Legislature(2019 - 2020)BARNES 124

04/22/2019 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 102 RENTAL VEHICLE BY PRIVATE OWNER TELECONFERENCED
Moved HB 102 Out of Committee
+ SB 29 EXTEND BOARD OF MARINE PILOTS TELECONFERENCED
Heard & Held
+ SB 36 EXTEND BOARD OF NURSING TELECONFERENCED
Heard & Held
*+ HB 78 INSURER & GROUP INSURANCE DISCLOSURE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 22, 2019                                                                                         
                           3:17 p.m.                                                                                            
                                                                                                                                
                             DRAFT                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Gabrielle LeDoux, Co-Chair                                                                                       
Representative Adam Wool, Co-Chair                                                                                              
Representative Zack Fields                                                                                                      
Representative Sara Hannan                                                                                                      
Representative Louise Stutes                                                                                                    
Representative Josh Revak                                                                                                       
Representative Dave Talerico                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 102                                                                                                              
"An Act relating to rental vehicles; relating to vehicle rental                                                                 
networks; relating to liability for vehicle rental taxes; and                                                                   
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HB 102 OUT OF COMMITTEE                                                                                            
                                                                                                                                
SENATE BILL NO. 29                                                                                                              
"An Act extending the termination date of the Board of Marine                                                                   
Pilots; and providing for an effective date."                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 36                                                                                                              
"An Act extending the termination date of the Board of Nursing;                                                                 
and providing for an effective date."                                                                                           
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 78                                                                                                               
"An Act relating to insurance; relating to an insurer's                                                                         
corporate annual disclosure; relating to insurance company                                                                      
holding systems; and providing for an effective date."                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 102                                                                                                                  
SHORT TITLE: RENTAL VEHICLE BY PRIVATE OWNER                                                                                    
SPONSOR(s): REPRESENTATIVE(s) WOOL                                                                                              
                                                                                                                                
03/20/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/20/19       (H)       L&C, FIN                                                                                               
04/03/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/03/19       (H)       Heard & Held                                                                                           
04/03/19       (H)       MINUTE(L&C)                                                                                            
04/08/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/08/19       (H)       Heard & Held                                                                                           
04/08/19       (H)       MINUTE(L&C)                                                                                            
04/15/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/15/19       (H)       Heard & Held                                                                                           
04/15/19       (H)       MINUTE(L&C)                                                                                            
04/17/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/17/19       (H)       -- MEETING CANCELED --                                                                                 
04/22/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB  29                                                                                                                  
SHORT TITLE: EXTEND BOARD OF MARINE PILOTS                                                                                      
SPONSOR(s): SENATOR(s) STEDMAN                                                                                                  
                                                                                                                                
01/23/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/23/19       (S)       L&C, FIN                                                                                               
02/07/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/07/19       (S)       Moved SB 29 Out of Committee                                                                           
02/07/19       (S)       MINUTE(L&C)                                                                                            
02/08/19       (S)       L&C RPT 5DP                                                                                            
02/08/19       (S)       DP: REINBOLD, BIRCH, BISHOP, COSTELLO,                                                                 
                         GRAY-JACKSON                                                                                           
03/01/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/01/19       (S)       Heard & Held                                                                                           
03/01/19       (S)       MINUTE(FIN)                                                                                            
03/08/19       (S)       FIN RPT  8DP 1NR                                                                                       
03/08/19       (S)       DP: STEDMAN, VON IMHOF, MICCICHE,                                                                      
                         HOFFMAN, WIELECHOWSKI, OLSON, WILSON,                                                                  
                         BISHOP                                                                                                 
03/08/19       (S)       NR: SHOWER                                                                                             
03/08/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/08/19       (S)       Moved SB 29 Out of Committee                                                                           
03/08/19       (S)       MINUTE(FIN)                                                                                            
04/05/19       (S)       TRANSMITTED TO (H)                                                                                     
04/05/19       (S)       VERSION: SB  29                                                                                        
04/08/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/08/19       (H)       L&C, FIN                                                                                               
04/17/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/17/19       (H)       -- MEETING CANCELED --                                                                                 
04/22/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB  36                                                                                                                  
SHORT TITLE: EXTEND BOARD OF NURSING                                                                                            
SPONSOR(s): SENATOR(s) GIESSEL                                                                                                  
                                                                                                                                
01/25/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/25/19       (S)       L&C, FIN                                                                                               
02/07/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/07/19       (S)       Moved SB 36 Out of Committee                                                                           
02/07/19       (S)       MINUTE(L&C)                                                                                            
02/08/19       (S)       L&C RPT 5DP                                                                                            
02/08/19       (S)       DP: REINBOLD, COSTELLO, BISHOP, BIRCH,                                                                 
                         GRAY-JACKSON                                                                                           
03/01/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/01/19       (S)       Heard & Held                                                                                           
03/01/19       (S)       MINUTE(FIN)                                                                                            
03/13/19       (S)       FIN RPT  6DP 2NR                                                                                       
03/13/19       (S)       DP: STEDMAN, VON IMHOF, MICCICHE,                                                                      
                         OLSON, WILSON, BISHOP                                                                                  
03/13/19       (S)       NR: SHOWER, WIELECHOWSKI                                                                               
03/13/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/13/19       (S)       Moved SB 36 Out of Committee                                                                           
03/13/19       (S)       MINUTE(FIN)                                                                                            
04/01/19       (S)       TRANSMITTED TO (H)                                                                                     
04/01/19       (S)       VERSION: SB  36                                                                                        
04/03/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/03/19       (H)       L&C, FIN                                                                                               
04/17/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/17/19       (H)       -- MEETING CANCELED --                                                                                 
04/22/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB  78                                                                                                                  
SHORT TITLE: INSURER & GROUP INSURANCE DISCLOSURE                                                                               
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/04/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/04/19       (H)       L&C                                                                                                    
04/22/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAVID SCOTT, Staff                                                                                                              
Senator Bert Stedman                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Presented  SB 29  on  behalf  of  Senator                                                             
Stedman, prime sponsor.                                                                                                         
                                                                                                                                
EILEEN DONAHUE, Audit Manager                                                                                                   
Division of Legislative Audit                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Presented a summary of the  Board of Marine                                                             
Pilot's sunset  audit and answered  questions during  the hearing                                                               
on SB 29.                                                                                                                       
                                                                                                                                
SENATOR CATHY GIESSEL                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented SB 36.                                                                       
                                                                                                                                
KAREN BUCHKOSKI, Audit Manager                                                                                                  
Division of Legislative Audit                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Presented  a  summary  of  the  Board  of                                                             
Nursing's sunset audit and answered  questions during the hearing                                                               
on SB 36.                                                                                                                       
                                                                                                                                
SARAH CHAMBERS, Director                                                                                                        
Division of Corporations, Business and Professional Licensing                                                                   
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on SB                                                             
36.                                                                                                                             
                                                                                                                                
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB  78 and answered questions from                                                             
the committee.                                                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:17:35 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  GABRIELLE LEDOUX  called the  House Labor  and Commerce                                                             
Standing   Committee    meeting   to    order   at    3:17   p.m.                                                               
Representatives  Hannan, Talerico,  Stutes, Fields,  Revak, Wool,                                                               
and LeDoux were present at the call to order.                                                                                   
                                                                                                                                
             HB 102-RENTAL VEHICLE BY PRIVATE OWNER                                                                         
                                                                                                                                
3:18:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced that the  first order of business would                                                               
be  HOUSE BILL  NO. 102,  "An  Act relating  to rental  vehicles;                                                               
relating to  vehicle rental networks;  relating to  liability for                                                               
vehicle rental taxes; and providing for an effective date."                                                                     
                                                                                                                                
3:19:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  moved to  report HB  102 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  Without objection, HB 102  was moved from the House Labor                                                               
and Commerce Standing Committee.                                                                                                
                                                                                                                                
3:19:29 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:19 to 3:21 p.m.                                                                            
                                                                                                                                
[Co-Chair LeDoux passed the gavel to Co-Chair Wool.]                                                                            
                                                                                                                                
              SB 29-EXTEND BOARD OF MARINE PILOTS                                                                           
                                                                                                                                
3:21:40 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that the  next order of business would be                                                               
SENATE BILL  NO. 29,  "An Act extending  the termination  date of                                                               
the  Board  of Marine  Pilots;  and  providing for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
3:22:29 PM                                                                                                                    
                                                                                                                                
DAVID   SCOTT,  Staff,   Senator  Bert   Stedman,  Alaska   State                                                               
Legislature,  introduced  SB 29  on  behalf  of Senator  Stedman,                                                               
prime sponsor.   He  said the  bill extends  the Board  of Marine                                                               
Pilots  for  eight  years,  as  recommended  by  the  legislative                                                               
auditor.   He  explained that  the board  licenses and  regulates                                                               
marine pilots to  ensure they are competent and safe.   The board                                                               
also  makes  final  licensing decisions  and  takes  disciplinary                                                               
action against violators of laws  and regulations.  He noted that                                                               
the  board  has seven  members:  two  marine pilots,  two  vessel                                                               
agents,  two   public  members,  and  the   commissioner  of  the                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED).     He  further  noted  that   the  legislative  auditor                                                               
conducted a  review of the board  and found a continued  need for                                                               
it.  The auditor determined that  the board is following the law;                                                               
it  is processing  investigations timely  and actively  reviewing                                                               
and changing its  regulations to improve the  industry and better                                                               
protect the  public.  He  directed attention to the  fiscal note,                                                               
which is funded by Receipt Supportive Services.                                                                                 
                                                                                                                                
3:24:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN  asked  why  the extension  is  for  eight                                                               
years.                                                                                                                          
                                                                                                                                
3:24:26 PM                                                                                                                    
                                                                                                                                
MR.  SCOTT offered  his  understanding that  eight  years is  the                                                               
longest  possible extension,  which means  the board  is in  good                                                               
standing.                                                                                                                       
                                                                                                                                
3:25:08 PM                                                                                                                    
                                                                                                                                
EILEEN  DONAHUE, Audit  Manager, Division  of Legislative  Audit,                                                               
Legislative Affairs  Agency, provided a  summary of the  Board of                                                               
Marine Pilot's sunset  audit.  She said the  audit concludes that                                                               
the  board  is  serving  the  public's  interest  by  effectively                                                               
licensing marine  pilots and approving trainees  and apprentices,                                                               
adding that  the maximum eight-year extension  is recommended for                                                               
the  board.   As  of January  2018,  there were  a  total of  103                                                               
licensees, and by  March the board had a surplus  of over 229,000                                                               
dollars.      She   noted   that    the   report   included   two                                                               
recommendations.    The  Division   of  Legislative  Audit  (DLA)                                                               
recommends that the board should  ensure applicable documents are                                                               
aboard  foreign pleasure  crafts  in  accordance with  regulatory                                                               
requirements.   The second recommendation  states that  the board                                                               
should ensure  the Southeast Alaska Pilot's  Association improves                                                               
its procedures for tracking drug test notifications.                                                                            
                                                                                                                                
3:28:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HANNAN  sought   clarification   on  the   first                                                               
recommendation and  the correct procedure for  a foreign pleasure                                                               
vessel that is not in compliance with the required documents.                                                                   
                                                                                                                                
3:28:53 PM                                                                                                                    
                                                                                                                                
MS.  DONAHUE  explained  that   the  recommendation  in  question                                                               
concerns  an  application  process  that  occurs  before  vessels                                                               
arrive in Alaska waters.                                                                                                        
                                                                                                                                
3:29:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  presumed that  any foreign  vessel lacking                                                               
proper documentation  would be denied permission  to enter Alaska                                                               
waters.  She asked if that was the conclusion of the audit.                                                                     
                                                                                                                                
3:29:23 PM                                                                                                                    
                                                                                                                                
MS. DONAHUE  clarified that  the audit  looks at  the application                                                               
process for  exemptions.  She  said before a vessel  arrives, the                                                               
operator  must submit  an application  that indicates  if certain                                                               
items are on  board.  The board approved any  exemptions with the                                                               
understanding that  the applicant will follow  through and obtain                                                               
the required documents  at a later date.  However,  the DLA is of                                                               
the  opinion that  the required  documents should  be aboard  the                                                               
vessels at the time of application.                                                                                             
                                                                                                                                
3:30:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL sought  clarification  on  the board's  cumulative                                                               
surplus.                                                                                                                        
                                                                                                                                
3:30:52 PM                                                                                                                    
                                                                                                                                
MS. DONAHUE  replied that it changes  from year to year  based on                                                               
biennial license  renewals.   She noted that  the DCCED  plans on                                                               
evaluating the fees  to ensure that the  board's surpluses aren't                                                               
excessive.                                                                                                                      
                                                                                                                                
3:32:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that SB 29 was held over.                                                                               
                                                                                                                                
                 SB 36-EXTEND BOARD OF NURSING                                                                              
                                                                                                                                
3:32:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that the  next order of business would be                                                               
SENATE BILL  NO. 36,  "An Act extending  the termination  date of                                                               
the Board of Nursing; and providing for an effective date."                                                                     
                                                                                                                                
3:33:10 PM                                                                                                                    
                                                                                                                                
SENATOR  CATHY  GIESSEL,  Alaska   State  Legislature,  as  prime                                                               
sponsor of  SB 36, introduced  the bill and paraphrased  parts of                                                               
the sponsor  statement [included in the  committee packet], which                                                               
read in its entirety as follows [original punctuation provided]:                                                                
                                                                                                                                
     In accordance  with AS  08.03.010(c)(14,) the  Board of                                                                    
     Nursing  is  scheduled  to  terminate  June  30,  2019.                                                                    
     Senate  Bill 36  extends the  board's termination  date                                                                    
     six years to June 30, 2025.                                                                                                
                                                                                                                                
     The Board of Nursing is  established under AS 08.68 for                                                                    
     the purpose of controlling  and regulating the practice                                                                    
     of  nursing,   including  APRNs,   nurse  anesthetists,                                                                    
     registered nurses, LPNs and CNAs.                                                                                          
                                                                                                                                
     The board's  mission statement is "to  actively promote                                                                    
     and  protect  the  health of  the  citizens  of  Alaska                                                                    
     through the  safe and effective practice  of nursing as                                                                    
     defined by law."                                                                                                           
                                                                                                                                
     The audit of the Board  demonstrated that it is meeting                                                                    
     this mission.                                                                                                              
                                                                                                                                
SENATOR GIESSEL  addressed the Board  of Nursing's  sunset audit,                                                               
which was  conducted by the  Division of Legislative  Audit (DLA)                                                               
to determine the  need for the board's continued  existence.  She                                                               
noted that the  DLA made four recommendations, all  of which have                                                               
been agreed to  by the board.  She directed  attention to page 11                                                               
of  the audit  and  addressed the  337,422-dollar  deficit.   She                                                               
pointed  out  that the  board's  revenues  and expenditures  have                                                               
since been updated  to reflect the license  renewals from October                                                               
and November  2018.  She  assured the committee  that, currently,                                                               
"the cash box is full."                                                                                                         
                                                                                                                                
                                                                                                                                
3:36:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  asked  why  the   DLA  recommended  a  six-year                                                               
extension as opposed to three or four years.                                                                                    
                                                                                                                                
3:36:58 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL offered  her understanding  that the  DLA wanted                                                               
the ability  to follow up  and ensure that  prior recommendations                                                               
will be resolved.                                                                                                               
                                                                                                                                
3:37:48 PM                                                                                                                    
                                                                                                                                
KAREN BUCHKOSKI,  Audit Manager,  Division of  Legislative Audit,                                                               
Legislative  Affairs  Agency,  explained that  the  reduction  in                                                               
extension time was due to the repeat findings.                                                                                  
                                                                                                                                
3:40:52 PM                                                                                                                    
                                                                                                                                
SARAH CHAMBERS, Director, Division  of Corporations, Business and                                                               
Professional  Licensing,  Department  of  Commerce,  Community  &                                                               
Economic   Development,   in   response  to   a   question   from                                                               
Representative Hannan, said  that the audit was one  of the first                                                               
things  that the  new board  addressed.   She  revealed that  the                                                               
board recently approved  two sets of regulations  to be forwarded                                                               
for public notice once they are through the legal process.                                                                      
                                                                                                                                
3:41:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  mentioned the opioid crisis  and expressed                                                               
concern   that   notifications   of   license   suspensions   for                                                               
prescriptive  authority  weren't being  dealt  with  in a  timely                                                               
matter.   She asked how  soon the  regulations would be  in place                                                               
and wondered if they would adequately address the problem.                                                                      
                                                                                                                                
3:42:42 PM                                                                                                                    
                                                                                                                                
MS.  CHAMBERS  explained  that the  division  views  the  audit's                                                               
recommendation   as  an   extra   safeguard.     She  said   that                                                               
administrative measures were established  6 months ago to address                                                               
the problem.   She said the  board created the regulations  as an                                                               
extra  step  and  to  "make  sure   that  it  was  a  mandate  on                                                               
themselves."                                                                                                                    
                                                                                                                                
3:46:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX pointed  out that the board is  still missing one                                                               
member  because  one  of  the   appointees  didn't  meet  certain                                                               
requirements.                                                                                                                   
                                                                                                                                
REPRESENTATIVE FIELDS requested  that the DCCED follow  up on the                                                               
review of CNA programs and report back to the committee.                                                                        
                                                                                                                                
3:46:55 PM                                                                                                                    
                                                                                                                                
MS.  CHAMBERS offered  to give  the committee  a current  update.                                                               
She  said that  timeframe of  lookback  for the  audit covered  a                                                               
period  when   the  board  was  switching   from  an  independent                                                               
contractor  to a  permanent  position, which  went  vacant for  a                                                               
period of time.  During  that time, she said, "programs approvals                                                               
fell by  the wayside  and the  board itself  didn't pick  up that                                                               
activity."  She said once  the position was filled, they returned                                                               
to a  regular schedule  and a  full update on  the status  of CNA                                                               
program  reviews was  reported to  the new  board at  their first                                                               
meeting.  She stated that it is no longer a deficiency.                                                                         
                                                                                                                                
3:48:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS questioned whether  all 22 CNA programs are                                                               
getting inspected.                                                                                                              
                                                                                                                                
MS. CHAMBERS confirmed that they  are all inspected on a biennial                                                               
basis.  She noted that they  received a federal grant through the                                                               
Department of  Health and  Social Services  (DHSS) to  offset the                                                               
cost and ensure that it doesn't  fall on the certified nurse aids                                                               
themselves.                                                                                                                     
                                                                                                                                
3:48:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  questioned whether the 22  CNA [training] programs                                                               
are mostly affiliated with hospitals or if they are educational.                                                                
                                                                                                                                
MS. CHAMBERS replied  that there is a variety;  for example, some                                                               
are private,  and some are  affiliated with  university programs.                                                               
Nonetheless, she pointed out that all  of them must meet the same                                                               
standards.                                                                                                                      
                                                                                                                                
3:49:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that SB 36 was held over.                                                                               
                                                                                                                                
           HB 78-INSURER & GROUP INSURANCE DISCLOSURE                                                                       
                                                                                                                                
3:49:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  announced that the  final order of  business would                                                               
be HOUSE BILL NO. 78, "An  Act relating to insurance; relating to                                                               
an insurer's  corporate annual disclosure; relating  to insurance                                                               
company holding systems; and providing for an effective date."                                                                  
                                                                                                                                
3:50:04 PM                                                                                                                    
                                                                                                                                
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community & Economic Development,  introduced HB 78 and                                                               
related  its  history.    The  bill  will  make  changes  to  the                                                               
insurance code that  conform to changes in model  laws adopted by                                                               
the National  Association of  Insurance Commissioners  (NAIC) and                                                               
will assist the  state in maintaining its  accredited status with                                                               
the NAIC and  improve uniformity nationwide in  the regulation of                                                               
insurance.   She noted  that HB 78  has two  components regarding                                                               
corporate governance and holding companies.                                                                                     
                                                                                                                                
3:52:22 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER began  the sectional  analysis  [included in  the                                                               
committee packet] of HB 78.   She addressed section 1, which adds                                                               
new sections  to AS  21.09 and requests  an annual  disclosure of                                                               
corporate  governance from  insurance  companies  to ensure  that                                                               
their policies and procedures comply with statute.                                                                              
                                                                                                                                
3:52:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX asked what corporate governance is.                                                                             
                                                                                                                                
MS. WING-HEIER  stated that,  in this  case, it  establishes that                                                               
the board knows the actions  of upper management and is cognizant                                                               
of what is taking place in that entity.                                                                                         
                                                                                                                                
3:54:06 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER returned  attention to section 1  and detailed the                                                               
annual disclosure requirement.   She read the  following from the                                                               
sectional analysis [original punctuation provided]:                                                                             
                                                                                                                                
     AS 21.09.332. Disclosure requirement                                                                                       
                                                                                                                                
          • Subsection (a)  requires  insurers  (the  term                                                                      
          "insurer"   and   "insurers"  includes   insurance                                                                    
          groups) to  submit to  the director  by June  1 of                                                                    
          each calendar  year a corporate  governance annual                                                                    
          disclosure, and, if the insurer  is a member of an                                                                    
          insurer group, to the lead  state regulator of the                                                                    
          insurance group.                                                                                                      
                                                                                                                                
          • Subsection (b) requires the  disclosure to  be                                                                      
          signed   by  the   CEO   or  corporate   secretary                                                                    
          indicating   the  insurer   has  implemented   the                                                                    
          corporate governance practices  required under the                                                                    
          disclosure provisions and  that the disclosure has                                                                    
          been provided to the  insurer's board of directors                                                                    
          or to the appropriate committee of the board.                                                                         
                                                                                                                                
          • Subsection (c) provides the director may require                                                                    
          an insurer  to submit a disclosure  if the insurer                                                                    
          is  not already  required to  do so  under (a)  of                                                                    
          this section.                                                                                                         
                                                                                                                                
          • Subsection (d) details the levels of corporate                                                                      
          governance at  which the  insurer may  provide the                                                                    
          information regarding its disclosure.                                                                                 
                                                                                                                                
          • Subsection (e) encourages the insurer  to make                                                                      
          its  disclosure  at  a level  based  on  specified                                                                    
          criteria.  If the  insurer  utilizes the  criteria                                                                    
          the entity  must so indicate  to the  director and                                                                    
          must  also explain  any subsequent  change in  the                                                                    
          level of reporting.                                                                                                   
                                                                                                                                
          • Subsection (f) provides that disclosures are to                                                                     
          be reviewed  and any requests for  information are                                                                    
          to be  made through  the lead state  in accordance                                                                    
          with  the  most  recent  NAIC  Financial  Analysis                                                                    
          Handbook.                                                                                                             
                                                                                                                                
          • Subsection (g) allows an insurer  to reference                                                                      
          other   documents   provided   to   the   director                                                                    
          containing information required  in the disclosure                                                                    
          without  having to  duplicate  the information  in                                                                    
          the  disclosure provided  the disclosure  provides                                                                    
          for  a cross-reference  of the  document in  which                                                                    
          the information is included.                                                                                          
                                                                                                                                
MS.  WING-HEIER  continued  by  saying  that  AS  21.09.334  will                                                               
authorize  the  director  to adopt  regulations  and  orders;  AS                                                               
21.09.336 will set  out the contents of  the corporate governance                                                               
annual   disclosure;   and   AS  21.09.338   will   provide   for                                                               
confidentiality.                                                                                                                
                                                                                                                                
3:55:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX questioned whether this was a recent concept                                                                    
from the NAIC.                                                                                                                  
                                                                                                                                
3:55:59 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER  said it has been  around for four to  five years,                                                               
adding that all  states are required to adopt this  by January 1,                                                               
2020 to keep accreditation.                                                                                                     
                                                                                                                                
3:56:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX inquired as to the  timing of it being brought to                                                               
the committee.  She asked why now instead of last year.                                                                         
                                                                                                                                
3:56:29 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER explained  that  last legislature,  the bill  was                                                               
introduced as a four-part accreditation  bill.  At that time, she                                                               
said, the  committee requested  that sections  three and  four be                                                               
eliminated in  order to pass  sections one and two  because there                                                               
was  already a  considerable amount  of time  spent on  the first                                                               
part of the bill.                                                                                                               
                                                                                                                                
3:57:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  asked what the real-world  impact would be                                                               
if HB 78 did not pass.                                                                                                          
                                                                                                                                
MS. WING-HEIER  replied that the  NAIC could  put the state  on a                                                               
probation.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  FIELDS questioned  whether  it could  potentially                                                               
force Alaska-based insurers to domicile elsewhere.                                                                              
                                                                                                                                
MS.  WING-HEIER answered  yes.   She  explained that  one of  the                                                               
purposes of having all states  conform to similar legislation and                                                               
having  accreditation is  that insurance  companies domiciled  in                                                               
Alaska can pay to have the  state do an examination and then they                                                               
would be accredited to transact insurance in other states.                                                                      
                                                                                                                                
3:58:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL sought clarification on accreditation.                                                                            
                                                                                                                                
3:58:59 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER  confirmed  that   Alaska  is  accredited.    She                                                               
explained  that every  5 years  Alaska  submits to  the NAIC  who                                                               
brings outside  consultants to look  at the state's  statutes and                                                               
regulations, as  well as  the Division  of Insurance's  staff and                                                               
credentialing.   She  noted that  the NAIC  ultimately ranks  the                                                               
state as  passing or failing,  adding that in 2017  Alaska passed                                                               
"with flying colors."                                                                                                           
                                                                                                                                
3:59:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL asked  how the  state's accreditation  affects the                                                               
ability  of  Alaska  insurance   companies  to  conduct  business                                                               
elsewhere.                                                                                                                      
                                                                                                                                
4:00:12 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER  conveyed that when  the state is  accredited, the                                                               
state's work is accepted by the  other 49 states and the District                                                               
of   Columbia.     She   pointed  out   that   if  Alaska   loses                                                               
accreditation,  each  state  must show  that  Alaska's  insurance                                                               
companies  are meeting  all the  financial solvency  requirements                                                               
that they have adopted.                                                                                                         
                                                                                                                                
4:01:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX asked if it is  necessary to adopt the exact same                                                               
language as the NAIC's model, or if there is any leeway.                                                                        
                                                                                                                                
4:01:24 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER replied  that accreditation must be  the model law                                                               
or substantially similar.                                                                                                       
                                                                                                                                
4:02:34 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER returned to the  sectional analysis.  She directed                                                               
attention to  AS 21.09.340, which  establishes the  penalties for                                                               
an insurer  that fails to  comply.   She continued to  section 2,                                                               
which amends  AS 21.22.0859(a) to  apply the requirements  of the                                                               
section to  transactions that occurred  the previous  December 31                                                               
rather than  the current year.   The  change is necessary  as the                                                               
director  would  not  have  all   the  information  necessary  to                                                               
calculate the transaction given the  timing of when an insurer is                                                               
required to provide information to the director for review.                                                                     
                                                                                                                                
4:04:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  asked why  the current  year is  less meaningful                                                               
than the past year.                                                                                                             
                                                                                                                                
4:04:51 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER stated  that prior  year shows  the impact  on 12                                                               
months of business as opposed to three or four months.                                                                          
                                                                                                                                
4:05:40 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER directed  attention to section 3,  which amends AS                                                               
21.22.1209(a) to allow  for confidentiality.  Section  4 adds new                                                               
subsections to AS 21.22.120 to  clarify that the director, staff,                                                               
or the NAIC could not release confidential information.                                                                         
                                                                                                                                
4:06:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  questioned  whether the  information  could  be                                                               
shared if it was subpoenaed.                                                                                                    
                                                                                                                                
4:06:46 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER said she understood that to be correct.                                                                          
                                                                                                                                
4:07:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN inquired  as  to  the current  regulations                                                               
regarding confidential information that was subpoenaed.                                                                         
                                                                                                                                
4:08:14 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER replied that the  current statutes already require                                                               
holding the  documents confidentially.   What they  don't clarify                                                               
is  that  the  holding  company  would be  subject  to  the  same                                                               
confidentiality as the companies underneath it.                                                                                 
                                                                                                                                
4:09:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX asked  what would happen under current  law, if a                                                               
subpoena was issued for information from a holding company.                                                                     
                                                                                                                                
4:09:51 PM                                                                                                                    
                                                                                                                                
MS.  WING-HEIER stated  that her  attorneys would  argue that  AS                                                               
21.09.06 would extend to that case.                                                                                             
                                                                                                                                
4:10:35 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER  addressed section 5,  which adds new  sections to                                                               
AS  21.22  regarding  group-wide supervision  of  internationally                                                               
active  insurance   groups.    She   noted  that  there   are  no                                                               
international  companies domiciled  in Alaska;  nonetheless, this                                                               
is part of the  model law Alaska must adopt.   Section 6 adds two                                                               
definitions  for an  "internationally  active insurance  company"                                                               
and a "group-wide supervisor" to  AS 21.22.200.  Section 7 allows                                                               
the  director to  adopt regulations  necessary to  implement this                                                               
bill and section 8 provides for an effective date.                                                                              
                                                                                                                                
4:12:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN sought  clarification on the aforementioned                                                               
status report that is submitted every June.                                                                                     
                                                                                                                                
4:12:55 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER acknowledged that every  June the division files a                                                               
status report on any bills  that impact accreditation, as well as                                                               
the status on examinations.                                                                                                     
                                                                                                                                
4:13:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL announced that HB 78 was held over.                                                                               
                                                                                                                                
4:13:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL ADJOURNMENT                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
4:13 p.m.                                                                                                                       

Document Name Date/Time Subjects
SB36 BON Sunset vsn A.PDF HL&C 4/22/2019 3:15:00 PM
SB 36
SB36 Sponsor Statement 1-28-19.pdf HL&C 4/22/2019 3:15:00 PM
SB 36
SB36 Fiscal Note DCCED-DCBPL 2-8-19.PDF HL&C 4/22/2019 3:15:00 PM
SB 36
SB36 Supporting Document BON Roster 3-29-19.pdf HL&C 4/22/2019 3:15:00 PM
HL&C 4/24/2019 3:15:00 PM
SB 36
SB36 Supporting Document DCCED CBPL Responses to SFIN 3-11-19.pdf HL&C 4/22/2019 3:15:00 PM
SB 36
SB36 Supporting Document BON Audit April 2017.pdf HL&C 4/22/2019 3:15:00 PM
SB 36
SB36 Bundled Letters of Support.pdf HL&C 4/22/2019 3:15:00 PM
HL&C 4/24/2019 3:15:00 PM
SB 36
SB36 Supporting Document BON Audit Summary 08-20113-18.pdf HL&C 4/22/2019 3:15:00 PM
SB 36
HB078 ver A 3.8.19.pdf HL&C 4/22/2019 3:15:00 PM
HB 78
HB078 Sponsor Statement 3.4.2019.pdf HL&C 4/22/2019 3:15:00 PM
HB 78
HB078 Sectional Analysis ver A 3.8.19.pdf HL&C 4/22/2019 3:15:00 PM
HB 78
HB078 Fiscal Note DCCED-DOI 3.4.19.pdf HL&C 4/22/2019 3:15:00 PM
HB 78
LT House Labor & Commerce - HB78 - Corp Gov, Holding Co.PDF HL&C 4/22/2019 3:15:00 PM
HB 78
SB 29 Version A.pdf HL&C 4/22/2019 3:15:00 PM
HL&C 4/24/2019 3:15:00 PM
SB 29
SB 29 Sponsor Statement.pdf HL&C 4/22/2019 3:15:00 PM
HL&C 4/24/2019 3:15:00 PM
SB 29
SB 29 Fiscal Note.pdf HL&C 4/22/2019 3:15:00 PM
HL&C 4/24/2019 3:15:00 PM
SB 29
SB 29 Board of Marine Pilots Audit.pdf HL&C 4/22/2019 3:15:00 PM
HL&C 4/24/2019 3:15:00 PM
SB 29
HB 102.Bill Version U.pdf HL&C 4/8/2019 3:15:00 PM
HL&C 4/15/2019 3:15:00 PM
HL&C 4/22/2019 3:15:00 PM
HB 102
2019.HB102.Sponsor Statement.docx HL&C 4/22/2019 3:15:00 PM
HB 102
2019.HB102.Sectional.docx HL&C 4/15/2019 3:15:00 PM
HL&C 4/22/2019 3:15:00 PM
HB 102
HB 102.Fiscal Note DOR.pdf HL&C 4/3/2019 3:15:00 PM
HL&C 4/8/2019 3:15:00 PM
HL&C 4/15/2019 3:15:00 PM
HL&C 4/22/2019 3:15:00 PM
HB 102
HB 102.Fiscal Note DOL.pdf HL&C 4/3/2019 3:15:00 PM
HL&C 4/8/2019 3:15:00 PM
HL&C 4/15/2019 3:15:00 PM
HL&C 4/22/2019 3:15:00 PM
HB 102
HB 102.Backup Letter of Opposition Drift.docx HL&C 4/15/2019 3:15:00 PM
HL&C 4/22/2019 3:15:00 PM
HB 102
HB 102.Backup Opposition Alliance of Automobile Manufacturers.pdf HL&C 4/3/2019 3:15:00 PM
HL&C 4/8/2019 3:15:00 PM
HL&C 4/15/2019 3:15:00 PM
HL&C 4/22/2019 3:15:00 PM
HB 102