Legislature(2001 - 2002)
05/04/2002 09:05 AM Senate L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 246-OMNIBUS INSURANCE BILL
CHAIRMAN STEVENS announced HB 246 to be up for consideration.
REPRESENTATIVE LISA MURKOWSKI, sponsor, said this bill was
requested by the Division of Insurance. She said that it was much
more comprehensive last year and that they had dealt with the
Gramm-Leach-Blighly provisions. She said the changes in terms of
policy matters are limited to two areas. The first is as they
related to multiple employer welfare arrangements. Essentially,
past employee welfare benefit plans have been regulated as an
insurer. HB 246 sets up a less burdensome regulatory structure
for them. The other area is issues that relate to the
confidentiality of records. HB 246 provides for confidential
information sharing arrangements. Confidentiality provisions are
required for Alaska to remain accredited by the National
Association of Insurance Commissioners.
She said that the other provisions correct existing insurance
laws. Essentially, the director went through the insurance
provisions and did a lot of the cleanup, addressing things like
fees for late payment of premium taxes, establishing minimum
benefit levels for stop loss insurance contracts and for the
first time, it provides for an annual fee to operate as a joint
insurance arrangement. It also revises the assessment formula for
the guarantee fund and has more corrections and clarifications.
SENATOR TORGERSON asked if the joint insurance arrangements
affect the AML-JAI's. He also had questions on the
confidentiality on page 36 where, "the director may withhold the
rating form from public inspection for as long as the director
determines that it is necessary to protect the service
corporation" is deleted and replaced with "confidential". He
wanted to know why they did that.
REPRESENTATIVE MURKOWSKI replied that Director Lohr was on line
to answer the last question and pointed out that the joint
insurance arrangements are discussed under section 48.
MR. LOHR, Director, Division of Insurance, answered Senator
Torgerson's last question saying that basically there are certain
types of documents that are invariably declared confidential by
the division including work papers from an examination by the
division. The degree of confidentiality associated with a case by
case determination is not enough to satisfy other states or the
National Association. Basically, a state that shares the contents
of an exam with other states is information that will not get out
to the public or to third parties. This language is designed to
do exactly that.
SENATOR TORGERSON noted his concern was with section 58 on page
36.
MS. KATIE CAMPBELL, Life and Health Actuary, said this particular
provision, section 3, they put in a definition of what it
actually means to be confidential. This provision was tightened
up a little bit, because Blue Cross/Blue Shield is the only
entity that has to file rates with the division and they're very
concerned that they're the only ones who have to file, so all the
details of the rating information are kept confidential for
proprietary reasons.
SENATOR TORGERSON asked what impacts this has on joint insurance
arrangements.
MS. CAMPBELL explained that although the division doesn't have
regulatory authority over JAI's, they are often asked to be
brought into that to do some work on it and there are costs
associated with it.
MR. LOHR added that basically JAI's are not in the business of
insurance. The chapter that sets them up states that
specifically.
However, each of the JAI's from time to time accuses
the other ones of intruding into what is the business
of insurance, which would then become regulated by the
division to the extent that they are going outside the
boundaries of the joint insurance arrangement.
The expenses are born by the fee payers to the division, since
they are entirely a fee-supported agency. So the fees are passed
on to the JAI's.
SENATOR TORGERSON asked what other JAI's the state has besides
AML.
MR. LOHR replied that there is Alaska Public Entities Insurance.
SENATOR TORGERSON said this would only affect them if they step
outside of their statutory authority.
MR. LOHR replied, "That's correct. It's only if they stray into
the area of regulating activity outside of the bounds of the JAI
organizing statute."
SENATOR TORGERSON moved to pass SCSHB 246(L&C) from committee
with individual recommendations and the $0 fiscal note. There
were no objections and it was so ordered.
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