Legislature(2005 - 2006)BELTZ 211
02/16/2006 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB289 | |
| SB253 | |
| SB254 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 289 | TELECONFERENCED | |
| *+ | SB 253 | TELECONFERENCED | |
| *+ | SB 254 | TELECONFERENCED | |
SB 289-INSURANCE
CHAIR CON BUNDE announced SB 289 to be up for consideration.
LINDA HALL, Director, Division of Insurance, presented the bill.
1:38:53 PM
SENATOR RALPH SEEKINS arrived.
1:39:03 PM
MS. HALL said the majority of the 37 pages deal with issues
relating to life health and annuity insurance.
Sections 3 - 23 bring individual health insurance policies into
the same statutes as group health insurance policies, so the
same protections are there for individuals as for people covered
under group health insurance policies. The biggest protection is
a provision for both an internal and an external appeals process
for claim denials. The amendments would make the process
applicable to the individual policies. Other changes are not
substantive and are designed to make the terms consistent with
state and federal law.
Section 31 sets a minimum requirement that a person may not
recommend a life, health or annuity product to a consumer
without reasonable grounds to believe that it is suitable. It
would also allow the director to adopt regulations to manage
that new requirement. She said that suitability, particularly
with annuity products, is receiving national attention
particularly with equity index and variable annuities. Standards
are being introduced to regulate those products and the
department would like to protect its consumers with those
standards.
Section 33 is new and contains prompt payment of health claim
provisions. Changes were made in annuity products to address
surrender charges in sections 35 - 37, called non-forfeiture.
They concern excessive surrender charges when the premiums are
no longer paid or when the policy is going to be cashed out.
Section 40 adds Health Insurance Portability and
Accountability Act (HIPAA) mental health parity provisions.
1:42:57 PM
Section 41 - 43 and 49 repeal the current Small Employer Health
Reinsurance Association. It's not being used today, there are
only two covered lives in it and administrative costs are
$10,000 to $12,000 annually. The only company with two covered
lives does not object. The end of the bill has a transition
provision to allow for the wrap up of it.
The rest of the bill deals with things other than life, health
and annuities. Section 24 is an actuarial opinion model law
taken from National Association of Insurance Commissioners
(NAIC). It's a standard that is already in the life and health
lines. This will apply to property casualty insurers. It
provides an additional tool the division can use to more quickly
identify an insurer that may be in a troubled financial
condition. It provides to the division an actuarial opinion
summary that would include the actuary's estimates of reasonable
estimates of reserves.
Section 28 was basically designed to bring Alaska laws into
conformity with laws around the country for managing general
agents that are intermediaries between an insurer and an agent
or broker. They have some underwriting authority and sometimes
do claims adjustments.
1:44:09 PM
Section 30 allows the division to publish a list of eligible
surplus lines insurers on the website instead of mailing it.
This clarifies that failure to pay a continuation fee is grounds
for removal from the list and provides authority to reinstate
the company under specific provisions including the payment of a
late fee.
Section 34 expands authority for electronic communications if
electronic confirmation can be obtained. Section 44 modifies the
definition to require licensure for any officer or salaried
employees of a title insurance company consistent with other
license classes. She explained that several years ago, if an
employee of an insurance company was dealing with consumers, he
also had to be licensed. The electronic communications industry
was omitted and they should be all handled equally.
1:45:42 PM
BUNDE asked her what the "Patients Bill of Rights" that she
mentioned in her summary refers to and where it is located.
MS. HALL replied that it is part of Title 21, Chapter 7, and
starts in Section 3 of the bill. It refers to the rights
patients have when they have contracts and with an insurance
company that has a contract with a provider.
MS. HALL said the intent of the bill is not to change
protections, but rather to bring individual insurance in line
with the same coverage as group health insurance.
CHAIR BUNDE said he also wanted more information on where
section 15 is going with religious non-medical providers.
MS. HALL reiterated that it's not the intent to change any
substance and that is already statutory language.
1:48:41 PM
KATIE CAMPBELL, Life and Health Actuary, Division of Insurance,
explained that the health care services definition is being
repealed because the term "medical care" is replacing it. The
"medical care" definition located in the general insurance
statutes was developed under the federal HIPAA Act and the
department, as a policy, is trying to conform statutes to that
definition.
CHAIR BUNDE asked what activities would occur under section 15.
MS. CAMPBELL read the definition of medical care as follows:
Diagnosis, care, mitigation, treatment or prevention
of disease or amounts paid for the purposes of
affecting any structure or function of the body.
The definition of health care services as it currently is in
statute is basically the treatment of an illness or injury.
1:51:00 PM
BEVERLY SMITH, Christian Science Committee on Publication for
Alaska, said it was confusing to talk about medical care
services provided by a religious non-medical provider as
proposed in section 15 of SB 289. She stated:
I am satisfied with the use of health care services
that is currently in AS 21.07.080 and would recommend
that the original language used in the statute be
retained. However, if the Division of Insurance feels
strongly about the use of 'medical care' in section
15, I would like to see a reference to the definition
of 'medical care' provided above inserted in section
15 so that citizens who are reading it will know how
broadly the term 'medical care' is defined....
CHAIR BUNDE thanked her for her testimony and announced SB 289
would be set aside for further work.
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