Legislature(2005 - 2006)SENATE FINANCE 532
03/29/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB289 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 305 | TELECONFERENCED | |
| += | SB 289 | TELECONFERENCED | |
| + | TELECONFERENCED |
MINUTES
SENATE FINANCE COMMITTEE
March 29, 2006
9:01 a.m.
CALL TO ORDER
Co-Chair Lyda Green convened the meeting at approximately
9:01:27 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: DARWIN PETERSON, Staff to Senator Lyda Green;
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB 289-INSURANCE
The Committee heard from the Division of Insurance, Department
of Commerce, Community and Economic Development. One amendment
was adopted, and the bill reported from Committee.
CS FOR SENATE BILL NO. 289(L&C)
"An Act relating to the payment of insurer examination
expenses, to the regulation of managed care insurance
plans, to actuarial opinions and supporting documentation
for an insurer, to insurance firms, managing general
agents, and third-party administrators, to eligibility of
surplus lines insurers, to suitability of life and health
insurance policies and annuity contracts, to unfair
discrimination under a health insurance policy, to prompt
payment of health care insurance claims, to required notice
by an insurer, to individual deferred annuities, to direct
payment to providers under a health insurance policy, to
mental health benefits under a health care insurance plan,
to the definitions of 'title insurance limited producer'
and of other terms used in the title regulating the
practice of the business of insurance, and to small
employer health insurance; repealing the Small Employer
Health Reinsurance Association; making conforming
amendments; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Green informed the Committee that, after conferring
with the Division of Insurance, Department of Commerce,
Community and Economic Development, an amendment has been
developed in order to address concerns raised about this bill.
The Division is agreeable to the amendment, as they view the
overall value of the bill to exceed the value of the sections
addressed in the amendment.
Amendment #1: This amendment deletes "to unfair discrimination
under a health insurance policy," following "annuity contracts"
in the bill's title on page 1, lines 5 and 6.
In addition, the amendment eliminates Sections 32 and 33 from
the bill. The language being removed is located on page 25, line
13 through page 26, line 2.
Co-Chair Green moved to adopt Amendment #1 and objected for
explanation.
DARWIN PETERSON, Staff to Senator Lyda Green, affirmed that the
amendment would remove Sections 32 and 33. Section 32, which
addressed "suitability", would be eliminated because of concerns
about its applicability to life and health insurance policies.
The language in question would be "problematic" in that it could
hold an insurance industry representative responsible "for
determining if the consumer is suitable for life and health
insurance". A compromise to remove Section 32 from the bill was
made after extensive discussions with representatives of the
insurance industry and the Division failed to produce alternate
suitable language. Otherwise, continued inclusion of Section 32
would delay the bill's forward progression.
Mr. Peterson stated that the decision to remove Section 33,
which amended Alaska Statute (AS) 23.36.090, "the insurance
statute dealing with unfair discrimination", was made due to the
fact there is no statutory definition as to what constitutes
unfair discrimination. The lack of this definition presents "a
potentially serious problem for health care providers and
insurance companies". Therefore, rather than keeping the bill in
Committee to resolve the definition issue, the decision was
again made to remove the language from the bill in order to
allow the bill to advance.
Mr. Peterson stated that the removal of Section 33 would require
the references to unfair discrimination in the bill's title to
be eliminated.
Mr. Peterson affirmed that the Director of the Division of
Insurance was consulted with and has agreed to Amendment #1.
Co-Chair Green reviewed the language that would be deleted from
the bill's title.
Senator Dyson asked the bill sponsor's position on the
amendment.
Senator Bunde, Chair of the Senate Labor & Commerce Committee
that sponsored the bill, deferred to the Division of Insurance,
as the bill was introduced by Request of the Division of
Insurance, Department of Commerce, Community and Economic
Development.
9:06:03 AM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development, affirmed her
support for the amendment. She noted that the majority of the
language in bills involving the Division is "highly technical".
During her initial testimony before the Committee regarding this
legislation, she had attempted "to simplify some" of the
provisions presented in the bill. The intent of the bill is to
change State statutes in order to provide the Division "greater
authority to do some consumer protection activities, and the
suitability piece that is Section 32, we have agreed to leave
out. We have in Chapter 36 of our title, which is 'Unfair Trade
Practices', a number of consumer protections that allow us to do
enforcement." A consumer protection case involving an order she
had issued was challenged in superior court. That case recently
concluded after being argued for ten years. Because the
Division's position in that case was successfully defended under
existing language, she was "not uncomfortable" with the removal
of Section 32. Other provisions in the title would provide
consumer protections.
Mr. Hall stated that the removal of Section 33 would not "damage
the bill". Other provisions, such as the inclusion of the
actuarial opinion, in the bill would benefit the overall
performance of the Division. The Division's efforts to increase
standardization would not be hampered by the removal of Section
33.
9:08:17 AM
Senator Dyson assumed that Sections 32 and 33 were originally
included to address "some problem". He surmised that the
language in Section 33 was an attempt to address endeavors,
"particularly by the medical provider field" … "to get access to
third party payments". Section 33 appears to have been "designed
to help them not be excluded from some third party payer's list
of who they would pay for."
Ms. Hall pointed out that "Section 33 is a list of people,
providers that can't be discriminated against. It's in statute
today. The only thing that was changed in Section 33 in this
bill was to remove the word 'group', and that will still remain
in Statute: the inability to discriminate against those
providers in any group health care insurance transaction. It
doesn't remove that from statute." Section 33 would simply serve
to "remove 'group' and make it applicable to individual
policies". While the Division has not "particularly had a
problem with it … in much of the bill, we're making some changes
in protections under individual policies." Removal of this
section would not be problematic. "Most insurance companies as
they put together policies today, don't have different standards
for individual and group policies. They may have some different
underwriting criteria, some different rating, but they have the
networks that they set up already, and I don't' think that would
change as a result of the removal of this provision."
Senator Dyson acknowledged.
Co-Chair Green removed her objection to the Amendment.
Without further objection, Amendment #1 was ADOPTED.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS SB 289 (FIN) was REPORTED from
Committee with previous zero fiscal note #1 from the Department
of Commerce, Community and Economic Development.
Co-Chair Green recapped the Committee's upcoming meeting
schedule, specifically that hearings on SB 305-OIL AND GAS
PRODUCTION TAX would begin Friday, March 31, 2006, pending
referral. She also noted that hearings on both SB 305 and the
Operating Budget would occur the following week. Subcommittee
reports on the Operating Budget must be provided to Co-Chair
Wilken by 5:00 PM Monday, April 3, 2006.
ADJOURNMENT
Co-Chair Lyda Green adjourned the meeting at 9:12:39 AM.
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