04/14/2005 01:30 PM Senate LABOR & COMMERCE

                        SB 108-INSURANCE                                                                                    
                                                                                                                                
CHAIR CON BUNDE announced SB 108 to be up for consideration.                                                                    
                                                                                                                                
SENATOR BEN STEVENS moved conceptual Amendment 1.                                                                               
                                                                                                                                
SENATOR ELLIS objected for an explanation.                                                                                      
                                                                                                                                
SENATOR BEN STEVENS explained that  Amendment 1 adds new sections                                                               
regarding bid fixing and a  director's ability to require written                                                               
reports from  people for  reasonable cause. This  is a  check and                                                               
balance measure for the director to use.                                                                                        
                                                                                                                                
CHAIR BUNDE asked how "reasonable cause" is defined.                                                                            
                                                                                                                                
SENATOR  STEVENS  answered that  using  "reasonable  cause" is  a                                                               
lesser-degree compromise to the legal term, "probable cause."                                                                   
                                                                                                                                
1:38:10 PM                                                                                                                    
SENATOR BETTYE DAVIS joined the committee.                                                                                      
                                                                                                                                
SENATOR JOHNNY ELLIS asked if the drafter suggested that.                                                                       
                                                                                                                                
1:38:24 PM                                                                                                                    
SENATOR BEN  STEVENS replied  that the  drafter did  suggest that                                                               
language,   because  it   gives  the   director  access   to  the                                                               
information she needs to make a determination.                                                                                  
                                                                                                                                
SENATOR  ELLIS said  he  thought the  director  already had  that                                                               
power.                                                                                                                          
                                                                                                                                
SENATOR BEN STEVENS responded that she does.                                                                                    
                                                                                                                                
CHAIR BUNDE asked  Ms. Hall if Amendment 1  supports what already                                                               
happens.                                                                                                                        
                                                                                                                                
1:39:25 PM                                                                                                                    
LINDA HALL, Director, Division  of Insurance, supported Amendment                                                               
1 and  explained that  probable cause is  a higher  standard than                                                               
reasonable  cause, but  explained that  she didn't  want to  work                                                               
with  that kind  of  legal concept  or high  of  a standard.  "We                                                               
certainly  do   have  authority   to  investigate.  We   do  that                                                               
regularly...."                                                                                                                  
                                                                                                                                
CHAIR   BUNDE  asked   if  there   had   been  complaints   about                                                               
investigations being done for unreasonable cause.                                                                               
                                                                                                                                
MS.  HALL replied  that  there have  been  pleadings to  criminal                                                               
charges and a lot of  allegations in the insurance industry about                                                               
bid rigging and  improper steering of business  for the financial                                                               
gain of  the individual. She  initiated an investigation  to make                                                               
sure she  knew what was  occurring in the Alaska  marketplace and                                                               
didn't  find  any  violations.   Several  national  brokers  have                                                               
recently paid  fines amounting  to $850 million,  but she  is not                                                               
aware of  other complaints or broad-reaching  investigations. She                                                               
pointed out that one of her  roles as director of her division is                                                               
compliance with statute before there is consumer harm.                                                                          
                                                                                                                                
1:44:30 PM                                                                                                                    
CHAIR  BUNDE  asked  her  how this  amendment  would  change  her                                                               
procedures.                                                                                                                     
                                                                                                                                
MS.  HALL replied  that Alaska  has  a small  marketplace and  it                                                               
doesn't have  the clout  to do  what some  of the  large national                                                               
brokers in  New York did. "I  would probably tailor what  I did a                                                               
little  differently with  this, but  just from  prior experience,                                                               
also."                                                                                                                          
                                                                                                                                
CHAIR  BUNDE asked  if this  amendment would  have prevented  her                                                               
from moving forward.                                                                                                            
                                                                                                                                
MS. HALL replied no.                                                                                                            
                                                                                                                                
1:45:59 PM                                                                                                                    
SENATOR ELLIS removed his objection and Amendment 1 was adopted.                                                                
                                                                                                                                
SENATOR  BEN  STEVENS moved  CSSB  108(L&C)  from committee  with                                                               
individual  recommendations. Senators  Ellis, Ben  Stevens, Davis                                                               
and  Chair  Bunde  voted  yea;   and  CSSB  108(L&C)  moved  from                                                               
committee.