03/14/2018 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB126 | |
| SB80 | |
| HB403 | |
| HB401 | |
| Presentation: Update of the 2020 Census Operations | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 403 | TELECONFERENCED | |
| *+ | HB 401 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | SB 80 | TELECONFERENCED | |
| += | SB 126 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 14, 2018
3:19 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Louise Stutes
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
SENATE BILL NO. 126
"An Act providing for an exception to the regulation of the
practice of medicine for a physician who provides medical
services to an athletic team from another state."
- MOVED SB 126 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 80(L&C)
"An Act relating to telecommunications services for certain
disabled subscribers; and providing for an effective date."
- MOVED HCS CSSB 80(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 403
"An Act relating to the Alaska Life and Health Insurance
Guaranty Association; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 401
"An Act relating to insurance; relating to credit for
reinsurance; insurance standard valuation; and providing for an
effective date."
- HEARD & HELD
PRESENTATION: UPDATE OF THE 2020 CENSUS OPERATIONS
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 126
SHORT TITLE: VISITING PHYSICIANS WITH SPORTS TEAMS
SPONSOR(s): SENATOR(s) MACKINNON
01/16/18 (S) PREFILE RELEASED 1/8/18
01/16/18 (S) READ THE FIRST TIME - REFERRALS
01/16/18 (S) L&C
01/30/18 (S) L&C AT 1:00 PM BELTZ 105 (TSBldg)
01/30/18 (S) Moved SB 126 Out of Committee
01/30/18 (S) MINUTE(L&C)
01/31/18 (S) L&C RPT 4DP
01/31/18 (S) DP: COSTELLO, MICCICHE, MEYER, GARDNER
01/31/18 (S) FIN REFERRAL ADDED AFTER L&C
02/05/18 (S) FIN RPT 4DP
02/05/18 (S) DP: MACKINNON, BISHOP, STEVENS,
MICCICHE
02/05/18 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/05/18 (S) Moved SB 126 Out of Committee
02/05/18 (S) MINUTE(FIN)
02/12/18 (S) TRANSMITTED TO (H)
02/12/18 (S) VERSION: SB 126
02/14/18 (H) READ THE FIRST TIME - REFERRALS
02/14/18 (H) L&C, FIN
03/12/18 (H) L&C AT 3:15 PM BARNES 124
03/12/18 (H) Heard & Held
03/12/18 (H) MINUTE(L&C)
03/14/18 (H) L&C AT 3:15 PM BARNES 124
BILL: SB 80
SHORT TITLE: TELECOMMUNICATIONS: DISABLED SUBSCRIBERS
SPONSOR(s): SENATOR(s) COSTELLO
03/08/17 (S) READ THE FIRST TIME - REFERRALS
03/08/17 (S) L&C, FIN
03/23/17 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/23/17 (S) -- MEETING CANCELED --
04/04/17 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/04/17 (S) Heard & Held
04/04/17 (S) MINUTE(L&C)
04/07/17 (S) L&C RPT CS 2DP 1NR SAME TITLE
04/07/17 (S) DP: COSTELLO, STEVENS
04/07/17 (S) NR: HUGHES
04/07/17 (S) L&C AT 9:00 AM BELTZ 105 (TSBldg)
04/07/17 (S) Moved CSSB 80(L&C) Out of Committee
04/07/17 (S) MINUTE(L&C)
04/14/17 (S) FIN WAIVED PUBLIC HEARING NOTICE,RULE
23
04/15/17 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/15/17 (S) Moved CSSB 80(L&C) Out of Committee
04/15/17 (S) MINUTE(FIN)
04/16/17 (S) FIN RPT CS(L&C) 3DP 4NR
04/16/17 (S) NR: HOFFMAN, MACKINNON, HUGHES, OLSON
04/16/17 (S) DP: BISHOP, VON IMHOF, MICCICHE
04/16/17 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/16/17 (S) -- MEETING CANCELED --
04/17/17 (S) TRANSMITTED TO (H)
04/17/17 (S) VERSION: CSSB 80(L&C)
04/19/17 (H) READ THE FIRST TIME - REFERRALS
04/19/17 (H) L&C
03/12/18 (H) L&C AT 3:15 PM BARNES 124
03/12/18 (H) Heard & Held
03/12/18 (H) MINUTE(L&C)
03/14/18 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 403
SHORT TITLE: LIFE & HEALTH INSURANCE GUARANTY ASSN.
SPONSOR(s): LABOR & COMMERCE
03/05/18 (H) READ THE FIRST TIME - REFERRALS
03/05/18 (H) L&C
03/14/18 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 401
SHORT TITLE: INSURANCE; REINSURANCE;VALUATION; CREDITS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/05/18 (H) READ THE FIRST TIME - REFERRALS
03/05/18 (H) L&C
03/14/18 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
JULI LUCKY, Staff
Senator Anna Mackinnon
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reintroduced SB 126 on behalf of Senator
Mackinnon, prime sponsor.
SENATOR MIA COSTELLO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reintroduced SB 80 as prime sponsor.
JOSH WALTON, Staff
Senator Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reintroduced SB 80 on behalf of Senator
Costello, prime sponsor.
DEAN GATES, President
Alaska Deaf Coalition
Anchorage, Alaska
POSITION STATEMENT: Testified [via interpreter] in support of
SB 80.
MILLIE RYAN, Executive Director
REACH, Inc.; Board Member, Key Coalition of Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 80.
PAM MUELLER-GUY
Southeast Alaska Independent Living (SAIL)
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 80.
RICK NELSON
Alaska Relay Advisory Board
Anchorage, Alaska
POSITION STATEMENT: Testified [via interpreter] in support of
SB 80.
HEIDI KELLY
Governor's Council on Disabilities and Special Education
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 80.
PATRICK REINHART, Executive Director
Governor's Council on Disabilities and Special Education
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 80.
GARY MCDONALD
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 80.
SORCHA HAZELTON, Staff, Representative Sam Kito
Alaska State Legislature
POSITION STATEMENT: Presented HB 403 on behalf of
Representative Kito, prime sponsor.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified in the hearing on HB 403.
DONALD THOMAS, Administrator and Counsel
Alaska Life and Health Insurance Guarantee Association
Anchorage, Alaska
POSITION STATEMENT: Testified in the hearing on HB 403.
JANA-LEE PRUITT, Regional Vice President
American Council of Life Insurers (ACLI)
Louisville, Kentucky
POSITION STATEMENT: Testified in support of HB 403.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified in the hearing on HB 401.
JANA-LEE PRUITT, Regional Vice President
American Council of Life Insurers
Louisville, Kentucky
POSITION STATEMENT: Testified in support of HB 401.
JAMES CHRISTY, Regional Director
US Census Bureau
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint on the "2020 Census
Update & Overview."
ACTION NARRATIVE
3:19:55 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:19 p.m. Representatives
Sullivan-Leonard, Josephson, Knopp, Wool, Kito, and Birch were
present at the call to order.
SB 126-VISITING PHYSICIANS WITH SPORTS TEAMS
3:20:54 PM
CHAIR KITO announced that the first order of business would be
SENATE BILL NO. 126, "An Act providing for an exception to the
regulation of the practice of medicine for a physician who
provides medical services to an athletic team from another
state."
JULI LUCKY, Staff, Senator Anna Mackinnon, Alaska State
Legislature, reintroduced SB 126 on behalf of Senator Mackinnon,
prime sponsor. She stated the proposed bill would provide an
exemption for doctors traveling with sports teams to allow them
to care for the members of the traveling team while in Alaska.
3:22:19 PM
CHAIR KITO said public testimony on SB 126 was still open from
the previous hearing. Upon ascertaining that no one was
available to testify, he closed public testimony.
3:22:33 PM
REPRESENTATIVE WOOL moved to report SB 126 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, it was so ordered.
3:22:56 PM
The committee took an at-ease from 3:22 p.m. to 3:24 p.m.
SB 80-TELECOMMUNICATIONS: DISABLED SUBSCRIBERS
3:24:56 PM
CHAIR KITO announced that the next order of business would be
SENATE BILL NO. 80, "An Act relating to telecommunications
services for certain disabled subscribers; and providing for an
effective date."
3:25:25 PM
REPRESENTATIVE WOOL moved to adopt committee substitute (CS) SB
80 as the working document.
CHAIR KITO objected for the purpose of discussion. He stated
the only change in the CS was to update the effective date.
CHAIR KITO removed his objection. There being no further
objections, it was so ordered.
3:25:52 PM
SENATOR MIA COSTELLO, Alaska State Legislature, reintroduced SB
80 as prime sponsor. She informed that her aide would review
the proposed bill for the committee.
3:26:09 PM
JOSH WALTON, Staff, Senator Mia Costello, Alaska State
Legislature, reintroduced SB 80 on behalf of Senator Costello,
prime sponsor. He said SB 80 would expand the landline
surcharge to aid hearing disabled subscribers to include
cellphones and voice over internet protocol (VOIP) phones.
3:27:14 PM
DEAN GATES, President, Alaska Deaf Coalition, testified [via
interpreter] in support of SB 80. He said the Alaska Deaf
Coalition is advocating for 25,000 Alaskans who have lost their
hearing. He said the proposed bill would allow them to use
mobile phones and internet. He shared his understanding that
the language says the RCA provides support and equipment and
there is a need to change the language to telecommunication
equipment. He said he encourages the [legislature] to pass the
bill as soon as possible. He explained he was signing with an
iPad and an interpreter was speaking for him.
3:32:04 PM
MILLIE RYAN, Executive Director, REACH, Inc.; Board Member, Key
Coalition of Alaska, testified in support of SB 80. She
explained REACH, Inc. provides services for people with
disabilities. She informed she is also representing Key
Coalition of Alaska, a statewide organization for people with
disabilities. She said both REACH, Inc. and Key Coalition
strongly support the bill. She said people with disabilities
want to be independent and make their own appointments, but
because sometimes they are hard to understand, people hang up on
them. She underlined the proposed bill would offer them the
possibility to be more independent.
REPRESENTATIVE BIRCH asked about the technology used to help
people with hearing and speech disabilities.
MS. RYAN said she knows technology keeps improving and becomes
less expensive and more accessible.
REPRESENTATIVE WOOL asked about the technology allowing people
to use video for direct translation.
MS. RYAN said she guessed it is only a matter of time before it
is available.
3:36:06 PM
PAM MUELLER-GUY, Southeast Alaska Independent Living (SAIL),
testified in support of SB 80. She shared a personal experience
in which she had to call for emergency services. She spoke to
the increase in costs in devices to aid people who want to be
independent.
3:38:20 PM
RICK NELSON, Alaska Relay Advisory Board, testified [via
interpreter] in support of SB 80. He said the Alaska Relay
board is a big supporter of SB 80 because it would allow people
who are deaf or hard of hearing or with speech impediments to
live independently and communicate. He stated the only people
paying for the services are people who have land lines and they
are paying .08 cents a month. He said his organization "would
like to have it more across the board and that would include
mobile services." He explained if mobile services were
included, it would drop the surcharge down to .02 cents per line
and this will allow for equipment to help more individuals who
have low income who can't communicate with anyone else outside
their home or community. He stated the Alaska Relay Advisory
Board is currently conducting a pilot project that lends devices
to rural communities. He added if the proposed bill passed, it
would reach out to the whole state and more people would have
the ability to communicate.
3:42:50 PM
HEIDI KELLY, Governor's Council on Disabilities and Special
Education, testified in support of SB 80. She said she speaks
on behalf of the autistic community. She shared her experiences
with her hearing disabilities. She spoke to the technology she
has used to be able to hear. She said the telephone is
difficult or impossible the use without the technology to aid
people with hearing disabilities.
3:46:39 PM
PATRICK REINHART, Executive Director, Governor's Council on
Disabilities and Special Education, testified in support of SB
80. He stated the council had been an early supporter of the
proposed bill and continues to support SB 80.
3:47:15 PM
GARY MCDONALD testified in support of SB 80.
3:47:52 PM
CHAIR KITO closed public testimony on SB 80 upon ascertaining
that no one else was available to testify.
3:48:05 PM
REPRESENTATIVE WOOL moved to report SB 80 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, it was so ordered.
3:48:27 PM
The committee took an at-ease from 3:48 p.m. to 3:50 p.m.
HB 403-LIFE & HEALTH INSURANCE GUARANTY ASSN.
3:50:31 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 403, "An Act relating to the Alaska Life and
Health Insurance Guaranty Association; and providing for an
effective date."
3:50:29 PM
SORCHA HAZELTON, Staff, Representative Sam Kito, presented HB
403 on behalf of House Labor and Commerce Standing Committee,
prime sponsor. She gave some background on HB 403. She
paraphrased the sponsor statement [included in committee
packet], which reads as follows [original punctuation provided]:
House Bill 403 updates the Alaska Life and Health
Insurance Guaranty Act to conform to the National
Association of Insurance Commissioners Life and Health
Guaranty Model Act. These changes update the Act and
improve uniformity nationwide in the administration of
life and health guarantee associations.
House Bill 403 incorporates changes made by the
National Association of Insurance Commissioners to the
Life & Health Insurance Guarantee Association Model
Act (MDL 520) in December 2017, after House Bill 157
had been introduced. These changes added health
maintenance organizations (HMOs) as members of the
association, providing HMO coverage, and addressing
long-term care insolvencies. With the substantial
number of changes made, HB 403 was introduced to help
explain these changes, though few are substantive.
Throughout, numerous conforming changes are made to AS
21.79 consistent with the model law, most of which do
not substantively change the bill.
The Alaska Life and Health Insurance Guarantee
Association (Association) is composed of insurers who
transact life insurance, health insurance, or
annuities in Alaska. The purpose of the Association is
to guarantee that residents and certain nonresidents
will continue to receive benefits in the event one of
the members becomes impaired or insolvent. In order to
accomplish this, the Act directs the insurers to form
a board and collect assessments from members to pay
for the operations of the Association and obligations
of insolvent or impaired members.
House Bill 403 amends terms for consistency with the
model act, raises payment limits, adds language
clarifying what products are included and excluded
from the protections under the Act, and adds language
clarifying that medical and hospital service
corporations and their products are subject to the
provisions of the Act. House Bill 403 amends the
powers and duties section for the Association to
follow the model act, authorizes the board to increase
assessments, grants the Association the ability to
develop procedures to remove an Association governor
for cause, and adds new definitions.
3:52:09 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), testified in
the hearing on HB 403. She said long term care insurance has
been around for many years, but there has been a concern about
the solvency of insurers. She explained the National
Association of Insurance Commissioners (NAIC) took action to
address those insurers. Previously, those insolvencies would
have been covered only by healthcare insurers. She indicated
the bill would bring in life insurers and split potential
insolvencies evenly. She stated the division was still asking
hospital services medical associations to participate. She
mentioned Primera is the only provider and they have not been a
member before. She added the update to the NAIC model also
brought in health maintenance organizations (HMOs). She
remarked the cost of health care is being discussed throughout
the legislature.
3:54:33 PM
MS. WING-HEIER summarized the sectional analysis [included in
committee packet], which reads as follows [original punctuation
provided]:
Sec. 1 AS 21.79.010 is amended to conform to National
Association of Insurance Commissioners' (NAIC) Life
and Health Insurance Guaranty Association Model Act
(MDL 520) model language and clarifies protections
that apply to the failure in performance of
contractual obligation because of the impairment or
insolvency of the member insurer.
Sec. 2 AS 21.79.020(a) is amended to clarify that
applicability includes a nonresident who is not
eligible for coverage by a guaranty association in
another state because the insurer was not licensed at
the time specified in the guaranty association law of
that state.
Sec. 3 AS 21.79.020(b) is amended to have AS 21.79
apply to a contract issued by a hospital or medical
service corporation and defines the terms "annuity
policy or contract" and "certificate under a direct
group life health, annuity, or supplemental policy or
contract". This section also includes health
maintenance organizations (HMOs) in the definition of
"health insurance," for the purposes of AS 21.79.
Sec. 4 AS 21.79.020(c) is amended to make AS 21.79
inapplicable to:
1. a policy or contract providing a hospital,
medical, prescription drug, or other health care
benefit in accordance with 42 U.S.C. 1395w-
211395- w154 or federal regulations adopted under
those sections; (Medicare Choice Program and
Voluntary Prescription Drug Benefit Program)
2. a person who acquires rights to receive
payments through a structured settlement
factoring transaction as defined in 26 U.S.C.
5891(c)(3)(A), regardless of whether the
transaction occurred before or after such
section became effective.
3. structured settlement annuity benefits to
which a payee or beneficiary has transferred the
payee or beneficiary's rights in a structured
settlement factoring transaction as defined in 26
U.S.C. 5891(c)(3)(A), regardless of whether the
transaction occurred before or after 26 U.S.C.
5891(c)(3)(A)
became effective.
• Subsection (c) is also amended to add clarifying
language consistent with the model language and
provide exceptions to the above inapplicability.
Sec. 5 AS 21.79.020(d) Non-substantive changes are
made for either consistency with the NAIC Model or
drafting conventions.
Sec. 6 AS 21.79.020(e) Non-substantive changes made
are for either consistency with the NAIC Model or
drafting conventions, with a citation correction in
paragraph (9).
Sec. 7 AS 21.79.025(a)
• AS 21.79.025(a)(2)(B)(ii) is amended to clarify
that the benefits for which the association may
become liable may not exceed $300,000 for long-
term care insurance as defined under AS
21.53.200. Conforms to model language by
replacing "basic hospital, medical, and surgical
insurance or major medical insurance" with the
term "health benefit plans."
• AS 21.79.025(a)(3) is amended to change "contract
holder" to "contract owner" to be consistent with
the NAIC Model, to clarify that the contract
refers to an unallocated annuity contract issued
to or in conjunction with a government lottery if
the owner is a resident, and to clarify that the
association is not liable to cover more than $5
million in benefits regardless of the number of
policies and contracts held by the owner.
• AS 21.79.025(a)(4) is amended to increase the
coverage limit for net cash surrender and net
cash withdrawal values of annuities from $100,000
to $250,000 for individuals participating in a
governmental retirement benefit plans established
under 26 U.S.C. 401, 26 U.S.C. 403(b) or 26
U.S.C. 457 and covered by an unallocated annuity
contract
• AS 21.79.025(a)(5) is amended to increase the
coverage limit for net cash surrender and net
cash withdrawal values, if any, from $100,000 to
$250,000 to each payee of a structured settlement
annuity, or beneficiary of the payee if the payee
is deceased, in the aggregate.
Sec. 8 AS 21.79.025(c) is amended to not require the
association to reissue the contractual obligations of
an insolvent or impaired insurer under a covered
policy or contract when the obligations do not
materially affect the economic values or economic
benefits of the covered policy or contract.
Sec. 9 AS 21.79.025(d) is amended to correct a
typographical error, to replace "basic hospital,
medical, and surgical insurance or major medical
insurance" with the term "health benefit plans," and
to add the word "contract" as is consistent with the
model language.
Sec. 10 AS 21.79.025 is amended to add a new
subsection: long-term care rider benefits to a life
insurance policy or contract are considered to be the
same type of benefits as the basic life insurance
policy or contract to which it relates.
Sec. 11 AS 21.79.040(a) is amended to require a
hospital or medical service corporation business and
an HMO business to become members of an association.
Sec. 12 AS 21.79.050(a) is amended to increase the
number of representatives on the Board of Governors of
a guaranty association to 7-11 from 5-9.
Sec. 13 AS 21.79.060(a) is amended to allow the
association to provide loans to assure payment of the
contractual obligations of the impaired insurer until
those obligations are guaranteed, reinsured, or
assumed; also gives authority to reissue policies or
contracts if the member insurer is impaired.
Sec. 14 AS 21.79.060(d) AS 21.79.060(d)(1) is amended
to better track the model language by combining
existing paragraphs 1 3 under AS 21.79.060(d).
Tracking NAIC models and language promotes national
uniformity and state-based regulation, and ease of
interpretation, compliance, administration,
enforcement, and amendment.
• AS 21.79.060(d)(1), consistent with the addition
of loans under AS 21.79.060(a)(2) under Section
13 above, is amended to authorize the association
to utilize loans necessary to discharge the
association's duties under AS 21.79.060.
• AS 21.79.060(d)(2) is amended to better track the
model language by placing existing subsections
(e) (j) in this paragraph. This subsection also
adds the terms "contract," "enrollee," and HMOs,
as is consistent with the model language.
Sec. 15 AS 21.79.060(k) is amended to conform with the
model language by adding the word "contract."
Sec. 16 AS 21.79.060(l) is amended to require the
association to provide a report to the liquidator
regarding the premium collected by the association if
requested by the liquidator of an insolvent insurer.
Sec. 17 AS 21.79.060(n) is amended to authorize the
association to impose a permanent policy or contract
lien under a guarantee, assumption, or reinsurance
agreement if approved by a court and the association
finds that the amount that may be assessed is less
than the amount needed to assure full and prompt
performance of the association's duties.
Sec. 18 AS 21.79.060(o) is amended to conform to the
model language and change a subsection citation to
conform with amendments being made.
Sec. 19 AS 21.79.060(p) is amended to change a
subsection citation to conform to amendments being
made to the section.
Sec. 20 AS 21.79.060(s) is amended to conform to the
model language by adding the words "policies,"
"contracts," and "enrollee."
Sec. 21 AS 21.79.060(t) is amended to conform to model
language and to allow the association to file rate and
premium increases with the director for policies or
contracts.
Sec. 22 AS 21.79.060 adds a new subsection (aa) to
better track the model language by incorporating the
provisions in existing AS 21.79.060(u) (x).
Sec. 23 AS 21.79.070(a) is amended to require that any
assessment of association members by the association
board must be adopted by a resolution of the board.
Sec. 24 AS 21.79.070(c) is amended to increase the
amount of a non-pro-rata assessment of from $250 per
calendar year to $500 per calendar year. It also
amends the class B assessment to include pro-rata
assessments related to long-term care insurance, as
well as changing the manner in which Class A and Class
B assessments are made.
Sec. 25 AS 21.79.070(f) is amended to conform to the
model language by adding the term "member insurer" in
place of "insurer."
Sec. 26 AS 21.79.070(j) is amended to conform to the
model language by adding the term "member insurer" in
place of "insurer."
Sec. 27 AS 21.79.070(k) is amended to allow hospital
and medical service corporations and HMOs to consider
the amount necessary to meet its assessment
obligations when determining its premium rates and
policy owner dividends.
Sec. 28 AS 21.79.070(l) is amended to conform to model
language by adding the term "member insurer."
Sec. 29 AS 21.79.080(c) is amended to require the
association board to adopt a plan of operation that
includes
(1) procedures for removing a member of the board for
cause, including procedures for removing a member of
the board who becomes an impair or insolvent insurer,
and (2) policies and procedures for addressing
conflicts of interest.
Sec. 30 AS 21.79.090(b) is amended to conform to the
model language by replacing the term "insurance" with
the term "business."
Sec. 31 AS 21.79.090(c) is amended to (1) clarify that
only a final action of the board may be appealed, and
(2) increase the time by which an appeal may be taken
from 30 days to 60 days after the date the notice of
the board's action is mailed.
Sec. 32 AS 21.79.090(d) is amended to clarify that the
liquidator, rehabilitator, or conservator of an
insolvent insurer may notify all interested persons of
the effect of AS 21.79.
Sec. 33 AS 21.79.100(a) is amended to require the
director to notify other insurance regulatory
officials in the country when issuing orders for the
security of contract owners and certificate holders.
Sec. 34 AS 21.79.100(e) is amended to allow the
director to seek the association board's advice and
recommendations as to the financial condition of
hospital and medical service corporations and HMOs.
Sec. 35 AS 21.79.100(f) is amended to enable the
association board to make reports and recommendations
to the director relating to the solvency of hospital
and medical service corporations and HMOs.
Sec. 36 AS 21.79.100(h) is amended to conform to model
language by using the term "member insurer."
Sec. 37 AS 21.79.110(c) is amended to add the words
"or contract," as is consistent with the model
language.
Sec. 38 AS 21.79.110(d) is amended to expand the list
of those situations where the court may or must
consider the contributions of the parties when
distributing ownership rights.
Sec. 39 AS 21.79.110(e) is amended to conform to model
language by using the term "member insurer."
Sec. 40 AS 21.79.110(f) is amended to conform to model
language by using the term "member insurer," and
adding the words "or contract" after "policy."
Sec. 41 AS 21.79.140 is amended to (1) clarify that a
cause of action may not arise for an action or
omission of the association and its agents and
employees, members of the Board of Governors, member
insurers, and agents and employees of member insurers,
and the director of the division of insurance and the
director's representatives in performing their duties
under AS 21.79, and (2) extend the immunity to such
entities' participation in an organization of one or
more state associations of similar purposes and to
that organization and its agents or employees.
Sec. 42 AS 21.79.150 is amended to extend the time a
proceeding involving an insolvent insurer may be
stayed from 60 days to 180 days after the date of a
final order of liquidation, rehabilitation, or
conservation in order to allow the association
additional time to exercise a power or duty authorized
under AS 21.79.
Sec. 43 AS 21.79.160(a) is amended to clarify that the
section does not apply to entities that do not sell or
solicit coverage by a hospital or medical service
corporation or coverage by an HMO; conforms to model
language by replacing the term "insurer" with "member
insurer."
Sec. 44 AS 21.79.160(b) is amended to conform to model
language by including the terms "member," "policy
owner," "contract owner," "certificate holder," and
"enrollee."
Sec. 45 AS 21.79.160(c) is amended to conform to model
language by including the words "member," "policy
owner," "contract owner," and "certificate owner."
Prohibits hospital or medical service corporations or
HMOs from using the existence of the association for
sales, solicitation, or inducement to purchase
insurance.
Sec. 46 AS 21.79.900(5) amends the term "called" to
(1) mean a notice has been mailed by the association
to member insurers requiring that an authorized
assessment be paid within the time set out in the
notice, and (2) include that an authorized assessment
becomes "called" when notice is mailed by the
association.
Sec. 47 AS 21.79.900(6) amends the term "contractual
obligation" to clarify that the term only applies to
an obligation for which coverage is provided under AS
21.79.020(a), (b), (d), and (e).
Sec. 48 AS 21.79.900(7) amends the term "covered
policy" to include "covered contract."
Sec. 49 AS 21.79.900(10) amends the term "member
insurer" to include a hospital or medical service
corporation licensed under AS 21.87, and includes even
those whose license or certificate of authority has
been suspended, revoked, not reviewed, or voluntarily
withdrawn.
Sec. 50 AS 21.79.900(12) is amended to conform to
model language by changing the term "owner" in regard
to a policy or contract to "policyholder," "policy
owner," and "contract owner."
Sec. 51 AS 21.79.900(13) amends the term "plan
sponsor" to clarify that the term applies to groups of
representatives of parties, similar to two or more
employers, or jointly by one or more employers and one
or more employee organizations, an association,
committee, or joint board of trustees who establish or
maintain the benefit plan.
Sec. 52 AS 21.79.900(14) amends the term "premium" to
clarify that assessable premium may not be reduced
on account of AS 21.79.020(c)(4) relating to interest
limitations and limitations with respect to one
individual, one participant, and one contract owner.
Sec. 53 AS 21.79.900(15) conforms to model language by
amending the definition of "receivership court" and
uses the term "member insurer" in place of "insurer."
Sec. 54 AS 21.79.900(16) amends the term "resident" to
delete language considered unnecessary under state
drafting conventions.
Sec. 55 AS 21.79.900(19) amends the term "supplemental
contract" to mean a written agreement entered into
for the distribution of proceeds under life, health,
or annuity policy or contract benefits.
Sec. 56 AS 21.79.900 is amended to add new paragraphs
to define the terms "health benefit plan", "election
date" and "extra contractual claim". The section is
also amended to define "published monthly average",
previously defined under AS 21.79.020(f).
Sec. 57 AS 21.86.260(a) is amended to apply AS 21.79
to HMOs.
Sec. 58 AS 21.87.340 is amended to add AS 21.79 to the
list of statutory provisions which apply to hospital
and medical service corporations.
Sec. 59 Repeals the following provisions
• AS 21.79.020(f) defining "published monthly
average" as the definition is moved under AS
21.79.900.
• AS 21.060(c) is repealed as the provision no
longer is in the model language.
• AS 21.79.060(e) (j) are repealed as these
provisions have been relocated to AS
21.79.060(d).
• AS 21.79.060(u) (x) are repealed as these
provisions have been relocated to
AS21.79.060(aa).
• AS 21.79.110(e) is repealed as unnecessary
because the state has adopted Section 602 of the
NAIC Insurers Receivership Model Act (MDL 555)(AS
21.78.325).
Sec. 60 Provides for an uncodified new section
outlining the timing of when the director may adopt
regulations.
Sec. 61 Provides that section 60 of the Act takes
effect immediately.
Sec. 62 Provides a July 1, 2018 effective date.
3:57:02 PM
REPRESENTATIVE SULLIVAN-LEONARD referred to Section 7 and asked
about the liability amount.
MS. WING-HEIER answered the liability amount is $300,000 for
disability income as defined, and $300,000 for long-term care is
new. She said it was clarifying that the limit is specific to
long-term care. She added the last two limits are increasing
from $100 [thousand] to $250 [thousand], which is what a
consumer could collect, provided as funded if their policy were
with an insolvent insurer.
CHAIR KITO summarized that the aim is to catch up with late
adopted changes to the model law. He added long-term care
insolvency is a big issue.
4:08:39 PM
DONALD THOMAS, Administrator and Counsel, Alaska Life and Health
Insurance Guarantee Association, testified in the hearing on HB
403. He said that during the past 8 years, he has been engaged
in efforts to have the Guarantee Association's Organic Act
updated. He explained HB 403 would give the board of governors
the tools to affect the purposes of the Association's Act. He
underlined the board is operating under outdated rules and has
had to incur expenses that could have been avoided had it not
been operating under an outdated system. He said HB 403 would
ensure functional consistency within the nationwide state-based
guarantee system. He added it is important as presently there
is no health or life insurance domesticated in Alaska. He said
with HB 403 there is an increased likelihood that Alaska law
will be applied to Alaska policyholders.
4:10:59 PM
JANA-LEE PRUITT, Regional Vice President, American Council of
Life Insurers (ACLI), testified in support of HB 403. She
stated the American Council of Life Insurers (ACLI) is a
national trade association representing around 290 companies
which offer life insurance annuities, long term care insurance,
disability income insurance, and reinsurance. She added ACLI
has 219 members licensed to do business in Alaska, and 96
percent of all life insurance and annuity payments to Alaska
citizens are made by ACLI member companies. She stated ACLI
supports the bill. She informed HB 403 would better protect
insured residents of Alaska in the unlikely event of an insurer
insolvency by amending the Alaska Life and Health Insurance
Guaranty Association Act to incorporate amendments made to the
National Association of Insurance Commissioners ("NAIC") Life &
Health Insurance Guaranty Association Model Act, upon which the
Alaska Act is based.
MS. PRUITT said HB 403 would increase coverage limits for
individuals covered by unallocated annuity contracts and
structured settlement annuities from $100,000 to $250,000 and
make the Alaska Act functionally consistent with the NAIC Model
Act. Forty-five states have already amended their guaranty
association laws to achieve functional consistency, which is
critical to ensuring multi-state insolvencies are handled as
quickly and efficiently as possible and policyholder claims are
treated similarly, regardless of a policyholder's state of
residence. She underlined that lack of consistency among state
guaranty association statutes has led to unnecessary and
expensive litigation in the past, which can delay claim payments
and divert resources from protecting policyholders.
MS. PRUITT stated HB 403 would also help ensure the continued
sustainability of the state-based guaranty association system in
the event of the insolvency of a carrier that writes long-term
care insurance. She said the current assessment formula for
long-term care insurance insolvencies is not sustainable. The
newly-revised NAIC Model Act and HB 403 would distribute the
assessments for long-term care insurance insolvencies among
companies writing life, health, annuity products. Regulators,
insurers, consumer representatives and experts in the insurance
receivership community worked together for over a year to make
these critical changes to the NAIC Model Act. She added HB 403
would help ensure the Alaska Act which was created to protect
consumers and act as a safety net in the event of an insurer
insolvency remains stable, fair, and sustainable through
sufficient assessment capacity.
MS. PRUITT said there are a few minor revisions required and
ACLI is in discussion with Ms. Wing-Heier and her staff to make
sure the revisions comply with Alaska's legislative drafting
conventions.
4:14:28 PM
CHAIR KITO opened testimony on HB 403.
CHAIR KITO held over HB 403.
HB 401-INSURANCE; REINSURANCE;VALUATION; CREDITS
4:14:52 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 401, "An Act relating to insurance; relating to
credit for reinsurance; insurance standard valuation; and
providing for an effective date."
4:14:59 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), testified in
the hearing on HB 401. She explained that insurers use re-
insurers to back their ability to pay claims. She said re-
insurers come from out of the country and the state doesn't have
the authority to examine financials and accreditation of foreign
reinsurers doing business in Alaska. She described the covered
agreement stating insurers don't have to pledge 100 percent of
every loss to back the loss. She said the NAIC has adopted newer
standards to ensure claims get paid.
4:18:36 PM
CHAIR KITO noted issues regarding legislative drafting of the
proposed bill. He asked Ms. Wing-Heier to share the direction
the proposed bill would be going.
4:19:38 PM
REPRESENTATIVE KNOPP asked whether the federal government
addresses what the state was attempting.
MS. WING-HEIER said, "Yes and no." She said the federal
government has challenged the states to pass the bill as
amended.
CHAIR KITO noted that the states regulate insurance
individually.
MS. WING-HEIER answered, hat is true. She explained the
division values state-based regulation as what works for Alaska
won't work for other states. She added state-based regulation
has worked for 150 years.
4:21:18 PM
REPRESENTATIVE WOOL asked why there is a shortage of American
companies in reinsurance.
MS. WING-HEIER answered there are lots of domesticated insurance
companies but sometimes the risks are so big that the companies
can't get enough re-insurance to cover the entire payment
required.
4:22:31 PM
JANA-LEE PRUITT, Regional Vice President, American Council of
Life Insurers, testified in support of HB 401. She said the
proposed bill would repeal and reenact portions of Alaska
statute governing credit for reinsurance, making them consistent
with NAIC model law which has been revised twice in recent years
to modernize reinsurance regulations in the U.S. She added that
HB 401 would govern the circumstances under which the Division
of Insurance would allow a life insurer to take credit for
reinsurance in its financial statements as an asset or a
reduction from liability.
MS. PRUITT stated the second section of HB 401 would amend
Alaska's valuation law to be consistent with NIAC's valuation
law. She explained life insurers set aside capital called
"reserves" to ensure they will be able to pay future claims.
She stated that until recently, the formula for calculating life
insurance reserves was a "one size fits all" approach. She said
in 2017 a new system called principle-based reserving (PBR) was
enacted in nearly every state. She explained PBR ensures that
reserves match the actual risk assumed by insurers. To
implement PBR, state legislatures must enact both the standard
valuation law approved by the NAIC in 2009 and the revisions
made to the NAIC standard non-forfeiture law in 2012. She
stated HB 401 includes the revisions to both those laws and
would be a major step forward in the process of implementing PBR
in Alaska. She stated there are one or two minor revisions that
need to be finalized.
4:24:47 PM
CHAIR KITO asked about the principles of PBR.
4:25:00 PM
MS. WING-HEIER said the second part of the bill deals with PBR.
She said life insurers have always had a "one size fits all"
approach to how reserves are set. She remarked the approach is
somewhat antiquated. She added PBR will allow the state to look
at the risks that insurance companies have taken on in a
different manner. She stated the industry supports the proposal
because it allows for an accurate portrayal of the risks
insurers are taking on.
4:26:34 PM
CHAIR KITO clarified that PBR stood for principle-based
reserves.
4:26:54 PM
REPRESENTATIVE WOOL asked whether the proposal was akin to a
credit check on the insurance companies.
MS. WING-HEIER answered in the affirmative.
4:27:13 PM
CHAIR KITO opened public testimony on HB 401.
CHAIR KITO held over HB 401.
4:27:44 PM
The committee took an at-ease from 4:27 p.m. to 4:29 p.m.
^Presentation: Update of the 2020 Census Operations
Presentation: Update of the 2020 Census Operations
4:29:18 PM
CHAIR KITO announced that the final order of business would be a
presentation on "Update of the 2020 Census Operations" by James
Christy, Regional Director, Los Angeles Regional Office, US
Census Bureau.
4:29:30 PM
JAMES CHRISTY, Regional Director, US Census Bureau, presented a
PowerPoint on the "2020 Census Update &
Overview." He provided a brief history of the US Census.
REPRESENTATIVE BIRCH asked whether the census counts
undocumented people in the United States.
MR. CHRISTY answered the language in the U.S. Constitution
states the census counts the actual amount of people in the U.S.
He said the census counts everyone that is living in the U.S.
regardless of citizenship status.
REPRESENTATIVE BIRCH mentioned Alaska only has one [U.S.] House
Representative. He remarked there are a lot of undocumented
individuals in California and if they are counted, then the
number of representatives would increase. He asked how the
calculation is reconciled.
MR. CHRISTY described the apportionment process. He explained
there is an algorithm. He added some states will have a small
population threshold. He said, "It's the laws of equal
proportions."
4:33:58 PM
REPRESENTATIVE BIRCH asked to receive the information.
CHAIR KITO reminded that Alaska is a beneficiary of the system
and has more representation than would strictly be entitled
according to the calculation.
4:35:02 PM
REPRESENTATIVE WOOL asked whether the number of representatives
has gone up.
MR. CHRISTY answered the number has been 435 for some time. He
informed that Congress could add to that.
4:35:36 PM
MR. CHRISTY addressed slide 2, "Why We Do a Census":
• Article 1, Section 2 of the US Constitution
- The actual Enumeration shall be made within
three Years after the first Meeting of the
Congress of the United States, and within every
subsequent Term of ten Years, in such Manner as
they shall by Law direct.
• Key Purpose is Apportioning the US House of
Representatives
4:36:43 PM
MR. CHRISTY spoke to slide 3, "Local Update of Census Addresses
(LUCA)":
• What is LUCA?
• Why Participate in LUCA?
• Who can Participate in LUCA?
- States
- Counties
- Incorporated places (Cities, towns)
- Federally recognized tribes and Alaska Native
Regions
MR. CHRISTY explained there had been a series of workshops
and training programs about LUCA in Alaska.
4:38:07 PM
MR. CHRISTY addressed "LUCA Status for Alaska" on slides 4 and
5.
• July 2017
- Invitation mailing to highest elected official
and working contacts
• October/ November 2017
- In person trainings and Alaska specific
webinars hosted by the Alaska State Data Center
- Reminder letter mailing
• December/January 2018
- Targeted contacts by SDC and Regional office to
large governments
- Email reminders and closeouts to all contacts
- Reminder and closeout mailing
• 30 percent of Governments participating,
including the
State of Alaska
• 100 percent of the population is covered though
the
participation by the State of Alaska
• 89 percent of the population is covered though
Boroughs/Alaska Native Regions/cities
• Next steps
- Materials produced and delivered though April
2018
- 23 percent of participants have received their
materials
- 120-day calendar review period
4:38:40 PM
REPRESENTATIVE SULLIVAN-LEONARD asked whether the census uses
Department of Commerce, Community & Economic Development (DCCED)
staff to connect homes, names and places.
MR. CHRISTY answered the question would be addressed in a
subsequent slide.
4:39:12 PM
MR. CHRISTY spoke to slide 6, "Area Census Office (ACO) in
Anchorage, AK":
• There are a total of 248 Area Census Offices in
the nation.
• Anchorage ACO is scheduled to open in Jan 2019 to
support the 2020 Census field operations
• Address Canvassing in the fall of 2019
• Remote Alaska enumeration
• Non-response Follow up in early summer of 2020
4:40:46 PM
MR. CHRISTY explained "How we do the Census" on slide 7:
1. Advance Notice:
• 2/3 will get mailing
• 1/4 will get mail delivery
2. Online response - expecting 60 percent 70 percent
will respond online
3. Will hire staff to follow-up on non-response
4. #1 doesn't equal to 100 percent
MR. CHRISTY described "Remote AK/Other Populations" on slide 8.
Special operation to count people in the remote areas
of Alaska (see map)
• Conducted in January April 2020
- First person in the 2020 Census will be counted
in Alaska!
• Military
- Conducted incorporation with the Dept. of
Defense
- Most captured administratively
• Other Populations
- Group Quarters
- Homeless
- Transitory locations
4:45:24 PM
CHAIR KITO asked about efforts to count the homeless.
MR. CHRISTY explained that the census takers tend to count the
homeless population over 2 to 3 days. He said they go to
shelters and count people who are there overnight. He added they
also look for mobile services such as meals in a park. He
stated the third activity is to identify the street locations
where people are sleeping. He underlined the enumerators do not
wake people up but do attempt to ensure the counts are accurate.
REPRESENTATIVE BIRCH asked how soon the information is publicly
available after the information is gathered.
MR. CHRISTY answered the date is in statute. He informed the
data is delivered to the President for purposes of apportionment
by December 31, 2020. He added his department likes to deliver
before that date. He said the office will also deliver to the
governor and to the senate and house leadership of each state by
April 1, 2021, for the purposes of the redistricting process.
4:48:10 PM
MR. CHRISTY moved to slide 9, "Recruiting, Hiring, & Staffing,
Anchorage ACO positions":
• Summer 2018
- ACO Management (approx. 10)
• Fall 2018
- ACO office staff, Recruiting Assistants
(approx. 25)
- Partnership Specialists (TBD)
• Spring 2019
- Address Canvassing field staff (300 plus)
- Remote Alaska field staff (TBD)
• Fall 2019
- Non-Response Follow-Up field staff (TBD)
MR. CHRISTY continued to describe the recruiting
information on slide 10:
• Online application (Paper Alternative)
• Competitive pay rates
• Qualifications
- U.S Citizen
- Pass a background check
- Veteran's Preference
4:49:29 PM
MR. CHRISTY address the "Census Partnership and Engagement
Program (CPEP)" on slides 11 and 12:
• Goals
- Improve public cooperation
- Leverage existing networks and "trusted voices"
- Focus on communities who are less likely to
respond
- Formation of Complete Count Committees
- Support operational efforts
• Partnership Specialist stationed in Alaska since
10/2016
• Met with tribes and Alaska Native Regional
governments to promote LUCA and build contact
lists
• Continue working with partners/stakeholders to
promote the important of the 2020 Census
• Continue to expand and increase our partnership
presence in Alaska
• Alaska Working Group is a great example!
4:52:12 PM
REPRESENTATIVE SULLIVAN-LEONARD remarked that she found the
census takers in the previous census "very pushy," and "quite
intrusive." She asked whether there was a format for answering
basic questions without contributing to data-driven information
for [Washington] D.C. statistics.
MR. CHRISTY answered that for the 2020 census the subjects have
been submitted to Congress. He added there are other programs
that are more in-depth. He said the upcoming census would
involve only seven questions.
4:55:04 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:55 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB80 Ver O.pdf |
HL&C 3/14/2018 3:15:00 PM |
SB 80 |
| HB 401 Transmittal Letter 3.6.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 401 |
| HB 401 Fiscal Note-DCCED DOI 3.6.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 401 |
| HB 401 ver A 3.6.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 401 |
| HB 401 Sectional 3.6.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 401 |
| HB157-403 Summary of Changes 3.13.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 157 |
| HB403 Sectional Analysis 3.13.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 403 |
| HB403 Sponsor Statement 3.13.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 403 |
| HB403 Fiscal Note DCCED DOI 3.9.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 403 |
| HB403 version D.PDF |
HL&C 3/14/2018 3:15:00 PM |
HB 403 |
| HB403 Sponsor Statement 3.13.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
HB 403 |
| HLAC Update on 2020 Census Operation 3.12.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
Presentation Census |
| SB080 Letters of Support 3.15.18.pdf |
HL&C 3/14/2018 3:15:00 PM |
SB 80 |