Legislature(1993 - 1994)

03/29/1994 01:33 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE LABOR AND COMMERCE                                   
                         March 29, 1994                                        
                           1:33 P.M.                                           
  MEMBERS PRESENT                                                              
 Senator Tim Kelly, Chairman                                                   
 Senator Steve Rieger, Vice Chairman                                           
 Senator Georgianna Lincoln                                                    
 Senator Judith Salo                                                           
  MEMBERS ABSENT                                                               
 Senator Bert Sharp                                                            
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 193                                                           
 "An Act relating to unfair discrimination under group disability              
 insurance; and providing for an effective date."                              
 SENATE BILL NO. 340                                                           
 "An Act relating to liquidated damages and attorney fees for                  
 minimum wage and overtime compensation claims."                               
 SENATE BILL NO. 359                                                           
 "An Act relating to investment pools for public entities; and                 
 providing for an effective date."                                             
 SENATE BILL NO. 361                                                           
 "An Act relating to real estate appraisers and the Board of                   
 Certified Real Estate Appraisers."                                            
 SENATE BILL NO. 362                                                           
 "An Act relating to insurance, to the licensing, accreditation,               
 examination, regulation, and solvency of persons engaged in the               
 insurance business, including insurers, nonadmitted insurers,                 
 purchasing groups, risk retention groups, and United States                   
 branches of alien insurers; relating to the management of and the             
 filing of reports by persons licensed or otherwise doing business             
 under the insurance code; amending Alaska Rule of Civil Procedure             
 45; and providing for an effective date."                                     
  PREVIOUS ACTION                                                              
 SB 193 - See Labor & Commerce minutes dated 3/24/94.                          
 SB 340 - No previous action to record.                                        
 SB 361 - See Labor & Commerce minutes dated 3/31/94.                          
 SB 362 - See Labor & Commerce minutes dated 3/31/94.  See                     
          Judiciary minutes dated 4/11/94.                                     
  WITNESS REGISTER                                                             
 Ken Erickson                                                                  
 c/o Senator Pearce                                                            
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Commented on SB 193.                                   
 Dixie Hood, MA Counselor                                                      
 222 Seward St., Suite 210                                                     
 Juneau, Ak. 99801                                                             
  POSITION STATEMENT:   Supported SB 193.                                      
 Mercy Dennis, Co-Chairman                                                     
 Legislative Committee for the Alaska Division of the American                 
 Association for Marriage and Family Therapy                                   
 Anchorage, Ak.                                                                
  POSITION STATEMENT:   Supported SB 193.                                      
 Parry Grover                                                                  
 Anchorage, Ak.                                                                
  POSITION STATEMENT:   Supported SB 340                                       
 Howard Joyce, Legislative Aide                                                
 c/o Representative Mulder                                                     
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Commented on SB 340.                                   
 Dave Rose, Financial Advisor                                                  
 Alaska Municipal League Investment Pool                                       
 Anchorage, Ak.                                                                
  POSITION STATEMENT:   Supported SB 359.                                      
 Wendy Mulder, Legislative Liaison                                             
 Department of Commerce                                                        
 P.O. Box 110800                                                               
 Juneau, Ak. 99811-0800                                                        
  POSITION STATEMENT:   Supported SB 361.                                      
 Dave Walsh, Director                                                          
 Division of Insurance                                                         
 Department of Commerce                                                        
 P.O. Box 110805                                                               
 Juneau, Ak. 99811-0805                                                        
  POSITION STATEMENT:                                                          
  ACTION NARRATIVE                                                             
  TAPE 94-21, SIDE A                                                           
  Number 001                                                                   
 CHAIRMAN KELLY called the Labor and Commerce meeting to order at              
 1:33 p.m. and announced  SB 193  (DISCRIMINATION UNDER HEALTH                 
 INSURANCE) to be up for consideration.                                        
 KEN ERICKSON, Staff to Senator Pearce, said SB 193 prevent health             
 insurance companies from discriminating against state licensed                
 marital and family therapists whenever the company offers coverage            
 for mental health services.  This bill does not mandate any new               
 coverage, he said.  It does provide freedom of choice for the                 
 consumer and passes on cost savings to both the patient and the               
 insuring companies.  He said that marital and family therapists               
 were awarded professional status last year and they have formed               
 their professional licensing board has been formed.                           
 DIXIE HOOD, licensed marriage and family therapist, supported SB
 193, because it would provide professional parity with other                  
 licensed health care professionals in Alaska.  She said adding them           
 to the list of options will not expand the number of clients or the           
 cost and would add an alternative level of treatment.  This is                
 comparable to nurse/practitioners vs. physicians for medical                  
 treatment.  It can actually decrease costs of service since                   
 marriage and family therapists are qualified to do much of the same           
 work as other licensed mental health professionals and can do it              
 MERCY DENNIS, Co-Chairman, Legislative Committee for the Alaska               
 Division of the Association for Marriage and Family Therapy,                  
 supported SB 193.  She said they have received significant federal            
 recognition as one of the five core mental health professions.                
 This type of therapy is often cost effective, because by definition           
 it tends to emphasize active, short term mental health treatment.             
 This is consistent with managed health care focus on shorter term             
 treatment as a way to protect escalating costs.  Marriage and                 
 family counseling fees are significantly less than psychologists              
 and psychiatrists.  MS. DENNIS explained that marriage and family             
 counselors treat individuals in the context of their families,                
 providing service for 2 or more persons at the cost of individual             
 SENATOR RIEGER asked what the qualifications are for becoming a               
 marriage and family therapist.  MS. DENNIS answered that in Alaska            
 one has to have a minimum of a masters degree in marriage and                 
 family therapy or a like field which has to be documented.  They              
 have to take a written exam or come in with credentials from                  
 another state.                                                                
 SENATOR SALO said she was supportive of this legislation, and asked           
 if on page 1, the word "licensed" applied to all the categories and           
 asked if each of those providers was licensed in the state                    
 separately.  Someone in the audience responded that the list of               
 providers are all licensed health care providers in the state of              
 Number 233                                                                    
 JOSH FINK, Aide to Senator Kelly, explained they had received an              
 amendment from Greg Pease who wanted to insert "acupuncturist"                
 after "naturopath" on page l, line 12.  Acupuncturists are licensed           
 in Alaska.                                                                    
 SENATOR LINCOLN and SENATOR RIEGER thought it was a good idea to              
 make sure "state licensed" applies to all the professions listed.             
 SENATOR KELLY said they would look into that issue and have the               
 bill and have the bill back before the committee at a later date.             
 SENATOR KELLY announced  SB 340  (DAMAGES & ATTY FEES FOR UNPAID              
 WAGES) to be up for consideration.                                            
 SENATOR LINCOLN noted that "liquidated damages" was removed from              
 the title, but on page 2 of the CS, line 23, it appears again and             
 asked why.  MR. FINK explained that a draft of the original bill              
 deals with settlements that go beyond liquidated damages to                   
 attorney's fees, specifically, and the drafter said the title                 
 didn't fit.  Because section (e) of the CS goes beyond the scope of           
 simple liquidated damages and attorney's fees, the title can't be             
 that narrow, but the amendment he handed out does tighten it up               
 considerably, he said.                                                        
 PARRY GROVER, Anchorage, said he was an attorney in private                   
 practice and he had mainly represented management in all aspects of           
 employment law.  He said in many respects the Alaska wage and hour            
 act is more stringent than the federal law on which it was based.             
 SB 340 corrects some things that have crept into the Alaska law               
 over the years that really isolate it from the rest of the states             
 and has the effect of making it harsher than employers face in                
 other states.  In section 2, as the law presently stands, only the            
 prevailing plaintiff can recover full attorney's fees.  The result            
 is that if an employer is sued and the case is frivolous, they                
 don't recover their attorney's fees.  Under Alaska Civil Rule 82,             
 the prevailing party recovers at least partial attorney's fees.               
 There is no reason the wage and hour law should not have that same            
 provision, MR. GROVER said.                                                   
 Section 3 (d) brings into Alaska law a limited exception that has             
 been available under federal law for many years and is available in           
 most other states, for employers who can show good faith in trying            
 to follow the law.                                                            
 Mr. Grover said subsection (e) was requested by the Alaska                    
 Department of Labor.  It would restore to the Commissioner the                
 power to settle cases without requiring liquidated damages.                   
 Subsection (f) allows private settlements of these cases.                     
 SENATOR KELLY asked what organized labor thought of this bill.                
 MR. JOYCE, Aide to Representative Mulder, said organized labor has            
 "bought off" on this compromise, but they are not in support of               
 this bill.  It doesn't really affect their constituency.                      
 SENATOR LINCOLN asked if the statute of limitations was addressed             
 in this bill.  MR. JOYCE said it doesn't now.  He said he would               
 have to consult with the Department of Labor and legal staff.                 
 SENATOR KELLY said they would hold SB 340 until they get the House            
 version and see how it addresses that issue.                                  
 SENATOR KELLY announced  SB 359  (INVESTMENT POOLS FOR PUBLIC                 
 ENTITIES) to be up for consideration.                                         
 DAVE ROSE, Financial Advisor, Alaska Municipal League Investment              
 Pool, said they are seeking clarification of what investment pools            
 can do.  AS 37.23. permits cities and boroughs to place money into            
 an investment pool for the purpose of trying to enhance their yield           
 or provide liquidity, and to secure professional funds management.            
 Section 1 clarifies the use of floating rate securities which are             
 reviewed annually or more frequently for rate.  The second change             
 in section 1 deals with the purchase of securities which are issued           
 by domestic branch banks whose parent may be a foreign bank.  These           
 are called Yankee securities which are denominated in dollars.                
 Section 2 is a new section which deals with lending of securities             
 providing collateral is received.  This is pretty much conventional           
 in the industry under the prudent investor rule; they are just                
 seeking explicit language.                                                    
 Section 3 removes a restriction which limits the amount of bank               
 paper that can be held by the portfolio, MR. ROSE said.                       
 SENATOR LINCOLN noted in a letter from Commissioner Rexwinkle there           
 was is a language change in section 2 that used "provided such                
 securities are fully collateralized" not "if the securities are..."           
 and asked the reason for that.  MR. ROSE said there was no reason             
 that he knew of and that the drafting attorneys did that.  He did             
 not think that was a major change.                                            
 Number 460                                                                    
 SENATOR RIEGER moved to pass SB 359 from committee with individual            
 recommendations.  There were no objections and it was so ordered.             
 SENATOR KELLY asked if this bill affected the Permanent Fund.  MR.            
 ROSE said it has no affect on it or any other state entity.                   
 SENATOR KELLY announced  SB 361  (REAL ESTATE APPRAISERS) to be up            
 for consideration.                                                            
 WENDY MULDER, Department of Commerce, said SB 361 takes from                  
 statute the state requirement for the number of instruction hours             
 for a state certified appraiser which the federal government keeps            
 changing.  This is so that the state does not have to keep coming             
 back and amending the statute to comply with the federal the                  
 Financial Institutions Reform and Recovery Act.  Unless we meet               
 federal requirements, federally financed programs are in trouble,             
 she said.                                                                     
 SENATOR RIEGER asked why we should have appraisals since it appears           
 in some cases that the appraisal is lower than what the property              
 actually sells for.  MS. MULDER said from the Department's                    
 perspective, they need to have a state certified program in order             
 to receive federal money.                                                     
 SENATOR KELLY asked Mr. Fink to contact the State Appraiser's                 
 Association to testify Thursday and announced  SB 362  (OMNIBUS               
 INSURANCE REFORM) to be up for consideration.  He announced a                 
 recess from 2:20 through 2:25 p.m.                                            
 DAVE WALSH, Director, Division of Insurance, said there was one               
 change in the bill that affected Lloyds of London and Mr. Gussi               
 would answer questions regarding that issue.  He said this bill has           
 a $0 fiscal note and gives them the authority to respond to                   
 catastrophic situations.                                                      
  TAPE 94-21, SIDE B                                                           
  Number 580                                                                   
 MR. WALSH said it provides them with the authority to suspend a               
 certificate of an insurance company if they don't renew it and                
 provides for the voluntary surrender of a certificate of authority            
 without going through a full liquidation process.  Another                    
 provision allows them to grant a refund or tax credits for                    
 overpayment of premium tax.  Industry does not object to this.                
 SB 362 restores their ability to promulgate regulations for                   
 continuing education for agents and brokers.  The Agents and                  
 Brokers Association is in support of this.  The bill also clarifies           
 fiduciary accounts, saying they must be in Alaska if it's an Alaska           
 broker, but that a single bond can cover multiple offices.                    
 The bill also allows incorporated insurers into the definition of             
 a group of unincorporated insurers to reflect a recent change at              
 Lloyds of London.  As they have reorganized, they have gone from              
 allowing only individual members to allowing corporate members.               
 This provision is key to continued participation of Lloyds in our             
 SB 362 strengthens the consumer protection and enforcement laws               
 with regards to false statements made when filing an insurance                
 claim.  A couple of other miner provisions allows the Director to             
 specify the format and content of rate and policy form filings.  It           
 clarifies health insurance coverage for newborn and adopted kids.             
 It allows electronic transfer of funds, makes "housekeeping"                  
 corrections and conforming amendments.                                        
 Number 500                                                                    
 SENATOR KELLY asked if there were any objections to adopting the CS           
 to SB 362.  There were none and it was so ordered.                            
 SENATOR RIEGER asked in reference to page 8, line 24 if somewhere             
 in statute you can have filings, but not be subject to subpoena.              
 MR. WALSH explained that the depth of a filing a company must make            
 really reveals everything.  In the past, frivolous lawsuits have              
 been filed just to obtain this information.  If any of the                    
 information is ruled to be material to a lawsuit, it is                       
 discoverable, but not from the Department of Commerce.                        
 SENATOR RIEGER asked at the top of page 37 what it meant that an              
 insurer may not increase the premium on auto insurance, unless it             
 applies to all insurance in the same class.  MR. WALSH said that              
 means that if you as a company set up your classes by age, type of            
 vehicle, etc., you may not have a discriminatory rate.                        
 SENATOR RIEGER said there were several references to credit                   
 insurance which, he thought, were bad deals, anyhow.  MR. WALSH               
 agreed and said their loss ratios are so low, you can't hold them             
 to a 20% standard.  This bill gives them the power to correlate the           
 premium to the losses.                                                        
 SENATOR SALO asked him to explain on page 3, closing an examination           
 hearing to the public.  MR. WALSH responded that when they examine            
 a company, they hold a hearing on the examination report.  At times           
 the reports can be highly critical and sometimes there are                    
 mistakes.  This is an opportunity where those things can get                  
 straightened out.  If the hearing officer disagrees, it becomes               
 public, but it gives an individual or company the right to come in            
 and be heard in a fashion that would do them the least harm, if a             
 mistake had been made.                                                        
 Number 430                                                                    
 SENATOR LINCOLN asked what section 12 does.  MR. WALSH explained              
 that insurers pay a premium tax to the state based upon the type of           
 line they write.  SB 362 would allow them to give tax credit, if              
 the figures were found to be wrong, so that the Department would              
 not have to come up with cash it didn't have, if it was a large               
 sum.  Although it has not come up, yet, he said they would have no            
 way of dealing with a big figure.                                             
 SENATOR LINCOLN asked what right we had to keep someone's money, so           
 they have to wait over a period to get it back.  MR. WALSH said if            
 it took longer than 1 year to pay back, he would come to the                  
 legislature for an appropriation.  This measure would give them               
 more flexibility to deal with an accidental overpayment to the                
 SENATOR LINCOLN said she would feel better if it said "to be used             
 in the next calendar year to the fullest extent possible and then             
 have a monetary refund" rather than saying "in each succeeding year           
 until no credit remains."  MR. WALSH said that would be fine with             
 SENATOR KELLY told Mr. Fink to put that language in the bill and              
 asked if there were any objections to adopting CSSB 362(L&C). There           
 were none and it was so ordered.                                              
 Number 508                                                                    
 SENATOR KELLY adjourned the meeting at 2:50 p.m.                              

Document Name Date/Time Subjects