Legislature(2001 - 2002)

04/10/2001 01:32 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                 SB 138-INSURANCE CODE AMENDMENTS                                                                           
                                                                                                                                
CHAIRMAN RANDY PHILLIPS called the Senate Labor & Commerce                                                                    
Committee meeting to order at 1:32 p.m. and announced SB 138 to be                                                              
up for consideration.                                                                                                           
                                                                                                                                
MR. BOB LOHR, Director, Division of Insurance, explained that the                                                               
Division had worked closely with every interest group that has                                                                  
expressed interest  about any portion  of the bill and has  achieved                                                            
agreement on  each point. The committee  substitute reflects  all of                                                            
those changes.  He said that SB 138 focuses on implementing  changes                                                            
at the federal  level that are contained  in the Gramm-Leach-Bliley                                                             
Act (GLBA),  which largely  eliminated the  barriers among  banking,                                                            
securities and insurance industries.                                                                                            
                                                                                                                                
     It allowed  mergers and take-overs  among those. There  is                                                                 
     very  recent evidence  that that  is happening.  The  bill                                                                 
     also reforms  the way insurance  regulation will occur  in                                                                 
     this country  and requires states to consider  a number of                                                                 
     different  changes  in  their  regulatory  structures  for                                                                 
     insurance  and this bill reflects  those changes in  three                                                                 
     basic  areas. It includes  producer licensing  to make  it                                                                 
     much more  straight forward and  faster for non-residents                                                                  
     to obtain a license in all 51 jurisdictions.                                                                               
                                                                                                                                
     Secondly,  it deals with consumer  privacy provisions  and                                                                 
     authority  for  states  to  adopt  privacy  provisions  by                                                                 
     regulation  that  at least  equal  the  federally adopted                                                                  
     regulations  on privacy;  and, if states  go beyond  those                                                                 
     privacy provisions to be  more protective of privacy, they                                                                 
     will be upheld under the GLBA.                                                                                             
                                                                                                                                
     The  third area of emphasis  in the  bill is the consumer                                                                  
     protection  provision, which  deals especially with  banks                                                                 
     selling insurance.                                                                                                         
                                                                                                                                
MR.  JOHN GEORGE,  American  Council  of  Life  Insurance,  National                                                            
Association of Independent  Insurers and AFLAC, said they negotiated                                                            
with  the Division  of Insurance  who  graciously  accepted many  of                                                            
their  proposals and  they support  the committee  substitute  to SB                                                            
138.                                                                                                                            
                                                                                                                                
SENATOR DAVIS moved to  adopt version F CS to SB 138 with individual                                                            
recommendations. There were no objections and it was so ordered.                                                                
                                                                                                                                
MR. DAVE  HALE, Alaska  Independent  Insurance  Agents and  Brokers,                                                            
supported CSSB 138.                                                                                                             
                                                                                                                                
CHAIRMAN PHILLIPS  asked if they had  ever resolved the third  party                                                            
liability issue with worker's compensation.                                                                                     
                                                                                                                                
MR.  LOHR  responded  that concern  had  been  addressed  under  the                                                            
revised language in the privacy section.                                                                                        
                                                                                                                                
MR. GEORGE concurred with that statement.                                                                                       
                                                                                                                                
CHAIRMAN  PHILLIPS said  he would  hold  SB 138  until Thursday  for                                                            
further work.                                                                                                                   

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