Legislature(2005 - 2006)CAPITOL 17

03/31/2006 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 29 HEALTH CARE INSUR./ COMP HEALTH INS. ASSN TELECONFERENCED
Moved CSHB 29(L&C) Out of Committee
= HB 480 INSURANCE COMPANY SELF-AUDIT INFORMATION
<Bill Hearing Postponed>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 273 MOTOR VEHICLE SALES TELECONFERENCED
Moved Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 31, 2006                                                                                         
                           3:32 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Tom Anderson, Chair                                                                                              
Representative Pete Kott                                                                                                        
Representative Bob Lynn                                                                                                         
Representative Norman Rokeberg                                                                                                  
Representative Harry Crawford                                                                                                   
Representative David Guttenberg                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Gabrielle LeDoux                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 273                                                                                                             
"An Act relating to a  motor vehicle dealer's selling or offering                                                               
to sell  motor vehicles  as new  or current models  or as  new or                                                               
current model motor vehicles having manufacturer's warranties."                                                                 
                                                                                                                                
     - MOVED SB 273 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 29                                                                                                               
"An  Act   relating  to   health  care   insurance  and   to  the                                                               
Comprehensive Health Insurance Association;  and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSHB 29(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
HOUSE BILL NO. 480                                                                                                              
"An Act relating to voluntary  self-evaluative audits by insurers                                                               
and  providing   for  an  insurance   compliance  self-evaluative                                                               
privilege;  and  indirectly amending  Rules  104,  402, and  501,                                                               
Alaska Rules of  Evidence, Rules 16, 26, 30, 31,  33, 34, 36, and                                                               
40, Alaska  Rules of Civil Procedure,  and Rules 15, 16,  and 17,                                                               
Alaska Rules of Criminal Procedure."                                                                                            
                                                                                                                                
     - BILL HEARING POSTPONED                                                                                                   
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 273                                                                                                                  
SHORT TITLE: MOTOR VEHICLE SALES                                                                                                
SPONSOR(s): SENATOR(s) COWDERY                                                                                                  
                                                                                                                                
02/08/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/08/06       (S)       TRA, L&C                                                                                               
02/23/06       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
02/23/06       (H)       -- Meeting Canceled --                                                                                 
03/02/06       (S)       TRA AT 2:00 PM FAHRENKAMP 203                                                                          
03/02/06       (S)       Moved  SB 273 Out of Committee                                                                         
03/02/06       (S)       MINUTE(TRA)                                                                                            
03/03/06       (S)       TRA RPT 4DP                                                                                            
03/03/06       (S)       DP:   HUGGINS,    THERRIAULT,   COWDERY,                                                               
                         KOOKESH                                                                                                
03/16/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/16/06       (S)       Moved  SB 273  Out of Committee                                                                        
03/16/06       (S)       MINUTE(L&C)                                                                                            
03/17/06       (S)       L&C RPT 5DP                                                                                            
03/17/06       (S)       DP: BUNDE, DAVIS, ELLIS, SEEKINS,                                                                      
                         STEVENS B                                                                                              
03/20/06       (S)       TRANSMITTED TO (H)                                                                                     
03/20/06       (S)       VERSION: SB 273                                                                                        
03/22/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/22/06       (H)       L&C, JUD                                                                                               
03/27/06       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
03/27/06       (H)       Heard & Held                                                                                           
03/27/06       (H)       MINUTE(L&C)                                                                                            
03/29/06       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
03/29/06       (H)       Heard & Held                                                                                           
03/29/06       (H)       MINUTE(L&C)                                                                                            
03/31/06       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB  29                                                                                                                  
SHORT TITLE: HEALTH CARE INSUR./COMP HEALTH INS. ASSN                                                                           
SPONSOR(s): REPRESENTATIVE(s) ROKEBERG                                                                                          
                                                                                                                                
01/10/05       (H)       PREFILE RELEASED 12/30/04                                                                              
01/10/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/10/05       (H)       L&C, HES                                                                                               
04/08/05       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
04/08/05       (H)       Heard & Held                                                                                           
04/08/05       (H)       MINUTE(L&C)                                                                                            
04/12/05       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
04/12/05       (H)       <Pending Referral>                                                                                     
03/31/06       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RYAN MAKINSTER, Staff                                                                                                           
to Senator John Cowdery                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during hearing on SB 273                                                               
on behalf of the sponsor.                                                                                                       
                                                                                                                                
KATIE CAMPBELL, Actuary-Life and Health                                                                                         
Juneau Office                                                                                                                   
Division of Insurance                                                                                                           
Department  of   Commerce,  Community,  &   Economic  Development                                                               
(DCCED)                                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During hearing on HB  29, explained changes                                                               
made by the committee substitute.                                                                                               
                                                                                                                                
JOHN GEORGE, Lobbyist                                                                                                           
American Family Life Assurance Company of Columbus (AFLAC)                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During hearing on HB  29, expressed support                                                               
and answered questions.                                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR TOM ANDERSON  called the House Labor  and Commerce Standing                                                             
Committee  meeting  to  order at  3:32:24  PM.    Representatives                                                             
Crawford, Rokeberg, Lynn,  and Anderson were present  at the call                                                               
to order.   Representatives  Kott and  Guttenberg arrived  as the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
3:32:55 PM                                                                                                                    
                                                                                                                                
SB 273-MOTOR VEHICLE SALES                                                                                                    
                                                                                                                                
CHAIR ANDERSON announced  that the first order  of business would                                                               
be  SENATE BILL  NO. 273,  "An Act  relating to  a motor  vehicle                                                               
dealer's selling  or offering  to sell motor  vehicles as  new or                                                               
current models or  as new or current model  motor vehicles having                                                               
manufacturer's warranties."                                                                                                     
                                                                                                                                
3:33:21 PM                                                                                                                    
                                                                                                                                
RYAN  MAKINSTER,  Staff to  Senator  John  Cowdery, Alaska  State                                                               
Legislature, sponsor,  said that  it is  the sponsor's  intent to                                                               
leave  the  bill  as  currently  written.   He  stated  that  the                                                               
language that  was previously discussed would  drastically change                                                               
the bill,  adding that  the bill  is merely  intended to  fix the                                                               
statutory language so that it is enforceable.                                                                                   
                                                                                                                                
3:33:58 PM                                                                                                                    
                                                                                                                                
CHAIR ANDERSON informed  the committee of his intent  to move the                                                               
bill at this time.                                                                                                              
                                                                                                                                
3:34:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG moved  to report SB 273  out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
REPRESENTATIVE KOTT objected,  and asked if the  sponsor would be                                                               
amenable to an immediate effective date.                                                                                        
                                                                                                                                
3:34:55 PM                                                                                                                    
                                                                                                                                
MR. MAKINSTER  replied that  the sponsor does  not wish  to amend                                                               
the bill at  this time, and remarked that this  may happen in the                                                               
next committee of referral.                                                                                                     
                                                                                                                                
3:35:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOTT removed his objection.                                                                                      
                                                                                                                                
3:35:55 PM                                                                                                                    
                                                                                                                                
There being  no further objection,  SB 273 was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
HB 29-HEALTH CARE INSUR./COMP HEALTH INS. ASSN                                                                                
                                                                                                                                
3:36:11 PM                                                                                                                    
                                                                                                                                
CHAIR ANDERSON announced  that the final order  of business would                                                               
be HOUSE BILL  NO. 29, "An Act relating to  health care insurance                                                               
and  to  the  Comprehensive  Health  Insurance  Association;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
3:36:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG made  a motion to adopt  CSHB 29, Version                                                               
24-LS0191\R,  Bailey, 3/22/06,  for discussion  purposes.   There                                                               
being no objection, Version R was before the committee.                                                                         
                                                                                                                                
3:37:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG  said that  when the bill  was previously                                                               
heard,  objections were  raised  regarding the  assessments.   He                                                               
stated  that Version  R removes  the sections  of the  bill which                                                               
were  of concern  in  addition to  changing  the funding  source.                                                               
Furthermore, Version R  relies on the current  assessments to the                                                               
health  insurance industry  for the  additional monies  needed to                                                               
keep  the  Alaska   Comprehensive  Health  Insurance  Association                                                               
(ACHIA)  pool alive.   He  explained  that it  would entitle  the                                                               
insurer  to a  premium  tax credit  equal to  50  percent of  the                                                               
assessment.  He  added that currently, the  assessments are about                                                               
$3.5 million.  He noted a  letter of support from ACHIA, which is                                                               
included in members' packets.                                                                                                   
                                                                                                                                
3:39:51 PM                                                                                                                    
                                                                                                                                
KATIE CAMPBELL, Actuary-Life and  Health, Juneau Office, Division                                                               
of  Insurance,  Department  of Commerce,  Community,  &  Economic                                                               
Development  (DCCED), explained  the changes  made by  Version R.                                                               
Section 4, she  said, clarifies that the  insurers' membership is                                                               
based on  the major  medical premium.   She  said that  Section 5                                                               
amends  the process  with which  ACHIA  determines liability  for                                                               
unpaid assessments.  She stated  that this section clarifies that                                                               
the insurer must  cease to do business in the  state before it is                                                               
no longer  assessed.   Section 6,  she said,  is the  premium tax                                                               
off-set.   She went  on to  say that  Section 7  redefines "major                                                               
medical".                                                                                                                       
                                                                                                                                
3:41:52 PM                                                                                                                    
                                                                                                                                
JOHN GEORGE, Lobbyist, American  Family Life Assurance Company of                                                               
Columbus (AFLAC), informed  the committee that AFLAC  is a member                                                               
of ACHIA, which is federally mandated.   He stated that while the                                                               
state had  the option of using  general funds to cover  the costs                                                               
of the  program, it chose to  assess the insurance industry.   He                                                               
said that anytime the insurance  industry is required to pay, the                                                               
cost "trickles  down" to the  policy holders.   In this  case, he                                                               
said,  the policy  holders are  small businesses  or individuals.                                                               
He said that the intent of HB  29 is to help small businesses and                                                               
individual  policy holders  who are  "shouldering 100  percent of                                                               
the burden."   He remarked that  it is beneficial to  have health                                                               
insurance because unless  a [business or individual]  is a member                                                               
of a  major self-insured group, insurance  is unaffordable, which                                                               
can be due  to add-ons or paying to  subsidize the aforementioned                                                               
program.  He expressed strong support of HB 29.                                                                                 
                                                                                                                                
3:44:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ROKEBERG  asked  if   the  definition  of  "major                                                               
medical" adopted in  HB 29 would affect AFLAC.   He also asked if                                                               
AFLAC would still be a participant [in ACHIA].                                                                                  
                                                                                                                                
MR. GEORGE  replied that AFLAC  would still be a  participant, as                                                               
it is  a major writer  of [the types  of insurance which  are not                                                               
considered "major medical"  by the legislation].   He stated that                                                               
currently, AFLAC's  assessment costs are  in excess of  its total                                                               
"major medical" premium.                                                                                                        
                                                                                                                                
3:44:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ROKEBERG pointed  out  that AFLAC  has been  very                                                               
forthcoming  in it's  participation  in the  ACHIA  program.   He                                                               
noted  that  Mr.  George  was  previously  the  Director  of  the                                                               
Division of  Insurance, and asked  if he considers  the potential                                                               
rising  amount of  the assessments  as a  "barrier to  entry" for                                                               
health insurance underwriters in the state.                                                                                     
                                                                                                                                
MR.  GEORGE  replied that  Alaska  has  never had  enough  health                                                               
insurers, adding  that any  efforts made to  remove a  portion of                                                               
the burden  will be of  assistance.   He opined that  while these                                                               
efforts  may  not  cause  insurance companies  to  "rush  to  the                                                               
state," it would encourage any  companies considering business in                                                               
Alaska.  He said that this is "the right thing to do."                                                                          
                                                                                                                                
3:46:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG  noted a  drafting error and  offered the                                                               
following conceptual amendment:                                                                                                 
                                                                                                                                
     Page 3, line 29                                                                                                            
     Delete "January 1, 2007"                                                                                                   
     Insert "March 1, 2008"                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG explained that  the amendment would allow                                                               
zero fiscal  impact in 2007.   He said  that this is  a "backward                                                               
looking  assessment."    There  being  no  objection,  Conceptual                                                               
Amendment 1 was adopted.                                                                                                        
                                                                                                                                
3:47:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN  moved  to   report  CSHB  29,  Version  24-                                                               
LS0191\R,  Bailey, 3/22/06,  as  amended, out  of committee  with                                                               
individual recommendations and the accompanying fiscal notes.                                                                   
There being no objection, CSHB 29(L&C) was reported from the                                                                    
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
3:48:08 PM.                                                                                                                   

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