.79.900(13)   amends  the  term   "plan                                                                   
     sponsor" to clarify that the term applies to groups of                                                                     
     representatives  of  parties,  similar  to two  or  more                                                                   
     employers, or  jointly by one or more employers  and one                                                                   
     or   more  employee   organizations,   an   association,                                                                   
     committee, or  joint board of trustees who  establish or                                                                   
     maintain the benefit plan.                                                                                                 
                                                                                                                                
     Sec. 52  AS 21.79.900(14) amends  the term "premium"  to                                                                   
     clarify that assessable premium may not be reduced                                                                         
     on account  of AS 21.79.020(c)(4)  relating to  interest                                                                   
     limitations   and  limitations   with  respect  to   one                                                                   
     individual, one participant, and one contract owner.                                                                       
                                                                                                                                
     Sec. 53 AS  21.79.900(15) conforms to model  language by                                                                   
     amending the definition of "receivership court" and                                                                        
     uses the term "member insurer" in place of "insurer."                                                                      
                                                                                                                                
     Sec. 54 AS  21.79.900(16) amends the term  "resident" to                                                                   
     delete language considered unnecessary under state                                                                         
     drafting conventions.                                                                                                      
                                                                                                                                
     Sec. 55 AS  21.79.900(19) amends the  term "supplemental                                                                   
     contract" to mean a written agreement entered into                                                                         
     for  the distribution  of proceeds  under life,  health,                                                                   
     or annuity policy or contract benefits.                                                                                    
                                                                                                                                
     Sec. 56  AS 21.79.900 is  amended to add new  paragraphs                                                                   
     to define the terms "health benefit plan", "election                                                                       
     date"  and "extra  contractual  claim".  The section  is                                                                   
     also amended to define "published monthly average",                                                                        
     previously defined under AS 21.79.020(f).                                                                                  
                                                                                                                                
     Sec. 57  AS 21.86.260(a)  is amended  to apply AS  21.79                                                                   
     to HMOs.                                                                                                                   
                                                                                                                                
     Sec. 58 AS  21.87.340 is amended to add AS  21.79 to the                                                                   
     list  of statutory  provisions which  apply to  hospital                                                                   
     and medical service corporations.                                                                                          
                                                                                                                                
     Sec. 59 Repeals the following provisions                                                                                   
        • AS 21.79.020(f) defining "published monthly                                                                           
          average" as the definition is moved under AS                                                                          
          21.79.900.                                                                                                            
        • AS 21.060(c) is repealed as the provision no                                                                          
          longer is in the model language.                                                                                      
        • AS 21.79.060(e)   (j) are repealed as these                                                                           
          provisions    have    been    relocated    to    AS                                                                   
          21.79.060(d).                                                                                                         
        • AS 21.79.060(u)   (x) are repealed as these                                                                           
          provisions      have     been     relocated      to                                                                   
          AS21.79.060(aa).                                                                                                      
        • AS 21.79.110(e) is repealed as unnecessary                                                                            
          because the state has adopted Section 602 of the                                                                      
          NAIC Insurers Receivership Model Act (MDL 555)(AS                                                                     
          21.78.325).                                                                                                           
                                                                                                                                
         Sec. 60 Provides for an uncodified new section                                                                         
      outlining the timing of when the director may adopt                                                                       
     regulations.                                                                                                               
                                                                                                                                
       Sec. 61 Provides that section 60 of the Act takes                                                                        
     effect immediately.                                                                                                        
                                                                                                                                
     Sec. 62 Provides a July 1, 2018 effective date.                                                                            
                                                                                                                                
3:57:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD referred  to Section 7  and asked                                                              
about the liability amount.                                                                                                     
                                                                                                                                
MS.  WING-HEIER  answered the  liability  amount  is $300,000  for                                                              
disability income  as defined, and $300,000 for  long-term care is                                                              
new.   She said it  was clarifying that  the limit is  specific to                                                              
long-term care.    She  added the last  two limits  are increasing                                                              
from  $100  [thousand]  to  $250   [thousand],  which  is  what  a                                                              
consumer could  collect, provided as  funded if their  policy were                                                              
with an insolvent insurer.                                                                                                      
                                                                                                                                
CHAIR  KITO summarized  that  the aim  is  to catch  up with  late                                                              
adopted  changes  to the  model  law.    He added  long-term  care                                                              
insolvency is a big issue.                                                                                                      
                                                                                                                                
4:08:39 PM                                                                                                                    
                                                                                                                                
DONALD THOMAS, Administrator  and Counsel, Alaska  Life and Health                                                              
Insurance Guarantee  Association, testified  in the hearing  on HB                                                              
403.  He  said that during the  past 8 years, he has  been engaged                                                              
in  efforts  to  have  the  Guarantee  Association's  Organic  Act                                                              
updated.   He explained HB 403  would give the board  of governors                                                              
the tools  to affect  the purposes  of the  Association's  Act. He                                                              
underlined  the board is  operating under  outdated rules  and has                                                              
had to  incur expenses  that could  have been  avoided had  it not                                                              
been operating  under an outdated  system.   He said HB  403 would                                                              
ensure functional  consistency within  the nationwide  state-based                                                              
guarantee system.   He  added it is  important as presently  there                                                              
is no health  or life insurance  domesticated in Alaska.   He said                                                              
with  HB 403  there is  an increased  likelihood  that Alaska  law                                                              
will be applied to Alaska policyholders.                                                                                        
                                                                                                                                
4:10:59 PM                                                                                                                    
                                                                                                                                
JANA-LEE  PRUITT, Regional  Vice  President,  American Council  of                                                              
Life  Insurers  (ACLI), testified  in  support  of  HB 403.    She                                                              
stated  the  American  Council   of  Life  Insurers  (ACLI)  is  a                                                              
national  trade  association  representing  around  290  companies                                                              
which offer  life insurance annuities,  long term  care insurance,                                                              
disability  income insurance,  and  reinsurance.   She added  ACLI                                                              
has  219  members  licensed  to  do business  in  Alaska,  and  96                                                              
percent  of all  life  insurance and  annuity  payments to  Alaska                                                              
citizens  are  made by  ACLI  member  companies. She  stated  ACLI                                                              
supports  the bill.   She  informed  HB 403  would better  protect                                                              
insured residents  of Alaska in  the unlikely event of  an insurer                                                              
insolvency  by  amending  the Alaska  Life  and  Health  Insurance                                                              
Guaranty  Association Act  to incorporate  amendments made  to the                                                              
National Association  of Insurance  Commissioners ("NAIC")  Life &                                                              
Health Insurance  Guaranty Association  Model Act, upon  which the                                                              
Alaska Act is based.                                                                                                            
                                                                                                                                
MS.  PRUITT  said  HB  403  would  increase  coverage  limits  for                                                              
individuals   covered  by   unallocated   annuity  contracts   and                                                              
structured  settlement annuities  from  $100,000  to $250,000  and                                                              
make the  Alaska Act functionally  consistent with the  NAIC Model                                                              
Act.  Forty-five  states  have   already  amended  their  guaranty                                                              
association  laws  to achieve  functional  consistency,  which  is                                                              
critical  to  ensuring  multi-state insolvencies  are  handled  as                                                              
quickly and  efficiently as possible  and policyholder  claims are                                                              
treated  similarly,  regardless   of  a  policyholder's  state  of                                                              
residence.   She underlined that  lack of consistency  among state                                                              
guaranty  association   statutes  has   led  to  unnecessary   and                                                              
expensive litigation  in the past, which can  delay claim payments                                                              
and divert resources from protecting policyholders.                                                                             
                                                                                                                                
MS. PRUITT  stated  HB 403 would  also help  ensure the  continued                                                              
sustainability of  the state-based guaranty association  system in                                                              
the event  of the insolvency  of a  carrier that writes  long-term                                                              
care  insurance.   She  said the  current  assessment formula  for                                                              
long-term  care insurance  insolvencies  is  not sustainable.  The                                                              
newly-revised  NAIC Model  Act  and HB  403  would distribute  the                                                              
assessments  for  long-term  care   insurance  insolvencies  among                                                              
companies  writing  life, health,  annuity  products.  Regulators,                                                              
insurers, consumer representatives and experts in the insurance                                                                 
receivership  community worked together  for over  a year  to make                                                              
these critical  changes to  the NAIC Model  Act. She added  HB 403                                                              
would help ensure the Alaska Act  which was created to protect                                                                  
consumers  and act  as a safety  net in  the event  of an  insurer                                                              
insolvency     remains  stable,   fair,  and  sustainable  through                                                              
sufficient assessment capacity.                                                                                                 
                                                                                                                                
MS.  PRUITT said  there are  a few  minor  revisions required  and                                                              
ACLI is in  discussion with Ms.  Wing-Heier and her staff  to make                                                              
sure  the  revisions comply  with  Alaska's  legislative  drafting                                                              
conventions.                                                                                                                    
                                                                                                                                
4:14:28 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened testimony on HB 403.                                                                                          
                                                                                                                                
CHAIR KITO held over HB 403.                                                                                                    
                                                                                                                                

Document Name Date/Time Subjects
SB80 Ver O.pdf HL&C 3/14/2018 3:15:00 PM
SB 80
HB 401 Transmittal Letter 3.6.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 401
HB 401 Fiscal Note-DCCED DOI 3.6.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 401
HB 401 ver A 3.6.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 401
HB 401 Sectional 3.6.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 401
HB157-403 Summary of Changes 3.13.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 157
HB403 Sectional Analysis 3.13.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 403
HB403 Sponsor Statement 3.13.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 403
HB403 Fiscal Note DCCED DOI 3.9.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 403
HB403 version D.PDF HL&C 3/14/2018 3:15:00 PM
HB 403
HB403 Sponsor Statement 3.13.18.pdf HL&C 3/14/2018 3:15:00 PM
HB 403
HLAC Update on 2020 Census Operation 3.12.18.pdf HL&C 3/14/2018 3:15:00 PM
Presentation Census
SB080 Letters of Support 3.15.18.pdf HL&C 3/14/2018 3:15:00 PM
SB 80