Legislature(2013 - 2014)BARNES 124

03/25/2013 03:15 PM LABOR & COMMERCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 168 TRAVEL INSURANCE TELECONFERENCED
Moved CSHB 168(L&C) Out of Committee
+= HB 102 RETIREMENT PLANS; ROTH IRAS; PROBATE TELECONFERENCED
Moved CSHB 102(L&C) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 25, 2013                                                                                         
                           3:19 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Lora Reinbold, Vice Chair                                                                                        
Representative Mike Chenault                                                                                                    
Representative Bob Herron                                                                                                       
Representative Charisse Millett                                                                                                 
Representative Dan Saddler                                                                                                      
Representative Andy Josephson                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 168                                                                                                              
"An  Act amending  the  definition of  travel  insurance for  the                                                               
purpose of  describing a person  eligible for a  travel insurance                                                               
limited  producer  license;  and  authorizing  a  person  selling                                                               
travel services to  transact the business of  travel insurance on                                                               
behalf  of and  under the  direction of  a person  licensed as  a                                                               
travel insurance limited producer."                                                                                             
                                                                                                                                
     - MOVED CSHB 168(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 102                                                                                                              
"An  Act relating  to property  exemptions for  retirement plans,                                                               
individual  retirement  accounts,  and  Roth  IRAs;  relating  to                                                               
transfers of individual retirement  plans; relating to the rights                                                               
of judgment  creditors of members of  limited liability companies                                                               
and partners  of limited liability partnerships;  relating to the                                                               
Uniform  Probate Code,  including  pleadings, orders,  liability,                                                               
and  notices  under  the  Uniform Probate  Code  and  the  Alaska                                                               
Principal and Income Act, the  appointment of trust property, the                                                               
Alaska   Uniform  Prudent   Investor   Act,  co-trustees,   trust                                                               
protectors, and trust advisors;  relating to the Alaska Principal                                                               
and  Income Act;  relating  to the  Alaska  Uniform Transfers  to                                                               
Minors  Act;  relating  to  the  disposition  of  human  remains;                                                               
relating  to the  tax on  insurers for  life insurance  policies;                                                               
relating to  insurable interests for certain  insurance policies;                                                               
relating  to  restrictions  on   transfers  of  trust  interests;                                                               
relating  to  discretionary   interests  in  irrevocable  trusts;                                                               
relating  to  the  community property  of  married  persons;  and                                                               
amending  Rule 64,  Alaska  Rules of  Civil  Procedure, and  Rule                                                               
301(a), Alaska Rules of Evidence."                                                                                              
                                                                                                                                
     - MOVED CSHB 102(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 168                                                                                                                  
SHORT TITLE: TRAVEL INSURANCE                                                                                                   
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
03/15/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/15/13       (H)       L&C                                                                                                    
03/25/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 102                                                                                                                  
SHORT TITLE: RETIREMENT PLANS; ROTH IRAS; PROBATE                                                                               
SPONSOR(s): KELLER                                                                                                              
                                                                                                                                
02/01/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/01/13       (H)       L&C, JUD                                                                                               
02/25/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/25/13       (H)       Heard & Held                                                                                           
02/25/13       (H)       MINUTE(L&C)                                                                                            
03/20/13       (H)       L&C AT 3:45 PM BARNES 124                                                                              
03/20/13       (H)       Heard & Held                                                                                           
03/20/13       (H)       MINUTE(L&C)                                                                                            
03/22/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/22/13       (H)       <Bill Hearing Canceled>                                                                                
03/25/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ANNA LATHAM, Staff                                                                                                              
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of the sponsor, Representative                                                                 
Kurt Olson, presented HB 168 and explained the changes in the                                                                   
proposed committee substitute, Version O.                                                                                       
                                                                                                                                
JOHN FIELDING, Attorney                                                                                                         
Steptoe & Johnson, LL&C                                                                                                         
Washington, D.C.                                                                                                                
POSITION STATEMENT:  Testified in support of HB 168.                                                                          
                                                                                                                                
ERNEST PRAX, Staff                                                                                                              
Representative Wes Keller                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   On behalf  of  Representative Wes  Keller,                                                             
sponsor, presented  changes in the proposed  committee substitute                                                               
for HB 102.                                                                                                                     
                                                                                                                                
BRET KOLB, Director                                                                                                             
Division of Insurance (DOI)                                                                                                     
Anchorage Office                                                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the discussion of                                                             
HB 102.                                                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:19:46 PM                                                                                                                    
                                                                                                                                
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee  meeting  to  order  at   3:19  p.m.    Representatives                                                               
Chenault, Millett,  Reinbold, Josephson,  and Olson  were present                                                               
at  the  call  to  order.   Representatives  Saddler  and  Herron                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
                    HB 168-TRAVEL INSURANCE                                                                                 
                                                                                                                                
3:20:08 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE BILL  NO. 168,  "An Act amending  the definition  of travel                                                               
insurance for the  purpose of describing a person  eligible for a                                                               
travel  insurance limited  producer  license;  and authorizing  a                                                               
person  selling  travel  services  to transact  the  business  of                                                               
travel  insurance on  behalf  of  and under  the  direction of  a                                                               
person licensed as a travel insurance limited producer."                                                                        
                                                                                                                                
3:20:22 PM                                                                                                                    
                                                                                                                                
ANNA  LATHAM,  Staff,  Representative Kurt  Olson,  Alaska  State                                                               
Legislature,  on behalf  of Representative  Kurt Olson,  sponsor,                                                               
stated  that HB  168 is  based on  National Council  of Insurance                                                               
Legislators (NCOIL) recommendations, who  have worked with states                                                               
for  the  goal  of  improving consumer  protection  and  creating                                                               
consistency in travel  insurance sales.  She  provided a section-                                                               
by-section analysis.  Section 1  would redefine travel insurance,                                                               
which provides  insurance coverage  for personal  risks connected                                                               
to  travel  including  trip  interruptions,  cancellations,  lost                                                               
baggage or  personal effects, damage to  accommodations or rental                                                               
vehicles, for sickness, accident,  disability, or death occurring                                                               
during  travel.   This insurance  does not  include comprehensive                                                               
medical insurance  that provides  coverage for trips  lasting six                                                               
months or  longer.  She  reiterated that this is  NCOIL's attempt                                                               
to  standardize the  definition  of travel  insurance  in all  50                                                               
states.  Alaska's version is slightly modified, she said.                                                                       
                                                                                                                                
MS.  LATHAM said  Section  2  would add  a  new section  defining                                                               
travel  insurance   and  identifying  who  may   transact  travel                                                               
insurance.    It  would  allow  a  person  who  transacts  travel                                                               
services the ability  to sell those products  under the direction                                                               
of  a  person  holding  a  travel  insurance  limited  producer's                                                               
license.    It would  also  require  a travel  insurance  limited                                                               
producer to maintain a register  of all persons selling insurance                                                               
on their  behalf, and to  provide a  training program.   It would                                                               
limit the information that a  person transacting travel insurance                                                               
may and  may not  provide to a  customer.  It  also would  make a                                                               
travel  insurance  limited producer  liable  for  the acts  of  a                                                               
person selling travel insurance on the producer's behalf.                                                                       
                                                                                                                                
3:22:06 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM said  NCOIL  prepared this  model  sine 41  different                                                               
qualifications  were   required  for  travel  agents   to  become                                                               
licensed to  sell insurance across  the U.S.   Additionally, many                                                               
states  do not  accept  the same  electronic applications,  which                                                               
impact  the length  of time  it takes  to become  licensed in  an                                                               
industry with high  job turnover.  Further,  travel agents really                                                               
are not in  the insurance business since  insurance sales account                                                               
for approximately 2  percent of the overall revenue.   The travel                                                               
industry  has changed  significantly in  the past  20 years  from                                                               
brick  and  mortar  to Internet  transactions  that  cross  state                                                               
lines.   This NCOIL model  would establish a  licensing framework                                                               
that reflects the unique distribution  system of travel insurance                                                               
in  the industry  and will  place  the regulatory  burden on  the                                                               
insurer, who  develops and distributes  the product.   This would                                                               
improve  consumer protection  by  requiring clear  accountability                                                               
and notice to  the consumer and regulator with respect  to who is                                                               
responsible  for  the  sale.  This  model  clearly  distinguishes                                                               
between licensed  and non-licensed  activities for  limited lines                                                               
of  product,   such  as  travel  insurance,   and  would  promote                                                               
uniformity  to   help  states   more  effectively   govern  these                                                               
products.   Thus far,  a version of  this model  travel insurance                                                               
has been enacted  in eight states and  awaits governor signatures                                                               
in two other  states, with bills pending in  16 states, including                                                               
Alaska.  She  concluded that this bill is  deregulatory in nature                                                               
and would bring Alaska in line with the national model.                                                                         
                                                                                                                                
CHAIR  OLSON  related  this  is  similar  with  what  occurs  for                                                               
customers of  car rentals when  the person at the  counter offers                                                               
them a limited insurance product.                                                                                               
                                                                                                                                
3:25:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to adopt the  committee substitute                                                               
(CS)  for  HB  168,  Version  O,  [labeled  28-LS0562\O,  Bailey,                                                               
3/22/13]  as  the working  document  [Version  O was  before  the                                                               
committee.]                                                                                                                     
                                                                                                                                
CHAIR OLSON objected for purpose of discussion.                                                                                 
                                                                                                                                
3:25:59 PM                                                                                                                    
                                                                                                                                
MS. LATHAM explained  the changes made in  the proposed committee                                                               
substitute (CS) for HB 168, Version  O.  She highlighted that the                                                               
changes were  technical in nature,  for purposes of  clarity, and                                                               
none were substantive changes.  She  referred to page 4, line 26,                                                               
which  reorganizes   the  language   that  requires   the  travel                                                               
insurance limited  producer to maintain  a register.   Everything                                                               
in the register is contained in   subsection (a), (b), & (c).  On                                                               
page 5 line 7, the  language requires a person transacting travel                                                               
insurance to complete a training program.                                                                                       
                                                                                                                                
CHAIR OLSON removed his objection.                                                                                              
                                                                                                                                
3:27:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  this  bill will  create                                                               
difficulties when  people feel  they need  recourse and  have not                                                               
received  benefits  of the  travel  insurance.   He  assumed  the                                                               
people would still go to the original broker for assistance.                                                                    
                                                                                                                                
MS.  LATHAM answered  that HB  168 contains  consumer protection,                                                               
such  that  complaints  or  comments would  be  directed  to  the                                                               
producer.   She previously asked the  department about complaints                                                               
with the 259 resident and  nonresident limited lines of insurance                                                               
registered  in the  state.    She advised  that  the Division  of                                                               
Insurance reported  very few complaints; however,  she agreed any                                                               
complaints would be addressed by the producer.                                                                                  
                                                                                                                                
3:29:13 PM                                                                                                                    
                                                                                                                                
JOHN  FIELDING, Attorney,  Steptoe  & Johnson,  LL&C, stated  his                                                               
firm represents the U.S. Travel  Insurance Association.  He urged                                                               
members  to adopt  HB 168.   He  said the  U.S. Travel  Insurance                                                               
Association   believes  this   bill   is   good  for   consumers,                                                               
regulators,  and the  industry.   First,  this bill  is good  for                                                               
consumers since it will provide  training to retail travel agents                                                               
who  offer  and  disseminate  the products.    It  also  requires                                                               
disclosures  to consumers,  not currently  required, in  terms of                                                               
the product and  the retail travel agents permitted  to offer it.                                                               
Second,  it   is  good  for   regulators  since  it   provides  a                                                               
streamlined  process to  provide regulators  information in  case                                                               
anything goes  wrong.   Finally, it  is   good for  the industry,                                                               
such as  the U.S. Travel  Insurance Association  (USTIA) members,                                                               
since  the  process is  difficult  for  retail travel  agents  to                                                               
comply with  obligations throughout  the U.S.   The  industry has                                                               
changed  significantly  and  some  agents  must  be  licensed  in                                                               
numerous states across  the country, but these  agents are travel                                                               
agents and not  insurance agents.  This  bill would appropriately                                                               
place the  onus on the  insurance members and  the intermediaries                                                               
who  are the  insurance "players"  in  this program.   They  must                                                               
comply and ensure  that everyone in the system  is in compliance.                                                               
He urged members to support HB 168.                                                                                             
                                                                                                                                
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on HB 168.                                                                                     
                                                                                                                                
3:32:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated he would support  the bill since                                                               
it  is a  good  bill.   People  need to  be  careful about  their                                                               
policies, he  said.  He recalled  his own experience in  which he                                                               
represented four  deceased Germans  who died west  of Whitehorse.                                                               
The  case  became  a  vicious   dispute  about  jurisdiction  and                                                               
questions arose as to whether the  case should be filed in Alaska                                                               
or in  Canada.  This bill  just brought back his  experiences and                                                               
he reiterated his support for HB 168.                                                                                           
                                                                                                                                
3:34:09 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON remarked he has been  involved with the bill from the                                                               
NCOIL perspective  and declared a  conflict.  The intent  of this                                                               
bill is to provide standardization,  level the playing field, and                                                               
remove unnecessary hurdles.                                                                                                     
                                                                                                                                
3:34:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to  report the  proposed committee                                                               
substitute  (CS) for  HB 168,  Version  O, [labeled  28-LS0562\O,                                                               
Bailey,    3/22/13]   out    of    committee   with    individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no  objection, the  CSHB  168(L&C) was  reported  from the  House                                                               
Labor and Commerce Standing Committee.                                                                                          
                                                                                                                                
3:34:57 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:34 p.m. to 3:38 p.m.                                                                       
                                                                                                                                
          HB 102-RETIREMENT PLANS; ROTH IRAS; PROBATE                                                                       
                                                                                                                                
3:38:34 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE BILL NO.  102, "An Act relating to  property exemptions for                                                               
retirement plans, individual retirement  accounts, and Roth IRAs;                                                               
relating to  transfers of  individual retirement  plans; relating                                                               
to  the  rights  of  judgment creditors  of  members  of  limited                                                               
liability   companies   and   partners   of   limited   liability                                                               
partnerships;  relating to  the Uniform  Probate Code,  including                                                               
pleadings,  orders,  liability,  and notices  under  the  Uniform                                                               
Probate  Code  and  the  Alaska Principal  and  Income  Act,  the                                                               
appointment  of  trust  property,   the  Alaska  Uniform  Prudent                                                               
Investor Act, co-trustees, trust  protectors, and trust advisors;                                                               
relating to the Alaska Principal  and Income Act; relating to the                                                               
Alaska  Uniform   Transfers  to  Minors  Act;   relating  to  the                                                               
disposition of  human remains;  relating to  the tax  on insurers                                                               
for life insurance policies; relating  to insurable interests for                                                               
certain   insurance  policies;   relating   to  restrictions   on                                                               
transfers   of  trust   interests;   relating  to   discretionary                                                               
interests  in  irrevocable  trusts;  relating  to  the  community                                                               
property of married  persons; and amending Rule  64, Alaska Rules                                                               
of Civil Procedure, and Rule 301(a), Alaska Rules of Evidence."                                                                 
                                                                                                                                
CHAIR  OLSON  recapped  that  the   committee  previously  has  a                                                               
presentation,  adopted the  proposed  committee substitute  (CS),                                                               
Version U, and took public testimony.                                                                                           
                                                                                                                                
3:39:00 PM                                                                                                                    
                                                                                                                                
ERNEST  PRAX,  Staff,  Representative Wes  Keller,  Alaska  State                                                               
Legislature,  on behalf  of Representative  Wes Keller,  sponsor,                                                               
referred  to the  committee substitute  (CS) Version  U, [labeled                                                               
28-LS0335\U,  Bannister,  2/26/13].   He  briefly  explained  the                                                               
differences  from  the  original  version  to  Version  U,  which                                                               
corrects  a drafting  error on  page 3,  line 3.   The  committee                                                               
substitute also  deleted Section 38  of the original  bill, since                                                               
some question  arose as to the  necessity of the language.   Thus                                                               
the sponsor deleted  the language.  [Section 38  would expand the                                                               
allowable time an insurance contract  may be procured on the life                                                               
of body  of a person with  whom there is a  significant financial                                                               
interest in the continued life of that person being insured].                                                                   
                                                                                                                                
3:39:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked for clarification on  whether these                                                               
remarks reflected the changes in Version U.                                                                                     
                                                                                                                                
REPRESENTATIVE CHENAULT asked for clarification on Section 38.                                                                  
                                                                                                                                
CHAIR  OLSON noted  that a  draft amendment  in members'  packets                                                               
labeled U.1 conceptual will not be offered.                                                                                     
                                                                                                                                
3:41:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  made a  motion  to  adopt Amendment  1,                                                               
labeled  [28-LS0335\U.3,  Bannister,  3/20/13],  which  read,  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 35, line 22:                                                                                                          
          Delete "a single" [AN INDIVIDUAL]"                                                                                
          Insert "an individual"                                                                                                
                                                                                                                                
     Page 35, lines 23 - 24:                                                                                                    
          Delete "or for a group or other type of policy                                                                  
     that insures the life of one or more individuals"                                                                      
          Insert ", or for a life insurance policy issued                                                                   
     for delivery to a trust  that was formed under the laws                                                                
     of  this state  or contains  a provision  that laws  of                                                                
     this  state  govern  the  validity,  construction,  and                                                                
     administration of the trust,"                                                                                          
                                                                                                                                
     Page 44, following line 1:                                                                                                 
     Insert a new subsection to read:                                                                                           
          "(d)  AS 21.09.210(m), as amended by sec. 37 of                                                                       
     this  Act, applies  to a  life insurance  policy issued                                                                    
     for delivery  to a trust  if the life  insurance policy                                                                    
     is  issued for  delivery to  a  trust on  or after  the                                                                    
     effective date of AS 21.09.210(m), as amended by sec.                                                                      
     37 of this Act."                                                                                                           
                                                                                                                                
     Reletter the following subsection accordingly.                                                                             
                                                                                                                                
CHAIR OLSON objected for the purpose of discussion.                                                                             
                                                                                                                                
3:41:58 PM                                                                                                                    
                                                                                                                                
BRET  KOLB,  Director,  Division of  Insurance  (DOI);  Anchorage                                                               
Office, Department of Commerce,  Community & Economic Development                                                               
(DCCED), stated  that Amendment 1  would delete the  language "or                                                               
for a group or other type of  policy that insures the life of one                                                               
or more  individuals" which  the division  thought was  broad and                                                               
[adds language that] ties it to trusts.   The intent of HB 102 is                                                               
to address trusts and the way  the bill was originally drafted it                                                               
broadened  out  the  premium  tax  handling  for  every  type  of                                                               
insurance instead of limiting it  to insurance related to trusts.                                                               
He  clarified  that  the  language in  Amendment  1,  lines  8-10                                                               
defines  it  to  limit  the  bill  to  a  life  insurance  policy                                                               
delivered  for   a  trust  that   would  receive   the  favorable                                                               
treatment,  which  is  2.7  percent premium  tax  for  the  first                                                               
$100,000 in premium and one-tenth  of one percent for the premium                                                               
above the first $100,000.                                                                                                       
                                                                                                                                
3:43:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked where the state  would stand vis-                                                               
à-vis other  states in  terms of rate  charges over  $100,000 and                                                               
whether Alaska would be the most generous rate.                                                                                 
                                                                                                                                
MR. KOLB  answered no; that  other states, perhaps  South Dakota,                                                               
offer eight-tenths of  one percent for insurance  above the first                                                               
$100,000  of premium  as  opposed to  one-tenth  of one  percent,                                                               
although he  admitted he  was unsure  of the  rate for  the first                                                               
$100,000.                                                                                                                       
                                                                                                                                
3:44:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether the  insured person  for                                                               
the  trust needs  to  have  some connection  to  Alaska, such  as                                                               
property or other nexus.                                                                                                        
                                                                                                                                
MR. KOLB  answered that that  the question pertains to  trust law                                                               
and not insurance so unfortunately he doesn't know the answer.                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked whether an amendment in members'                                                                 
packets labeled U.2 would be offered.                                                                                           
                                                                                                                                
CHAIR OLSON answered yes.                                                                                                       
                                                                                                                                
CHAIR OLSON removed his objection. There being no further                                                                       
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
3:45:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD made a motion to adopt Amendment 2,                                                                     
labeled U.2 [labeled 28-LS0335\U.2, Bannister, 3/15/13], which                                                                  
read as follows:                                                                                                                
                                                                                                                                
     Page 1, line 12:                                                                                                           
          Delete "and"                                                                                                        
                                                                                                                                
     Page 2, line 2:                                                                                                            
          Delete "Evidence"                                                                                                   
          Insert "Evidence; and providing for an effective                                                                    
     date"                                                                                                                    
                                                                                                                                
     Page 35, following line 27:                                                                                                
          Insert a new bill section to read:                                                                                    
       "* Sec. 38. AS 21.09.210(m), as amended by sec. 37                                                                     
     of this Act, is amended to read:                                                                                           
          (m)  The tax imposed under this section for an                                                                    
     individual [A  SINGLE] life insurance policy  [OR FOR A                                                                
     GROUP OR OTHER TYPE OF  POLICY THAT INSURES THE LIFE OF                                                                    
     ONE OR MORE INDIVIDUALS] shall  be computed at the rate                                                                    
     of                                                                                                                         
               (1)  2.7 percent of policy year premium up                                                                       
     to $100,000; and                                                                                                           
               (2)  one-tenth of one percent of policy year                                                                     
     premium exceeding $100,000."                                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 43, line 9:                                                                                                           
          Delete "sec. 42"                                                                                                      
          Insert "sec. 43"                                                                                                      
                                                                                                                                
     Page 43, line 13:                                                                                                          
          Delete "sec. 45"                                                                                                      
          Insert "sec. 46"                                                                                                      
                                                                                                                                
     Page 43, line 15:                                                                                                          
          Delete "sec. 45"                                                                                                      
          Insert "sec. 46"                                                                                                      
                                                                                                                                
     Page 44, line 2:                                                                                                           
          Delete "42"                                                                                                           
          Insert "43"                                                                                                           
                                                                                                                                
     Page 44, following line 5:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "*  Sec. 52.   The  uncodified law  of the  State of                                                                
     Alaska is amended by adding a new section to read:                                                                         
          APPLICABILITY. AS 21.09.210(m), as amended by                                                                         
     sec.  38 of  this  Act, applies  to  a policy  offered,                                                                    
     issued  for  delivery, or  delivered  on  or after  the                                                                    
     effective date  of AS 21.09.210(m), as amended  by sec.                                                                    
     38  of this  Act.  In this  section,  "policy" has  the                                                                    
     meaning given in AS 21.97.900."                                                                                            
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
     Page 44, line 8:                                                                                                           
          Delete "sec. 42"                                                                                                      
          Insert "sec. 43"                                                                                                      
                                                                                                                                
     Page 44, line 9:                                                                                                           
          Delete "sec. 49(a)"                                                                                                   
          Insert "sec. 50(a)"                                                                                                   
     Page 44, line 11:                                                                                                          
          Delete "sec. 45"                                                                                                      
          Insert "sec. 46"                                                                                                      
          Delete "sec. 49(b)"                                                                                                   
          Insert "sec. 50(b)"                                                                                                   
                                                                                                                                
     Page 44, following line 13:                                                                                                
          Insert a new bill section to read:                                                                                    
        "* Sec.  54. AS 21.09.210(m), as amended  by sec. 38                                                                  
     of this Act,  and sec. 52 of this Act  take effect five                                                                    
     years  after the  effective  date of  sec.  37 of  this                                                                    
     Act."                                                                                                                      
                                                                                                                                
3:46:06 PM                                                                                                                    
                                                                                                                                
MR.  KOLB  explained that  Amendment  2  would provide  a  sunset                                                               
provision  after five  years,  so the  statutes  would revert  to                                                               
exactly to how  insurance is handled today.  It  would remove the                                                               
favorable  trust treatment  just to  ensure that  the process  is                                                               
working adequately, he said.                                                                                                    
                                                                                                                                
3:46:56 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON commented  that at this point it does  not appear the                                                               
state has  missed any  premium sales.   In  fact, it  appears the                                                               
state has been competitive on  the few number of policies issued;                                                               
however, if it  turns out that hundreds or  thousands of policies                                                               
are  over the  limit  of  the premium,  the  state  could lose  a                                                               
significant amount of premium tax.   He related his understanding                                                               
[Amendment 2]  would not interfere  with existing  contracts, but                                                               
would  apply  to  new  contracts  after the  sunset  date.    The                                                               
proposed  language  change  [in   Amendment  2]  would  give  the                                                               
director a means to determine  whether an adjustment is required.                                                               
Additionally,  this amendment  would provide  a means  to measure                                                               
the effect of the change after a reasonable amount of time.                                                                     
                                                                                                                                
CHAIR  OLSON  removed his  objection.    There being  no  further                                                               
objection, Amendment 2 was adopted.                                                                                             
                                                                                                                                
3:48:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to  report the  proposed committee                                                               
substitute  (CS) for  HB 102,  Version  U, [labeled  28-LS0335\U,                                                               
Bannister, 2/26/13] as amended,  out of committee with individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no objection,  CSHB 102 (L&C)  was reported from the  House Labor                                                               
and Commerce Standing Committee.                                                                                                
                                                                                                                                
3:48:40 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
3:48 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB168 ver C.pdf HL&C 3/25/2013 3:15:00 PM
HB 168
HB168 Draft Proposed CS version O.PDF HL&C 3/25/2013 3:15:00 PM
HB 168
HB168 Sponsor Statement.pdf HL&C 3/25/2013 3:15:00 PM
HB 168
HB168 Sectional Analysis.pdf HL&C 3/25/2013 3:15:00 PM
HB 168
HB168 Supporting Documents-Letter ASTA 3-21-2013.pdf HL&C 3/25/2013 3:15:00 PM
HB 168
HB168 Supporting Documents-USTIA-Travel Producer Overview.pdf HL&C 3/25/2013 3:15:00 PM
HB 168
HB102 Draft Proposed Amendment U.2.PDF HL&C 3/25/2013 3:15:00 PM
HB 102
HB102 Draft Proposed Amendment U.3.PDF HL&C 3/25/2013 3:15:00 PM
HB 102
HB168 Fiscal Note-DCCED-DOI-03-22-13.pdf HL&C 3/25/2013 3:15:00 PM
HB 168