04/28/2023 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB29 | |
| HB181 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 29 | TELECONFERENCED | |
| += | HB 181 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 28, 2023
1:05 p.m.
DRAFT
MEMBERS PRESENT
Representative Sarah Vance, Chair
Representative Jamie Allard, Vice Chair
Representative Ben Carpenter
Representative Craig Johnson
Representative David Eastman
Representative Andrew Gray
Representative Cliff Groh
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 29
"An Act relating to insurance discrimination."
- HEARD & HELD
HOUSE BILL NO. 181
"An Act renaming the State Commission for Human Rights the
Alaska State Commission for Civil Rights; relating to removal of
commissioners of the Alaska State Commission for Civil Rights;
relating to reports from the Alaska State Commission for Civil
Rights; relating to the definition of 'employer' for the
purposes of the Alaska State Commission for Civil Rights; and
relating to local civil rights commissions."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 29
SHORT TITLE: INSURANCE DISCRIMINATION
SPONSOR(s): REPRESENTATIVE(s) MCCABE
01/19/23 (H) PREFILE RELEASED 1/9/23
01/19/23 (H) READ THE FIRST TIME - REFERRALS
01/19/23 (H) L&C, JUD
02/10/23 (H) L&C AT 3:15 PM BARNES 124
02/10/23 (H) Heard & Held
02/10/23 (H) MINUTE(L&C)
02/17/23 (H) L&C AT 3:15 PM BARNES 124
02/17/23 (H) Heard & Held
02/17/23 (H) MINUTE(L&C)
03/03/23 (H) L&C AT 3:15 PM BARNES 124
03/03/23 (H) <Bill Hearing Canceled>
03/06/23 (H) L&C AT 3:15 PM BARNES 124
03/06/23 (H) Moved CSHB 29(L&C) Out of Committee
03/06/23 (H) MINUTE(L&C)
03/08/23 (H) L&C RPT CS(L&C) 1DP 1DNP 5NR
03/08/23 (H) DP: CARRICK
03/08/23 (H) DNP: FIELDS
03/08/23 (H) NR: PRAX, WRIGHT, SADDLER, RUFFRIDGE,
SUMNER
04/28/23 (H) JUD AT 1:00 PM GRUENBERG 120
BILL: HB 181
SHORT TITLE: STATE COMMISSION FOR CIVIL RIGHTS
SPONSOR(s): JUDICIARY
04/26/23 (H) READ THE FIRST TIME - REFERRALS
04/26/23 (H) JUD, STA
04/26/23 (H) JUD AT 1:00 PM GRUENBERG 120
04/26/23 (H) Heard & Held
04/26/23 (H) MINUTE(JUD)
04/28/23 (H) JUD AT 1:00 PM GRUENBERG 120
WITNESS REGISTER
REPRESENTATIVE KEVIN MCCABE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented CSHB 29(L&C), as the prime
sponsor.
BUDDY WHITT, Staff
Representative Kevin McCabe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for CSHB
29(L&C), on behalf of Representative McCabe, prime sponsor.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
CSHB 29(L&C).
CHERYL BOWIE
Representing Self
Colorado
POSITION STATEMENT: Testified in support of HB 181.
KAREN BARNARD
Representing Self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 181.
ZACKARY GOTTSHALL, Chair
Alaska State Commission for Human Rights
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 181.
JESSIE RUFFRIDGE, Commissioner
Alaska State Commission for Human Rights
Soldotna, Alaska
POSITION STATEMENT: Testified in support of HB 181.
MAE MARSH, Vice Chair
Alaska State Commission for Human Rights
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 181.
ACTION NARRATIVE
1:05:34 PM
CHAIR SARAH VANCE called the House Judiciary Standing Committee
meeting to order at 1:05 p.m. Representatives Eastman, Gray,
Groh, Allard, and Vance were present at the call to order.
Representative C. Johnson and Carpenter arrived as the meeting
was in progress.
HB 29-INSURANCE DISCRIMINATION
1:06:16 PM
CHAIR VANCE announced that the first order of business would be
HOUSE BILL NO. 29, "An Act relating to insurance
discrimination." [Before the committee was CSHB 29(L&C).]
1:06:30 PM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, prime
sponsor, presented CSHB 29(L&C). He said insurance companies
were in the business of discrimination. These companies
segregate the insured into separate risk pools based on their
differences and risk profiles for two main reasons: to charge
different premiums to different groups based on their risk; and
to incentivize risk production by the insured. There are,
however, limits to the type of discrimination that insurers can
engage in, which was decided upon at the national and local
levels of government. He reported that insurance companies had
been denying coverage to Alaskans based solely on their
political affiliation, expression, or elected status. The bill
sought to prohibit discrimination based solely on those factors.
Specifically, CSSB 29(L&C) would amend the insurance code in
Alaska from using political expression, affiliation, or elected
status as the sole reason for refusing to ensure or renew
insurance coverage; limiting the scope of insurance coverage;
canceling an existing policy; denying a claim covered by an
existing insurance policy; or increasing the premium policy fees
or rates charged on an insurance policy. He emphasized that the
bill would not prohibit refusals, limitations, or fees based on
sound underwriting or actuarial principles. Given that
insurance products are necessary to protect the health of
property and in some instances, required by law, he believed
that it was in the public interest to ensure that consumers were
protected by discriminatory practices. He opined that the
proposed legislation would assist in that effort.
1:09:08 PM
BUDDY WHITT, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor,
presented the sectional analysis for CSHB 29(L&C), [included in
the committee packet], which read as follows [original
punctuation provided]:
Section 1 amends Sec. 21.36 to add a new section that
prohibits a person transacting insurance in this state
from discriminating against a person based solely on a
person's political affiliation or expression or a
person's status as an elected state official as
defined in AS 44.99.205.
Section 2 amends uncodified law of the State of Alaska
by adding a new section regarding applicability and
effective dates to insurance policies and/or
contracts.
CHAIR VANCE sought questions from members of the committee for
Ms. Wing-Heier.
1:13:11 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), introduced
herself for the record and welcomed questions from committee
members.
1:13:26 PM
REPRESENTATIVE GROH questioned the inspiration for the bill.
MS. WING-HEIER informed the committee that she had not heard of
elected officials being denied insurance because of their
elected status before being approached by the bill sponsor.
However, she said that independent agents and brokers confirmed
that it was, in fact, happening, highlighting instances of state
officials, including school board members and borough members,
not being able to obtain insurance. She noted that she could
not find any instances [of discrimination] in reference to
political party.
REPRESENTATIVE GROH said he had never heard of this issue and
characterized it as "illogical." He expressed a desire to
understand the nature of the problem and the apparent cause.
MS. WING-HEIER reiterated that after being presented with the
bill she conducted some research with insurance companies who
confirmed that their guidelines did not permit underwriting
excess liability of public officials.
1:15:09 PM
REPRESENTATIVE MCCABE noted that that the term "excess
liability" was commonly known as an umbrella policy. He shared
a personal anecdote about being denied an umbrella policy based
on his status as an elected official.
1:16:07 PM
REPRESENTATIVE GROH asked why this was happening.
MS. WING-HEIER stated that insurance companies considered
overall risk. She shared her belief that elected officials were
viewed as targets for being sued, which was the reason for the
policy denial.
REPRESENTATIVE ALLARD shared that she had also been denied an
umbrella policy. She expressed her belief that the refusal was
discriminatory, based on either her status as an elected
official or her political affiliation.
1:18:01 PM
REPRESENTATIVE GRAY asked whether [excess liability] insurance
was required of all elected officials.
MS. WING-HEIER said she could not tell Representative Gray what
to purchase. She indicated that it was more common for people
to buy higher policy limits in today's litigious society.
REPRESENTATIVE GRAY shared his understanding that Article 2,
Section 6, of the Alaska Constitution, offered legislative
immunity. He stated his belief that he could not be sued for
his words or actions in the legislature.
1:20:14 PM
MS. WING-HEIER acknowledged that some legislative immunity was
provided; however, in a personal capacity, legislators were not
protected by immunity outside of their role as a senator or
representative. She shared, for example, that a legislator
could be held liable for a "horrific" car accident.
REPRESENTATIVE GRAY pointed out that any reckless driver could
be held liable. He acknowledged that he was not understanding
the purpose of the bill.
1:20:57 PM
REPRESENTATIVE MCCABE shared a personal anecdote to
contextualize the purpose of the bill.
REPRESENTATIVE GRAY asked whether Representative McCabe was
denied [excess liability] because he was an elected official.
REPRESENTATIVE MCCABE said, "That's correct."
1:22:40 PM
REPRESENTATIVE EASTMAN shared a personal anecdote. He pointed
out that a member of the legislature's home had been recently
burglarized, indicating that the insurance company may ask
questions and wonder whether the theft was related to her status
as an elected official. He explained that insurance companies
may not want to incur additional risk by providing coverage to
legislators who are more likely to be victims of theft or a
slashed tire, for example.
1:25:28 PM
REPRESENTATIVE GROH pointed out that there was often a
difference between someone's legal rights and the reason they
were asserting them.
CHAIR VANCE asked whether the bill would cover all insurance
types.
MS. WING-HEIER answered yes.
1:26:20 PM
CHAIR VANCE questioned the need for the bill's inclusion of
political party.
REPRESENTATIVE MCCABE explained that "political affiliation" was
changed to "political party" in the House Labor and Commerce
Standing Committee. He acknowledged that the language may not
be necessary; nonetheless, he argued that an individual could be
denied umbrella insurance due to his/her party affiliation.
REPRESENTATIVE ALLARD shared a personal anecdote, claiming that
she watched her premiums "skyrocket," in part, due to her
political party.
1:29:58 PM
REPRESENTATIVE GRAY asked whether an umbrella policy would pay
for the damages if a legislator was sued for making defamatory
statements to a constituent.
REPRESENTATIVE MCCABE did not know the answer.
MR. WHITT offered to follow up with the requested information.
He expounded on the change made in the previous committee of
referral, indicating that the purpose of the amendments was to
tighten up ambiguous language.
1:34:11 PM
REPRESENTATIVE EASTMAN asked whether the reference to political
party was included based on specific incidents that had already
happened or specific incidents that may happen in the future.
REPRESENTATIVE MCCABE answered "future incidents," in reference
to divisiveness and polarization in the country.
1:35:22 PM
REPRESENTATIVE EASTMAN directed attention to page 1, line 11 and
asked whether the scope of the bill related to new policies,
increases to new policies, or increases to current policies.
REPRESENTATIVE MCCABE said he envisioned all of the above.
REPRESENTATIVE EASTMAN considered a scenario in which a
legislator was a victim of theft. He asked whether the bill
would allow the insurance company to "jack up their rates
accordingly based on the fact that it's now more likely that
they'll be a victim of future theft."
MR. WHITT said if an insurance company decided to increase the
premium or refused to renew a policy based on something other
than the individual's status as an elected official, there must
be a level of proof. Alternatively, per the bill language, a
refusal based only on the elected official's status would be
against the law.
REPRESENTATIVE MCCABE added that there was no retroactive clause
in the bill.
1:40:30 PM
REPRESENTATIVE GRAY said he could envision a scenario in which a
hypothetical legislator was sued often for "[pushing] the
envelope." He asked whether that legislator would get dropped
from the policy for multiple lawsuits.
REPRESENTATIVE MCCABE responded that the insurance policy would
have every right to raise that person's rates to "cover [its]
bases." He reiterated that the bill only contemplated
situations in which rates were raised, or policies were denied
based solely on an elected official's status.
1:42:11 PM
MR. WHITT read page 1, line 13, which read as follows [original
punctuation provided]:
(b) The provisions of (a) of this section do not apply
if the refusal, limitation, cancellation, denial, or
increase is
(1) based on sound underwriting or actuarial
principles reasonably related to actual or anticipated
loss experience; or
MR. WHITT added that if an elected official continued to create
liability for himself/herself, the insurance company, through
sound actuarial principles, could point to that liability as a
reason to increase a current policy or deny a new policy, which
would be covered under the law.
1:43:19 PM
REPRESENTATIVE GRAY asked whether insurance companies had
weighed in on the bill.
MR. WHITT reported that the bill sponsor's office had not
received any letters in support of or opposition to the bill.
REPRESENTATIVE MCCABE suspected that insurance companies would
not be in favor of the bill, as they were in the business of
limiting their risk. He asserted that there were enough
insurance companies providing umbrella policies in Alaska that
if one decided to stop insuring in the state as a result of the
proposed legislation, it would not materially affect Alaskans.
He opined that the risk to the average Alaskan was minimal.
1:45:08 PM
REPRESENTATIVE EASTMAN asked whether insurance companies should
be allowed to discriminate based on age.
REPRESENTATIVE MCCABE indicated that a certain level of
discrimination was inherent to the industry. He explained that
because a twenty-year-old person lives a more active lifestyle
than a fifty-year-old, the life insurance policy for the fifty-
year-old individual would cost more based on sound actuarial
principles.
1:46:51 PM
REPRESENTATIVE EASTMAN posited that, based on Representative
McCabe's previous statement, it wasn't considered discrimination
if there was proof to support the insurance company's argument
[that fifty-year-olds were less active than twenty-year-olds].
He asserted that it should be easy to demonstrate that elected
officials were more likely to end up in court or make an
insurance claim due to injury, for example.
REPRESENTATIVE MCCABE expected insurance coverage for a
legislator to be more expensive; however, he reiterated his
belief that complete denial based on someone's status as an
elected official was wrong.
1:48:41 PM
REPRESENTATIVE CARPENTER asked how discrimination based solely
on politics would be proven.
REPRESENTATIVE MCCABE deferred to Ms. Wing-Heier. He shared his
belief that the director [of the Division of Insurance] had
enforcement capabilities.
1:50:23 PM
REPRESENTATIVE GRAY asked for the definition of "umbrella
policy."
CHAIR VANCE clarified that [the bill] covered all types of
insurance.
REPRESENTATIVE GRAY asked whether it was his duty to disclose
that he was an elected official when purchasing insurance.
REPRESENTATIVE ALLARD nodded in the affirmative.
REPRESENTATIVE GRAY shared that he was not asked to disclose his
status as an elected official when purchasing his auto policy.
REPRESENTATIVE MCCABE explained that an umbrella policy was
excess liability, which covered "over and above" [the general
liability].
MR. WHITT stated that when issuing policies, every insurance
company asked different questions regarding their actuarial and
risk models. He reiterated that the bill covered all types of
insurance policies, including umbrella policies. He offered to
follow up with the Division of Insurance.
1:54:09 PM
REPRESENTATIVE CARPENTER explained that Errors and Omissions
(E&O) Insurance was often sought out by elected officials and
Chief Executive Officers (CEOs) to protect from liability.
REPRESENTATIVE EASTMAN asked why insurance companies were being
asked to bear the additional risk, as opposed to the state.
REPRESENTATIVE MCCABE agreed that the state should be
indemnifying the governor, for example. He indicated that the
decision would be a policy call.
1:58:26 PM
CHAIR VANCE announced that the bill would be held over.
HB 181-STATE COMMISSION FOR CIVIL RIGHTS
1:58:53 PM
CHAIR VANCE announced that the final order of business would be
HOUSE BILL NO. 181, "An Act renaming the State Commission for
Human Rights the Alaska State Commission for Civil Rights;
relating to removal of commissioners of the Alaska State
Commission for Civil Rights; relating to reports from the Alaska
State Commission for Civil Rights; relating to the definition of
'employer' for the purposes of the Alaska State Commission for
Civil Rights; and relating to local civil rights commissions."
CHAIR VANCE opened public testimony on HB 181.
1:59:40 PM
CHERYL BOWIE, Representing Self, testified in support of HB 181.
She requested that tribal organizations be included in the
proposed legislation to start recognizing cultural diversity and
respecting people's civil rights. She referenced an offensive
blog article. She alluded to the use of Native corporations'
political savvy and "ability to bend the law to gain access to
our medical records without individual consent."
2:01:46 PM
REPRESENTATIVE CARPENTER asked for clarification on the article
she had referenced.
MS. BOWIE cited a Must Read Alaska article, titled "Valerie
Davidson says Native hospitals don't have to honor religious
exemptions because aren't covered by the Civil Rights Act of
1964" published on October 12, 2021. She argued that there was
an obligation [for Native organizations] to act in tandem with
state laws to protect Alaskans and Alaska Native peoples.
REPRESENTATIVE ALLARD agreed with Ms. Bowie. She summarized the
article and asked whether she was referring to the correct one.
MS. BOWIE answered yes. She emphasized the need to review
conflicting laws [of Native organizations] and the various
interpretations of such laws. She stressed the need to research
the impact of civil rights issues in Alaska and suggested that
the bill was an avenue to do so.
2:05:35 PM
KAREN BARNARD, Representing Self, opined that the Alaska State
Commission for Human Rights (ASCHR) should be changed to the
Alaska State Commission for Human and Civil Rights. She opined
that the removal of "human" would lead to abuse against various
groups of people. She opined that two seats on the board should
be reserved for Alaska Natives; further, that only the
legislature should be able to remove [a commissioner]. She
discussed the removal of the Alaska Permanent Fund Corporation's
executive director, asserting that it was unfair. She argued
that the bill language on page 1, line 11, allowing the governor
to remove a commissioner "for cause" was too ambiguous.
2:08:42 PM
ZACKARY GOTTSHALL, Chair, Alaska State Commission for Human
Rights (ASCHR), testified in support for HB 181. He highlighted
four major components of the bill. He shared his belief that
changing the commission's name would ensure that Alaskans had a
better understanding of the commission's role and discussed the
need to close a loophole in statute as it related to nonprofit
organizations. He reported that 2018 data alluded to over 5,700
nonprofits in Alaska that constituted 44,000 employees and
generated approximately $3.9 billion of annual income. He
explained that under current law, those 44,000 employees were
unable to receive support from ASCHR due to jurisdictional
limitations.
2:11:27 PM
REPRESENTATIVE EASTMAN asked Mr. Gottshall to describe his
experience with the commission.
MR. GOTTSHALL said he was first elected as the commission's
chairman in 2022, adding that he was recently reelected in
January [2023].
2:11:59 PM
REPRESENTATIVE ALLARD asked whether Mr. Gottshall was supportive
of the portion of the bill pertaining to the governor's removal
of a commissioner for freedom of speech violations.
MR. GOTTSHALL indicated that forthcoming edits would address
that portion of the legislation.
REPRESENTATIVE ALLARD asked whether Mr. Gottshall was speaking
on behalf of the entire commission. Additionally, she asked Mr.
Gottshall to clarify whether he, the commissioners, or the
executive director was making decisions for the commission.
MR. GOTTSHALL stated that the commission had brought forth
several resolutions, which were all unanimously voted upon. He
said the executive director was often the voice of the
commission. In regard to editing recommendations for the
proposed legislation, he declined to speak on behalf of the
commission until the topic was discussed in session.
REPRESENTATIVE ALLARD asked whether the executive director was
providing legal advice to ensure that the bill was accurate.
MR. GOTTSHALL remarked:
I would say, carefully, yes, there is an advantage of
our executive director having that legal background,
but we also understand that the AG also does provide
us with input as well as it relates to the legalities
and the proper terminology. So, we have benefit of
both offices, I think, when it comes to the verbiage
utilized in our resolution that we push forward to the
legislative branch.
REPRESENTATIVE ALLARD remarked, "I'd like for that to be put on
record, that legal advice is being given when that is not
allowed."
CHAIR VANCE responded, "Vice Chair Allard, I don't believe that
that was the statement that Mr. Gottschall had made."
2:14:54 PM
JESSIE RUFFRIDGE, Commissioner, Alaska State Commission for
Human Rights (ASCHR), testified in support of HB 181. She noted
that often, the commission was called for services that fall
outside its jurisdiction, which she believed was due to a lack
of clarity regarding ASCHR's name. She summarized the
components of the bill, adding that she supported the overall
intent and purpose of the proposed legislation.
2:16:37 PM
MAE MARSH, Vice Chair, Alaska State Commission for Human Rights
(ASCHR), testified in support of HB 181. She outlined the four
major components of the bill, which had been voted on by the
commission and unanimously passed.
2:18:07 PM
CHAIR VANCE closed public testimony on HB 181. She announced
that the bill would be held over.
2:19:31 PM
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 1:19 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 29 - Sponsor Statement.pdf |
HFSH 5/3/2023 1:00:00 PM HJUD 4/28/2023 1:00:00 PM |
HB 29 |
| HB 29 - v.B.PDF |
HFSH 5/3/2023 1:00:00 PM HJUD 4/28/2023 1:00:00 PM |
HB 29 |
| HB 29 - Sectional Analysis.pdf |
HFSH 5/3/2023 1:00:00 PM HJUD 4/28/2023 1:00:00 PM |
HB 29 |
| HB 29 - Fiscal Note DCCED (04-05-23).pdf |
HFSH 5/3/2023 1:00:00 PM HJUD 4/28/2023 1:00:00 PM HJUD 5/3/2023 1:00:00 PM |
HB 29 |