Legislature(1993 - 1994)
04/18/1994 08:00 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 18, 1994
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice-Chairman
Representative Gary Davis
Representative Harley Olberg
Representative Fran Ulmer
MEMBERS ABSENT
Representative Bettye Davis
Representative Jerry Sanders
COMMITTEE CALENDAR
HJR 53: Proposing amendments to the Constitution of
the State of Alaska relating to the length of
a regular session and establishing a
unicameral legislature; and providing for an
effective date for each amendment.
MOVED FROM COMMITTEE WITH NO RECOMMENDATIONS
HJR 51: Requesting the governor to file suit in the
United States Supreme Court against the
United Sates government alleging violations
of the civil rights of Americans listed as
prisoners of war or missing in action in
Southeast Asia; and requesting the other
states to join in this suit."
MOVED FROM COMMITTEE AS CSHJR 51(STA) WITH DO
PASS RECOMMENDATIONS
*HCR 33: Requesting the governor to offer the United
States Congress $10,000,000,000 in cash, or
other terms that may be negotiated between
the state and the federal government, to
purchase all federal land, water, or land and
water, including any surface or subsurface
interests, in Alaska other military
reservations and federal offices, to have the
federal government relinquish all dominion,
control, and regulatory authority over all
land, water, or land and water, including
surface or subsurface interests, in Alaska
other than military reservations and federal
offices, and providing a bonus if certain
federal agencies are removed from the state
within six months of the federal sale to the
state and relinquishment of control.
HELD IN COMMITTEE
SB 342: "An Act relating to risk based capital for
insurers; and providing for an effective
date."
HELD IN COMMITTEE
SB 355: "An Act relating to errors in surveys of
land."
HELD IN COMMITTEE
(*First public hearing)
WITNESS REGISTER
REPRESENTATIVE JEANNETTE JAMES
Alaska State Legislature
Alaska State Capitol, Room 501
Juneau, AK 99811-0460
Phone: 465-3743
POSITION STATEMENT: Sponsor of HJR 51
DAVID WALSH, Director
Division of Insurance
Department of Commerce & Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
Phone: 465-2515
POSITION STATEMENT: Addressed CSSB 342
JOHN GEORGE
American Council on Life Insurance
National Association of Independent Insurers
9515 Moraine Way
Juneau, AK 99801
Phone: 789-0172
POSITION STATEMENT: Supported CSSB 342
KATIE CAMPBELL, Life & Health Actuary
Division of Insurance
Department of Commerce & Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
Phone: 465-2515
POSITION STATEMENT: Answered questions on CSSB 342
ANNE RINGSTAD, Staff
Senator Steve Rieger
Alaska State Capitol, Room 516
Juneau, AK 99811
Phone: 465-3879
POSITION STATEMENT: Addressed SB 355 for Senator Steve
Rieger, Sponsor
PREVIOUS ACTION
BILL: HJR 53
SHORT TITLE: UNICAMERAL LEGISLATURE/SESSION LIMIT
SPONSOR(S): REPRESENTATIVE(S)GREEN,Navarre,
Brown,Bunde,Mulder,Hudson,Sitton
JRN-DATE JRN-PG ACTION
02/04/94 2255 (H) READ THE FIRST TIME/REFERRAL(S)
02/04/94 2255 (H) STATE AFFAIRS,JUDICIARY,FINANCE
04/16/94 (H) STA AT 08:00 AM CAPITOL 102
04/16/94 (H) MINUTE(STA)
BILL: HJR 51
SHORT TITLE: SUIT RE POWS & MIAS AGAINST U.S. & OTHERS
SPONSOR(S): REPRESENTATIVE(S) JAMES,Therriault,
Martin,Mulder,Hudson
JRN-DATE JRN-PG ACTION
01/19/94 2108 (H) READ THE FIRST TIME/REFERRAL(S)
01/19/94 2109 (H) MLV, STATE AFFAIRS
02/09/94 2327 (H) COSPONSOR(S): MARTIN, MULDER
02/10/94 (H) MLV AT 05:00 PM CAPITOL 17
02/10/94 (H) MINUTE(MLV)
02/22/94 2474 (H) MLV RPT CS(MLV) 3DP 1NR
02/22/94 2475 (H) DP: MULDER, KOTT, FOSTER
02/22/94 2475 (H) NR: NAVARRE
02/22/94 2475 (H) -INDETERMINATE FISCAL NOTE
(LAW) 2/22/94
02/22/94 2475 (H) REFERRED TO STATE AFFAIRS
02/22/94 2484 (H) FIN REFERRAL ADDED
03/28/94 3028 (H) COSPONSOR(S): HUDSON
04/16/94 (H) STA AT 08:00 AM CAPITOL 102
04/16/94 (H) MINUTE(STA)
BILL: HCR 33
SHORT TITLE: PURCHASE FEDERAL LAND FROM THE U.S.
SPONSOR(S): STATE AFFAIRS
JRN-DATE JRN-PG ACTION
03/29/94 3050 (H) READ THE FIRST TIME/REFERRAL(S)
03/29/94 3050 (H) STATE AFFAIRS
04/18/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: SB 342
SHORT TITLE: RISK BASED CAPITAL FOR INSURERS
SPONSOR(S): LABOR & COMMERCE BY REQUEST
JRN-DATE JRN-PG ACTION
03/03/94 3057 (S) READ THE FIRST TIME/REFERRAL(S)
03/03/94 3057 (S) LABOR & COMMERCE, JUDICIARY
03/15/94 (S) L&C AT 01:30 PM FAHRENKAMP
ROOM 203
03/18/94 3266 (S) L&C RPT CS 1DP 3NR SAME TITLE
03/18/94 3266 (S) ZERO FN TO SB & CS (DCED)
04/06/94 (S) JUD AT 01:30 PM BELTZ ROOM 211
04/08/94 (S) RLS AT 00:00 AM FAHRENKAMP
ROOM 203
04/08/94 3523 (S) JUD RPT 3DP 2NR (L&C)CS
04/08/94 3523 (S) PREVIOUS ZERO FN (DCED)
04/11/94 3556 (S) RULES RPT 3CAL 1NR 4/11/94
04/11/94 3561 (S) READ THE SECOND TIME
04/11/94 3561 (S) L&C CS ADOPTED UNAN CONSENT
04/11/94 3561 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/11/94 3561 (S) READ THE THIRD TIME
CSSB 342(L&C)
04/11/94 3562 (S) PASSED Y19 N1
04/11/94 3562 (S) EFFECTIVE DATE SAME AS PASSAGE
04/11/94 3562 (S) Adams NOTICE OF RECONSIDERATION
04/12/94 3609 (S) RECON TAKEN UP-IN THIRD READING
04/12/94 3610 (S) PASSED ON RECONSIDERATION
Y18 N1 A1
04/12/94 3610 (S) EFFECTIVE DATE SAME AS PASSAGE
04/12/94 3611 (S) TRANSMITTED TO (H)
04/13/94 3400 (H) READ THE FIRST TIME/REFERRAL(S)
04/13/94 3400 (H) STATE AFFAIRS, JUDICIARY
04/18/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: SB 355
SHORT TITLE: ADJUSTMENTS FOR DEFECTIVE SURVEY
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS
JRN-DATE JRN-PG ACTION
03/10/94 3149 (S) READ THE FIRST TIME/REFERRAL(S)
03/10/94 3149 (S) CRA, RES
03/15/94 (S) CRA AT 9:00 AM BUTROVICH RM 205
03/15/94 (S) MINUTE(CRA)
03/16/94 3241 (S) CRA RPT 1DP 2NR
03/16/94 3241 (S) ZERO FISCAL NOTE PUBLISHED
(DCRA)
03/30/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/31/94 3425 (S) RES RPT CS 3DP 1NR SAME TITLE
03/31/94 3425 (S) PREVIOUS ZERO FN APPLIES (DCRA)
04/07/94 (S) RLS AT 09:00 AM FAHRENKAMP
ROOM 203
04/11/94 3556 (S) RULES TO CALENDAR 4/11/94
04/11/94 3562 (S) READ THE SECOND TIME
04/11/94 3562 (S) RES CS ADOPTED UNAN CONSENT
04/11/94 3562 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/11/94 3562 (S) READ THE THIRD TIME
CSSB 355(RES)
04/11/94 3563 (S) PASSED Y15 N5
04/11/94 3567 (S) TRANSMITTED TO (H)
04/12/94 3367 (H) READ THE FIRST TIME/REFERRAL(S)
04/12/94 3367 (H) STATE AFFAIRS, RESOURCES
04/18/94 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 94-49, SIDE A
Number 000
CHAIRMAN AL VEZEY called the meeting to order at 9:05 a.m.
The meeting had been delayed from 8 to 9 o'clock due to a
lack of a quorum. Members present were REPRESENTATIVES
KOTT, G. DAVIS and OLBERG.
HJR 53 - UNICAMERAL LEGISLATURE/SESSION LIMIT
CHAIRMAN VEZEY, under bills previously heard, opened HJR 53.
He noted the committee did not have a quorum at the April 16
meeting when it voted to move HJR 53 from committee.
Therefore, for technical reasons, the vote would be taken
again.
CHAIRMAN VEZEY asked for a motion to move HJR 53 with
individual recommendations and attached House State Affairs
Committee fiscal note.
REPRESENTATIVE HARLEY OLBERG so moved.
CHAIRMAN VEZEY asked the committee secretary to call the
roll.
IN FAVOR: REPRESENTATIVES VEZEY, G. DAVIS, OLBERG.
OPPOSED: REPRESENTATIVE KOTT.
ABSENT: REPRESENTATIVES B. DAVIS, SANDERS, ULMER.
MOTION FAILED
HJR 51 - SUIT RE POWS & MIAS AGAINST U.S. & OTHERS
Number 045
CHAIRMAN VEZEY, under bills previously heard, opened CSHJR
51 for discussion. He stated a the committee had a
committee substitute prepared reflecting the amendments
adopted April 16. CSHJR 51(STA) was before the committee.
REPRESENTATIVE GARY DAVIS commented page 1, line 9, had been
one of his concerns in the CSHJR 51(MLV). The language was
changed.
REPRESENTATIVE OLBERG noted page 1, line 12, the general's
name was corrected to read "Kwang." He directed to the
letter from the American Legion in the packet and said the
four suggested amendments at the bottom had been adopted.
Number 092
REPRESENTATIVE PETE KOTT asked if there had been discussion
on April 16 as to what the Administration has done that
would imply the state has taken this position. He referred
to page 1, line 9.
CHAIRMAN VEZEY answered he did not believe there was not
anything indicating the U.S. government had taken this
position. The phrase "implied" was inserted because he
believed they had not taken an official position on the
disposition of all POWs.
REPRESENTATIVE KOTT commented general use of "implied" is
the result of some type of action. He felt CSHJR 51 was
saying the governmental action was in fact inaction.
CHAIRMAN VEZEY clarified the committee interpreted "implied"
is default, and not saying otherwise.
(REPRESENTATIVE OLBERG left the meeting at 9:11 a.m.)
Number 134
REPRESENTATIVE G. DAVIS directed to page 2, line 15, reading
"WHEREAS the executive branch of the federal government has
not even attempted to negotiate the release of Americans
that may still be held in Southeast Asia and is not actively
searching for remaining Americans;..." He was not
comfortable agreeing with this statement, unless it was in
fact the case. This was the amended language.
(REPRESENTATIVE OLBERG rejoined the meeting at 9:12 a.m.)
REPRESENTATIVE JEANNETTE JAMES, SPONSOR OF CSHJR 51, join
the committee table to answer questions. She responded she
did not know if there was justification for the statement on
page 2, line 15. The problem is that when HJR 51 began
certain conditions existed; however, there has been a lot of
pressures since then. She had no objection to making the
language more gentle.
CHAIRMAN VEZEY responded the simplest way to do it would be
to extricate it.
REPRESENTATIVE JAMES stated from what she had heard in the
news, the U.S. government is saying the search is over. She
noted there had been testimony, however, which indicated
some people were there looking for remains. They are not
looking for live people only remains, according to the news.
REPRESENTATIVE JAMES said as a side note there had not been
testimony from Fairbanks on April 16 because the Legislative
Information Office had been closed. Anchorage was also.
(REPRESENTATIVE ULMER joined the meeting at 9:15 a.m.)
CHAIRMAN VEZEY noted REPRESENTATIVE ULMER's arrival.
Number 231
REPRESENTATIVE G. DAVIS moved to delete page 2, lines 15, 16
and 17.
CHAIRMAN VEZEY, hearing no objection, passed the motion.
REPRESENTATIVE KOTT observed page 1, line 9, and conveyed
"implied" would be satisfactory to use.
REPRESENTATIVE G. DAVIS clarified he understood "implied"
meant implied by the makers of the resolution.
CHAIRMAN VEZEY added he interpreted "implied" as it is
implied to whomever wanted to listen. Not stated, but
implied.
REPRESENTATIVE KOTT agreed. He mentioned, based on the
WHEREAS clause on page 2, lines 4-8, the committee could use
the word "implied." There is an implication based on
federal intelligence agencies.
CHAIRMAN VEZEY indicated another committee substitute would
have to be drawn up; however, he would consider a motion to
move CSHJR 51(STA) reflecting the amendment out of
committee. He emphasized it was very late in the session
and he was sure it would not get another committee hearing.
REPRESENTATIVE G. DAVIS moved to pass CSHJR 51(STA), as
amended, from committee with individual recommendations.
CHAIRMAN VEZEY, hearing no objection, passed the motion.
MOTION PASSED
Number 299
REPRESENTATIVE G. DAVIS moved to rescind the committee's
action on HJR 53, whereby it failed to pass it from
committee.
REPRESENTATIVE KOTT objected.
CHAIRMAN VEZEY clarified the motion to rescind is not
correct, as long as a motion to reconsider is available.
Therefore, he ruled the motion to rescind out of order.
REPRESENTATIVE G. DAVIS could move to reconsider.
REPRESENTATIVE G. DAVIS moved to reconsider HJR 53.
REPRESENTATIVE KOTT said he maintained his objection. He
said he voted against moving HJR 53 from committee because
it has two additional committee referrals, one of which is
Judiciary. Being so late into the session he assured the
committee, as a member of Judiciary, HJR 53 would not be
heard. He emphasized Judiciary has already addressed the
unicameral legislature and regular session length, therefore
it would be frivolous for Judiciary to deal with the issue
again.
CHAIRMAN VEZEY added he did not think "anyone at the table
had illusions of HJR 53 becoming law." The passage was a
gesture on the committee's part.
REPRESENTATIVE G. DAVIS said he did not disagree with either
REPRESENTATIVE KOTT or CHAIRMAN VEZEY; however, he wanted to
be a part of supporting HJR 53 and moving it out of
committee.
CHAIRMAN VEZEY reiterated the motion to reconsider. He
asked the committee secretary to call the roll.
IN FAVOR: REPRESENTATIVES VEZEY, ULMER, G. DAVIS,
OLBERG.
OPPOSED: REPRESENTATIVE KOTT.
ABSENT: REPRESENTATIVES B. DAVIS, SANDERS.
MOTION PASSED
HCR 33 - PURCHASE FEDERAL LAND FROM THE UNITED STATES
Number 345
CHAIRMAN VEZEY opened HCR 33 for discussion. He noted the
committee had been waiting for the companion bill in the
Senate to come over. He said HCR 33 is calling for the
governor to offer the U.S. $10 billion for the federal
government's interest in Alaska.
REPRESENTATIVE FRAN ULMER commented $10 million would be a
great deal, but she was not so sure about $10 billion.
CHAIRMAN VEZEY, hearing no more comments, held HCR 33 in
committee.
(REPRESENTATIVE G. DAVIS left the meeting at 9:27 a.m. to
testify on a bill in Finance Committee.)
SB 342 - RISK BASED CAPITAL FOR INSURERS
Number 370
CHAIRMAN VEZEY opened CSSB 342 for discussion.
DAVID WALSH, DIRECTOR, DIVISION OF INSURANCE, DEPARTMENT OF
COMMERCE & ECONOMIC DEVELOPMENT (CED), addressed CSSB 342.
He began CSSB 342 is a companion bill to HB 514, which State
Affairs has already heard. He said CSSB 342 provides a new
system for calculating the solvency of insurance companies.
The old law is a "one size fits all" template that is used
on companies as large as Allstate and as small as the Alaska
Timber Exchange. With the sophistication of financial
products and the diversification of assets of all financial
institutions over the last 10 years arises the need for a
new system.
MR. WALSH explained the new formula calculates the various
risk, (e.g., asset, underwriting, etc...) that an individual
insurance company undertakes. Insurance companies insure
different types of people and things, therefore the
reserving each company must do is different based upon their
asset risk. Likewise their investment risk. Alaskan
domestic companies are conservative and tend to invest in T
bills, which are very safe with low risk. Other companies
tend to invest in higher risk items. Under the old system,
each type of company got equal credit on their financial
statement for the value of those assets, regardless of where
they were invested. Risk based capital would weight them.
MR. WALSH stated risk based capital has been worked out on a
national basis for the last 5-6 years. Contributors were
insurance commissioners with input from consumer groups and
also from the industry. CED is very pleased with CSSB 342.
MR. WALSH expressed Alaskan companies would be able to
expand their distribution of money, and hopefully provide
better coverage at lower cost. At 100 percent of risk based
capital CED must take the company over, at 150 percent they
must have a rehabilitation plan, at 200 CED works out a
voluntary way to bring the company back into good health.
He said the average solid company in the U.S. has a risk
based capital number around 485-500. The 10 Alaska domestic
companies range from 934-24,000. Therewith, Alaska has very
small conservatively run companies. This value has not been
apparent under the old system, however, it would be under
the new. He noted CSSB 342 would hopefully result in
premium decrease which will make Alaskan companies much more
competitive with outside companies who are competing for the
same risk.
MR. WALSH stated CSSB 342 passed the Senate, 19-1. CED
noticed as it passed through there was one additional change
they wanted to make. He referred to page 2 where it states
whatever system is passed must be substantially similar to
that passed by the National Association Insurance
Commissioners. He recommended the committee delete this
sentence because the sentence is redundant, and they have
jealously guarded both the legislative and administrative
prerogative to tailor the national models for what is best
for the Alaskan marketplace. With its removal, the emphasis
would be put on the establishment of risk based capital
instructions by regulation in the state, and for the state.
Number 445
CHAIRMAN VEZEY mentioned he was surprised because he had
only received one letter of support from an insurance
company on this issue.
MR. WALSH said he felt likewise. He said he talked with the
CEOs or the representatives of probably a half dozen of
Alaska's domestic companies and they all said they were in
support and would contact the committee.
CHAIRMAN VEZEY explained he did not solicit their input. He
said he thought SB 342 was an "absolutely outstanding idea"
for encouraging competition to come into Alaska and improve
the options available to customers. He noted it would be
the most major change in insurance since statehood.
MR. WALSH agreed, one of them.
CHAIRMAN VEZEY further stated he thought they should use a
slow approach. He reiterated his concern for little input
even from those outside Alaska.
MR. WALSH responded everyone on a nationwide basis is
"delighted" with CSSB 342. CSSB 342 provides regulators
with a much better tool to identify a company as they start
to descend and to intervene. He noted the overwhelming
majority of the 6,000 insurance companies in the U.S. are
not in any trouble at all. The new formula would merely
allow everyone to see how strong the companies are.
Number 481
JOHN GEORGE, AMERICAN COUNCIL OF LIFE INSURANCE, NATIONAL
ASSOCIATION OF INDEPENDENT INSURERS, answered questions on
CSSB 342. He explained he had not signed up to testify
because he wanted to stay out of the way, thereby expediting
CSSB 342 from committee faster. He stated they feel CSSB
342 is good solid regulation and urge its passage.
CHAIRMAN VEZEY reiterated his concern about the lack of
input because he felt CSSB 342 to be a major piece of
legislation.
MR. GEORGE agreed. They were trying to stay out of the way
because the director was tending to it. He said if they had
opposed CSSB 342, they would have made efforts to make
amendments or kill it.
CHAIRMAN VEZEY observed people think CSSB 342 is more
positive than negative. He would like both sides of the
story.
MR. GEORGE commented the companies he represents are not
Alaska domestic companies, they do business on a national
basis and are basically domiciled in another state. He
believed CSSB 342 would have the greatest impact on Alaska
domestics. He has not heard any opposition.
CHAIRMAN VEZEY noted CSSB 342 came up fairly late in the
session, therefore he was not sure if they should rush into
it. He considered waiting for the next legislative session
to move it through then.
REPRESENTATIVE ULMER questioned if CSSB 342 had another
referral.
MR. WALSH answered CSSB 342 would be referred to Judiciary
next; however, they have indicated they will waive it. He
noted REPRESENTATIVE GENE THERRIAULT had heard HB 514 in
Labor & Commerce and was supportive.
REPRESENTATIVE ULMER noted if CSSB 342 passed with 19 `yes'
votes in the Senate it was a fairly good indication there is
not a problem it. She stated the packet does not show
opposition and there is potential for significant benefit
for Alaskans, therefore, she was ready to pass CSSB 342 out
of committee.
CHAIRMAN VEZEY replied significant risk comes with
significant benefits.
Number 528
REPRESENTATIVE OLBERG moved to delete on page 2, lines 18,
19 and 20 of CSSB 342(L&C), as recommended by MR. WALSH.
CHAIRMAN VEZEY stated a another committee substitute had
been prepared reflecting the proposed amendment.
REPRESENTATIVE OLBERG, therefore, moved to adopt the House
CS for CSSB 342(STA), version J, for purposes of discussion.
CHAIRMAN VEZEY, hearing no objection, adopted the HCS for
CSSB 342(STA). He recalled MR. WALSH to the table for
questions. He questioned MR. WALSH'S reference to the state
taking over at 100 percent, whereby he had thought the bill
mentioned 70 percent.
Number 565
KATIE CAMPBELL, LIFE & HEALTH ACTUARY, DIVISION OF
INSURANCE, DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT,
answered CHAIRMAN VEZEY. She clarified 70 percent was the
mandatory control event.
MR. WALSH corrected himself and said the formula is based
upon 100 percent calculation of risk based capital and 70
percent is the mandatory takeover.
CHAIRMAN VEZEY clarified the mandatory control level is 70
percent.
MS. CAMPBELL stated the first level where the director is
required to take action is at the regulatory action level.
This means the company action the company has to take.
CHAIRMAN VEZEY clarified the regulatory action event was at
150 percent.
MS. CAMPBELL said correct. She noted 200 percent is where
the company has to file a financial plan of action.
MR. WALSH explained one of the problems with the current
formula is that it is subject to varying interpretations.
He gave the example of Executive Life, whereby there was
serious debate as to whether or not the company was
"underwater" when it was taken over. Some argue it was
"underwater" a year earlier.
MR. WALSH expressed risk based capital sets up a fair and
more certain formula. There is no question that at 200
percent of risk based capital the company must come into the
regulator with a plan. This plan is then shared with all
the regulators from the states in which that company writes.
If the company continues descent to 150 percent, some
regulatory action is required. CED would put in a plan.
When the company reaches the mandatory 70 percent level, CED
shuts the company down. There would be no debate as there
has been with Executive Life. He noted the failure of the
old system with Executive Life provided the impetus to
resolve a better system.
Number 609
CHAIRMAN VEZEY observed the formula, which was not before
him, was a rather complex algorithm of accounting
evaluation.
MR. WALSH affirmed CHAIRMAN VEZEY. He had attended numerous
meetings with experts and has confidence in the formula. He
said he does not have the educational background or
capability to explain in any form other than the most
general policy terms.
CHAIRMAN VEZEY asked MR. GEORGE to join the table again. He
inquired who MR. GEORGE was representing.
MR. GEORGE answered the American Council of Life Insurance
(ACLI), a trade association of life insurance companies, and
the National Association of Independent Insurers (NAII), a
property/casualty insurance company trade association. He
noted Allstate, USAA, Progressive and Nationwide.
CHAIRMAN VEZEY clarified he did not represent major carriers
such as Great Northwest, Aetna, Blue Cross and Willis
Corroon, within the state.
MR. GEORGE replied Aetna is a member of the ACLI. Major
property/ casualty insurance companies such as the Firemen's
Fund, Aetna Property & Casualty and Continental Casualty,
are not members of the NAII. He noted a large portion of
the property insurance in the state is written by the NAII.
Members of the ACLI write virtually all of the life and
health insurance in Alaska.
CHAIRMAN VEZEY explained there is an imposed deadline of
April 20 for moving Senate Bills, therefore, he would hold
HCSCSSB 342 in committee because he did not feel comfortable
with it yet. He would like assurance from the industry.
Number 643
REPRESENTATIVE ULMER asked CHAIRMAN VEZEY to identify which
companies he would like to hear from.
MR. GEORGE stated he did not represent any of the domestic
companies such as Alaska National, and others formed in the
state of Alaska.
CHAIRMAN VEZEY asked if MR. GEORGE was referring to the
underwriters as opposed to the brokers.
MR. GEORGE clarified he did not represent the brokers.
CHAIRMAN VEZEY asked for names of the some of the
underwriters he did not represent.
MR. GEORGE answered Firemen's Fund, Industrial Indemnity and
Aetna Property & Casualty. He noted there are major
companies on the national basis he did represent, however,
he had not heard opposition from them. Those companies
would be members of the American Insurance Association,
which does have a lobbyist. He assumed if they were in
opposition they would have been present.
CHAIRMAN VEZEY stated he believed the committee should move
with due deliberation because of the complex subject matter.
CSSB 355 - ADJUSTMENTS FOR DEFECTIVE SURVEY
Number 690
CHAIRMAN VEZEY opened CSSB 355, sponsored by Senate
Community & Regional Affairs, for discussion.
TAPE 94-49, SIDE B
Number 000
ANNE RINGSTAD, STAFF, SENATOR STEVE RIEGER, addressed CSSB
355. She stated CSSB 355 provides that a person or a local
governing body, upon the resolution of a local governing
body can request a resurvey and replat of a manifestly
defective survey of subdivision lines, and subsequent
changes in individual lots through Superior Court action.
CSSB 355 provides a remedy for grossly incorrect subdivision
surveys.
MS. RINGSTAD indicated the municipality of Anchorage
requested CSSB 355 to correct two manifestly defective
surveys in the Anchorage area, although it applies to
surveys statewide. She stated CSSB 355 is the only
practical solution to offer assistance to property owners in
correcting this defect and establish their ownership status.
The municipality of Anchorage has recently changed their
municipal ordinances to include a special assessment
district for resurvey and replatting of manifestly
inaccurate surveys of record. They are also in the process
of petitioning the property owners of record of two
particular subdivisions. She stated by this legislation
they must also pass a resolution supporting this action
before any action can be taken. The cost of the resurvey
will be allocated by the court and could be on a per lot, or
mil basis.
MS. RINGSTAD mentioned the municipality of Anchorage,
William Mendenhall, Patrick Kalen, and various land title
companies support CSSB 355.
MS. RINGSTAD commented she understood, from their
constituents in the subdivisions, that about 20 years ago
there was a very notorious surveyor, who has since left the
state. He surveyed the outside subdivision lines of the
properties, thereby manifestly incorrect. Therefore, there
are about 300 lots in those two subdivisions that cannot
claim clear title until the matter is resolved. She noted,
in some cases, the property lines are 20 feet off.
CHAIRMAN VEZEY expressed there is nothing new about that
occurrence because it happens everyday. He stated there is
nothing in CSSB 355 that cannot be accomplished under
existing law. Therefore, why incorporate defective surveys
into a statute that "equates to acts of God." He commented
there have been defective surveys in the matters of equity
for going on 4,000 years. The court system deals with this
routinely. He believed there was nothing in CSSB 355 to
correct why defective surveys occur. He noted the packet
did not include information from the Alaska Professional
Surveyors Association (APSA) stating their support. He
failed to see the purpose of CSSB 355.
MS. RINGSTAD replied the municipality of Anchorage has been
working for a long time to remedy this situation.
Number 088
CHAIRMAN VEZEY interjected the example of Nome, whereby it
replatted the entire townsite without the law proposed in
CSSB 355. The problem arises when there are arguments
between the affected property owners. If adjoining owners
agree, the problem can be worked out technically. However,
if they disagree, the courts intervene, which they do
routinely.
MS. RINGSTAD explained they had argued that point with legal
services and the municipality of Anchorage, however, they
still felt CSSB 355 was necessary. There are apparent
problems throughout the two subdivisions. In order for them
to go to court, each party would have to provide a suit,
which would enjoin all of the owners of record to go into
one suit to remedy the problem.
(REPRESENTATIVES OLBERG and ULMER left the meeting at 10:00
a.m.)
CHAIRMAN VEZEY stated there are still surveyors in Alaska
who do poor work. Therefore, he could not see how CSSB 355
would be to anyone's benefit. He interpreted CSSB 355 as
excusing surveyors for malpractice.
MS. RINGSTAD interjected, in this case, the surveyor is no
where to be found and may not even be alive anymore. She
noted there are remedies if the survey was done within the
past two years; however, it has been more than two years in
this case.
CHAIRMAN VEZEY responded it would not matter if the survey
was done 100 years ago. The courts deal with this problem
even if they do not like to. Lacking better support for
CSSB 355, he said he could not let it pass from committee.
He commented CSSB 355 might cause people to abrogate their
existing rights.
MS. RINGSTAD mentioned Patrick Kalen had said the APSA would
support CSSB 355.
CHAIRMAN VEZEY agreed if the APSA knew about CSSB 355 they
would have provided a letter. He suggested the National
Society of Professional Engineers. He said he felt CSSB 355
was a very poor piece of legislation, however, he could
stand to be corrected. CSSB 355 states what the courts
already have the power to do. His first suspicion was that
someone was trying to coerce someone else into a binding
arbitration situation.
Number 208
MS. RINGSTAD expressed she would get various testimony,
including from the municipality, and bring it back to the
committee.
CHAIRMAN VEZEY commented some of the best experts on land
law are some professional surveyors. They might be better
than some attorneys in the area. He mentioned Robert Hicks
in Anchorage, who did the legal work for the city of Nome.
MS. RINGSTAD added she would seek testimony from William
Mendenhall who supported CSSB 355, as well.
CHAIRMAN VEZEY said he would be interested in hearing from
him.
Number 234
REPRESENTATIVE KOTT referred to the sponsor statement which
reads the municipality has exhausted all their aspects of
law to correct this problem, and finds that the legislation
is the only practical solution. He inquired who developed
this position in the municipality.
MS. RINGSTAD answered George Newsham, Assistant Municipal
Attorney.
REPRESENTATIVE KOTT asked if there was a letter of support
from him in the packets.
MS. RINGSTAD replied the letter from George Newsham in the
packet only serves to correct a provision in CSSB 355. He
had contacted Senator Rieger's office for the drafting of
the bill.
REPRESENTATIVE KOTT said he felt a letter from Mr. Newsham,
articulating why he felt CSSB 355 was the only solution
would be beneficial. The letter may dispel concerns.
CHAIRMAN VEZEY interjected the letter might complicate the
concerns because CSSB 355 is not a subdivision specific
piece of legislation. CSSB 355 is generic Alaska law.
MS. RINGSTAD agreed. She noted in the packet an approved
ordinance change by the Anchorage assembly to specifically
address resurvey and replatting of manifestly inaccurate
surveys in record.
CHAIRMAN VEZEY explained certain words, such as "manifestly
inaccurate" or "reasonably diligent searches," would have to
be defined. The law would go back to the courts to be
defined.
MS. RINGSTAD agreed. She expressed CSSB 355 was left open
for the court to define it. In some cases where the
property line is only a couple of feet off, it is up to the
court to decide whether it is manifestly defective or not.
In most cases it is not; therefore, should not be changed.
She emphasized only in the cases where the property lines
are completely off does CSSB 355 apply.
CHAIRMAN VEZEY commented the nature of property ownership is
external boundaries cannot be changed without going to
court. Internal boundaries can shift substantially.
MS. RINGSTAD agreed, and noted the internal boundaries are
off because the external boundaries are off. The community
cannot even line up the roads because the external
boundaries are off. She explained that until this problem
is resolved, they cannot realign a number of roads in that
area.
CHAIRMAN VEZEY pointed out this has happened before. If
property owners are obstructions and uncooperative, then the
process can be difficult. He suspected the impetus for CSSB
355 came from property owners who are surrounded by a lot of
land that is not able to be developed because of defective
lot lines. Therefore, they have a private park and do not
want to see it corrected. Those who own the undeveloped
property want to see it corrected. He noted he could be
wrong.
MS. RINGSTAD pointed out none of the property owners there
can be afforded clear title until the problem is solved.
Therefore, anyone who wants to sell their property cannot
because they have no clear title.
CHAIRMAN VEZEY clarified everyone is eager to solve the
problem.
MS. RINGSTAD affirmed CHAIRMAN VEZEY.
CHAIRMAN VEZEY further stated then there would be no
problem. The problem would be taken care of technically.
MS. RINGSTAD suggested when MR. NEWSHAM presents his support
to CSSB 355 that he also include the circumstances of the
case.
CHAIRMAN VEZEY held CSSB 355 in committee.
ADJOURNMENT
Number 319
CHAIRMAN VEZEY, having no more business before the
committee, adjourned the meeting at 10:10 a.m.
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