Legislature(2001 - 2002)

04/27/2001 01:10 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 27, 2001                                                                                         
                           1:10 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Norman Rokeberg, Chair                                                                                           
Representative Scott Ogan, Vice Chair                                                                                           
Representative Jeannette James                                                                                                  
Representative John Coghill                                                                                                     
Representative Kevin Meyer                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 86                                                                                                               
"An  Act  relating  to  civil  liability  for  certain  false  or                                                               
improper allegations in a civil  pleading or for certain improper                                                               
acts relating to a civil action."                                                                                               
                                                                                                                                
     - MOVED HB 86 OUT OF COMMITTEE                                                                                             
                                                                                                                                
HOUSE BILL NO. 207                                                                                                              
"An Act relating to the judicial districts of the state."                                                                       
                                                                                                                                
     - MOVED HB 207 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 17                                                                                                   
Urging the  President of  the United States  and the  Congress to                                                               
act  to  ensure  that  federal agencies  do  not  retain  records                                                               
relating  to lawful  purchase or  ownership of  firearms gathered                                                               
through the Brady Handgun Bill instant check system.                                                                            
                                                                                                                                
     - MOVED HJR 17 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 134                                                                                                              
"An Act  relating to the  rights of  crime victims, the  crime of                                                               
violating   a  protective   injunction,  mitigating   factors  in                                                               
sentencing  for an  offense,  and the  return  of certain  seized                                                               
property  to  victims; clarifying  that  a  violation of  certain                                                               
protective  orders is  contempt of  the authority  of the  court;                                                               
expanding the  scope of  the prohibition  of compromise  based on                                                               
civil remedy  of misdemeanor crimes involving  domestic violence;                                                               
providing for protective  relief for victims of  stalking that is                                                               
not domestic  violence and  for the crime  of violating  an order                                                               
for  that relief;  providing for  continuing education  regarding                                                               
domestic  violence for  certain persons  appointed by  the court;                                                               
making  certain conforming  amendments; amending  Rules 65.1  and                                                               
100(a), Alaska Rules  of Civil Procedure; amending  Rules 10, 11,                                                               
13, 16, and  17, Alaska District Court Rules  of Civil Procedure;                                                               
and amending Rule 9, Alaska Rules of Administration."                                                                           
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 160                                                                                                              
"An  Act  requiring  the reporting  of  induced  terminations  of                                                               
pregnancies."                                                                                                                   
                                                                                                                                
     - MOVED CSHB 160(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 184                                                                                                              
"An Act relating to the  business of insurance, including changes                                                               
to  the insurance  code to  implement federal  financial services                                                               
reforms  for  the business  of  insurance  and to  authorize  the                                                               
director  of   insurance  to  review  criminal   backgrounds  for                                                               
individuals  applying to  engage  in the  business of  insurance;                                                               
amending Rule  402, Alaska Rules  of Evidence; and  providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 86                                                                                                                   
SHORT TITLE:CIVIL LIABILITY FOR IMPROPER LITIGATION                                                                             
SPONSOR(S): REPRESENTATIVE(S)MULDER                                                                                             
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
01/22/01     0144       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
01/22/01     0144       (H)        JUD, FIN                                                                                     
02/07/01     0269       (H)        COSPONSOR(S): ROKEBERG                                                                       
04/11/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
04/11/01                (H)        Heard & Held                                                                                 
                                   MINUTE(JUD)                                                                                  
04/27/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 207                                                                                                                  
SHORT TITLE:REALIGNMENT OF JUDICIAL DISTRICTS                                                                                   
SPONSOR(S): REPRESENTATIVE(S)KAPSNER                                                                                            
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/22/01     0691       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/22/01     0691       (H)        JUD, FIN                                                                                     
04/27/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HJR 17                                                                                                                  
SHORT TITLE:DESTROY BRADY BILL RECORDS                                                                                          
SPONSOR(S): REPRESENTATIVE(S)HAYES                                                                                              
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/23/01     0409       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/23/01     0409       (H)        JUD                                                                                          
02/28/01     0473       (H)        COSPONSOR(S): DYSON                                                                          
03/09/01     0528       (H)        COSPONSOR(S): GUESS                                                                          
04/19/01     1075       (H)        COSPONSOR(S): CROFT                                                                          
04/27/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 134                                                                                                                  
SHORT TITLE:CRIME VICTIMS RTS/CRIMES/PROTECTIVE INJ.                                                                            
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/01     0367       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/19/01     0367       (H)        JUD, FIN                                                                                     
02/19/01     0367       (H)        FN1: INDETERMINATE(ADM)                                                                      
02/19/01     0367       (H)        FN2: INDETERMINATE(COR)                                                                      
02/19/01     0367       (H)        FN3: ZERO(LAW)                                                                               
02/19/01     0368       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
02/19/01     0368       (H)        REFERRED TO JUDICIARY                                                                        
04/09/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
04/09/01                (H)        <Bill Postponed>                                                                             
04/10/01                (H)        JUD AT 5:00 PM CAPITOL 120                                                                   
04/10/01                (H)        Heard & Held                                                                                 
04/10/01                (H)        MINUTE(JUD)                                                                                  
04/10/01                (H)        MINUTE(JUD)                                                                                  
04/27/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 160                                                                                                                  
SHORT TITLE:REPORTING OF ABORTIONS                                                                                              
SPONSOR(S): REPRESENTATIVE(S)COGHILL                                                                                            
                                                                                                                                
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/09/01     0514       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/09/01     0514       (H)        HES, JUD, FIN                                                                                
03/22/01     0697       (H)        COSPONSOR(S): JAMES, KOTT                                                                    
03/23/01     0711       (H)        COSPONSOR(S): WILSON, MEYER                                                                  
03/29/01                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
03/29/01                (H)        Heard & Held                                                                                 
03/29/01                (H)        MINUTE(HES)                                                                                  
04/03/01                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
04/03/01                (H)        Moved CSHB 160(HES) Out of                                                                   
                                   Committee                                                                                    
04/03/01                (H)        MINUTE(HES)                                                                                  
04/04/01     0838       (H)        HES RPT CS(HES) 5DP 1NR 1AM                                                                  
04/04/01     0838       (H)        DP: COGHILL, KOHRING, WILSON,                                                                
                                   CISSNA,                                                                                      
04/04/01     0838       (H)        STEVENS; NR: JOULE; AM: DYSON                                                                
04/04/01     0839       (H)        FN1: ZERO(H.HES/HSS)                                                                         
04/04/01     0847       (H)        COSPONSOR(S): STEVENS                                                                        
04/05/01     0869       (H)        COSPONSOR(S): KOHRING                                                                        
04/19/01     1076       (H)        COSPONSOR(S): GREEN                                                                          
04/27/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 184                                                                                                                  
SHORT TITLE:INSURANCE CODE AMENDMENTS                                                                                           
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/14/01     0588       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/14/01     0588       (H)        L&C, JUD                                                                                     
03/14/01     0589       (H)        FN1: ZERO(CED)                                                                               
03/14/01     0589       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
04/04/01                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/04/01                (H)        Heard & Held                                                                                 
04/04/01                (H)        MINUTE(L&C)                                                                                  
04/20/01                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/20/01                (H)        Heard & Held                                                                                 
04/20/01                (H)        MINUTE(L&C)                                                                                  
04/25/01                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/25/01                (H)        Moved CSHB 184(L&C) Out of                                                                   
                                   Committee                                                                                    
04/25/01                (H)        MINUTE(L&C)                                                                                  
04/25/01                (H)        MINUTE(L&C)                                                                                  
04/26/01     1232       (H)        L&C RPT FORTHCOMING CS(L&C)                                                                  
                                   2DP 4NR 1AM                                                                                  
04/26/01     1233       (H)        DP: HAYES, MURKOWSKI; NR:                                                                    
                                   HALCRO,                                                                                      
04/26/01     1233       (H)        KOTT, MEYER, ROKEBERG; AM:                                                                   
                                   CRAWFORD                                                                                     
04/26/01     1233       (H)        FN1: ZERO(CED)                                                                               
04/27/01     1286       (H)        RECEIVED CS(L&C) NT                                                                          
04/27/01                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SHELDON E. WINTERS, Attorney at Law                                                                                             
Lessmeier & Winters                                                                                                             
Lobbyist for State Farm Insurance Company                                                                                       
431 North Franklin Street, Suite 400                                                                                            
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified in support of HB 86.  During                                                                     
discussion of HB 184, testified in support of proposed Amendment                                                                
1 provided a sunset clause is added.                                                                                            
                                                                                                                                
STEVE CLEARY                                                                                                                    
Alaska Public Interest Research Group (AkPIRG)                                                                                  
PO Box 101093                                                                                                                   
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Testified in opposition to HB 86; during                                                                   
discussion of HB 184 expressed concerns regarding an "opt out"                                                                  
default for financial information.                                                                                              
                                                                                                                                
REPRESENTATIVE MARY KAPSNER                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 424                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of HB 207.                                                                                         
                                                                                                                                
WILLIAM T. COTTON, Executive Director                                                                                           
Alaska Judicial Council (AJC)                                                                                                   
1029 West 3rd Avenue, Suite 201                                                                                                 
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:  Testified in support of HB 207.                                                                            
                                                                                                                                
REPRESENTATIVE JOE HAYES                                                                                                        
Alaska State Legislature                                                                                                        
Capitol Building, Room 422                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of HJR 17.                                                                                         
                                                                                                                                
RALPH SEEKINS, President                                                                                                        
Alaska Wildlife Conservation Association (AWCA)                                                                                 
4611 Maresh Avenue                                                                                                              
Fairbanks, Alaska  99709                                                                                                        
POSITION STATEMENT:  Testified in support of HJR 17.                                                                            
                                                                                                                                
DEAN J. GUANELI, Chief Assistant Attorney General                                                                               
Legal Services Section-Juneau                                                                                                   
Criminal Division                                                                                                               
Department of Law (DOL)                                                                                                         
PO Box 110300                                                                                                                   
Juneau, Alaska  99811-0300                                                                                                      
POSITION STATEMENT:  On behalf of the administration, asked that                                                                
HB 134 be held over through the interim.                                                                                        
                                                                                                                                
DANIELLE SERINO, Staff                                                                                                          
to Representative John Coghill                                                                                                  
Alaska State Legislature                                                                                                        
Capitol Building, Room 102                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  During discussion of HB 160, answered                                                                      
questions on behalf of the sponsor, Representative Coghill.                                                                     
                                                                                                                                
AL ZANGRI, Chief                                                                                                                
Vital Statistics                                                                                                                
Division of Public Health (DPH)                                                                                                 
Department of Health & Social Services (DHSS)                                                                                   
PO Box 110675                                                                                                                   
Juneau, Alaska  99811-0675                                                                                                      
POSITION STATEMENT:  Answered questions during discussion of HB                                                                 
160 and proposed Amendment 1.                                                                                                   
                                                                                                                                
BOB LOHR, Director                                                                                                              
Division of Insurance                                                                                                           
Department of Community & Economic Development (DCED)                                                                           
3601 C Street, Suite 1324                                                                                                       
Anchorage, Alaska  99503-5948                                                                                                   
POSITION STATEMENT:  Presented HB 184 on behalf of the                                                                          
administration.                                                                                                                 
                                                                                                                                
LINDA BRUNETTE, Licensing Supervisor                                                                                            
Central Office                                                                                                                  
Division of Insurance                                                                                                           
Department of Community & Economic Development (DCED)                                                                           
PO Box 110805                                                                                                                   
Juneau, Alaska  99811-0805                                                                                                      
POSITION STATEMENT:  Assisted with the presentation of HB 184 by                                                                
answering questions.                                                                                                            
                                                                                                                                
JOHN L. GEORGE, Lobbyist                                                                                                        
for American Council of Life Insurance (ACLI),                                                                                  
National Association of Independent Insurers (NAII), and                                                                        
American Family Life Assurance Company (AFLAC)                                                                                  
3328 Fritz Cove Road                                                                                                            
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   During discussion  of HB 184,  testified in                                                               
support of proposed Amendment 1.                                                                                                
                                                                                                                                
REED STOOPS, Lobbyist                                                                                                           
for Health Insurance Association of America (HIAA)                                                                              
240 Main Street, Suite 600                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   During discussion  of HB 184,  testified in                                                               
support of proposed Amendment 1.                                                                                                
                                                                                                                                
CHARLIE MILLER, Lobbyist                                                                                                        
for Alaska National Insurance Company (ANIC)                                                                                    
PO Box 102286                                                                                                                   
Anchorage, Alaska  99510                                                                                                        
POSITION STATEMENT:   During discussion of HB  184, assisted with                                                               
the presentation of proposed Amendment 2.                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-76, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  NORMAN  ROKEBERG  called   the  House  Judiciary  Standing                                                               
Committee  meeting  to  order  at   1:10  p.m.    Representatives                                                               
Rokeberg,  Ogan, Coghill,  Meyer, and  Berkowitz were  present at                                                               
the call to order.   Representatives James and Kookesh arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
HB 86 - CIVIL LIABILITY FOR IMPROPER LITIGATION                                                                               
                                                                                                                                
Number 0100                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the first order  of business would                                                               
be HOUSE  BILL NO. 86,  "An Act  relating to civil  liability for                                                               
certain false or improper allegations  in a civil pleading or for                                                               
certain improper acts relating to a civil action."                                                                              
                                                                                                                                
Number 0143                                                                                                                     
                                                                                                                                
SHELDON  E.  WINTERS,  Attorney  at  Law,  Lessmeier  &  Winters,                                                               
Lobbyist for  State Farm Insurance Company  ("State Farm"), noted                                                               
that over  the years, his  firm has litigated hundreds  of "tort/                                                               
civil type  cases."  He said  that State Farm supports  HB 86 for                                                               
the reasons  articulated in  the sponsor  statement.   He posited                                                               
that  HB 86  requires truthfulness  and attorney  responsibility,                                                               
and  enforces these  requirements  with meaningful  consequences.                                                               
In  defense of  the position  that there  is currently  a problem                                                               
with  frivolous  lawsuits,  he  referred to  an  article  in  The                                                             
National Law  Journal written by  Michael Jones on 3/22/01.   Mr.                                                             
Winters opined  that the  article establishes  two points:   One,                                                               
that  the current  system  does not  prevent  lying, but  instead                                                               
encourages it in  some instances because there  are no meaningful                                                               
consequences; and two, "lying in lawsuits is widespread."                                                                       
                                                                                                                                
MR. WINTERS offered  that those who "are in this  day to day" see                                                               
examples of lying  everyday.  He mentioned  that another article,                                                               
which  referred  to  Alaska  Airlines   flight  261,  noted  that                                                               
fraudulent claims  were brought on behalf  of children supposedly                                                               
fathered  illegitimately  by  four  of  the  passengers.    Those                                                               
fraudulent  claims   were  filed  by  U.S.   attorneys  and  were                                                               
determined to be  false, but only after Alaska  Airlines had been                                                               
subjected  to  a lot  of  litigation  and  legal expenses.    Mr.                                                               
Winters opined that  the problem of lying  during litigation does                                                               
exist.                                                                                                                          
                                                                                                                                
MR. WINTERS, referring to the  hypothetical examples given at the                                                               
last meeting  on HB 86, said  that virtually all of  the examples                                                               
that  he  heard  ignored  the  safeguards in  the  bill.    These                                                               
safeguards will address a lot  of the concerns expressed to date,                                                               
he opined.   He suggested  that hypothetical examples  should not                                                               
be used as the basis for  stopping legislation.  He said it comes                                                               
down to a  policy call.  Who  will be protected?   The people who                                                               
make false statements,  or the people who are the  victims of the                                                               
false statements?                                                                                                               
                                                                                                                                
REPRESENTATIVE BERKOWITZ,  referring to the example  given by Mr.                                                               
Cole at that last hearing on  HB 86, asked whether Mr. Winters is                                                               
asserting  that  all  of  the denial  of  claims  that  insurance                                                               
attorneys make would be impermissible under HB 86.                                                                              
                                                                                                                                
MR. WINTERS said he is not asserting  that at all.  He noted that                                                               
when  he heard  Mr. Cole's  hypothetical example,  he thought  of                                                               
eight  or nine  different remedies  to the  situation.   First of                                                               
all, when an answer to a  complaint is due, it is common practice                                                               
(and the law in Alaska) that if  "you need more time, you call up                                                               
the other side and you get more time to answer the complaint."                                                                  
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked what  incentive there is  for the                                                               
plaintiff to  allow that  additional time.   He added  that there                                                               
would be every incentive to disregard that courtesy.                                                                            
                                                                                                                                
Number 0658                                                                                                                     
                                                                                                                                
MR.  WINTERS answered  that professional  courtesy  would be  the                                                               
incentive.   If,  however, extra  time is  not granted,  a person                                                               
would simply go  to the trial court and ask  for more time, which                                                               
he  has never  seen  denied.   On another  point  related to  Mr.                                                               
Cole's example,  Mr. Winters explained,  "you don't have  to have                                                               
blanket denials";  other responses  include "denied" or  "can not                                                               
answer  for  lack  of  information  [and]  knowledge,"  which  is                                                               
commonly [given].  There does not  have to be a commitment in the                                                               
answer if  there is not enough  information to respond.   "If you                                                               
are committed  to a response," he  pointed out, it can  always be                                                               
amended; the rules  allow for an amendment without  even going to                                                               
court.   He noted  that motions to  amend are  liberally granted.                                                               
Therefore, Mr.  Winters asserted, Mr. Cole's  premise that within                                                               
a matter  of days,  a person  has to file  a denial  that commits                                                               
him/her to a certain position is  just not the case.  Mr. Winters                                                               
noted  that if  someone  wanted  to file  a  lawsuit  based on  a                                                               
blanket  denial,  he/she  is  required to  send  notice  of  that                                                               
[intention] and give the other  party an opportunity to amend the                                                               
denial.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  OGAN,  referring  to  an  example  given  in  the                                                               
article provided  by Mr. Winters, remarked  that it is up  to the                                                               
attorneys to point out who is  lying, and ultimately the judge or                                                               
jury decides  the case based on  whom they believe the  most.  He                                                               
noted  that the  standard of  proof  in civil  litigation is  "50                                                               
percent plus 1";  therefore, since there are always  two sides to                                                               
a story,  one person  merely has  to be  believed 1  percent more                                                               
than the  other person.   Both  parties could  be lying,  or both                                                               
could be  telling the  truth to the  best of  their recollection;                                                               
the  truth  could  ultimately  be   determined  on  a  1  percent                                                               
[margin].                                                                                                                       
                                                                                                                                
MR. WINTERS argued that  HB 86 is not trying to  do away with the                                                               
jury  system;  instead,  it tries  to  discourage  a  "deliberate                                                               
intentional  false lie."   Honest  recollections  that are  under                                                               
dispute  will still  go before  a jury,  he explained,  but quite                                                               
often there are "black and  white" different stories in which one                                                               
of the parties  is lying.  He added that  the sanctions listed in                                                               
HB  86  would  not  be imposed  simply  because  someone  doesn't                                                               
prevail in a lawsuit.                                                                                                           
                                                                                                                                
REPRESENTATIVE  OGAN said  he understands  that  point but  noted                                                               
that there is  already a system in place to  decide who is lying.                                                               
"Why do we need more," he asked.                                                                                                
                                                                                                                                
MR. WINTERS  opined that the purpose  of HB 86 is  to prevent the                                                               
blatant lie to  begin with, but if someone chooses  to go through                                                               
the jury system  with a false allegation and  he/she gets caught,                                                               
then the sanctions  would be imposed.  He recounted  that in many                                                               
of his  cases, although there  may be a legitimate  dispute about                                                               
liability,  these  lawsuits  often  include  preposterous  damage                                                               
claims  as well,  which drives  up the  cost of  litigation.   He                                                               
opined that the  meaningful sanctions imposed on  a person should                                                               
he/she  be  caught   lying  are  incentive  not   to  make  false                                                               
allegations to begin with.                                                                                                      
                                                                                                                                
Number 1036                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  posited that  the code  of professional                                                               
ethics,  Civil  Rule  11,  criminal  statutes,  and  professional                                                               
courtesy   already  adequately   address  concerns   about  false                                                               
allegations and  false witnesses.   He said  he is  uncertain why                                                               
the addition of HB 86 is  supposed to make all the difference, if                                                               
proponents of HB 86 consider the current safeguards inadequate.                                                                 
                                                                                                                                
MR. WINTERS argued that HB  86 is not directed towards witnesses,                                                               
rather towards the  parties and their attorneys.   He opined that                                                               
what is  currently in effect is  not working; Civil Rule  11 only                                                               
applies to attorneys  (not parties) and is rarely used.   In Keen                                                             
v. Ruddy, he  noted, the trial court and the  supreme court found                                                             
that the underlying lawsuit was  totally frivolous and brought in                                                               
bad  faith (and  cost the  defendant thousands  and thousands  of                                                               
dollars), but  the trial  court issued a  Civil Rule  11 sanction                                                               
against the attorney of only  $100, which was subsequently upheld                                                               
by the supreme  court as sufficient penalty  against the attorney                                                               
because  it   carried  with  it   a  stigma  and  a   message  of                                                               
disapproval.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BERKOWITZ, after  noting that  the representative                                                               
from  the state  chamber of  commerce was  unable to  provide any                                                               
specific examples  of frivolous lawsuits during  the last meeting                                                               
on HB 86, said such an  inability belies the assertion that there                                                               
is strong evidence of a problem.                                                                                                
                                                                                                                                
MR. WINTERS offered that the  article he provided, Representative                                                               
James' personal example, the letter  from the City and Borough of                                                               
Juneau Manager,  and his  own anecdotal  cases are  evidence that                                                               
there is a problem.                                                                                                             
                                                                                                                                
REPRESENTATIVE  BERKOWITZ   countered  that   the  aforementioned                                                               
article  is merely  anecdotal, just  "war stories"  from a  trial                                                               
lawyer, not quantifiable  evidence of a problem,  and, as pointed                                                               
out by Representative  Ogan, the weaknesses of the  claims in the                                                               
examples  given  were  exposed   by  the  attorneys  through  the                                                               
existing  legal system.   The  assertion that  anecdotal evidence                                                               
constitutes strong  evidence does not  change his position  on HB                                                               
86, he stated.                                                                                                                  
                                                                                                                                
Number 1275                                                                                                                     
                                                                                                                                
STEVE  CLEARY, Alaska  Public Interest  Research Group  (AkPIRG),                                                               
testified via  teleconference.  He  noted simply that  the points                                                               
raised by Representatives Berkowitz  and Ogan constitute the main                                                               
reasons why AkPIRG  opposes HB 86.  There  are already safeguards                                                               
in place, he said, and HB  86 would discourage people from having                                                               
their  day in  court, even  if  their claims  have merit,  simply                                                               
because they  may be  intimidated by the  sanctions listed  in HB                                                               
86.                                                                                                                             
                                                                                                                                
CHAIR ROKEBERG closed the public  hearing, and announced that the                                                               
committee would  set HB 86  aside and return  to it later  in the                                                               
meeting.                                                                                                                        
                                                                                                                                
HB 207 - REALIGNMENT OF JUDICIAL DISTRICTS                                                                                    
                                                                                                                                
Number 1411                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  HOUSE  BILL  NO.  207,  "An  Act  relating  to  the  judicial                                                               
districts of the state."                                                                                                        
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 1:32 p.m. to 1:34 p.m.                                                                    
                                                                                                                                
Number 1420                                                                                                                     
                                                                                                                                
REPRESENTATIVE MARY  KAPSNER, Alaska State  Legislature, sponsor,                                                               
explained  that  HB  207  deals  with  a  discrepancy  between  a                                                               
judicial district and  a court venue district.   The Bethel court                                                               
currently  services the  Lower Yukon  region of  Alaska; however,                                                               
residents of that region are  in the Third Judicial District, not                                                               
the Fourth Judicial  District.  During the last  election for the                                                               
retention of judges, the people of  the Lower Yukon area were not                                                               
able to  vote for (or  against) the  retention of the  judge that                                                               
services  that  area.   The  judicial  district  boundaries  were                                                               
established at statehood,  she explained, and they  were based on                                                               
boundaries of  the established  election districts  and reflected                                                               
commerce and communication  systems at that time.   These systems                                                               
have  substantially changed  since then.   She  said that  HB 207                                                               
simply  places  court  venue  for that  area  within  the  proper                                                               
judicial  district.     She  mentioned  that   the  Alaska  Civil                                                               
Liberties Union (AkCLU) supports HB 207.                                                                                        
                                                                                                                                
Number 1596                                                                                                                     
                                                                                                                                
WILLIAM T.  COTTON, Executive  Director, Alaska  Judicial Council                                                               
(AJC), testified via teleconference and  said simply that the AJC                                                               
voted unanimously to recommend the  change encompassed by HB 207.                                                               
The  AJC has  recognized the  problem even  before Representative                                                               
Kapsner  sponsored this  legislation.   The  people  who live  in                                                               
villages apart  from Bethel,  he explained,  are serviced  by the                                                               
courts of  Bethel; it is the  only practical way to  provide such                                                               
service, and  these people are  treated in  every way as  if they                                                               
are  in  the  Fourth  Judicial  District  except  that  they  are                                                               
currently unable  to vote on  the judge  that services them.   He                                                               
said that  as a  general rule, judicial  districts should  not be                                                               
changed  very often;  however, in  this  particular instance,  it                                                               
makes a lot of sense and is a very fair thing to do.                                                                            
                                                                                                                                
CHAIR ROKEBERG closed the public hearing on HB 207.                                                                             
                                                                                                                                
Number 1690                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES moved  to report  HB 207  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note.  There  being no objection, HB 207 was  reported out of the                                                               
House Judiciary Standing Committee.                                                                                             
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 1:40 p.m. to 1:41 p.m.                                                                    
                                                                                                                                
HJR 17 - DESTROY BRADY BILL RECORDS                                                                                           
                                                                                                                                
Number 1707                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  JOINT RESOLUTION  NO. 17, Urging  the President  of the                                                               
United  States and  the Congress  to act  to ensure  that federal                                                               
agencies do  not retain  records relating  to lawful  purchase or                                                               
ownership  of firearms  gathered through  the Brady  Handgun Bill                                                               
instant check system.                                                                                                           
                                                                                                                                
Number 1724                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JOE  HAYES,  Alaska State  Legislature,  sponsor,                                                               
explained  that the  purpose  of HJR  17 is  to  ensure that  the                                                               
federal government destroy information  pertaining to persons who                                                               
may lawfully own firearms that  is gathered per the Brady Handgun                                                               
Bill.  Currently the federal  government retains such information                                                               
although doing so  is contrary to both the letter  and the spirit                                                               
of the Brady Handgun Bill.  He urged members to pass HJR 17.                                                                    
                                                                                                                                
Number 1800                                                                                                                     
                                                                                                                                
RALPH   SEEKINS,   President,    Alaska   Wildlife   Conservation                                                               
Association  (AWCA), testified  via  teleconference.   He  stated                                                               
that the  AWCA is  in favor of  HJR 17, believing  that it  is an                                                               
intrusion  for the  federal government  to retain  records longer                                                               
than anything  specifically laid out  in the Brady  Handgun Bill.                                                               
He concluded  by encouraging  the legislature  to support  HJR 17                                                               
adding that it is a step in the right direction.                                                                                
                                                                                                                                
CHAIR ROKEBERG closed the public hearing on HJR 17.                                                                             
                                                                                                                                
Number 1880                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGAN made a motion to  adopt Amendment 1:  on page                                                               
2, line 5, insert "dangerous" after "WHEREAS the".                                                                            
                                                                                                                                
Number 1886                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG objected.                                                                                                        
                                                                                                                                
REPRESENTATIVE OGAN withdrew Amendment 1.                                                                                       
                                                                                                                                
Number 1894                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES moved  to report  HJR 17  out of  committee                                                               
with individual recommendations.                                                                                                
                                                                                                                                
REPRESENTATIVE  BERKOWITZ noted  that in  the section  of HJR  17                                                               
that specifies  to whom a  copy shall be  sent to, all  but Louis                                                               
Freeh are referred to as "the Honorable".                                                                                       
                                                                                                                                
CHAIR  ROKEBERG said  this is  because Mr.  Freeh is  an employee                                                               
rather than an elected official.                                                                                                
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said he  recalls that  at one  point in                                                               
time Mr. Freeh was also a federal judge.                                                                                        
                                                                                                                                
CHAIR  ROKEBERG asked  the sponsor  to  investigate this  further                                                               
because if  Mr. Freeh  has had  the appellation  at any  time, he                                                               
retains it.                                                                                                                     
                                                                                                                                
Number 1952                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  asked  whether  there  were  any  objections  to                                                               
reporting HJR 17  from committee.  There being  no objection, HJR                                                               
17 was reported from the House Judiciary Standing Committee.                                                                    
                                                                                                                                
HB 134 - CRIME VICTIMS RTS/CRIMES/PROTECTIVE INJ.                                                                             
                                                                                                                                
Number 1970                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  BILL NO. 134, "An  Act relating to the  rights of crime                                                               
victims,  the   crime  of  violating  a   protective  injunction,                                                               
mitigating factors in  sentencing for an offense,  and the return                                                               
of  certain  seized  property  to   victims;  clarifying  that  a                                                               
violation  of  certain  protective  orders  is  contempt  of  the                                                               
authority of  the court; expanding  the scope of  the prohibition                                                               
of  compromise  based  on  civil  remedy  of  misdemeanor  crimes                                                               
involving domestic violence; providing  for protective relief for                                                               
victims of  stalking that  is not domestic  violence and  for the                                                               
crime  of  violating an  order  for  that relief;  providing  for                                                               
continuing  education  regarding  domestic violence  for  certain                                                               
persons  appointed  by  the   court;  making  certain  conforming                                                               
amendments;  amending  Rules 65.1  and  100(a),  Alaska Rules  of                                                               
Civil Procedure;  amending Rules 10,  11, 13, 16, and  17, Alaska                                                               
District Court  Rules of  Civil Procedure;  and amending  Rule 9,                                                               
Alaska Rules of Administration."                                                                                                
                                                                                                                                
Number 1976                                                                                                                     
                                                                                                                                
DEAN  J.   GUANELI,  Chief  Assistant  Attorney   General,  Legal                                                               
Services  Section-Juneau, Criminal  Division,  Department of  Law                                                               
(DOL), explained  that the DOL would  prefer that HB 134  did not                                                               
move out  of committee at  this point.  After  having discussions                                                               
with Senator Halford  and his staff, and Lauree  Hugonin from the                                                               
Alaska Network  on Domestic Violence  & Sexual  Assault (ANDVSA),                                                               
the DOL  has agreed  to work  on HB  134 over  the interim  in an                                                               
effort to address some of the concerns raised.                                                                                  
                                                                                                                                
Number 2081                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that HB 134 would be held  over for the                                                               
interim.                                                                                                                        
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 1:49 p.m. to 1:58 p.m.                                                                    
                                                                                                                                
HB 160 - REPORTING OF ABORTIONS                                                                                               
                                                                                                                                
Number 2180                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  HOUSE  BILL NO.  160,  "An  Act  requiring the  reporting  of                                                               
induced terminations of pregnancies."   [Before the committee was                                                               
CSHB 160(HES).]                                                                                                                 
                                                                                                                                
Number 2193                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL, as the sponsor  of HB 160, explained that                                                               
HB 160 would put in place  a reporting system for the termination                                                               
of pregnancies.  The Vital  Statistics section of the Division of                                                               
Public Health (DPH)  will be responsible for  providing an annual                                                               
report  regarding how  many abortions  are performed.   He  noted                                                               
that the reporting will be  done according to national standards,                                                               
and that the  information will remain secure.   He mentioned that                                                               
he  has  no objections  to  a  forthcoming amendment  that  would                                                               
ensure that  confidentiality be  maintained.   He added  that the                                                               
Alaska Civil Liberties Union (AkCLU) supports HB 160.                                                                           
                                                                                                                                
REPRESENTATIVE   BERKOWITZ  asked   whether  any   other  medical                                                               
procedures are reported.                                                                                                        
                                                                                                                                
Number 2271                                                                                                                     
                                                                                                                                
DANIELLE  SERINO, Staff  to Representative  John Coghill,  Alaska                                                               
State  Legislature, sponsor  of  HB 160,  explained that  births,                                                               
deaths, fetal deaths, marriages, and  divorces are reported.  She                                                               
added  that sexually  transmitted diseases  (STDs), any  forms of                                                               
cancer,  tuberculosis,  and  a number  other  diseases  are  also                                                               
reported by doctors.                                                                                                            
                                                                                                                                
REPRESENTATIVE COGHILL  noted that  the concept of  recording and                                                               
reporting abortions is not "precedent setting."                                                                                 
                                                                                                                                
CHAIR ROKEBERG closed the public hearing on HB 160.                                                                             
                                                                                                                                
Number 2349                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG made a motion to adopt Amendment 1, which read:                                                                  
                                                                                                                                
     Page 2, line 11, following "section":                                                                                      
          Insert ", except that the statistical report may                                                                      
     not identify  or give information  that can be  used to                                                                    
     identify  the name  of any  physician who  performed an                                                                    
     induced  termination  of  pregnancy, the  name  of  any                                                                    
     facility in  which an induced termination  of pregnancy                                                                    
     occurred, or the name of  the municipality or community                                                                    
     in   which  the   induced   termination  of   pregnancy                                                                    
     occurred."                                                                                                                 
                                                                                                                                
     Page 2, following line 21:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "*Sec. 2.  AS 18.50.310(a) is amended to read:                                                                        
          (a)  To protect the integrity of vital statistics                                                                     
     records, to ensure their proper  use, and to ensure the                                                                    
     efficient  and  proper   administration  of  the  vital                                                                    
     statistics  system,  it is  unlawful  for  a person  to                                                                    
     permit  inspection of  [,] or  to disclose  information                                                                    
     contained in  vital statistics records,  or to  copy or                                                                    
     issue a  copy of  all or  part of  a record,  except as                                                                    
     provided   by  this   section  or   as  authorized   by                                                                    
     regulations  issued under  this  chapter.   Regulations                                                                
     issued   under   this   chapter   may   not   authorize                                                                
     inspection, disclosure,  or copying  of all or  part of                                                                
     any  report  or  record  received  under  AS 18.50.245,                                                                
     except  that  the  statistical  report  prepared  under                                                                
     AS 18.50.245(d) may  be copied and distributed."                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
CHAIR ROKEBERG explained that he  is offering Amendment 1 because                                                               
he has  concerns about  the potential  for misuse  of information                                                               
related to  doctors, health clinics,  and hospitals;  Amendment 1                                                               
is intended to  strictly prohibit any information  other than the                                                               
final report from becoming a matter of public record.                                                                           
                                                                                                                                
Number 2382                                                                                                                     
                                                                                                                                
AL ZANGRI, Chief, Vital Statistics, Division of Public Health                                                                   
(DPH), Department of Health & Social Services (DHSS), noted that                                                                
he has not yet reviewed Amendment 1.                                                                                            
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked whether the reporting  of medical                                                               
procedures  is  done  through  Vital  Statistics  or  some  other                                                               
entity.                                                                                                                         
                                                                                                                                
MR.  ZANGRI  explained  that Vital  Statistics  receives  medical                                                               
reports  on  births,  deaths,   marriages,  divorces,  and  fetal                                                               
deaths.  Other kinds of  medical procedures or medical conditions                                                               
such as  HIV (human immunodeficiency virus)  and tuberculosis are                                                               
reported to the DPH's Epidemiology Section.                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  asked  Representative Coghill  why  he                                                               
opted not  to go through  the latter  route of reporting  with HB                                                               
160.                                                                                                                            
                                                                                                                                
REPRESENTATIVE  COGHILL  said  that   because  fetal  deaths  are                                                               
reported   through   Vital    Statistics,   he   and   department                                                               
representatives  agreed that  it would  be appropriate  to handle                                                               
abortion reporting in the same manner.                                                                                          
                                                                                                                                
REPRESENTATIVE  BERKOWITZ noted  that the  [Epidemiology Section]                                                               
is   already   accustomed   to  handling   confidential   medical                                                               
information.                                                                                                                    
                                                                                                                                
MR.  ZANGRI   countered  that   Vital  Statistics   also  handles                                                               
confidential medical information.   He added that  there are only                                                               
four  other  states  that  do not  have  mandatory  reporting  of                                                               
induced terminations  of pregnancy,  and in  all of  those states                                                               
that  do report  them, with  the exception  of one  or two,  that                                                               
information is reported through Vital Statistics.                                                                               
                                                                                                                                
TAPE 01-76, SIDE B                                                                                                              
Number 2466                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL asked  Mr. Zangri  to comment  on whether                                                               
Amendment 1 is actually needed.                                                                                                 
                                                                                                                                
MR.  ZANGRI said  that vital  statistics  records are  prohibited                                                               
from inspection for a specific period  of time, by record.  There                                                               
is   nothing  in   current  statute   that  defines   an  induced                                                               
termination  of pregnancy  as a  vital statistic  record; in  the                                                               
absence of such a definition, he  said, Amendment 1 is needed and                                                               
will be very helpful.                                                                                                           
                                                                                                                                
REPRESENTATIVE  COGHILL reiterated  that he  has no  objection to                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
CHAIR ROKEBERG  asked whether Amendment  1 would have  any impact                                                               
on  other [confidential]  information, or  create any  unintended                                                               
consequences for Vital Statistics.                                                                                              
                                                                                                                                
MR. ZANGRI said it might create  some problems; other areas in AS                                                               
18.50 permit  disclosure of  birth records  after 100  years, and                                                               
death, marriage,  and divorce records  after 50 years.   He noted                                                               
that Vital  Statistics permits inspection of  other vital records                                                               
for various purposes as well.                                                                                                   
                                                                                                                                
REPRESENTATIVE COGHILL  surmised that if any  regulations have to                                                               
be created  in order to comply  with the requirements of  HB 160,                                                               
the intent  of Amendment 1  is to protect  information pertaining                                                               
to induced termination of pregnancies.                                                                                          
                                                                                                                                
Number 2350                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  asked  whether  there  were  any  objections  to                                                               
Amendment 1.  There being no objection, Amendment 1 was adopted.                                                                
                                                                                                                                
REPRESENTATIVE BERKOWITZ  stated that he is  incredibly concerned                                                               
about  privacy  and  the  safety  of  people;  it  is  absolutely                                                               
imperative  that  this  information receive  the  most  stringent                                                               
protection possible.   He noted  that he has  received complaints                                                               
that  Vital  Statistics  has  released  information  to  agencies                                                               
without authorization.  Should  information pertaining to induced                                                               
termination of pregnancies  be released in a  similar fashion, he                                                               
said he  would view  it as  the most egregious  type of  abuse of                                                               
personal privacy.   If he ever  hears of any instance  of such an                                                               
abuse,  he warned,  he would  expect the  legislature to  revisit                                                               
this  issue.   The  more  "sideboards"  put  around HB  160,  the                                                               
better, he added.                                                                                                               
                                                                                                                                
REPRESENTATIVE COGHILL said he did  not want to elevate this type                                                               
of information  above other types  of sensitive information.   He                                                               
noted that he has not heard of any breaks in confidentiality.                                                                   
                                                                                                                                
Number 2240                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  moved to report CSHB  160(HES), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal  note.    There  being  no  objection,  CSHB                                                               
160(JUD)  was   reported  from   the  House   Judiciary  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
HB 86 - CIVIL LIABILITY FOR IMPROPER LITIGATION                                                                               
                                                                                                                                
Number 2230                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the committee would  again take up                                                               
HOUSE  BILL NO.  86,  "An  Act relating  to  civil liability  for                                                               
certain false or improper allegations  in a civil pleading or for                                                               
certain improper acts relating to a civil action."                                                                              
                                                                                                                                
Number 2206                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL  moved to  report HB  86 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
Number 2199                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  objected.  He  said this is a  bad idea                                                               
according to  Attorney General  Cole and Wev  Shea; it's  bad for                                                               
plaintiffs, it's bad  for the defendants, it's  bad for business,                                                               
and the  only one it  seems to be good  for is an  individual who                                                               
didn't  testify  here today  and  one  other individual  who  did                                                               
testify.   "We  heard no  quantitative evidence  that there  is a                                                               
rampant problem out there ..., and  in fact, ... to the contrary,                                                               
... this  bill will impose  burdens on business and  would impede                                                               
on civil justice," he concluded.                                                                                                
                                                                                                                                
Number 2126                                                                                                                     
                                                                                                                                
A  roll  call  vote  was taken.    Representatives  James,  Ogan,                                                               
Coghill, and  Rokeberg voted  to report HB  86 out  of committee.                                                               
Representatives   Berkowitz  and   Kookesh   voted  against   it.                                                               
Therefore, HB 86  was reported from the  House Judiciary Standing                                                               
Committee by a vote of 4-2.                                                                                                     
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 2:10 p.m. to 2:38 p.m.                                                                    
                                                                                                                                
HB 184 - INSURANCE CODE AMENDMENTS                                                                                            
                                                                                                                                
Number 2128                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  last order of  business would                                                               
be  HOUSE BILL  NO.  184, "An  Act relating  to  the business  of                                                               
insurance, including  changes to the insurance  code to implement                                                               
federal financial services reforms  for the business of insurance                                                               
and to  authorize the  director of  insurance to  review criminal                                                               
backgrounds for  individuals applying  to engage in  the business                                                               
of insurance;  amending Rule 402,  Alaska Rules of  Evidence; and                                                               
providing  for an  effective date."   [Before  the committee  was                                                               
CSHB 184(L&C).]                                                                                                                 
                                                                                                                                
Number 2103                                                                                                                     
                                                                                                                                
BOB  LOHR,   Director,  Division  of  Insurance,   Department  of                                                               
Community &  Economic Development  (DCED), explained that  HB 184                                                               
is the  result of federal legislation  that passed in 1999  - the                                                               
Financial  Services Modernization  Act, also  referred to  as the                                                               
Gramm-Leach-Bliley Act (GLBA).   This Act took  down the barriers                                                               
among insurance, banking, and securities  that were erected right                                                               
after the  [Great Depression]  by the Glass-Steagall  Act.   As a                                                               
result of  GLBA, regulation of  these three sectors  - insurance,                                                               
banking, and securities - has had  to adapt to "the new reality."                                                               
He  noted  that the  Federal  Reserve  was  appointed to  be  the                                                               
"umbrella   regulator"  over   all  sectors,   but  below   that,                                                               
functional [state]  regulation was the  key with respect  to each                                                               
of  the other  sectors,  and, specifically  for insurance,  state                                                               
authority  to regulate  insurance  is preserved.   The  insurance                                                               
sector  is  unique  in  the  federal  picture  because  there  is                                                               
essentially  no  federal  regulation  of  insurance,  unlike  the                                                               
banking and  securities sectors  in which  there is  both federal                                                               
and state regulation.                                                                                                           
                                                                                                                                
MR. LOHR  explained that  under GLBA,  the federal  government is                                                               
requiring  states  to  adopt  specific  standards  for  insurance                                                               
regulation without  which national regulation will  "kick in"; HB                                                               
184  is  designed  to maintain  state  government  authority  for                                                               
regulation of  insurance.   He noted that  there are  three areas                                                               
covered by  HB 184.   One area  pertains to producer  licensing -                                                               
licensing  of agents  and  brokers;  if 29  states  do not  adopt                                                               
licensing  statutes  that  treat  nonresidents  on  a  reciprocal                                                               
basis,  then a  national  system of  licensing  will be  imposed.                                                               
Thus  far 45  states  have introduced  legislation to  accomplish                                                               
reciprocity, which  allows someone  licensed in another  state to                                                               
be granted a nonresident license in  Alaska and vice versa for an                                                               
Alaskan licensee, as  long as there is not a  regulatory issue to                                                               
prevent it such as a  criminal background or other problems found                                                               
by the  regulating agency.   Basically, by  sending money  to one                                                               
location, a  person could be  licensed in  all 50 states  and the                                                               
District of  Columbia through a  24-hour process.   The licensing                                                               
fees would in turn be distributed to the appropriate states.                                                                    
                                                                                                                                
MR. LOHR  said that a second  area covered by HB  184 pertains to                                                               
privacy.  House Bill 184  addresses what information a person may                                                               
share that  is obtained from insurance  applications, which could                                                               
include  financial  information  and/or health  information,  and                                                               
what  degree  of restrictions  are  appropriate  with respect  to                                                               
marketing and  sharing information.   A third area covered  by HB                                                               
184  involves consumer  protection for  banks selling  insurance.                                                               
Currently there are consumer  protection provisions for insurance                                                               
companies, but  now that banks  are permitted to  sell insurance,                                                               
additional provisions  are necessary in order  to ensure consumer                                                               
protection in those areas too.                                                                                                  
                                                                                                                                
Number 1816                                                                                                                     
                                                                                                                                
MR.  LOHR,  in  response  to   questions,  said  that  there  are                                                               
currently  some   barriers  to  nonresident  reciprocity.     One                                                               
provision in HB  184 says that there will  be no "post-licensing"                                                               
barriers, that  is, no  additional barriers  to licensing.   Some                                                               
states,  for  example,  do not  have  very  much  "surplus-lines"                                                               
activity  for a  non-admitted insurer  selling insurance  in that                                                               
state.  Alaska does  have a good deal of "that,"  he said, and as                                                               
a  result,   requires  a  $200,000  bond   from  a  surplus-lines                                                               
licensee.  Some  states, he noted, require up to  a $200,000 bond                                                               
but  other states  do not  require  anything, so  with regard  to                                                               
reciprocity,  "if it's  good  enough in  their  state, it's  good                                                               
enough in  ours," and  while this bond  can become  an additional                                                               
restriction  on licensing,  it also  provides Alaskans  with some                                                               
important consumer  protections.  What  is proposed by HB  184 is                                                               
to maintain the  ability of the director to  have a surplus-lines                                                               
requirement but not  to have it in the  licensing chapter; rather                                                               
to move it from there to a  separate section where it is not tied                                                               
in as a licensing restriction.                                                                                                  
                                                                                                                                
MR.  LOHR mentioned  that trust  accounts  [are an  example of  a                                                               
licensing requirement]; a trust account  is used when an agent or                                                               
broker  is receiving  funds  that are  going to  be  used to  buy                                                               
insurance from the  company - those funds must  be maintained and                                                               
accounted for  separately from any  other funds.   In HB  184 the                                                               
term   "trust   account"   has  been   replaced   by   "fiduciary                                                               
responsibility";  the net  effect is  identical and  the director                                                               
maintains the  authority to require  trust accounts, but  "we de-                                                               
link  it"  from  the  notion of  being  an  additional  licensing                                                               
requirement.    He  opined that  this  terminology  change  would                                                               
satisfy  the  requirement   of  reciprocity  without  sacrificing                                                               
consumer protection.                                                                                                            
                                                                                                                                
REPRESENTATIVE   COGHILL   asked   what  regulations   Mr.   Lohr                                                               
anticipates developing.                                                                                                         
                                                                                                                                
MR. LOHR  said, for example,  that some  of the provisions  of HB                                                               
184  have  delayed  effective  dates,  and  if  the  Division  of                                                               
Insurance determines that additional  regulations are needed, the                                                               
authority  is there  to develop  them; essentially  reenacting by                                                               
regulation what is  currently in statute until  after the delayed                                                               
effective dates.   He noted, however, that  some negotiations are                                                               
occurring at  the national  level because  "we" don't  know quite                                                               
what it takes  to trigger reciprocity since that will  be a "post                                                               
state legislative decision";  once a bill is enacted  in at least                                                               
29  states, that  legislation  will be  submitted  for review  to                                                               
determine whether the states are  reciprocal.  In states that are                                                               
not,  regulations could  be adopted  to fix  the problem  without                                                               
further statutory  change.  On  the issue of  fingerprinting, Mr.                                                               
Lohr  noted  that the  Division  of  Insurance is  attempting  to                                                               
strengthen  the fingerprinting  requirements  by simplifying  the                                                               
process through which fingerprints  of licensee applicants can be                                                               
used to obtain "FBI data" for criminal background checks.                                                                       
                                                                                                                                
Number 1561                                                                                                                     
                                                                                                                                
LINDA  BRUNETTE, Licensing  Supervisor, Central  Office, Division                                                               
of  Insurance, Department  of  Community  & Economic  Development                                                               
(DCED), added  that currently the Division  of Insurance requires                                                               
any individual - both residents  and nonresidents - who transacts                                                               
the business  of insurance and who  is applying for a  license to                                                               
submit a fingerprint card for a criminal background check.                                                                      
                                                                                                                                
MR. LOHR noted that a  separate process for companies grants what                                                               
is called a Certificate of  Authority.  In response to questions,                                                               
he  noted that  the  privacy  provisions begin  on  page 43  with                                                               
Section 59, that  there is no specific reference  in this section                                                               
to GLBA,  that subsection  (b) grants  authority to  the director                                                               
[to  adopt regulations  that provide  protection  for a  person's                                                               
financial  and  health  information],   and  that  paragraph  (5)                                                               
contains  reference  to  the  Health  Insurance  Portability  and                                                               
Accountability Act (HIPAA) as the  default regulations for health                                                               
insurance.                                                                                                                      
                                                                                                                                
CHAIR  ROKEBERG  mentioned  that  the House  Labor  and  Commerce                                                               
Standing Committee  favored a default  "opt in"  regarding health                                                               
insurance information.                                                                                                          
                                                                                                                                
MR.  LOHR noted  that directions  for "opt  in", which  prohibits                                                               
sharing,  start  with  subsection  (a), and  that  the  following                                                               
paragraphs itemize exceptions.                                                                                                  
                                                                                                                                
CHAIR ROKEBERG  pointed out that  paragraph (4) contains  a large                                                               
list of  different insurance activities  that would  be exempted;                                                               
he  added  that  he  finds  this  method  of  listing  exceptions                                                               
cumbersome.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL noted  that  subsection  (b) still  gives                                                               
authority to make regulations.                                                                                                  
                                                                                                                                
CHAIR ROKEBERG  noted that  while this is  correct, the  issue is                                                               
what type of policy call  the legislature is making, whether "opt                                                               
in" or "opt out."                                                                                                               
                                                                                                                                
MR. LOHR  explained that the  term "opt out" means  that personal                                                               
information  may   be  shared  with  others   unless  the  person                                                               
specifically says  that it  can not be  shared; whereas  "opt in"                                                               
means  that  personal  information   may  not  be  shared  unless                                                               
explicit permission  to do so is  given.  He added  that "opt in"                                                               
is typically  more protective of  privacy than  "opt out."   If a                                                               
person  does   not  respond  to   an  "opt   out"  questionnaire,                                                               
information can  be shared.  If  a person does not  respond to an                                                               
"opt in" questionnaire, the information will not be shared.                                                                     
                                                                                                                                
Number 1241                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  noted that what  is happening "with  this federal                                                               
law is  that we are  in a position where  we have to  conform our                                                               
statutes  with national  practice."   He said  that the  question                                                               
faced by  the legislature  is which  default Alaskans  will have:                                                               
"opt in" or  "opt out."  He  opined that one of  the goals should                                                               
be  to provide  a "level  playing field"  for local  insurers and                                                               
banks that compete  against national entities.   He remarked that                                                               
he has come  to the conclusion that  national insurance companies                                                               
are making national policy, so  in order for Alaskan companies to                                                               
compete, they should  not be out of step.   He suggested that the                                                               
default for health  insurance should be "opt in"  and the default                                                               
for other types of insurance should  be "opt out."  He added that                                                               
Amendment 1  addresses this issue.   Amendment 1  reads [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
          Sec.    21.36.162   Nondisclosure    of   personal                                                                  
     information.    The  director shall  adopt  regulations                                                                  
     regarding   the  release   of   financial  and   health                                                                    
     information  regarding  an   individual  who  seeks  to                                                                    
     obtain, obtains,  or has obtained an  insurance product                                                                    
     or  service  from  a  licensee   that  is  to  be  used                                                                    
     primarily for personal,  family, or household purposes.                                                                    
     The regulations  must be no  less restrictive  than the                                                                    
     model regulations  adopted by the  National Association                                                                    
     of    Insurance    Commissioners   (NCOIL)    Financial                                                                    
     Information  Privacy Protection  Model Act,  adopted by                                                                    
     the NCOIL Executive Committee on  November 17, 2000 and                                                                    
     amended on March 2, 2001.                                                                                                  
                                                                                                                                
MR.  LOHR  explained  that  Amendment 1  would  replace  most  of                                                               
Section 59, beginning on page 43,  line 15, through page 45, line                                                               
27.                                                                                                                             
                                                                                                                                
MS  BRUNETTE  pointed  out  that Amendment  1  contains  a  typo:                                                               
"National Association of  Insurance Commissioners" should instead                                                               
read  "National   Conference  of  Insurance  Legislators".     As                                                               
corrected, Amendment 1 reads [original punctuation provided]:                                                                   
                                                                                                                                
          Sec.    21.36.162   Nondisclosure    of   personal                                                                  
     information.    The  director shall  adopt  regulations                                                                  
     regarding   the  release   of   financial  and   health                                                                    
     information  regarding  an   individual  who  seeks  to                                                                    
     obtain, obtains,  or has obtained an  insurance product                                                                    
     or  service  from  a  licensee   that  is  to  be  used                                                                    
     primarily for personal,  family, or household purposes.                                                                    
     The regulations  must be no  less restrictive  than the                                                                    
     model  regulations adopted  by the  National Conference                                                                    
     of Insurance Legislators  (NCOIL) Financial Information                                                                    
     Privacy  Protection Model  Act,  adopted  by the  NCOIL                                                                    
     Executive Committee  on November  17, 2000  and amended                                                                    
     on March 2, 2001.                                                                                                          
                                                                                                                                
Number 0855                                                                                                                     
                                                                                                                                
MR. LOHR  said that  this change  would provide  for an  "opt in"                                                               
default  for health  information, and  an "opt  out" default  for                                                               
financial information.   He said  these defaults would be  set as                                                               
"the minimum floor";  the Division of Insurance  would be allowed                                                               
to adopt  regulations that would  provide for no less  than these                                                               
standards.                                                                                                                      
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 3:06 p.m. to 3:13 p.m.                                                                    
                                                                                                                                
Number 0703                                                                                                                     
                                                                                                                                
STEVE  CLEARY, Alaska  Public Interest  Research Group  (AkPIRG),                                                               
testified  via  teleconference.   He  said  that the  AkPIRG  has                                                               
concerns  about  privacy  rights.    [The  AkPIRG]  is  a  strong                                                               
proponent  of an  "opt in"  default for  health information,  but                                                               
does  not support  the use  an  "opt out"  default for  financial                                                               
information.     The  latter  is  inappropriate   and  will  hurt                                                               
consumers, he opined.  He pointed  out that the mailings sent out                                                               
informing consumers that their information  will be shared unless                                                               
they  respond  will  contain  very   fine  print,  and  therefore                                                               
consumers may  not be cognizant  of the fact that  their personal                                                               
financial  information is  going to  be shared  rather than  held                                                               
private.  Mr. Cleary said that  the AkPIRG would also like to see                                                               
included in  HB 184 "a private  right of action."   Right now, he                                                               
explained,  individuals   need  to  wait  for   the  Division  of                                                               
Insurance to act  on their behalf, but a private  right of action                                                               
would allow  individuals to proceed  on their own.   He concluded                                                               
by saying  he would like  to give  further testimony at  the next                                                               
meeting after taking more time to  review HB 184 and its proposed                                                               
amendments.                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG remarked  that the  director of  the Division  of                                                               
Insurance  and various  people from  the  insurance industry  all                                                               
recommend using the NCOIL model  as the baseline for regulations.                                                               
He noted  that he intends  to put a  sunset on that  provision so                                                               
that the legislature can review the issue.                                                                                      
                                                                                                                                
Number 0366                                                                                                                     
                                                                                                                                
JOHN L. GEORGE,  Lobbyist for American Council  of Life Insurance                                                               
(ACLI), National Association of  Independent Insurers (NAII), and                                                               
American  Family Life  Assurance Company  (AFLAC), said  that the                                                               
organizations he  represents favor  the adoption of  Amendment 1;                                                               
without it,  the language  is too  complicated and  far different                                                               
from what is  being applied in other states.   Most companies, on                                                               
the other  hand, are already familiar  with the NCOIL model.   In                                                               
response to  questions, he  said that the  "opt out"  default for                                                               
"non  health insurance"  has  to  be in  place  for  the sake  of                                                               
uniformity.    To have  an  "opt  in"  standard for  "non  health                                                               
insurance" purposes would be different  from what "everyone else"                                                               
has.    The "opt  out"  standard  allows insurance  companies  to                                                               
continue  with  their  everyday business  while  still  providing                                                               
consumers with the option of stating  that they do not want their                                                               
information shared.                                                                                                             
                                                                                                                                
Number 0163                                                                                                                     
                                                                                                                                
SHELDON  E.  WINTERS,  Attorney  at  Law,  Lessmeier  &  Winters,                                                               
Lobbyist for  State Farm Insurance  Company ("State  Farm"), said                                                               
simply   that  State   Farm  supports   Amendment   1  with   the                                                               
understanding that a "sunset" provision will be added.                                                                          
                                                                                                                                
Number 0058                                                                                                                     
                                                                                                                                
REED  STOOPS,  Lobbyist  for   Health  Insurance  Association  of                                                               
America (HIAA),  said simply that  the HIAA supports  Amendment 1                                                               
even though  health information is treated  more stringently than                                                               
financial  information.    Consistency  around  the  country,  he                                                               
opined, is  paramount to the  industry in order to  allow Alaskan                                                               
companies  to do  business under  the same  basic rules  as other                                                               
states.    He  noted  that   the  regulatory  process  for  "this                                                               
particular subject" is fairly extensive under the NCOIL model.                                                                  
                                                                                                                                
TAPE 01-77, SIDE A                                                                                                              
Number 0030                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  opined that with  the provisions of the  GLBA and                                                               
the  provisions encompassed  by  HB 184  going  into effect,  the                                                               
consumer   will   have   substantially   more   protection   than                                                               
previously.                                                                                                                     
                                                                                                                                
MR. LOHR concurred  with that point.  There is  no protection for                                                               
insurance information  gathered from  applications at  this point                                                               
in time;  whatever level of  privacy standard that is  adopted by                                                               
the  legislature  will   be  an  increase  over   what  there  is                                                               
currently, he said.                                                                                                             
                                                                                                                                
CHAIR ROKEBERG  asked whether Mr.  Lohr would be offended  if the                                                               
legislature  were to  attach a  letter of  intent regarding  "opt                                                               
in/opt out."                                                                                                                    
                                                                                                                                
MR. LOHR  opined that a  letter of  intent is not  necessary; the                                                               
mandate to the director is very  clear, it is not permissive, and                                                               
it  does "set  a  floor."   Therefore,  he  added,  he could  not                                                               
imagine a  scenario under HB 184  where it would not  be "opt in"                                                               
for   health   information   [and   "opt   out"   for   financial                                                               
information].                                                                                                                   
                                                                                                                                
CHAIR ROKEBERG  argued, however, that the  language simply refers                                                               
to the  NCOIL model and  does not specify what  the legislature's                                                               
policy is with regard to "opt in/opt out."                                                                                      
                                                                                                                                
MR.  LOHR  said,  "it's  your  call, but  I  don't  believe  it's                                                               
necessary."                                                                                                                     
                                                                                                                                
Number 0159                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG made a motion  to adopt Amendment 1, as corrected.                                                               
There  being  no  objection,  Amendment   1,  as  corrected,  was                                                               
adopted.                                                                                                                        
                                                                                                                                
Number 0203                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG made a motion to adopt Amendment 2, which read                                                                   
[original punctuation provided]:                                                                                                
                                                                                                                                
     *Sec. X  AS 21.18. is  amended by adding a  new section                                                                    
     to read:                                                                                                                   
          Sec.21.18.160.  Valuation of investments.  For                                                                        
     the purposes  of this chapter,  the value or  amount of                                                                    
     an  investment acquired,  held,  or invested  in or  an                                                                    
     investment  practice  engaged   in  under  this  title,                                                                    
     unless otherwise  specified in this title,  must be the                                                                    
     value at which assets of  an insurer are required to be                                                                    
     reported for  accounting purposes under this  title and                                                                    
     as  required under  procedures prescribed  in published                                                                    
     accounting  and  valuation  standards of  the  National                                                                    
     Association of  Insurance Commissioners,  including the                                                                    
     purposes  and  procedures   manual  of  the  securities                                                                    
     valuation office,  the valuation of  securities manual,                                                                    
     the  accounting practices  and  procedures manual,  and                                                                    
     the   annual   statement  instructions   or   valuation                                                                    
     procedures   officially   adopted   by   the   National                                                                    
     Association of Insurance Commissioners.                                                                                    
     *Sec.  X  AS 21.21.010  is  repealed  and reenacted  to                                                                    
     read:                                                                                                                      
          Sec. 21.21.010.  Scope.  This chapter applies                                                                         
     only  to an  investment  and investment  practice of  a                                                                    
     domestic  insurer  and a  United  States  branch of  an                                                                    
     alien insurer  entered through this  state.   Except as                                                                    
     provided  in AS  21.42.370(c),  this  chapter does  not                                                                    
     apply to separate accounts of a life insurer.                                                                              
     *Sec. X AS 21.21.020 (d) is amended to read:                                                                               
          (d) An investment limitation based upon the                                                                           
     amount  of the  insurer's  assets  or particular  funds                                                                    
     shall  relate  to the  assets  or  funds shown  by  the                                                                    
     insurer's  annual statement  most recently  required to                                                                  
     be  [AS   OF  THE   PRECEDING  DECEMBER  31,   DATE  OF                                                                  
     ACQUISITION OF THE INVESTMENT BY  THE INSURER, OR SHOWN                                                                    
     BY  A CURRENT  FINANICAL (stet)  STATEMENT] filed  with                                                                    
     the director.                                                                                                              
     *Sec.  X  AS  21.21.020  is amended  by  adding  a  new                                                                    
     section to read:                                                                                                           
          (e) Determination of compliance with limitations                                                                      
     under this chapter shall use admitted asset values.                                                                        
     *Sec. X AS 21.21.255 is amended to read:                                                                                   
     As provided under 15  U.S.C. 77r-1(b) and (c)(Secondary                                                                    
     Mortgage  Market Enhancement  Act of  1984), securities                                                                    
     that are purchased,  held or invested in  by an insurer                                                                    
     shall be  regulated under AS 21.18.160  [AS 21.18.150],                                                                  
     AS  21.21  [AS  21.21.050, 21.21.260,  21.21.270],  and                                                                  
     other applicable provisions of this title.                                                                                 
     *Sec. X AS 21.21 is amended  by adding a new section to                                                                    
     read:                                                                                                                      
          Sec. 21.21.420.  Regulations.  The director shall                                                                     
     adopt    regulations   regarding    insurance   company                                                                    
     investments  that  are   consistent  with  the  defined                                                                    
     limits  standards  for   investments  of  the  National                                                                    
     Association  of  Insurance  Commissioners,  as  amended                                                                    
     from time to time."                                                                                                        
     *Sec. XX. AS 21.24.030(a) is amended to read:                                                                              
          (a) All deposits required under AS 21.09.090 for                                                                      
     authority  to transact  insurance in  this state  shall                                                                    
     consist  of   certificates  of   deposit  [,]   or  any                                                                    
     combination of  rated credit instruments of  the United                                                                  
     States,  Canada,   or  state   of  the   United  States                                                                  
     [SECURITIES  OF THE  KINDS DESCRIBED  IN AS  21.21.060,                                                                    
     21.21.080, AND 21.21.090].                                                                                                 
     *Sec. XX AS 21.87.220(b) is amended to read:                                                                               
          (b) AS 21.21 shall [THE FOLLOWING SECTIONS] apply                                                                   
     to  the investments  of  service  corporations, to  the                                                                    
     extent  applicable,  and,  for   the  purposes  of  the                                                                    
     application, a service  corporation shall be considered                                                                    
     to be an  insurer.[: AS 21.21.020-21.21.050, 21.21.290,                                                                  
     AND 21.21.300].                                                                                                            
     *Sec.   XX   AS    21.18.120,   21.18.130,   21.18.140,                                                                    
     21.18.150; 21.21.030,  21.21.040, 21.21.050, 21.21.060,                                                                    
     21.21.070, 21.21.080,  21.21.090, 21.21.100, 21.21.110,                                                                    
     21.21.120, 21.21.130,  21.21.140, 21.21.150, 21.21.160,                                                                    
     21.21.170, 21.21.180,  21.21.190, 21.21.200, 21.21.210,                                                                    
     21.21.220, 21.21.225,  21.21.230, 21.21.240, 21.21.245,                                                                    
     21.21.250, 21.21.260,  21.21.270, 21.21.280, 21.21.290,                                                                    
     21.21.300, 21.21.310,  21.21.321, 21.21.330, 21.21.350,                                                                    
     21.21.355, 21.21.360,  21.21.370, 21.21.380, 21.21.390,                                                                    
     21.21.400,    21.21.600;     AS    21.87.340(7),    and                                                                    
     21.87.340(8) are repealed.                                                                                                 
     *Sec. XX The  uncodified law of the State  of Alaska is                                                                    
     amended by adding a new section to read:                                                                                   
          TRANSITION:  REGULATIONS.  The director of                                                                            
     insurance may immediately  proceed to adopt regulations                                                                    
     necessary to  implement the changes  made by  this Act.                                                                    
     The   regulations   take    effect   under   AS   44.62                                                                    
       (Administrative Procedure Act), but not before the                                                                       
     effective date of the statutory change.                                                                                    
        *Sec. XX Sections XX-XX of this Act take effect                                                                         
     January 1, 2002.                                                                                                           
                                                                                                                                
Number 0239                                                                                                                     
                                                                                                                                
CHARLIE MILLER,  Lobbyist for  Alaska National  Insurance Company                                                               
(ANIC), explained  that ANIC  is one  of three  locally domiciled                                                               
insurance companies  in Alaska and  as such  is one of  the three                                                               
companies whose investments are  regulated under the authority of                                                               
Alaska's  Division  of  Insurance.     All  the  other  insurance                                                               
companies that  underwrite and practice  in Alaska  are domiciled                                                               
elsewhere  and  so  their  investments  are  regulated  by  other                                                               
states.   The companies domiciled  in Alaska have  been operating                                                               
under  some pretty  old  statutes that  haven't  been updated  in                                                               
quite some  time.  To  update those statute would  be cumbersome;                                                               
they are lengthy  and difficult to deal with.   At the suggestion                                                               
of the director  of the Division of Insurance, he  spoke with his                                                               
client about supporting an amendment  authorizing the director to                                                               
promulgate  regulations  that  would address  the  regulation  of                                                               
investments.  He  said his client doesn't feel that  there is any                                                               
conflict between what  is good for the industry and  what is good                                                               
for the  regulators.  Primarily, the  consumers' investments need                                                               
to  be protected;  if  there is  a  claim, the  money  has to  be                                                               
available to  pay the claim.   Companies should not  be investing                                                               
the money  in risky  instruments that would  put claims  at risk,                                                               
which,   unfortunately,  takes   a  lot   of  [statutory   and/or                                                               
regulatory] verbiage to ensure.                                                                                                 
                                                                                                                                
MR.  MILLER said  that Amendment  2  is drafted  so as  to put  a                                                               
constraint on  the director:   he/she can  promulgate regulations                                                               
but  they  have  to  be  consistent  with  the  current  National                                                               
Association of  Insurance Commissioners'  (NAIC) Model Acts.   He                                                               
added that the ANIC feels  that this authority is appropriate and                                                               
that  there are  several steps  in the  process during  which the                                                               
industry can  provide input.   The industry also has  recourse in                                                               
court if  it feels that  the standards of consistency  within the                                                               
NAIC model are  not met, as well as the  recourse of returning to                                                               
the legislature for statutory assistance.   He said that the ANIC                                                               
does  not feel  that the  director will  be given  any unfettered                                                               
authority via Amendment  2, rather, that it is to  the benefit of                                                               
both the  industry and  the director to  have the  flexibility to                                                               
change current  statute via  regulation in  order to  ensure that                                                               
the investment possibilities are current, safe, and appropriate.                                                                
                                                                                                                                
REPRESENTATIVE OGAN said  he does not share  Mr. Millers' comfort                                                               
level with  the bureaucracy.   He added that he  views [Amendment                                                               
2]  as  a  major  delegation  of  legislative  authority  to  the                                                               
administration.   He  noted that  he would  feel better  if there                                                               
were an independent administrative hearing process.                                                                             
                                                                                                                                
Number 0550                                                                                                                     
                                                                                                                                
MR. MILLER  said that he and  his client have given  a great deal                                                               
of thought  about this particular  process, and they do  not feel                                                               
that they are  putting themselves at the mercy  of a bureaucratic                                                               
body that  won't respond to their  needs.  This will  merely be a                                                               
promulgation  of regulations  that  have  very clear  guidelines;                                                               
since the regulations have to  be consistent with the NAIC model,                                                               
the  director and  his staff  won't  have much  flexibility.   He                                                               
added that he feels [Amendment  2] constitutes an appropriate use                                                               
of the regulatory process.                                                                                                      
                                                                                                                                
MR. LOHR added that if Amendment  2 is adopted and HB 184 becomes                                                               
law,  he  intends to  promulgate  as  a proposed  regulation  the                                                               
defined  limits version  of the  NAIC's model  law on  investment                                                               
regulation.  This  is an established law, which,  if the Division                                                               
of Insurance were to propose  updating Alaska statute, is exactly                                                               
what would  be proposed.   This would  be the starting  point for                                                               
public  comment  on  a  proposed regulation;  it  would  then  go                                                               
through the  full Administrative  Procedure Act's  public hearing                                                               
process in which the division  would receive public comments, and                                                               
then based  on that  input, a  regulation would  be adopted.   He                                                               
opined that  the final  product of this  process would  look very                                                               
similar to the NAIC's "investment regulation bill."                                                                             
                                                                                                                                
MR.  LOHR added  that there  is broad  public interest  in making                                                               
sure  that  insurance companies  meet  their  obligations to  pay                                                               
claims well  into the  future, and  if the money  that is  now in                                                               
reserve is  not invested wisely, it  may not be available  to pay                                                               
future claims.   He added  that the regulation that  would result                                                               
from  the   aforementioned  process   would  allow   for  updated                                                               
investment  vehicles.     Investment  products  that   have  been                                                               
invented  in the  last 25  years may  currently be  classified as                                                               
suspect  investments simply  because they  were not  available at                                                               
the time the  original statute was developed,  but the regulatory                                                               
process   would  allow   them   to  be   treated  as   legitimate                                                               
investments.   He said  that the  Division of  Insurance supports                                                               
Amendment  2.   He also  remarked that  he has  not heard  of any                                                               
opposition  to  the concept  of  Amendment  2,  and that  at  the                                                               
national level there  have been extensive public  hearings on the                                                               
model during its development.                                                                                                   
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 3:35 p.m. to 3:37 p.m.                                                                    
                                                                                                                                
Number 0825                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  asked  whether  there  were  any  objections  to                                                               
Amendment 2.  There being no objection, Amendment 2 was adopted.                                                                
                                                                                                                                
Number 0842                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  made a  motion to  adopt Conceptual  Amendment 3,                                                               
"which would be a three-year  basic sunset of the privacy rights.                                                               
The conceptual amendment would read  something to the effect that                                                               
'Those provisions  under AS  21.36.162 would  sunset on  the 90th                                                               
day  of   the  next   regular  session,   two  years   after  the                                                               
promulgation or  adoption of the regulations  authorized for that                                                               
[section].'"                                                                                                                    
                                                                                                                                
Number 0874                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER  objected.  He  asked why the  sunset should                                                               
be three years instead of two years.                                                                                            
                                                                                                                                
CHAIR ROKEBERG  explained that  it would be  two years  after the                                                               
regulations were  promulgated, and it  will take about a  year to                                                               
establish the regulations.                                                                                                      
                                                                                                                                
MR. LOHR added that a three-year  sunset would be preferable to a                                                               
two-year sunset  because the division  would experience  a couple                                                               
of   years  of   operating   under  the   regulations  that   are                                                               
promulgated.                                                                                                                    
                                                                                                                                
REPRESENTATIVE MEYER withdrew his objection.                                                                                    
                                                                                                                                
Number 0967                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  asked whether there  were any  further objections                                                               
to Conceptual Amendment 3.   There being no objection, Conceptual                                                               
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
[HB 184 was  held over; the hearing  on HB 184 was  recessed to a                                                               
call of  the chair,  tentatively scheduled  for the  afternoon of                                                               
4/28/01.]                                                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 0974                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG recessed the House Judiciary Standing Committee                                                                  
meeting at 3:39 p.m., to a call of the chair, tentatively                                                                       
scheduled for the afternoon of 4/28/01.                                                                                         

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