Legislature(2015 - 2016)BARNES 124

03/28/2016 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 308 CHILD SAFETY SEAT INSTALLATION LIABILITY TELECONFERENCED
Moved HB 308 Out of Committee
-- Public Testimony <Time Limit May Be Set> --
*+ HB 372 OMNIBUS INSURANCE TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= HB 214 REPEAL WORKERS' COMP APPEALS COMMISSION TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 28, 2016                                                                                         
                           3:16 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Shelley Hughes, Vice Chair                                                                                       
Representative Jim Colver                                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Cathy Tilton                                                                                                     
Representative Andy Josephson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 308                                                                                                              
"An  Act  relating  to  the   limitation  of  liability  for  the                                                               
inspection, installation,  or adjustment  of a child  safety seat                                                               
or  in   providing  education   regarding  the   installation  or                                                               
adjustment of a child safety seat."                                                                                             
                                                                                                                                
     - MOVED HB 308 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 372                                                                                                              
"An  Act   relating  to  insurance;  relating   to  expenses  for                                                               
insurance  examinations; relating  to  regulations for  insurance                                                               
utilization   review,   benefits   determination,   health   care                                                               
insurance grievance resolution  procedures, independent review of                                                               
adverse   determinations   or   final   adverse   determinations,                                                               
independent  review   organizations,  and   continuing  education                                                               
providers;  relating  to  required  provisions  for  health  care                                                               
insurance contracts and policies,  including health care provider                                                               
choice; establishing civil penalties  for insurers for failure to                                                               
provide  requested  records;  amending  the  definition  of  'wet                                                               
marine  and  transportation'  insurance; amending  provisions  on                                                               
limited licenses  to include crop  insurance; relating  to third-                                                               
party  administrator   notification  requirements;   relating  to                                                               
certification   filing  by   reinsurance  intermediary   brokers;                                                               
relating  to  rate filings,  delivery  of  insurance policies  or                                                               
endorsements;  relating to  refunds  of  variable life  insurance                                                               
policies  and  variable  annuities; establishing  limitations  on                                                               
issuance of  long- term care insurance;  relating to requirements                                                               
for group  health insurance policies; amending  the definition of                                                               
'group  health  insurance';  relating to  motor  vehicle  service                                                               
contracts;  relating  to  notice  requirements  for  meetings  of                                                               
stockholders  or members  of a  domestic insurer;  establishing a                                                               
definition of  'bona fide association'; relating  to requirements                                                               
and penalties  for committing a fraudulent  or criminal insurance                                                               
act; updating criteria for examinations;  relating to rate filing                                                               
deviations;  establishing  civil  penalties  for  certain  wilful                                                               
violations; and providing for an effective date."                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 214                                                                                                              
"An Act  repealing the Workers' Compensation  Appeals Commission;                                                               
relating  to   decisions  and  orders  of   the  Alaska  Workers'                                                               
Compensation Board; relating to  superior court jurisdiction over                                                               
appeals  from Alaska  Workers' Compensation  Board decisions  and                                                               
orders; repealing Rules 201.1, 401.1,  and 501.1, Alaska Rules of                                                               
Appellate  Procedure, and  amending Rules  202(a), 204(a)  - (c),                                                               
210(e), 508(g), 601(b),  602, and 603, Alaska  Rules of Appellate                                                               
Procedure; and providing for an effective date."                                                                                
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 308                                                                                                                  
SHORT TITLE: CHILD SAFETY SEAT INSTALLATION LIABILITY                                                                           
SPONSOR(s): REPRESENTATIVE(s) MILLETT                                                                                           
                                                                                                                                
02/12/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/12/16       (H)       L&C, JUD                                                                                               
03/28/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 372                                                                                                                  
SHORT TITLE: OMNIBUS INSURANCE                                                                                                  
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
03/21/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/21/16       (H)       L&C                                                                                                    
03/28/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE CHARISSE MILLETT                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Speaking as the sponsor, introduced HB 308.                                                            
                                                                                                                                
LINDSEY WHITT, Staff                                                                                                            
Representative Charisse Millett                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Millett,                                                                     
sponsor, provided a sectional analysis for HB 308.                                                                              
                                                                                                                                
JANE FELLMAN, Registered Nurse                                                                                                  
Central Peninsula Hospital                                                                                                      
Coordinator, Kenai Peninsula Safe Kids Coalition                                                                                
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified in favor of HB 308.                                                                            
                                                                                                                                
DON ETHERIDGE, Spokesperson                                                                                                     
AFL-CIO                                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in favor of HB 308.                                                                            
                                                                                                                                
CLINTON POWELL, Senior Captain                                                                                                  
Anchorage Fire Department                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in favor of HB 308.                                                                            
                                                                                                                                
SARA PENISTEN, Registered Nurse                                                                                                 
Providence Alaska Medical Center                                                                                                
State Coordinator, Safe Kids Alaska Coalition                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
308, and stated support for the bill.                                                                                           
                                                                                                                                
ANTHONY GREEN, Director of Public Policy                                                                                        
Safe Kids Worldwide                                                                                                             
Washington, District of Columbia                                                                                                
POSITION STATEMENT:  Answered a question during the hearing on                                                                
HB 308, and stated support for the bill.                                                                                        
                                                                                                                                
CORLIS TAYLOR, Director                                                                                                         
Education Department                                                                                                            
Fairbanks Memorial Hospital                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in favor of HB 308.                                                                            
                                                                                                                                
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Anchorage Office                                                                                                                
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Introduced HB 372 and  provided a sectional                                                             
analysis.                                                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:16:51 PM                                                                                                                    
                                                                                                                                
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee meeting to  order at 3:16 p.m.   Representatives Olsen,                                                               
LeDoux, Kito, Josephson,  Hughes, and Tilton were  present at the                                                               
call to order.  Representative  Colver arrived as the meeting was                                                               
in progress.                                                                                                                    
                                                                                                                                
        HB 308-CHILD SAFETY SEAT INSTALLATION LIABILITY                                                                     
                                                                                                                                
3:17:01 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE  BILL  NO. 308,  "An  Act  relating  to the  limitation  of                                                               
liability for  the inspection, installation,  or adjustment  of a                                                               
child  safety  seat  or  in  providing  education  regarding  the                                                               
installation or adjustment of a child safety seat."                                                                             
                                                                                                                                
3:17:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHARISSE   MILLETT,  Alaska   State  Legislature,                                                               
speaking as  the sponsor  of HB 308,  informed the  committee the                                                               
bill  limits the  liability of  those who  volunteer to  properly                                                               
install child  safety car  seats for parents.   She  relayed that                                                               
car seats for infants and toddlers  have been shown to save lives                                                               
and reduce  injuries in the case  of an accident.   At this time,                                                               
those who  inspect child safety seats  as part of their  job at a                                                               
fire station or a hospital,  have limited liability; in a similar                                                               
manner,  HB 308  would limit  the liability  for child  passenger                                                               
safety  technicians   who  volunteer   to  do  so   at  community                                                               
gatherings, for example, in rural  Alaska.  Representative Millet                                                               
said technicians  complete hours of  training and keep  kids safe                                                               
and their parents comfortable by  correctly installing car seats.                                                               
She concluded  that the  bill advocates for  safety seat  use and                                                               
protects technicians from the fear of being sued.                                                                               
                                                                                                                                
3:21:13 PM                                                                                                                    
                                                                                                                                
LINDSEY  WHITT, Staff  to  Representative  Millett, Alaska  State                                                               
Legislature, sponsor  of HB 308,  paraphrased from  the following                                                               
sectional analysis [original punctuation provided]:                                                                             
                                                                                                                                
     Section 1:                                                                                                                 
                                                                                                                                
     Provides that  the following are not  civilly liable in                                                                    
     the  case of  an act  or  omission that  occurs in  the                                                                    
     inspection,  installation,  or  adjustment of  a  child                                                                    
     safety  seat or  in providing  education regarding  the                                                                    
     installation or adjustment of a  child safety seat: - A                                                                    
     certified Child Passenger Safety  Technician (CPST) - A                                                                    
     person who  arranges or offers  the services of  a CPST                                                                    
     for the community - A  person who owns property where a                                                                    
     CPST is operating A CPST  must offer their services for                                                                    
     free or for  the amount of their actual  costs, in good                                                                    
     faith,  and within  the scope  of their  training. They                                                                    
     may also not  be sponsored by a  child passenger safety                                                                    
     device manufacturer or retailer.                                                                                           
                                                                                                                                
     Section 2:                                                                                                                 
                                                                                                                                
     Applicability clause.                                                                                                      
                                                                                                                                
CHAIR OLSON  asked whether the  bill applies to  firefighters and                                                               
emergency medical technicians (EMTs) who have received training.                                                                
                                                                                                                                
REPRESENTATIVE  MILLET said  the aforementioned  firefighters and                                                               
EMTs  would be  covered  by their  employers;  however, the  bill                                                               
would cover them if they  volunteered outside of the firehouse or                                                               
police station.                                                                                                                 
                                                                                                                                
REPRESENTATIVE LEDOUX asked for clarification.                                                                                  
                                                                                                                                
REPRESENTATIVE  MILLETT  further   explained  that  liability  is                                                               
covered through  the municipality for  which they work;  the bill                                                               
applies  when  they  are volunteering,  and  not  representing  a                                                               
municipality  or a  private  employer.   In  further response  to                                                               
Representative  LeDoux,   she  said   insurance  is   through  an                                                               
employer.  The  bill applies, for example, when  a state employee                                                               
gets a certificate to install  safety seats on a voluntary basis,                                                               
and completes the training and  volunteers to install a car seat,                                                               
his/her  liability  would be  limited  if  the  car seat  or  the                                                               
installation of the car seat failed.                                                                                            
                                                                                                                                
REPRESENTATIVE LEDOUX  suggested volunteers  would be  covered by                                                               
their homeowners  insurance.    She questioned  whether insurance                                                               
companies have requested the bill.                                                                                              
                                                                                                                                
REPRESENTATIVE  MILLETT said  HB  308 was  requested by  off-duty                                                               
police officers  and firefighters  who are  certified technicians                                                               
and would like  to offer installation service,  but without civil                                                               
liability.   In  further response  to Representative  LeDoux, she                                                               
pointed out that not all people own homes.                                                                                      
                                                                                                                                
REPRESENTATIVE  HUGHES asked  whether  all new  parents and  baby                                                               
leave the hospital with a car seat installed.                                                                                   
                                                                                                                                
3:26:23 PM                                                                                                                    
                                                                                                                                
MS.  WHITT recommended  that  expectant  parents contact  someone                                                               
locally  to take  a  class  and learn  how  to  install the  baby                                                               
safely;  she  said   help  and  instructions  can   be  found  at                                                               
firehouses and police  stations.  There are  over 200 technicians                                                               
throughout the  state and anyone  could call "one of  the numbers                                                               
provided."                                                                                                                      
                                                                                                                                
REPRESENTATIVE  MILLETT  said  she would  verify  with  hospitals                                                               
across the state that they are aware of the service.                                                                            
                                                                                                                                
REPRESENTATIVE LEDOUX directed  attention to the bill  on page 1,                                                               
beginning on  line 13, and continuing  to page 2, line  10, which                                                               
read:                                                                                                                           
                                                                                                                                
     (1) the person                                                                                                             
          (A) has successfully completed the National Child                                                                     
     Passenger                                                                                                                  
      Safety Certification Training  program and maintains a                                                                    
     current   child   passenger    safety   technician   or                                                                    
     technician instructor  certification issued  under that                                                                    
     program;                                                                                                                   
          (B) offers or arranges a nonprofit child safety                                                                       
     seat educational   program, checkup event,  or checking                                                                    
     station  program for  the public  with   instruction by                                                                    
     certified   child  passenger   safety  technicians   or                                                                    
     technician  instructors; or                                                                                                
          (C) owns property where a nonprofit child safety                                                                      
     seat   educational program, checkup event,  or checking                                                                    
     station   program  for   the      public  occurs   with                                                                    
     instruction   by  certified   child  passenger   safety                                                                    
     technicians or  technician instructors;                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX inquired  as to aforementioned subparagraph                                                               
(C) and  the relevance of  owning property where  the educational                                                               
program occurs.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  MILLETT  deferred  the  question  to  Legislative                                                               
Legal Services, Legislative Affairs  Agency, and offered that the                                                               
bill  applies to  those  who do  not work  at  a police  station,                                                               
hospital,  or firehouse,  but are  interested in  child car  seat                                                               
safety.                                                                                                                         
                                                                                                                                
3:30:16 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON opened public testimony on HB 308.                                                                                  
                                                                                                                                
3:30:33 PM                                                                                                                    
                                                                                                                                
JANE FELLMAN,  registered nurse, Central Peninsula  Hospital, and                                                               
coordinator, Kenai  Peninsula Safe  Kids Coalition, said  she has                                                               
been a child  passenger safety technician (CPST)  since 1998, and                                                               
an  instructor  since  2000.    The  Kenai  Peninsula  Safe  Kids                                                               
Coalition has  spent many years assisting  parents properly place                                                               
their children in  car seats.  The  requirements are continuously                                                               
changing  because motor  vehicle safety  is improving,  and CPSTs                                                               
are  a  resource  for parents,  inspecting  seats  and  providing                                                               
proper  installation.   They also  educate parents  about how  to                                                               
prevent and  correct the misuse of  car seats.  Ms.  Fellman said                                                               
in Alaska,  the misuse of car  seats is 85 percent,  so CPSTs are                                                               
needed.  In order to keep  technicians, and have more who are not                                                               
employed by an  agency, the bill is needed to  provide a level of                                                               
protection for  them.   She encouraged  the committee  to support                                                               
the bill.                                                                                                                       
                                                                                                                                
3:33:13 PM                                                                                                                    
                                                                                                                                
DON ETHERIDGE,  Spokesperson, AFL-CIO,  said his  organization in                                                               
supports the  bill because many  of its members provide  car seat                                                               
installation training on a voluntary  basis.  He advised that the                                                               
local hospital  sends expectant parents to  the police department                                                               
for a  car seat and instruction.   Mr. Etheridge gave  a personal                                                               
story  of the  improper  use  of a  car  seat,  and restated  his                                                               
support of the proposed legislation.                                                                                            
                                                                                                                                
3:34:31 PM                                                                                                                    
                                                                                                                                
CLINTON  POWELL,  Senior   Captain,  Anchorage  Fire  Department,                                                               
expressed support  for the bill.   The Anchorage  Fire Department                                                               
has  an inspection  program  and checks  almost  400 seats  every                                                               
year.    In  addition,   the  department  conducts  award-winning                                                               
outreach throughout  the state, and  HB 308 provides  a statewide                                                               
benefit to educators.                                                                                                           
                                                                                                                                
REPRESENTATIVE HUGHES  asked about coordination with  new parents                                                               
at Providence Alaska Medical Center.                                                                                            
                                                                                                                                
3:36:26 PM                                                                                                                    
                                                                                                                                
SARA  PENISTEN,  registered   nurse,  Providence  Alaska  Medical                                                               
Center  (Providence), and  state  coordinator,  Safe Kids  Alaska                                                               
Coalition, said she has been  a child passenger safety technician                                                               
since 1999,  and an  instructor since  2006.   Regarding hospital                                                               
policy  and  protocol  at  Providence,  she  advised  that  every                                                               
newborn leaving  Providence has its  car seat checked  for recall                                                               
status,  appropriate fit,  and expiration  date.   If  requested,                                                               
certified CPSTs on  the hospital staff will assist  parents.  Ms.                                                               
Penisten  noted that  some  children  have unique  transportation                                                               
needs and the  hospital provides special training.   However, the                                                               
aforementioned  policies  and  procedures  are  not  required  of                                                               
hospitals, and each  hospital in the state differs  in the matter                                                               
of car seats  for pediatric patients and newborns.   Further, not                                                               
every  hospital   has  certified   technicians;  in   fact,  some                                                               
hospitals  are  reluctant  to  check car  seats  because  of  the                                                               
liability involved.   She  said HB 308  would take  the liability                                                               
issue away  due to  the certification  of the  technicians, which                                                               
requires  a three-day  nationally  standardized course  involving                                                               
evaluations, written examinations, and  participation in a public                                                               
check-up  event.    In response  to  Representative  LeDoux,  she                                                               
directed  attention   to  [Section  1,  subparagraph   (B)],  and                                                               
explained that  this addresses those who  arrange public check-up                                                               
events,  not   necessarily  the  technicians,  and   [Section  1,                                                               
subparagraph  (C)]   addresses  the  potential  liability   of  a                                                               
property owner where the event takes  place, such as a child care                                                               
center or public school.                                                                                                        
                                                                                                                                
REPRESENTATIVE  HUGHES  questioned whether  for-profit  hospitals                                                               
are liable.                                                                                                                     
                                                                                                                                
MS. PENISTEN advised  that it is not the nonprofit  status of the                                                               
property owner  - but the  status of the  event - that  is valid.                                                               
For example,  the nonprofit child  safety seat  education program                                                               
check-up event does not charge a  fee for attendance.  In further                                                               
response  to  Representative  Hughes,  Ms. Penisten  said  if  an                                                               
employee is  acting within the  scope of his/her  employment, the                                                               
employer's insurance  provides primary coverage;   HB 308 applies                                                               
when  certified  technicians are  not  working  for an  employer,                                                               
such  as a  firefighter  who  volunteers for  a  public car  seat                                                               
safety event during his/her off-duty hours.                                                                                     
                                                                                                                                
REPRESENTATIVE  HUGHES  returned  attention   to  the  policy  at                                                               
Providence  and asked  whether car  seats are  brought in  to the                                                               
hospital to be  checked, or whether hospital personnel  go to the                                                               
vehicle.                                                                                                                        
                                                                                                                                
MS. PENISTEN  stated that at  Providence the protocol  and policy                                                               
are that a car seat for a newborn is brought in to the hospital.                                                                
                                                                                                                                
REPRESENTATIVE  HUGHES  asked  whether  there  are  any  past  or                                                               
pending lawsuits against technicians in  the state related to the                                                               
installation of car seats.                                                                                                      
                                                                                                                                
MS.  WHITT  said  no.   In  further  response  to  Representative                                                               
Hughes, she  said she  is aware  of one  case outside  of Alaska.                                                               
The issue  in Alaska is  the recruiting  of and the  retention of                                                               
technicians.                                                                                                                    
                                                                                                                                
3:45:48 PM                                                                                                                    
                                                                                                                                
ANTHONY GREEN,  Director of Public  Policy, Safe  Kids Worldwide,                                                               
stated that he is aware of one  incident in which a parent had an                                                               
issue related  to a car  seat inspection.    His  organization is                                                               
responsible   for  the   training  of   child  passenger   safety                                                               
technicians, and  Mr. Green expressed  his strong support  for HB                                                               
308  and  providing a  level  of  comfort  to  volunteers.     He                                                               
observed  that 94  percent of  cars in  the U.S.  that have  been                                                               
inspected have had  car seats installed, and 46  percent of those                                                               
are incorrectly used.                                                                                                           
                                                                                                                                
REPRESENTATIVE  HUGHES inquired  as to  the cause  of the  higher                                                               
incorrect installation percentage in Alaska.                                                                                    
                                                                                                                                
MS. WHITT said  in 2014, the percentage  of incorrectly installed                                                               
car seats  in Alaska was 85  percent; she added that  she did not                                                               
know the cause.                                                                                                                 
                                                                                                                                
3:48:47 PM                                                                                                                    
                                                                                                                                
CORLIS   TAYLOR,   Director,  Education   Department,   Fairbanks                                                               
Memorial  Hospital,  stated  she  is  a  child  passenger  safety                                                               
technician and  an instructor.   For more  than 20 years  she has                                                               
been involved  in this issue, and  she spoke in favor  of HB 308.                                                               
As an instructor  she has trained many  technicians in Fairbanks,                                                               
and she restated that 85 percent  of the seats installed by those                                                               
who  attend  events  are  incorrectly   installed.    Ms.  Taylor                                                               
observed there is  a need to educate parents on  how to transport                                                               
children safely.   Fairbanks Memorial  Hospital has a  program to                                                               
work  with families  of children  with  disabilities and  special                                                               
needs.  She restated her support for the bill.                                                                                  
                                                                                                                                
REPRESENTATIVE HUGHES restated her question.                                                                                    
                                                                                                                                
MS. TAYLOR  recalled that  in the beginning  of the  program, the                                                               
nationwide percentage  for incorrect installation was  85 percent                                                               
to 95 percent; she suggested  that the percentage has declined in                                                               
the Lower 48 because there  are more technicians and advertising,                                                               
which differs in Alaska.                                                                                                        
                                                                                                                                
3:52:34 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON after ascertaining no  one further wished to testify,                                                               
closed public testimony on HB 308.                                                                                              
                                                                                                                                
3:52:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES  moved to  report HB  308 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 308 was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
3:53:13 PM                                                                                                                    
                                                                                                                                
The committee took an at ease from 3:53 p.m. to 3:55 p.m.                                                                       
                                                                                                                                
                    HB 372-OMNIBUS INSURANCE                                                                                
                                                                                                                                
3:55:06 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  next order of business  would be                                                               
HOUSE BILL  NO. 372, "An  Act relating to insurance;  relating to                                                               
expenses for insurance examinations;  relating to regulations for                                                               
insurance  utilization  review,  benefits  determination,  health                                                               
care  insurance  grievance   resolution  procedures,  independent                                                               
review    of   adverse    determinations    or   final    adverse                                                               
determinations, independent review  organizations, and continuing                                                               
education providers;  relating to required provisions  for health                                                               
care  insurance contracts  and  policies,  including health  care                                                               
provider choice;  establishing civil  penalties for  insurers for                                                               
failure to provide requested records;  amending the definition of                                                               
'wet  marine and  transportation' insurance;  amending provisions                                                               
on  limited  licenses  to include  crop  insurance;  relating  to                                                               
third-party administrator notification  requirements; relating to                                                               
certification   filing  by   reinsurance  intermediary   brokers;                                                               
relating  to  rate filings,  delivery  of  insurance policies  or                                                               
endorsements;  relating to  refunds  of  variable life  insurance                                                               
policies  and  variable  annuities; establishing  limitations  on                                                               
issuance of  long- term care insurance;  relating to requirements                                                               
for group  health insurance policies; amending  the definition of                                                               
'group  health  insurance';  relating to  motor  vehicle  service                                                               
contracts;  relating  to  notice  requirements  for  meetings  of                                                               
stockholders  or members  of a  domestic insurer;  establishing a                                                               
definition of  'bona fide association'; relating  to requirements                                                               
and penalties  for committing a fraudulent  or criminal insurance                                                               
act; updating criteria for examinations;  relating to rate filing                                                               
deviations;  establishing  civil  penalties  for  certain  wilful                                                               
violations; and providing for an effective date."                                                                               
                                                                                                                                
3:55:13 PM                                                                                                                    
                                                                                                                                
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community  & Economic  Development, introduced  HB 372,                                                               
the omnibus insurance  bill for the Division  of Insurance, which                                                               
relates  to   the  following  issues:     addresses  key  federal                                                               
preemptions  brought   about  by   the  Patient   Protection  and                                                               
Affordable Care  Act of 2010 (PPACA);  provides modernization and                                                               
updates  to existing  law;   amends  the cost  of market  conduct                                                               
examinations;  addresses  modernized recordkeeping  requirements;                                                               
requires  the designation  of one  compliance officer  in certain                                                               
circumstances;   clarifies  continuing   education  requirements;                                                               
modernizes existing  law pertaining  to licensing;  clarifies the                                                               
payment of certain fees;  clarifies associations; amends existing                                                               
law  dealing  with  criminal  fraud   and  associated  fines  and                                                               
penalties;   provides   filing    efficiencies;      allows   for                                                               
endorsements to be  posted on a web site; clarifies  the value of                                                               
a variable  life or variable annuity  refund; modernizes existing                                                               
law related to group life insurance.                                                                                            
                                                                                                                                
MS. WING-HEIER  paraphrased the following sectional  analysis for                                                               
HB 372: [original punctuation provided]                                                                                         
                                                                                                                                
     Sec. 1 AS 21.06.120(a) Examination of insurers                                                                             
     · Subsection  (a)  is amended  to  reflect the  correct                                                                    
     references  to   the  handbooks  used   throughout  the                                                                    
     country for financial  and market conduct examinations.                                                                    
     Both  publications   are  published  by   the  National                                                                    
     Association   of    Insurance   Commissioners   (NAIC).                                                                    
     Formerly,   the  term   "Examiners'  Handbook"   was  a                                                                    
     sufficient   description   as    both   the   financial                                                                    
     examination  and market  conduct examination  handbooks                                                                    
     used  the  term  in  their  title.  Now,  however,  the                                                                    
     "Market  Conduct  Examiners   Handbook"  is  no  longer                                                                    
     published  and  is  part   of  the  "Market  Regulation                                                                    
     Handbook".                                                                                                                 
                                                                                                                                
     Sec. 2 AS 21.06.140(f) Conduct of examination                                                                              
     · Subsection  (f)  is amended  to  reflect the  correct                                                                    
     references  to   the  handbooks  used   throughout  the                                                                    
     country for financial  and market conduct examinations.                                                                    
     Both  publications   are  published  by   the  National                                                                    
     Association of  Insurance Commissioners.  Formerly, the                                                                    
     term   "Examiners'    Handbook"   was    a   sufficient                                                                    
     description  as  both  the  financial  examination  and                                                                    
     market conduct  examination handbooks used the  term in                                                                    
     their   title.  Now,   however,  the   "Market  Conduct                                                                    
     Examiners Handbook" is no longer  published and is part                                                                    
     of the "Market Regulation Handbook".                                                                                       
                                                                                                                                
     Sec. 3 AS 21.06.160(a) Examination expense                                                                                 
     · Subsection (a) is amended to exclude managing general                                                                    
     agents,    third-party   administrators,    reinsurance                                                                    
     intermediary managers,  motor vehicle  service contract                                                                    
     providers,   and  surplus   lines   brokers  from   the                                                                    
     requirements  of  paying  for  division  personnel  and                                                                    
     overhead  costs   relating  to  an   examination;  such                                                                    
     entities  would  still  be  required  to  pay  for  the                                                                    
     division's  "out-of-pocket"  expenses including  travel                                                                    
     expenses and  for compensation of a  contract examiner,                                                                    
     however,  the entities  could apply  for a  waiver from                                                                    
     the director based on financial hardship                                                                                   
                                                                                                                                
3:59:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  asked   for  a   description  of   an                                                               
examination conducted by the division.                                                                                          
                                                                                                                                
MS. WING-HEIER  explained that personnel  from the  division will                                                               
go to a brokerage firm and examine  its books to confirm it is in                                                               
compliance  with  [Alaska  Statutes   Title  21],  and  then  the                                                               
division bills  the firm  for its  expenses; however,  some firms                                                               
and agents are very small,  independent offices in the state, and                                                               
the examination costs including travel  and days of work could be                                                               
more than  the firm's  annual income,  thus the  division stopped                                                               
the  examinations.   Since  the  affected  firms and  agents  are                                                               
already paying  the division for  licensure, the bill  allows the                                                               
division to  make an examination,  and not bill for  the salaries                                                               
of division personnel.                                                                                                          
                                                                                                                                
CHAIR OLSON  surmised the division  would conduct  an examination                                                               
immediately if illegal activity was suspected.                                                                                  
                                                                                                                                
MS. WING-HEIER indicated yes.                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON inquired  as  to lost  revenue for  the                                                               
state.                                                                                                                          
                                                                                                                                
MS. WING-HEIER restated  that the firms are already  paying for a                                                               
license to support  the division, thus the  division is recouping                                                               
its cost.  She continued  paraphrasing the sectional analysis for                                                               
HB 372, as follows: [original punctuation provided]                                                                             
                                                                                                                                
     Sec.  4 AS  21.07.005  Utilization  review and  benefit                                                                    
     determination,   grievance  procedures,   and  external                                                                    
     review                                                                                                                     
     · A  new section, AS  21.07.005 provides  authority for                                                                    
     the   director  to   adopt   regulations  relating   to                                                                    
     utilization   review    and   benefit   determinations;                                                                    
     grievance procedures; external  review requirements for                                                                    
     health care insurance;  and registration and regulation                                                                    
     of  independent  review   organizations  including  the                                                                    
     establishment of fees.  These regulations are necessary                                                                    
     to   make  Alaska's   laws  consistent   with  national                                                                    
     standards  and federal  law.  The  regulations will  be                                                                    
     based  on   model  laws   developed  by   the  National                                                                    
     Association of Insurance Commissioners.                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON inquired  as to  whether the  threat of                                                               
federal  preemption was  that the  state was  not performing  its                                                               
utilization review.                                                                                                             
                                                                                                                                
MS. WING-HEIER  answered that the  state has been  performing its                                                               
external  review under  federal law,  not under  state law.   She                                                               
continued  paraphrasing the  sectional  analysis for  HB 372,  as                                                               
follows: [original punctuation provided]                                                                                        
                                                                                                                                
     Sec.  5   AS  21.07.010(a)  Patient  and   health  care                                                                    
     provider protection                                                                                                        
     · Subsection (a)  is amended to require  that contracts                                                                    
     between  a participating  health  care  provider and  a                                                                    
     health care  insurer include  a provision  that clearly                                                                    
     states  that the  health care  provider will  adhere to                                                                    
     the  health  care  insurer's  policies  and  procedures                                                                    
     regarding referrals  and obtaining  prior authorization                                                                    
     and providing services under  a treatment plan approved                                                                    
     by  the health  care insurer.  Non-substantive drafting                                                                    
     convention changes are also made.                                                                                          
                                                                                                                                
     Sec. 6  AS 21.07.020  Required contract  provisions for                                                                    
     health care insurance policy                                                                                               
     · AS  21.07.020  is amended  to revise  and update  the                                                                    
     provisions that must be included  in a health insurance                                                                    
     policy and to comply with federal law.                                                                                     
                                                                                                                                
                                                                                                                                
4:05:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for a description of the repealed                                                                
language in proposed Section 6.                                                                                                 
                                                                                                                                
MS. WING-HEIER said the repealed language will be put into                                                                      
regulations.  She continued paraphrasing the sectional analysis                                                                 
for HB 372, as follows: [original punctuation provided]                                                                         
                                                                                                                                
     Sec. 7 AS 21.07.030(d) Choice of health care provider                                                                      
     · Subsection  (d) is amended  to require a  health care                                                                    
     insurer  to  permit a  covered  person  to designate  a                                                                    
     pediatrician  where the  insurer offers  a health  care                                                                    
     policy that  requires or provides for  a designation by                                                                    
     the  covered person  of  a  participating primary  care                                                                    
     provider.                                                                                                                  
                                                                                                                                
     Sec. 8 AS 21.07.030(e) Choice of health care provider                                                                      
     · Subsection (e)  is amended to recognize  an exception                                                                    
     to  the   subsection's  requirements   due  to   a  new                                                                    
     subsection (h).                                                                                                            
                                                                                                                                
     Sec. 9 AS 21.07.030(h) Choice of health care provider                                                                      
     · New  subsection (h) prohibits  a health  care insurer                                                                    
     that  offers  a  health   care  insurance  policy  that                                                                    
     provides  coverage for  obstetric and  gynecologic care                                                                    
     and that requires designation by  a covered person of a                                                                    
     participating  primary  care  provider  from  requiring                                                                    
     authorization  or  referral  for a  female  patient  to                                                                    
     receive   obstetric    gynecological   care    from   a                                                                    
     participating  provider. A  health  care insurer  shall                                                                    
     treat  authorizations by  an obstetrics  and gynecology                                                                    
     specialist  as the  authorization of  the primary  care                                                                    
     provider.                                                                                                                  
                                                                                                                                
     Sec. 10 AS 21.07.250(3) Definitions                                                                                        
     · Paragraph  (3) is  repealed and  reenacted to  define                                                                    
     "emergency services"  to mean medical care  services or                                                                    
     items furnished  or required to  evaluate and  treat an                                                                    
     emergency medical condition.                                                                                               
                                                                                                                                
     Sec. 11 AS 21.07.250(14) Definitions                                                                                       
     · Paragraph  (14) is repealed  and reenacted  to define                                                                    
     "utilization  review"  to  mean  a  set  of  techniques                                                                    
     designed  to  monitor  the  use  of,  or  evaluate  the                                                                    
     clinical   necessity,  appropriateness,   efficacy,  or                                                                    
     efficiency  of, health  care  services, procedures,  or                                                                    
     settings;  techniques  may include  ambulatory  review,                                                                    
     prospective   review,  second   opinion  certification,                                                                    
     concurrent    review,   case    management,   discharge                                                                    
     planning, or retrospective review.                                                                                         
                                                                                                                                
     Sec. 12 AS 21.07.250(15) Definitions                                                                                       
     ·  New  paragraph  (15)  defines  "  emergency  medical                                                                    
     condition"  to  mean  the  sudden  and,  at  the  time,                                                                    
     unexpected  onset of  a  medical  condition or  illness                                                                    
     that  requires immediate  medical  attention and  where                                                                    
     failure  to provide  immediate medical  attention would                                                                    
     result in  (A) the  placing of  the person's  health in                                                                    
     serious jeopardy;  (B) a  serious impairment  to bodily                                                                    
     functions; or  (C) a serious dysfunction  of any bodily                                                                    
     organ or part.                                                                                                             
                                                                                                                                
     Sec. 13 AS 21.09.320(b) Maintenance Records                                                                                
     · Subsection (b) is amended to require that an insurer,                                                                    
     to  meet the  requirements  of  AS 21.09.320(a),  shall                                                                    
     keep  records as  required by  the maintenance  records                                                                    
     requirements of the insurer's domicile jurisdiction.                                                                       
                                                                                                                                
     Sec. 14 AS 21.09.320(c)  and (d) Maintenance of records                                                                    
     · New  subsection (c)  requires the  insurer not  later                                                                    
     than 10 business days after  the date of the request to                                                                    
     provide  the  records  to  the  director  or  make  the                                                                    
     records  available  for  inspection  and  copying.  The                                                                    
     records  inspected or  examined  under this  subsection                                                                    
     are confidential but  may be used by the  director in a                                                                    
     proceeding against the insurer.                                                                                            
     ·  New subsection  (d)  provides  that failure  of  the                                                                    
     insurer  to provide  the information  required by  this                                                                    
     section may result  in a civil penalty of  up to $1,000                                                                    
     for each violation and, an  additional civil penalty of                                                                    
     up to  $50 for  each day  the information  requested is                                                                    
     not provided.                                                                                                              
                                                                                                                                
     Sec.  15  AS  21.12.090(b)   Marine,  wet  marine,  and                                                                    
     transportation insurance defined                                                                                           
     · Subsection (b)  is amended to define  "wet marine and                                                                    
     transportation"  insurance  as   that  part  of  marine                                                                    
     insurance that includes only  (1) insurance on vessels,                                                                    
     crafts,  and hulls,  and insurance  of interests  in or                                                                    
     with  relation  to  vessels,  crafts,  and  hulls;  (2)                                                                    
     insurance of marine builder's  risks, marine war risks,                                                                    
     and  contracts  of   marine  protection  and  indemnity                                                                    
     insurance; (3) insurance  of freights and disbursements                                                                    
     pertaining  to a  subject  of  insurance coming  within                                                                    
     this  section; or  (4) insurance  of personal  property                                                                    
     and interests  in personal property,  in the  course of                                                                    
     exportation from  or importation into any  country, and                                                                    
     in the course of  transportation coastwise or on inland                                                                    
     waters,  including transportation  by  land, water,  or                                                                    
     air  from  point of  origin  to  final destination,  in                                                                    
     respect to  , appertaining  to, or in  connection with,                                                                    
     any and all risks or  perils of navigation, transit, or                                                                    
     transportation, and while being  prepared for and while                                                                    
     awaiting   shipment,   and  during   delays,   storage,                                                                    
     transshipment,  or  reshipment  incident  thereto.  The                                                                    
     amendment corrects  a drafting error that  required all                                                                    
     four  of  the   paragraphs  to  be  met   to  meet  the                                                                    
     definition.                                                                                                                
                                                                                                                                
     Sec.  16  AS  21.27.020(c) General  qualifications  for                                                                    
     license                                                                                                                    
     · Paragraph  (c)(3) is amended  to provide that  a firm                                                                    
     insurance producer,  firm managing general  agent, firm                                                                    
     intermediary  broker,   firm  reinsurance  intermediary                                                                    
     manager, firm surplus lines  broker or firm independent                                                                    
     adjuster  applicant or  license in  designating one  or                                                                    
     more  compliance   officers  for  the  firm   may  only                                                                    
     designate  one compliance  officer  for  each class  of                                                                    
     authority.   A   non-substantive  drafting   convention                                                                    
     change is also made to paragraph (c)(5).                                                                                   
                                                                                                                                
     Sec.  17  AS  21.27.020(f) General  qualifications  for                                                                    
     license                                                                                                                    
     · Subsection (f) is amended to make clear the authority                                                                    
     of  the  director  to  adopt  regulations  establishing                                                                    
     additional  education  or experience  requirements  for                                                                    
     continuing education providers.                                                                                            
                                                                                                                                
     Sec. 18 AS 21.27.025(a) Required notice of licensee                                                                        
     · Subsection  (a) is amended  to require a  licensee to                                                                    
     report to  the director  in writing  any administrative                                                                    
     action  taken  against  the  licensee  by  a  financial                                                                    
     industry regulatory  authority sanction  or arbitration                                                                    
     proceeding.   Non-substantive    drafting   conventions                                                                    
     changes are also made.                                                                                                     
                                                                                                                                
     Sec. 19 AS 21.27.150(a) Limited licenses                                                                                   
     ·  Subsection  (a) is  amended  to  give  the  director                                                                    
     authority to  issue a  crop insurance  limited producer                                                                    
     license.  Non-substantive drafting  conventions changes                                                                    
     are also made.                                                                                                             
                                                                                                                                
     Sec.  20 AS  21.27.380(a) License  renewal, lapse,  and                                                                    
     reinstatement                                                                                                              
     · Subsection  (a)  is amended  to make  non-substantive                                                                    
     changes to conform the language  to State Based Systems                                                                    
     (SBS),  an  electronic  system owned  by  the  National                                                                    
     Association  of  Insurance  Commissioners  for  use  by                                                                    
     state  regulators in  support  of insurance  regulatory                                                                    
     functions.   SBS   enables   the   division   to   more                                                                    
     efficiently    and    effectively    process    license                                                                    
     applications,    renewals,    inquiries,    complaints,                                                                    
     enforcement   actions   and   other   functions   while                                                                    
     remaining    compliant    with   national    uniformity                                                                    
     initiatives.                                                                                                               
                                                                                                                                
     Sec.  21 AS  21.27.380(b) License  renewal, lapse,  and                                                                    
     reinstatement                                                                                                              
     · Subsection  (b)  is amended  to make  non-substantive                                                                    
     changes to conform the language to SBS.                                                                                    
                                                                                                                                
     Sec.  22 AS  21.27.380(d) License  renewal, lapse,  and                                                                    
     reinstatement                                                                                                              
     · Subsection  (d)  is amended  to make  non-substantive                                                                    
     changes to conform the language to SBS.                                                                                    
                                                                                                                                
     Sec.  23  AS   21.27.640(b)  Third-party  administrator                                                                    
     qualifications                                                                                                             
     · Subsection  (b) is amended  to require  a third-party                                                                    
     administrator  registrant to  notify  the director  not                                                                    
     later than  30 days after  the final disposition  of an                                                                    
     administrative action  taken against the  registrant by                                                                    
     a   governmental  agency   of  another   state,  by   a                                                                    
     governmental agency  of another  jurisdiction, or  by a                                                                    
     financial  industry  regulatory authority  sanction  or                                                                    
     arbitration  proceeding.   The  registrant   must  also                                                                    
     submit to the director  documents relating to the final                                                                    
     disposition.  A   non-substantive  drafting  convention                                                                    
     change is also made.                                                                                                       
                                                                                                                                
     Sec.  24  AS  21.27.650(r) Operating  requirements  for                                                                    
     third-party administrators                                                                                                 
     · New  subsection (r) requires  insurers to  review its                                                                    
     books  and records  quarterly  to  determine whether  a                                                                    
     person  or   insurance  producer   has  acted   as  the                                                                    
     insurer's third-party administrator.  If the insurer so                                                                    
     finds, the insurer must notify  the person or insurance                                                                    
     producer and  the director. The insurer  and the person                                                                    
     or insurance  producer must then  fully comply  with AS                                                                    
     21.27 not later than 30 days after notification.                                                                           
                                                                                                                                
     Sec.  25  AS  21.27.690(b) Operating  requirements  for                                                                    
     reinsurance intermediary brokers; actions for loss                                                                         
     · Subsection (b) is amended to add the requirement that                                                                    
     an  insurer  may  not  use  a  nonresident  reinsurance                                                                    
     intermediary  broker who  is  not  licensed under  this                                                                    
     chapter unless the  reinsurance intermediary broker has                                                                    
     filed  a  certification  with  the  director  that  the                                                                    
     reinsurance intermediary  broker is operating  only for                                                                    
     a foreign  insurer. Subsection (b)  is also  amended to                                                                    
     add  the requirement  that a  domestic insurer  may not                                                                    
     use  an alien  reinsurance  intermediary broker  unless                                                                    
     the alien  reinsurance intermediary broker has  filed a                                                                    
     certification  with the  director that  the reinsurance                                                                    
     intermediary broker  is operating  only for  a domestic                                                                    
     insurer.                                                                                                                   
                                                                                                                                
     Sec. 26 AS 21.34.035(b) Health care insurance                                                                              
     · Subsection (b) is amended to change references from a                                                                    
     repealed   statute  (AS   21.87.190)  to   the  correct                                                                    
     references of AS 21.51.405 and AS 21.54.015.                                                                               
                                                                                                                                
     Sec. 27 AS 21.34.050(a)  Listing eligible surplus lines                                                                    
     insurers                                                                                                                   
     · Subsection (a) is amended to  remove the authority of                                                                    
     the director  to adopt a  regulation to charge  fees to                                                                    
     eligible  nonadmitted   insurers.  This   amendment  is                                                                    
     necessary  to  meet  the requirements  of  the  federal                                                                    
     Nonadmitted and Reinsurance Reform  Act of 2010 (NRRA).                                                                    
     The division has not been  charging this fee since 2011                                                                    
     due to this federal law.                                                                                                   
                                                                                                                                
     Sec. 28 AS 21.34.050(c)  Listing eligible surplus lines                                                                    
     insurers  ·  Subsection   (c)  is  amended   to  remove                                                                    
     references  to  fees  charged to  eligible  nonadmitted                                                                    
     insurers.                                                                                                                  
                                                                                                                                
     Sec. 29 AS 21.34.180(a)  Surplus lines tax · Subsection                                                                    
     (a) is  amended to add  "home state" to  the subsection                                                                    
     to be consistent with the  NRRA and previous amendments                                                                    
     to AS 21.34.                                                                                                               
                                                                                                                                
     Sec.  30  AS  21.36.025(b)  and  (c)  Unfair  marketing                                                                    
     practices prohibited                                                                                                       
     · New  subsection (b)  provides that  a person  may not                                                                    
     sell a membership in an  association or labor union for                                                                    
     the purpose  of qualifying for an  individual for group                                                                    
     insurance.                                                                                                                 
     · New subsection (c) provides that  a person that sells                                                                    
     a  membership in  an association  may  not offer  group                                                                    
     insurance  for purposes  of selling  memberships in  an                                                                    
     association or labor union.                                                                                                
                                                                                                                                
     Sec. 31 AS 21.36.185  Maintenance of complaint handling                                                                    
     records                                                                                                                    
     · This section is amended to account for differences in                                                                    
     recordkeeping  requirements  between this  section  and                                                                    
     those   in  the   National  Association   of  Insurance                                                                    
     Commissioners Health Carrier  Grievance Procedure Model                                                                    
     Act which the director will  be required to adopt under                                                                    
     section 4 of the bill                                                                                                      
                                                                                                                                
4:12:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX questioned the necessity for Section 30.                                                                  
                                                                                                                                
MS. WING-HEIER explained that one  cannot form a fictitious group                                                               
solely for  the purpose  of selling  insurance; for  example, the                                                               
National  Rifle  Association (NRA)  has  a  group life  insurance                                                               
product it can  sell to its members, but the  main purpose of the                                                               
NRA is  not to sell  insurance.  This  also applies to  unions or                                                               
other  associations  in  the  state.    In  further  response  to                                                               
Representative LeDoux,  she said  PPACA is tough  on associations                                                               
because  it  wants  insurers  to join  the  group  or  individual                                                               
insurance market.   The state  does not want the  associations in                                                               
the state that  have insurance programs to be  disbanded, but the                                                               
bill does  state that  associations cannot  be formed  solely for                                                               
the purpose of  selling insurance, or solicit  members solely for                                                               
the same, to remain in compliance with  PPACA.  This is not a new                                                               
provision.                                                                                                                      
                                                                                                                                
REPRESENTATIVE LEDOUX restated her question.                                                                                    
                                                                                                                                
MS. WING-HEIER gave an example  of the Sons of Norway approaching                                                               
a prospective  member with an  offer to sell insurance,  which it                                                               
should  not do,  because they  are not  licensed as  an insurance                                                               
company to sell insurance.                                                                                                      
                                                                                                                                
REPRESENTATIVE LEDOUX  asked whether  the provision  only applies                                                               
to medical insurance.                                                                                                           
                                                                                                                                
MS. WING-HEIER opined this applies  to medical insurance, and she                                                               
said she would confirm that it  does not apply to life insurance.                                                               
She continued paraphrasing the sectional  analysis for HB 372, as                                                               
follows: [original punctuation provided]                                                                                        
                                                                                                                                
     Sec.  32  AS  21.36.225(a)  and (b)  Notice  of  health                                                                    
     insurance  coverage cancellation,  coverage change,  or                                                                    
     premium change                                                                                                             
     · Subsections (a)  and (b) are amended  by changing the                                                                    
     term  "covered  individual"  to "policyholder"  as  the                                                                    
     intent  of  the provisions  were  not  to require  that                                                                    
     every  covered  person  under, for  example,  a  family                                                                    
     policy  receives  the notice.  The  intent  is for  the                                                                    
     primary insured to  receive the notice and  in the case                                                                    
     of a group for the policyholder to receive the notice.                                                                     
                                                                                                                                
     Sec.   33  AS   21.36.360(b)  Fraudulent   or  criminal                                                                    
     insurance acts                                                                                                             
     ·  Subsection  (b)   is  amended  to  clarify   that  a                                                                    
     fraudulent insurance act is committed  by a person who,                                                                    
     with intent  to injure,  defraud, or  deceive knowingly                                                                    
     omits  material information  1) when  presenting to  an                                                                    
     insurer a  written or  oral statement  in support  of a                                                                    
     claim for  payment or other benefit  under an insurance                                                                    
     policy or 2) when  assisting or conspiring with another                                                                    
     to prepare or make a  written or oral statement that is                                                                    
     submitted  to  an insurer  in  support  of a  claim  or                                                                    
     benefit under an insurance policy.                                                                                         
     ·  Subsection (b)  is  also  amended  by adding  a  new                                                                    
     paragraph  (7) that  would  provide  that a  fraudulent                                                                    
     insurance  act  is  committed by  a  person  who,  with                                                                    
     intent to  injure, defraud, or deceive  makes a written                                                                    
     or  oral   statement  in   response  to   an  insurer's                                                                    
     inquiries  related to  another's claim  for payment  or                                                                    
     other benefit  under an  insurance policy,  knowing the                                                                    
     statement  contains  false, incomplete,  or  misleading                                                                    
     information, or  omits information concerning  a matter                                                                    
     material  to  the  claim.   This  statutory  change  is                                                                    
     intended  to  address  the  situation  where  a  person                                                                    
     obtains  insurance immediately  after  an accident  (to                                                                    
     avoid arrest  for driving  without insurance)  and then                                                                    
     claims he/she was  insured at the time  of the accident                                                                    
     when  the other  driver's insurer  inquiries about  the                                                                    
     person's coverage.                                                                                                         
                                                                                                                                
     Sec.   34  AS   21.36.360(q)  Fraudulent   or  criminal                                                                    
     insurance acts                                                                                                             
     · Subsection (q)  is amended to  provide for a  class C                                                                    
     felony for a fraudulent  insurance act that (1) falsely                                                                    
     makes, completes, or alters  a certificate of insurance                                                                    
     or  other  document  relating   to  insurance  and  (2)                                                                    
     knowingly possesses  a forged certificate  of insurance                                                                    
     or other  document relating  to insurance.  The current                                                                    
     statute does not specify a penalty for these offences.                                                                     
                                                                                                                                
4:19:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COLVER asked whether the level of offense is                                                                     
determined by the dollar amount of the infraction.                                                                              
                                                                                                                                
MS. WING-HEIER said the amount of the felony is found elsewhere                                                                 
in the bill.                                                                                                                    
                                                                                                                                
REPRESENTATIVE COLVER questioned how the division will determine                                                                
intent to defraud, as opposed to a mistake.                                                                                     
                                                                                                                                
CHAIR OLSON suggested that only the person committing fraud has                                                                 
liability.                                                                                                                      
                                                                                                                                
MS. WING-HEIER explained that insurance brokers or agents issue                                                                 
the certificates of insurance, thus unless the consumer modifies                                                                
the document, the consumer is not party to fraud.                                                                               
                                                                                                                                
REPRESENTATIVE COLVER then  gave examples of a  broker who failed                                                               
to renew a  policy after receiving payment from a  consumer, or a                                                               
broker who made an accounting error.                                                                                            
                                                                                                                                
MS. WING-HEIER  said that insurance  agencies such as  State Farm                                                               
are responsible for  their agents; in a  brokerage agreement, the                                                               
consumers  would  look  to  the  broker's  errors  and  omissions                                                               
insurance (E&O).   In  further response to Representative Colver,                                                               
she said brokers are not required to carry E&O insurance.                                                                       
                                                                                                                                
REPRESENTATIVE   COLVER  suggested   an   agency  would   declare                                                               
bankruptcy in the instance of a large claim.                                                                                    
                                                                                                                                
CHAIR OLSON noted that insurers would have a bond.                                                                              
                                                                                                                                
4:25:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  surmised  that   brokers  are  agents  of                                                               
insurance companies,  therefore, the  insurance company  would be                                                               
liable.                                                                                                                         
                                                                                                                                
MS.  WING-HEIER  clarified that  an  agent  is  an agent  for  an                                                               
insurance company, and a broker is independent and solicits bids                                                                
from independent insurance  companies, and has "no  right to bind                                                               
the insurance company to that client."                                                                                          
                                                                                                                                
CHAIR OLSON added that they also  need to have received money for                                                               
a premium.                                                                                                                      
                                                                                                                                
REPRESENTATIVE LEDOUX opined  that if money changed  hands, and a                                                               
binder  was  issued,  the binder  would  obligate  the  insurance                                                               
company.                                                                                                                        
                                                                                                                                
MS. WING-HEIER said  if a broker takes consumers'  money and does                                                               
not have  an agreement  from an insurance  company to  accept the                                                               
risk - that is fraud.                                                                                                           
                                                                                                                                
REPRESENTATIVE COLVER asked whether  a national insurance company                                                               
has a  duty to pay the  claims of an  agent, even in the  case of                                                               
consumer fraud.                                                                                                                 
                                                                                                                                
4:28:02 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER  said the  difference is  an agent  represents for                                                               
example,  State   Farm  Insurance  or  Allstate,   but  a  broker                                                               
represents a  client, and in a  manner similar to that  of a real                                                               
estate broker, can show a client a variety policies.                                                                            
                                                                                                                                
REPRESENTATIVE COLVER suggested that if a mistake was made by                                                                   
the agent, the company would have a duty to insure as                                                                           
represented by the agent.                                                                                                       
                                                                                                                                
4:28:54 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER said yes, in most cases.  She continued                                                                          
paraphrasing the sectional analysis for HB 372, as follows:                                                                     
[original punctuation provided]                                                                                                 
                                                                                                                                
     Sec. 35 AS 21.36.390(b) Notice to director                                                                                 
     · Subsection  (b) is amended  to require an  insurer or                                                                    
     licensee that  has reason to believe  that an insurance                                                                    
     producer with  which it is  doing business  is involved                                                                    
     in  violation of  (1)  AS 21.36.030  (Misrepresentation                                                                    
     and false  advertising of  insurance policies),  (2) AS                                                                    
     21.36.050 (Twisting  prohibited), and (3)  AS 21.36.360                                                                    
     (Fraudulent or  criminal acts), to immediately  send to                                                                    
     the  director a  report disclosing  the basis  for that                                                                    
     belief and any other  information that the director may                                                                    
     require.                                                                                                                   
                                                                                                                                
     Sec. 36 AS 21.39.040(a)(2) Rate filings                                                                                    
     · Paragraph  (a)(2) is  amended to  clarify what  is an                                                                    
     acceptable effective date for a rate filing.                                                                               
                                                                                                                                
     Sec. 37 AS 21.39.070(a) Deviations                                                                                         
     · Subsection (a) is repealed and reenacted to allow the                                                                    
     division  to   consider  a  member's   or  subscriber's                                                                    
     application   for    a   deviation   from    a   rating                                                                    
     organization's  class rates,  schedules, rating  plans,                                                                    
     or rules  respecting a kind  of insurance, or  class of                                                                    
     risk with a  kind of insurance, or  combination as part                                                                    
     of  the  regular  filing process  without  requiring  a                                                                    
     formal  order from  the director.  The amendment  would                                                                    
     also   eliminate   the   requirements   that   casualty                                                                    
     insurance deviations  may only be a  uniform percentage                                                                    
     deviation  and that  deviation application  copies must                                                                    
     also   be    sent   simultaneously   to    the   rating                                                                    
     organization.                                                                                                              
                                                                                                                                
     Sec.  38  AS  21.42.160(d)   Contents  of  policies  in                                                                    
     general                                                                                                                    
     ·  Subsection   (d)   is  amended   to  eliminate   the                                                                    
     requirement that  insurers print  the year  of adoption                                                                    
     on all forms submitted to the division.                                                                                    
                                                                                                                                
     Sec. 39 AS 21.42.250(c)  Delivery or posting of policy;                                                                    
     notifications                                                                                                              
     · Subsection (c) is amended to expand the applicability                                                                    
     of  the subsection  to all  lines  of insurance  rather                                                                    
     than  to   just  property   and  casualty   lines.  The                                                                    
     subsection provides  for an insurer providing  a policy                                                                    
     or endorsement by posting the  policy or endorsement on                                                                    
     the insurer's Internet  website and clearly identifying                                                                    
     the  posted  policy  or endorsement  purchased  by  the                                                                    
     insured  in  the  declaration   page  provided  to  the                                                                    
     insured.                                                                                                                   
                                                                                                                                
     Sec. 40 AS  21.45.020(d) Standards provisions required;                                                                    
     return and refund                                                                                                          
    · Subsection (d) is amended to correct drafting errors.                                                                     
                                                                                                                                
     Sec. 41  AS 21.48.010(a)  Group requirements  for group                                                                    
     contracts                                                                                                                  
     · Subsection (a) is amended to clarify what constitutes                                                                    
     a valid group for issuance  of life insurance and gives                                                                    
     the director  authority to add  additional requirements                                                                    
     by regulation.                                                                                                             
                                                                                                                                
     Sec. 42  AS 21.48.010(b)  Group requirements  for group                                                                    
     contracts                                                                                                                  
     ·  Subsection  (b) is  amended  to  provide  that  this                                                                    
     section  does  not  apply  to  certain  specified  life                                                                    
     insurance policies.                                                                                                        
                                                                                                                                
     Sec. 43 AS 21.48.010(e)  and (f) Group requirements for                                                                    
     group contracts                                                                                                            
     ·  New  subsection  (e)  provides  that  a  group  life                                                                    
     insurance policy  may be  issued to  a group  that does                                                                    
     not  meet  one  or   more  of  the  requirements  under                                                                    
     subsection (a)  if the director finds  that issuance is                                                                    
     in  the  best  interests  of  the  public,  results  in                                                                    
     economies of  acquisition or administration,  and meets                                                                    
     other requirements established by regulation.                                                                              
     · New  subsection (f) provides  that the  director must                                                                    
     approve the  issuance of a group  life insurance policy                                                                    
     under  subsection (a)  or (e)  prior to  issuance of  a                                                                    
     policy  by the  insurer  under subsection  (a) or  (e).                                                                    
     Sec.  44  AS  21.51.020   Scope,  format  of  policy  ·                                                                    
     Paragraph (3)  is amended to  allow a policy  of health                                                                    
     insurance to  cover children of a  policyholder under a                                                                    
     specified age  may not exceed  25 years.  The amendment                                                                    
     is necessary to avoid conflict with federal law.                                                                           
                                                                                                                                
     Sec. 45 AS  21.51.070(a) Reinstatement · Subsection (a)                                                                    
     is  amended   to  provide  for  an   exception  to  the                                                                    
     subsection  for a  policy offered  or  renewed in  this                                                                    
     state on a health care  exchange and subject to federal                                                                    
     regulation   on   reinstatement.   The   amendment   is                                                                    
     necessary to avoid conflict with federal law.                                                                              
                                                                                                                                
     Sec.  46 AS  21.51.405(b)  Rate requirements;  filings;                                                                    
     regulations                                                                                                                
     ·  Subsection (b)  is  amended  to extend  the  waiting                                                                    
     period  for the  effective date  for individual  health                                                                    
     insurance rates from  45 days to 90 days  to allow time                                                                    
     for  review  and  approval  of  the  rates  while  also                                                                    
     allowing sufficient  time for  insurers to  provide the                                                                    
     required 45 days' notice of a change in premium.                                                                           
                                                                                                                                
     Sec. 47 AS 21.51.500 Definitions                                                                                           
     · New paragraph  (4) defines "health care  exchange" to                                                                    
     mean  an American  Health Benefit  Exchange established                                                                    
     under 42 U.S.C. 18031.                                                                                                     
                                                                                                                                
     Sec. 48  AS 21.53.068 Limitations related  to producers                                                                    
     and third-party administrators                                                                                             
     · This section  is amended to correct  a drafting error                                                                    
     by changing "compensates" to "does not compensate".                                                                        
                                                                                                                                
     Sec.  49 AS  21.54.015(b)  Rate requirements;  filings;                                                                    
     regulations; health care insurance restrictions                                                                            
     · Subsection  (b) is amended  to correct  the paragraph                                                                    
     citation to  AS 21.54.060 due to  amendments being made                                                                    
     to AS 21.54.060.                                                                                                           
                                                                                                                                
     Sec.  50 AS  21.54.015(c)  Rate requirements;  filings;                                                                    
     regulations; health care insurance restrictions                                                                            
     ·  Subsection (c)  is  amended  to extend  the  waiting                                                                    
     period  for  the  effective  date  for  large  employer                                                                    
     health care  insurance plan premium rates  from 45 days                                                                    
     to 90  days to  allow time for  review and  approval of                                                                    
     the  rates  while  also allowing  sufficient  time  for                                                                    
     insurers to provide  the required 45 days'  notice of a                                                                    
     change in premium.                                                                                                         
                                                                                                                                
     Sec. 51 AS 21.54.060 Group health insurance defined                                                                        
     · Paragraph (2) is amended to clarify that associations                                                                    
     and   labor  unions   issued  group   health  insurance                                                                    
     policies  under   this  section  must  be   "bona  fide                                                                    
     associations".  A  nonsubstantive  drafting  convention                                                                    
     change is also made.                                                                                                       
     · Paragraph (3) is amended to clarify that group health                                                                    
     insurance may  be issued under  a policy issued  to the                                                                    
     trustees of  a fund adopted  or participated in  by two                                                                    
     or more employers or by one  or more labor unions or by                                                                    
     one or more  employers and one or more  labor unions or                                                                    
     by  an association  as defined  in  paragraph (2).  The                                                                    
     requirement  that  the  employers  be in  the  same  or                                                                    
     related industry is deleted with respect to trusts.                                                                        
     · Paragraph (5) is  deleted and is replaced  by the new                                                                    
     subsection (b) of AS 21.54.060.                                                                                            
                                                                                                                                
     Sec. 52 AS 21.54.060(b)  and (c) Group health insurance                                                                    
     defined                                                                                                                    
     ·  New subsection  (b)  provides  that a  group  health                                                                    
     insurance policy  may be  issued to  a group  that does                                                                    
     not  meet one  or  more of  the  requirements under  AS                                                                    
     21.54.060(1)- (4)  and (6) if  the director  finds that                                                                    
     issuance  is  in  the best  interests  of  the  public,                                                                    
     results in economies  of acquisition or administration,                                                                    
     and   meets    other   requirements    established   by                                                                    
     regulation.  This replaces  the existing  authority and                                                                    
     makes it consistent with the group life provision.                                                                         
     · New  subsection  (c) provides  that  an insurer  must                                                                    
     submit a  form filing  that complies with  AS 21.42.123                                                                    
     (Form filing  subject to prior approval)  and establish                                                                    
     that  the group  meets the  requirements of  subsection                                                                    
     (e) in order  to issue a group  health insurance policy                                                                    
     to  a group  under  subsection (e).  The director  must                                                                    
     also  affirmatively  find  that  the  group  meets  the                                                                    
     requirements  of subsection  (e) prior  to the  insurer                                                                    
     issuing  a group  health  insurance  policy under  this                                                                    
     section.                                                                                                                   
                                                                                                                                
     Sec. 53 AS 21.54.500(4) Definitions                                                                                        
     · Paragraph (4) repeals and  reenacts the definition of                                                                    
     "bona  fide association"  to the  meaning  given in  AS                                                                    
     21.97.900                                                                                                                  
                                                                                                                                
     Sec. 54 AS 21.56.110(a) Applicability                                                                                      
     · Subsection (a) is amended  to reconcile any conflicts                                                                    
     between  AS  21.56  and  federal   law  by  adding  the                                                                    
     language "except as prohibited by federal law."                                                                            
                                                                                                                                
     Sec.  55  AS  21.56.120(e) Premium  rate  restrictions;                                                                    
     disclosures; reports; confidentiality                                                                                      
     · Subsection  (e) is amended  to correct  the paragraph                                                                    
     citation to  AS 21.54.060 due to  amendments being made                                                                    
     to AS 21.54.060.                                                                                                           
                                                                                                                                
     Sec 56 AS 21.56.250(6) Definitions                                                                                         
     · Paragraph (6) is amended to reflect the definition of                                                                    
     "bona  fide association"  has the  meaning given  in AS                                                                    
     21.97.900.                                                                                                                 
                                                                                                                                
     Sec.  57  AS  21.59.150(a)  and  (b)  Provider  license                                                                    
     renewal, lapse, reinstatement.                                                                                             
     · Subsection  (a)  and  (b) are  amended  to make  non-                                                                    
     substantive changes  to conform  the language  to State                                                                    
     Based Systems (SBS), an electronic  system owned by the                                                                    
     National  Association  of Insurance  Commissioners  for                                                                    
     use  by  state  regulators   in  support  of  insurance                                                                    
     regulatory functions. SBS enables  the division to more                                                                    
     efficiently    and    effectively    process    license                                                                    
     applications,    renewals,    inquiries,    complaints,                                                                    
     enforcement   actions   and   other   functions   while                                                                    
     remaining    compliant    with   national    uniformity                                                                    
     initiatives.                                                                                                               
                                                                                                                                
     Sec. 58 AS 21.59.170(a) Return and cancellation                                                                            
     · Subsection (a) is amended to correct a drafting error                                                                    
     by  deleting   the  word   "unearned".  Non-substantive                                                                    
     drafting convention changes are also made.                                                                                 
                                                                                                                                
     Sec. 59 AS 21.59.170(b) Return and cancellation                                                                            
     · Subsection (b) is amended to correct a drafting error                                                                    
     by   adding   the  word   "unearned".   Non-substantive                                                                    
     drafting convention changes are also made.                                                                                 
                                                                                                                                
     Sec.   60   AS    21.59.180(a)   Provider's   financial                                                                    
     responsibility                                                                                                             
                                                                                                                                
     · Subsection (a) is amended to correct a drafting error                                                                    
     by deleting the words "a provider".                                                                                        
                                                                                                                                
     Sec.  61 AS  21.69.310(a) Meetings  of stockholders  or                                                                    
     members                                                                                                                    
     · Subsection (a)  is amended to remove  the requirement                                                                    
     for stockholder  or member meetings  to be held  in the                                                                    
     city or town  of a company's principal  office or place                                                                    
     of  business   in  this  state.  The   amended  statute                                                                    
     reflects the  reality of the Alaska  domiciled insurers                                                                    
     and of the nationwide  insurance industry. Of the seven                                                                    
     Alaska domestic insurers, one is  a U.S. branch of a UK                                                                    
     company with  central administration in the  UK and two                                                                    
     other insurers  are members of holding  company systems                                                                    
     that are  domiciled in other  states and  are centrally                                                                    
     administered  there. This  is  common nationwide  where                                                                    
     holding company systems  have insurer members domiciled                                                                    
     in  states  other than  where  the  holding company  is                                                                    
     domiciled.  Significant  administrative  functions  are                                                                    
     often  centralized  at  the holding  company  domiciled                                                                    
     location for the whole group.  The amended statute also                                                                    
     accommodates  three Alaska  domestic insurers  from the                                                                    
     difficulty  of always  having  to  hold stockholder  or                                                                    
     member meetings  at their principal office  or place of                                                                    
     business. These  insurers have  board members  that are                                                                    
     disbursed  throughout the  state and  in other  states.                                                                    
     Annual meetings are often held  in locations other than                                                                    
     the principal  office or place  of business such  as in                                                                    
     Anchorage  where  travel to  and  from  is easiest,  or                                                                    
     rotated to  other areas  of the state  to make  it more                                                                    
     convenient for  members to attend  the meetings  and to                                                                    
     participate  on the  boards. These  insurers are  still                                                                    
     able to request approval of  the director to hold these                                                                    
     meetings  at  a  location  that is  not  the  principle                                                                    
     office or place of business.                                                                                               
                                                                                                                                
     Sec.  62 AS  21.69.310(c) Meetings  of stockholders  or                                                                    
     members                                                                                                                    
     ·  Subsection  (c) is  amended  to  give  the  director                                                                    
     discretion  to approve  a date  for  an annual  meeting                                                                    
     later than the  first six months of  each calendar year                                                                    
     upon  a written  request for  approval for  good cause.                                                                    
     The request for approval must  be made at least 30 days                                                                    
     before  the  end  of the  six-month  requirement.  This                                                                    
     amendment  reflects the  fact that  annual meetings  of                                                                    
     Alaska insurers cannot always be  held within the first                                                                    
     six  months  of  the  calendar year  due  to  the  wide                                                                    
     disbursement  of board  members  and  to the  differing                                                                    
     requirements  for  the  timing of  annual  meetings  of                                                                    
        other states where holding companies with Alaska                                                                        
     insurers are domiciled.                                                                                                    
                                                                                                                                
     Sec. 63 AS 21.69.390(b) Home office and records                                                                            
     · Subsection (b) is amended to  delete the reference AS                                                                    
     21.69.390(d) as  that subsection is being  repealed for                                                                    
     the  reasons  as  stated  in   Sec.  67  of  this  Bill                                                                    
     Analysis.                                                                                                                  
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  redirected   attention  to   proposed                                                               
Section  61, and  asked whether  domestic insurers  are based  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
MS. WING-HEIER said  yes.  In further  response to Representative                                                               
Josephson, she said domestic insurers  have registered in Alaska,                                                               
but may have  stockholders who live outside the  state or outside                                                               
the U.S.,  thus the  bill allows for  stockholder meetings  to be                                                               
held  elsewhere.    She provided  several  examples  of  domestic                                                               
insurers, and stated  that the important point was  for the state                                                               
to receive  the required notice,  attendance, and minutes  of the                                                               
stockholders' meetings.                                                                                                         
                                                                                                                                
4:39:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HUGHES asked  why  the director  of the  division                                                               
seeks to approve the location of a stockholder meeting.                                                                         
                                                                                                                                
MS. WING-HEIER  advised that if  it is  prudent for a  company to                                                               
come  to Alaska  for  an  open meeting  that  the division  could                                                               
attend, she would require it to do so.                                                                                          
                                                                                                                                
REPRESENTATIVE  LEDOUX inquired  as  to whether  meetings can  be                                                               
held telephonically.                                                                                                            
                                                                                                                                
MS. WING-HEIER  said no.   In further response  to Representative                                                               
LeDoux -  as to  why telephonic  meetings are  not allowed  - she                                                               
said she would research that question.                                                                                          
                                                                                                                                
REPRESENTATIVE LEDOUX asked whether  board of directors' meetings                                                               
could be telephonic.                                                                                                            
                                                                                                                                
4:42:29 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER   said  board  of  directors   meetings  are  not                                                               
addressed  in   proposed  Section  61,  and   she  would  conduct                                                               
additional research.                                                                                                            
                                                                                                                                
4:43:27 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER, in  response to  Representative Josephson,  said                                                               
FFM  is an  acronym  for the  federally facilitated  marketplace,                                                               
healthcare.gov.     She  continued  paraphrasing   the  sectional                                                               
analysis for HB 372, as follows: [original punctuation provided]                                                                
                                                                                                                                
     Sec. 64 AS 21.85.500(5) Definitions                                                                                        
     · Paragraph (5) is amended to  change the definition of                                                                    
     "multiple  employer  welfare  arrangement"  to  conform                                                                    
     with  the  meaning of  the  term  as defined  under  29                                                                    
     U.S.C. 1002.                                                                                                               
                                                                                                                                
     Sec. 65 AS 21.97.020 General penalty                                                                                       
     · The general  penalty amounts are being  updated to be                                                                    
     more consistent with other penalty  provisions in AS 21                                                                    
     such as AS 21.27.440 and  to provide a mechanism to use                                                                    
     under section four  of the bill and  for market conduct                                                                    
     enforcement.  This section  has  not  been updated  for                                                                    
     over 30 years.                                                                                                             
                                                                                                                                
     Sec. 66 AS 21.97.900(47) Definitions for title                                                                             
     · Amended  to add  a new  paragraph (47)  defines "bona                                                                    
     fide association".                                                                                                         
                                                                                                                                
     Sec.  67   Repeals  the  following   provisions:  ·  AS                                                                    
     21.06.087  (Insurance report)  Repeal  of this  section                                                                    
     removes  the  requirement   that  the  division  report                                                                    
     annually  on the  impacts of  tort  reforms enacted  in                                                                    
     1997 (chapter 26,  SLA 1997). This report  has not been                                                                    
     updated  since   2004.  At  this  time,   it  would  be                                                                    
     difficult to  attribute observed changes in  the market                                                                    
     to the tort reform legislation.                                                                                            
     ·  AS  21.07.250(9)  (Definitions)  The  definition  of                                                                    
     "medical  emergency"   is  repealed  as  it   is  being                                                                    
     replaced  by  the  definition  for  "emergency  medical                                                                    
     condition".                                                                                                                
     · AS 21.54.500(4) (Definitions) The definition of "bona                                                                    
     fide association"  is no longer needed  in this chapter                                                                    
     because  an updated  definition  of the  term has  been                                                                    
     added to AS 21.97 by section 58 of the bill.                                                                               
     · AS 21.69.390(d) is outdated as  books and records are                                                                    
     increasingly   being   maintained  electronically   and                                                                    
     access  can be  made remotely  or on-site  at the  home                                                                    
     office of  an insurer. The  division also can  access a                                                                    
     company's    financial    filings   with    the    NAIC                                                                    
     electronically. AS  21.06.140 requires  examinations of                                                                    
     domestic,   foreign  and   Canadian   insurers  to   be                                                                    
     conducted  at  an insurer's  home  office  or at  other                                                                    
     places  where   the  records  are  kept,   not  at  the                                                                    
     insurer's principal place of business in the state.                                                                        
                                                                                                                                
     Sec. 68 Repeals the following provisions                                                                                   
     ·  AS  21.07.050  (External  health  care  appeals)  AS                                                                    
     21.07.060,    (Qualifications   of    external   appeal                                                                    
     agencies),  AS 21.07.070  (Limitation  on liability  of                                                                    
     reviewers),    AS   21.07.250(1),    (2),   and    (7),                                                                    
     (Definitions).  These provisions  are no  longer needed                                                                    
     due  to  Section  4  of the  bill  which  requires  the                                                                    
     director   to   adopt   by  regulation   the   National                                                                    
     Association of Insurance Commissioners model acts.                                                                         
                                                                                                                                
     Sec. 69 Repeals the following provisions                                                                                   
     · AS 21.27.115(8)  crop insurance is removed  as a line                                                                    
     of  authority  due to  section  16  of the  bill  which                                                                    
     provides  that  crop insurance  is  a  limited line  of                                                                    
     authority    consistent   with    national   uniformity                                                                    
     licensing standards.                                                                                                       
     · AS 21.27.115(9) surety insurance is removed as a line                                                                    
     of authority to be  consistent with national uniformity                                                                    
     licensing standards.                                                                                                       
                                                                                                                                
     Sec. 70                                                                                                                    
     · Provides for an uncodified  new section outlining the                                                                    
     timing  of when  the  director of  insurance may  adopt                                                                    
     regulations.                                                                                                               
                                                                                                                                
     Sec. 71                                                                                                                    
     · Provides  for a revisor's  instruction to  change the                                                                    
     catch line of AS 21.27.380.                                                                                                
                                                                                                                                
     Sec. 72                                                                                                                    
     · Provides  that section  70 of  the bill  takes effect                                                                    
     immediately under AS 01.10.070(c).                                                                                         
                                                                                                                                
     Sec. 73                                                                                                                    
     · Provides  that section  68 of  the bill  takes effect                                                                    
     January 1, 2017.                                                                                                           
                                                                                                                                
     Sec. 74                                                                                                                    
     · Provides that AS 21.27.150(a)(9), enacted by section                                                                     
     19 of the bill, and section 69 of the bill take effect                                                                     
     March 1, 2017.                                                                                                             
                                                                                                                                
4:45:35 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON  pointed  out  the  bill  has  a  zero  fiscal  note                                                               
attached.                                                                                                                       
                                                                                                                                
REPRESENTATIVE HUGHES  returned attention to proposed  Section 4,                                                               
which  said  the  regulations  would   be  based  on  model  laws                                                               
developed by the National  Association of Insurance Commissioners                                                               
(NAIC),  and  questioned whether  the  regulations  would not  be                                                               
based on Alaska Statutes.                                                                                                       
                                                                                                                                
MS.  WING-HEIER answered  PPACA allows  for three  processes:   a                                                               
utilization review,  an internal  review, and an  external review                                                               
of claims presented.  Subsequent  to PPACA, the reviews have been                                                               
informally performed by the division.   Many states did not agree                                                               
with  the PPACA  processes,  and the  NAIC  produced three  model                                                               
acts:  the utilization review  and benefit determination act; the                                                               
uniform  health  carrier  external  review  act;  health  carrier                                                               
grievance procedure  model act.   The division proposes  to place                                                               
the  model  acts  in  regulation,  so they  can  be  revised  for                                                               
Alaskans as necessary.                                                                                                          
                                                                                                                                
REPRESENTATIVE HUGHES  asked whether anything based  on the three                                                               
model acts conflicts with Alaska state statutes.                                                                                
                                                                                                                                
MS. WING-HEIER said no.                                                                                                         
                                                                                                                                
REPRESENTATIVE  COLVER   clarified  that  the  state   would  not                                                               
reference national standards in its  regulations; in fact, if the                                                               
national  standards  change,  the  state  regulations  would  not                                                               
automatically be affected.                                                                                                      
                                                                                                                                
MS. WING-HEIER  agreed that  the regulations  would be  "based on                                                               
what works for Alaskans, not a one-size-fits-all."                                                                              
                                                                                                                                
4:50:27 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON said  the state has used model  legislation from NAIC                                                               
six  or  seven  times;  model   legislation  helps  consumers  by                                                               
providing  standardization  and  reciprocity with  other  states.                                                               
The division can rely on  audits provided by other states because                                                               
they  meet  the  same  standards,   thereby  saving  millions  of                                                               
dollars.   Standardized policies  and insurance  certificates are                                                               
helpful to those who do business  in more than one state, and the                                                               
goal is to help those buying insurance.                                                                                         
                                                                                                                                
MS. WING-HEIER added that since  PPACA, various states have taken                                                               
the model regulations, statutes, and a combinations thereof.                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES directed  attention to the bill  on page 4,                                                               
beginning on line 22, which read:                                                                                               
                                                                                                                                
     (2) clearly  states that the health  care provider will                                                                    
     adhere  to  the  health  care  insurer's  policies  and                                                                    
     procedures,  including procedures  regarding referrals,                                                                    
     obtaining prior  authorization, and  providing services                                                                    
     under  a treatment  plan approved  by  the health  care                                                                    
     insurer;                                                                                                                   
                                                                                                                                
REPRESENTATIVE  HUGHES expressed  her concern  about whether  the                                                               
medical community  would accept paragraph (2)  because the health                                                               
care provider needs to determine  the health care treatment plan,                                                               
and the insurance company should not dictate care.                                                                              
                                                                                                                                
MS.  WING-HEIER  observed  that  there   are  two  parts  to  the                                                               
provision:    the  relationship  between  the  provider  and  the                                                               
patient,  and  the  relationship  between  the  insurer  and  the                                                               
provider.   Included in the  regulations pertaining  to grievance                                                               
procedures  is "predetermination,"  so that  a patient  knows the                                                               
cost  of a  service and  what insurance  will pay.   The  network                                                               
provider  has signed  a contract  with an  insurer regarding  the                                                               
fee, so a patient is informed of  the cost, and can make a choice                                                               
of provider.                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES restated her  concern related to "providing                                                               
services  under a  treatment  plan approved  by  the health  care                                                               
insurer,"  because  sometimes a  health  care  provider needs  to                                                               
suddenly  change the  approved  plan, and  this  would tie  their                                                               
hands.                                                                                                                          
                                                                                                                                
CHAIR OLSON  stated that  the Alaska  State Hospital  and Nursing                                                               
Home  Association (ASHNA),  hospitals, and  physicians have  been                                                               
participating as  stakeholders in  the bill,  and he  assured the                                                               
committee that their opinions will be heard.                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  agreed   with  Representative  Hughes'                                                               
concern and pointed  out similar questions are raised  on page 9,                                                               
beginning on line 17, which read:                                                                                               
                                                                                                                                
     (14)  "utilization review"  means a  set of  techniques                                                                    
     designed  to  monitor   the  use  of, or  evaluate  the                                                                    
     clinical   necessity,  appropriateness,   efficacy,  or                                                                    
     efficiency  of, health  care  services, procedures,  or                                                                    
     settings;  techniques  may include  ambulatory  review,                                                                    
     prospective   review,  second   opinion  certification,                                                                    
     concurrent    review,   case    management,   discharge                                                                    
     planning, or retrospective review.                                                                                         
                                                                                                                                
REPRESENTATIVE COLVER also agreed with Representative Hughes.                                                                   
                                                                                                                                
[HB 372 was held over.]                                                                                                         
                                                                                                                                
4:58:19 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
4:58 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB372 ver W.PDF HL&C 3/28/2016 3:15:00 PM
HB 372
HB372 Sponsor Statement.pdf HL&C 3/28/2016 3:15:00 PM
HB 372
HB372 Sectional Analysis.pdf HL&C 3/28/2016 3:15:00 PM
HB 372
HB308 ver A.PDF HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Sponsor Statement.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Sectional Analysis.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from June May 3-03-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Landon Forth 3-02-2016.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Jane Fellman 3-07-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Lori Tyler 3-03-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Marialourdes Apilado 3-03-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Sara Penisten 3-07-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Article Safe Kids Maine 3-17-2016.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Article-ADN 1-12-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Article-NBC-KARE 6-25-14.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Amanda Ferrara 3-03-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Amanda Seethaler 3-02-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Andrea Konik 3-07-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Beth Schuerman 3-02-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Hilario Alva 3-02-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB308 Supporting Documents-Letter from Gwendolynne Teutsch 3-02-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB214 Fiscal Note-ACS-TRC-03-17-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 214
HB214 Supporting Documents-Memo-WCAC Chairman Hemenway Response to Committee Questions 03-22-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 214
HB214 Draft Proposed Blank CS ver P.pdf HL&C 3/28/2016 3:15:00 PM
HB 214
HB214 Summary of Changes CS ver E to ver P.pdf HL&C 3/28/2016 3:15:00 PM
HB 214
HB214 Sectional Analysis CS ver P.pdf HL&C 3/28/2016 3:15:00 PM
HB 214
HB308 Fiscal Note-LAW-CIV-03-25-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 308
HB372 Fiscal Note-DCCED-DOI-03-24-16.pdf HL&C 3/28/2016 3:15:00 PM
HB 372