Legislature(1997 - 1998)
03/13/1997 01:33 PM Senate L&C
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SENATE LABOR AND COMMERCE COMMITTEE
March 13, 1997
1:33 P.M.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jerry Mackie, Vice Chairman
Senator Mike Miller
Senator Tim Kelly
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 119
"An Act relating to fraternal benefit societies; and providing for
an effective date."
- MOVED CSSB119(L&C) OUT OF COMMITTEE
SENATE BILL NO. 92
"An Act relating to veterinarians; extending the termination date
of the Board of Veterinary Examiners; and providing for an
effective date."
- HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 119 - No previous action to be considered.
SB 92 - See Labor and Commerce Committee minutes dated 3/6/97.
Confirmation Hearings:
Board of Chiropractic Examiners
Dr. LeRoy Nordstrom - Anchorage
Board of Registration of Architects, Engineers, and Land
Surveyors
Ms. Daphne E. Brown - Anchorage
Board of Pharmacy
Ms. Bonnie Stewart - Anchorage
Mr. Stanley Thompson - Anchorage
WITNESS REGISTER
Mr. Richard Kleven, Assistant Vice President
Law Division
Lutheran Brotherhood
625 Fourth Ave. South
Minneapolis, Minnesota 55415
POSITION STATEMENT: Supported SB 119.
Mr. Don Koch, Chief
Market Surveillance
Division of Insurance
Department of Commerce and Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
POSITION STATEMENT: Supported SB 119.
ACTION NARRATIVE
TAPE 97-11, SIDE A
Number 001
SB 119 FRATERNAL BENEFIT SOCIETIES
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee
meeting to order at 1:33 p.m. and announced SB 119 to be up for
consideration.
MR. RICHARD KLEVEN, Assistant Vice President, Law Division,
Lutheran Brotherhood, said they are a fraternal brotherhood society
and he is here on behalf of the National Fraternal Congress of
America, an association of approximately 90 fraternal benefit
societies. He said they support SB 119 which will revise our
statute that regulates them. They have done this in a number of
other states and they have essentially the model law that's before
the Committee in 34 other states to date.
Alaska has six fraternals: the Knights of Columbus, Independent
Order of Foresters, Sons of Norway, Aid Association for Lutherans,
Lutheran Brotherhood, and Woodmen of the World.
Fraternals are membership groups and are very accountable to their
members. They exist to benefit the members and their communities
providing them with individual life and annuity insurance. They
must also have a system of local lodges, by law. Fraternals exist
for social and fellowship reasons, but also to provide services to
communities like local volunteer units.
The reason a new section on fraternal orders is needed is because
in the 30 years since the fraternal code was passed there has been
a lot of change - at the economic level and federal level,
especially with taxation and securities regulation which has had an
effect on insurers. Some provisions need to be modernized so
fraternals can continue to provide the same service.
The proposed legislation allows fraternals to write variable life
and annuity products. It gives some flexibility in the code as new
products are developed in the life and health insurance industry
that fraternals can use (with the approval of the director of the
Insurance Division). It provides clearer language regarding the
ability of fraternals to have subsidiaries as long they are
organized to further the fraternal purposes of the organization.
It will clarify how members can use their insurance to meet their
own estate or tax planning needs. It also makes it clear that
fraternals are subject to the same insurance and regulatory
practice rules as are other life insurers. It also gives the
director of the Division of Insurance clearer and stronger
authority over them. The language is also modernized to flow
better in terms of interpretation.
This legislation will not change the essential character of what
fraternal orders are and won't have any appreciable change in their
presence in the market for insurance.
MR. KLEVEN said that two amendments would be offered, one from the
Department regarding conforming the law to the Kassenbaum-Kennedy
law that was passed regarding health insurance last summer. The
other amendment deals with intermediate assembly and he believes it
is a technical amendment. It clarifies that if a society has an
intermediate assembly (a group of delegates that's elected to elect
the higher level group) that those people have to be members.
SENATOR MACKIE moved to adopt amendment #1. There were no
objections and it was so adopted.
MR. DON KOCH, Division of Insurance, supported SB 119. He said
they have worked with Mr. Kleven and have done a number of internal
reviews including financial and Department of Law. He explained
the reason for conforming with the Kassenbaum-Kennedy, Public Law
104-191, was there will be a number of requirements placed on
insurers and their group health plans as to portability of those
plans and there were no references in this proposal that would
reflect the appropriate sections of the insurance code that would
be needed to comply with the KK bill, and therefore, State statutes
and fraternal benefit societies. MR. KOCH explained that insurance
is not the primary focus of a fraternal; it is almost incidental to
things they do.
SENATOR MACKIE moved to adopt amendment #2 as corrected (line 15
the reference is corrected to AS 21.54). There were no objections
and it was so ordered.
SENATOR MACKIE moved to pass CSSB 92(L&C) from committee with
individual recommendations and the accompanying $0 fiscal note.
There were no objections and it was so ordered.
SB 92 BOARD OF VETERINARY EXAMINERS; LICENSE
CHAIRMAN LEMAN announced SB 92 to be up for consideration.
MS. ANNETTE KREITZER, Staff to Senator Leman, said she tried to
come up with language that reflected the desires of the Committee
which would require amending 08.981.65 (Qualifications for a
license) and 08.981.84 (Licensure by credentials). After reviewing
her memo, Ms. Reardon and Mr. Welker noted one item that is a
policy question for the Committee - whether or not the State is
going to require the CCT and the NBE exam for credentialed
applicants.
Right now section 2 says that they pass the written exam of the
State and pass the practical examination of skills, but section 3,
Licensure by credential under the amendment, only includes State
written or practical exam, she said. The question is are
credential applicants being given the choice of passing either the
Alaskan written exam or the CCT, but not both.
CHAIRMAN LEMAN said he thought the issue was that the Board might
require it, but the concern is that it might be too restrictive.
He said that existing statutes require applicants from the United
States to be a graduate of an accredited veterinary school. MS.
KREITZER added, or pass the NBE Committee's Education Commission
for Foreign Veterinary Graduates. The current statute has an "or."
CHAIRMAN LEMAN said in Engineering there is an option for people
who do not graduate from an accredited school. Although he
believes it is highly unlikely that anyone would fall in that
category, but he thought it unwise to preclude it in case someone
wanted to teach themselves or have alternate training - as long as
they can pass the practical exams and do everything else that shows
they are qualified to practice as a veterinarian. He is not
opposed to having certain restrictions for the foreign applicants
so they can demonstrate that they are at least qualified to sit for
the exam.
SENATOR MACKIE asked if there were three ways to be a veterinarian
under the new language; one, to have graduated from an accredited
school, two, to have passed the Education Commission on Foreign
Veterinary Graduates Certification process; or three, to have
passed the NBE. MS. KREITZER replied that that was her
understanding.
CHAIRMAN LEMAN said he wanted to correct their understanding. He
said there are two provisions. The third one Senator Mackie listed
was an "and" provision.
SENATOR KELLY asked if you are an American and have graduated from
an accredited American veterinary school, do you still have to take
a test. CHAIRMAN LEMAN answered yes.
MR. RANDY WELKER, Legislative Audit, clarified that section two
addresses if you are trying to come into Alaska and get your
initial license to be a veterinarian. You must have graduated from
an accredited school or have passed the Foreign Veterinary
Graduates examination and then have satisfied the other
requirements which are the State written exam and a practical exam
(CCT which is also written).
MS. KREITZER interjected that passing the NBE is one of the four
requirements of the foreign test and this is why the language was
changed to the "certification process."
MR. WELKER continued saying that section three's proposed change
says if you are licensed in another jurisdiction and you want to
get licensed in Alaska, right now, the way the amendment is worded,
you would have to have the same as the other, plus satisfy 2, 3, 4,
and 5. That takes the NBE out of the equation for licensed by
credentials. There is nothing in there saying a graduate from an
accredited school has to have passed that test. The law they are
trying to amend says that to come in, you have to have been
licensed under standards that were equivalent to or greater than
the State's at the time you were initially licensed.
SENATOR MACKIE asked if they currently have to do a State written
or practical exam. MR. WELKER replied no; that right now the law
says the standards they have to meet when they were licensed
originally in their state have to be equivalent to the requirements
in Alaska at the time they were licensed in the other state.
SENATOR MACKIE asked if the proposed language makes the
requirements more stringent. MR. WELKER replied that it was more
stringent, but that was in response to the fact that the Board is
headed towards requiring the CCT of all applicants whether they had
passed it before or not.
CHAIRMAN LEMAN said he was hesitant to make policy changes when
they didn't fully understand the impacts of those changes. SENATOR
MACKIE said he was having a hard time following, also, and wanted
the amendment presented as a CS. CHAIRMAN LEMAN said they would do
that and bring it up at another meeting.
CHAIRMAN LEMAN said they would have the confirmation hearing for
Dr. LeRoy Nordstrom, Board of Chiropractic Examiners.
DR. NORDSTROM said he would like to be reappointed to the Board of
Chiropractic Examiners where he has been serving for eight months
without reappointment. He reported that they are almost finished
with roughing out the legislation that is needed to develop a peer
review board. He also commented he thought they should increase
the minimum standards of care as time goes on.
CHAIRMAN LEMAN asked him if he supported the legislation regarding
the HMOs. Dr. Nordstrom said he supported it and said that
chiropractic should be included in HMOs and CPOs along with medical
doctors, osteopaths, and dentists.
There were no further questions from the Committee.
CHAIRMAN LEMAN stated that Ms. Daphne Brown was unable to be with
them again today. He asked the Committee what they wanted to do
regarding her and the other appointees.
SENATOR MA CKIE moved to forward Dr. Nordstrom's, Ms. Brown's, Ms.
Stewart's, and Mr. Thompson's appointments to the full body for
consideration in a joint session. There were no objections and it
was so ordered.
CHAIRMAN LEMAN adjourned the meeting at 2:15 p.m.
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