Legislature(1993 - 1994)

04/12/1994 01:40 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   SENATE LABOR AND COMMERCE                                   
                         April 12, 1994                                        
                           1:40 P.M.                                           
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator Tim Kelly, Chairman                                                   
 Senator Steve Rieger, Vice Chairman                                           
 Senator Bert Sharp                                                            
 Senator Georgianna Lincoln                                                    
 Senator Judith Salo                                                           
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 None                                                                          
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 SENATE BILL NO. 347                                                           
 "An Act relating to limited liability companies; amending Alaska              
 Rules of Civil Procedure 20 and 24; and providing for an effective            
 date."                                                                        
                                                                               
 CS FOR HOUSE BILL NO. 358(STA)                                                
 "An Act allowing a mobile home owner to obtain a certificate of               
 title from the Department of Public Safety."                                  
                                                                               
 SENATE BILL NO. 313                                                           
 "An Act relating to the Comprehensive Health Insurance Association            
 and to health insurance provided to residents of the state who are            
 high risks; and providing for an effective date."                             
                                                                               
 CS FOR HOUSE BILL NO. 54(L&C)                                                 
 "An Act relating to telephone caller identification; and providing            
 for an effective date."                                                       
                                                                               
 HOUSE BILL NO. 403                                                            
 "An Act requiring that automobile liability insurance include                 
 coverage for uninsured or underinsured motor vehicles and an offer            
 of policy limits for that coverage equal to coverage voluntarily              
 purchased for bodily injury or death; and providing for an                    
 effective date."                                                              
                                                                               
 HOUSE BILL NO. 439                                                            
 "An Act enacting the Uniform Fraudulent Transfer Act."                        
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
 SB 347 - See Labor & Commerce minutes dated 3/24/94                           
          3/31/94, and 4/7/94.                                                 
                                                                               
 HB 358 - No previous action to record.                                        
                                                                               
 SB 313 - See Health, Education & Social Services minutes dated                
          3/21/94.                                                             
                                                                               
 HB 54 - No previous action to record.                                         
                                                                               
 HB 403 - No previous action to record.                                        
                                                                               
 HB 439 - No previous action to record.                                        
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Patrick Lounsbury, Legislative Aide                                           
 c/o Representative Brian Porter                                               
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Supported HB 358.                                      
                                                                               
 Carol Carrol, Legislative Aid                                                 
 c/o Senator Jay Kerttula                                                      
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Robert Niebrugge                                                              
 P.O. Box 365                                                                  
 Glennallen, Ak. 99588                                                         
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Brenda Evans                                                                  
 300 Howland Rd. #41                                                           
 Fairbanks, Ak. 99712                                                          
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Rudy Vetter                                                                   
 P.O. box 70342                                                                
 Fairbanks, Ak. 99707                                                          
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Vicki Lahti                                                                   
 5190 Amherst, #51                                                             
 Fairbanks, Ak. 99709                                                          
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Sybil Skelton                                                                 
 15 Eleanor                                                                    
 Fairbanks, Ak. 99709                                                          
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Bonnie Nelson                                                                 
 20615 White Birch Rd.                                                         
 Chugiak, Ak. 99567                                                            
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Thelma Walker                                                                 
 800 E Dimond, Ste 300                                                         
 Anchorage, Ak. 99515                                                          
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Nina Magnuson                                                                 
 P.O. Box 771885                                                               
 Eagle River, ak. 99577                                                        
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Stella Walker                                                                 
 Division of Insurance                                                         
 Department of Commerce and Economic Development                               
 P.O. Box 110805                                                               
 Juneau, Ak. 99811-0805                                                        
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Dan Austin, Legislative Aide                                                  
 c/o Representative Kay Brown                                                  
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Supported HB 54.                                       
                                                                               
 Royce Weller, Legislative Aide                                                
 c/o Representative Bill Hudson                                                
 State Capitol                                                                 
 Juneau, Ak. 99811-1182                                                        
  POSITION STATEMENT:   Supported HB 403.                                      
                                                                               
 Josh Fink, Legislative Aide                                                   
 c/o Senator Tim Kelly                                                         
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Commented on HB 54.                                    
                                                                               
 Senator Donley                                                                
 State Capitol                                                                 
 Juneau, Ak. 99811-1182                                                        
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 John George                                                                   
 National Association of Independent Insurers                                  
 9515 Moraine Way                                                              
 Juneau, Alaska 99801                                                          
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Howard Jaegar                                                                 
 Alaska Independent Agents and Brokers                                         
 301 Seward St.                                                                
 Juneau, Ak. 99801                                                             
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 Michael Lessmeier                                                             
 State Farm Insurance                                                          
 One Sealaska Plaza, Suite 303                                                 
 Juneau, Ak. 99801                                                             
  POSITION STATEMENT:   Supported SB 313.                                      
                                                                               
 David Walsh, Director                                                         
 Division of Insurance                                                         
 Department of Commerce and Economic Development                               
 P.O. Box 110805                                                               
 Juneau, Ak. 99811-0805                                                        
  POSITION STATEMENT:   Neutral position on SB 313.                            
                                                                               
 Daniella Loper, Legislative Aide                                              
 c/o Representative Brian Porter                                               
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Supported HB 439.                                      
                                                                               
 Mary Ellen Beardsley, Assistant Attorney General                              
 Department of Law                                                             
 1031 W. 7th, Suite 200                                                        
 Anchorage, Ak. 99501-1994                                                     
  POSITION STATEMENT:   Commented on HB 439.                                   
                                                                               
 Charles McGee                                                                 
 Anchorage, Ak.                                                                
  POSITION STATEMENT:   Commented on his driver's license.                     
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-27, SIDE A                                                           
  Number 001                                                                   
 CHAIRMAN KELLY called the Labor and Commerce meeting to order at              
 1:40 p.m. and announced  SB 347  (LIMITED LIABILITY COMPANIES) to be     e    
 up for consideration.  He said they had a CS incorporating the                
 changes made on the House side and adding an effective date of July           
 1, 1995.  It puts off the tax question until next year when it will           
 become clear what is going to happen in Alaska.                               
                                                                               
 SENATOR SHARP moved to adopt the CS to SB 347.  There were no                 
 objections and it was so ordered.                                             
                                                                               
 SENATOR SHARP moved to pass CSSB 347 (L&C) with individual                    
 recommendations.  There were no objections and it was so ordered.             
 Number 35                                                                     
 SENATOR KELLY announced  HB 358  (MOBILE HOME CERTIFICATES OF TITLE)     )    
 to be up for consideration.                                                   
                                                                               
 PATRICK LOUNSBURY, Staff to Representative Porter, said HB 358 is             
 necessary because last year the DMV's authority to issue mobile               
 home titles was repealed.  Without a title, there is no way of                
 knowing for certain that the person selling the mobile home is a              
 legal owner or whether there is a lien that needs to be paid off.             
                                                                               
 SENATOR SHARP moved to pass CSHB 358 (STA Aff) from committee with            
 individual recommendations and with fiscal note #1.  There were no            
 objections and it was so ordered.                                             
 SENATOR KELLY announced  SB 313  (HEALTH INS. FOR HIGH RISK                   
 RESIDENTS) to be up for consideration.                                        
                                                                               
 CAROL CARROL, Staff for Senator Kerttula, said SB 313 amends his              
 high risk health insurance bill that was passed in 1992.  The                 
 amendments were requested by the High Risk Health Insurance                   
 Association that was set up at that time.  One of the requirements            
 of the insurance bill is that each member of the industry be a                
 member of the Association in order to do business in the state by             
 participating in the high risk health insurance pool.                         
                                                                               
 Sections 3 and 4 provide additional forms of deductibles, co-                 
 payments, and maximums.  This responds to requests by residents               
 seeking only catastrophic insurance with high deductibles.                    
                                                                               
 Section 5 broadens the ability of the association to offer policies           
 to groups that maintain healthy lifestyles without changing the               
 basic requirements that premium rates be based on age and                     
 geographic location.                                                          
                                                                               
 Section 6 further defines eligibility for the state plan.  This               
 would disqualify those residents who are eligible to be covered by            
 a plan subject to the Small Employer Health Reinsurance                       
 Association.                                                                  
                                                                               
 Sections 7 and 8 require payment of the premium with the request or           
 the application.                                                              
                                                                               
 Section 9 gives the Director of Insurance the ability to formulate            
 policy and adopt regulations.                                                 
                                                                               
 Section 10 provides a member of the Board of the Association with             
 immunity from civil or criminal liability for an act or omission in           
 good faith in the scope of the director's duties.                             
                                                                               
 Section 11 allows the director to accept an application for                   
 coverage in cases where 2 denials of coverage seem to be                      
 superfluous.  This would allow the director to list those                     
 disabilities that are recognized as being high risk before they               
 have to be rejected by an insurance company.                                  
                                                                               
 SENATOR SALO asked how many people had taken advantage of the high            
 risk insurance since the bill was passed.  MS. CARROL said there              
 were 70 people in the pool at the time.  She said that number would           
 expand, especially the catastrophic insurance.                                
                                                                               
 BOB NIEGRUGGE, Glennallen, supported SB 313 and said they could               
 offer a reduced rate if there was a higher deductible which would             
 make it more accessible to Alaska residents.                                  
                                                                               
 BRENDA EVANS, Fairbanks, said she is a diabetic and has renal                 
 failure and she has no medical insurance and is not on any                    
 government sponsored program or medicaid.                                     
                                                                               
 SENATOR KELLY asked Rudy Vetter, Vicki, Lahti, and Sybil Skelton,             
 teleconferencing from Fairbanks, if they supported this                       
 legislation.  They said yes they did.                                         
                                                                               
 SENATOR KELLY asked Bonnie Nelson, Thelma Walker, and Nina                    
 Magnuson, teleconferencing from Anchorage, it they supported SB
 313.  They said they did.                                                     
                                                                               
 STELLA WALKER, Division of Insurance, said as of February 1, they             
 had 71 people insured under this program.  Since then, they have              
 issued 24 new policies.                                                       
                                                                               
 SENATOR KELLY asked how this program is being financed.  MS. WALKER           
 replied that it is being financed through insurance premiums and              
 that state money is not going into this program.                              
                                                                               
 SENATOR SALO moved to pass SB 313 with individual recommendations             
 and the fiscal note.  There were no objections and it was so                  
 ordered.                                                                      
 SENATOR KELLY announced  HB  54  (TELEPHONE CONSUMER PROTECTION) to           
 be up for consideration.                                                      
                                                                               
 DAN AUSTIN, Legislative Aide to Representative Kay Brown, said HB
 54 provides if a telephone utility offers the feature known as                
 caller I.D. to its Alaska customers, it shall also offer the                  
 customers the choice of not having their number or other                      
 identification revealed by that feature.  This is known as                    
 "blocking."  The issue involved is that of privacy and its impact             
 on facilities such as domestic violence shelters.                             
                                                                               
 MR. FINK explained the change in the proposed CS was a simple                 
 prohibition against the telephone company for charging a fee for              
 caller blocking for the first time, but not for subsequent                    
 services.                                                                     
 SENATOR RIEGER moved to adopt the Senate CS to CSHB 54.  There were           
 no objections and it was so ordered.                                          
                                                                               
 SENATOR RIEGER moved to pass SCSCSHB 54 with individual                       
 recommendations.  There were no objections and it was so ordered.             
 Number 277                                                                    
 SENATOR KELLY announced  HB 403  (AUTOMOTIVE LIABILITY INSURANCE              
 COVERAGE) to be up for consideration.                                         
                                                                               
 ROYCE WELLER, Legislative Aide to Representative Hudson, said the             
 best way to insure Alaska consumers competitive auto insurance                
 premiums is to have a market place which encourages competition.              
 HB 403 does this by not mandating unreasonable insurance coverages.           
 Current law requires all insurance companies offering auto                    
 liability coverage to have coverage up to 1 million dollars per               
 person for bodily injury or death and 2 million dollars per                   
 accident for more than one person.                                            
                                                                               
 No other state mandates a company to offer such an uninsured or               
 underinsured motorist higher than the driver selects for himself.             
 No other state mandates even the minimum levels of coverage we have           
 here in Alaska.                                                               
                                                                               
 HB 403 has the support of the Division of Insurance and the Alaska            
 Independent Insurance Agents and Brokers and has a $0 fiscal note,            
 Mr. Weller said.                                                              
                                                                               
 SENATOR DONLEY said the position of the Division was neutral, but             
 they had formerly supported it.  He said this is the kind of                  
 insurance coverage that protects us from underinsured or uninsured            
 motorists if they hit us.                                                     
                                                                               
 He explained that the insurance industry strongly opposes mandatory           
 auto insurance, but 80 - 85% of Alaskans support mandatory auto               
 insurance.  About 11% of Alaskan drivers are uninsured presently.             
 This is a good figure compared to other states.  People should have           
 the choice to protect themselves from that small percentage.  The             
 problem is that some less preferred companies that do a smaller               
 amount of the market, who specifically deal with high risk drivers,           
 have difficulty in getting reinsurance for this type of coverage.             
                                                                               
 The provisions of this bill would apply just to the people who are            
 in the assigned risk pools now and would allow them more insurance            
 companies to do business in the Alaska market just like they do in            
 other places.                                                                 
                                                                               
 SENATOR DONLEY said he thought the average motorist is probably               
 underinsured against uninsured and underinsured drivers.                      
                                                                               
 Number 425                                                                    
 SENATOR RIEGER asked why the insurance industry was against                   
 mandatory liability insurance.  SENATOR DONELY explained that when            
 you have mandatory auto insurance, a lot of people who are lousy              
 risks are forced to get insurance and that tends to make it more              
 difficult for everybody.                                                      
                                                                               
 JOHN GEORGE, National Association of Independent Insurers, agreed             
 with Senator Donley.  He said as in other states there is an                  
 assigned risk market where someone who can't buy insurance in the             
 voluntary market can be assured of finding insurance coverage.  The           
 problem that insurance companies face in Alaska is that they were             
 either unable or unwilling to buy reinsurance specifically for                
 Alaska, because of the limit.  Also, it just seems like if you buy            
 a certain amount to cover another driver if you hit him, you should           
 be able to get the same amount of coverage for yourself if he hits            
 you.                                                                          
                                                                               
 Number 511                                                                    
                                                                               
 HOWARD JAEGER, Alaska Independent Agents and Brokers, said they are           
 not the companies, but are the retailers of the products the                  
 insurance companies make available to them.  They are in support of           
 this bill which does not preclude insurers from buying the higher             
 limits.  The problem is that Alaska has the highest mandatory auto            
 liability limits in the nation which has an impact on cost to the             
 consumer.  This bill would encourage more competition, Mr. Jaeger,            
 stated.                                                                       
                                                                               
  TAPE 94-27, SIDE B                                                           
  Number 580                                                                   
                                                                               
 MICHAEL LESSMEIER, State Farm Insurance, said 11% for uninsureds is           
 a very good number nation wide.  One of the difficulties with                 
 mandatary insurance is that no matter what form you adopt, there              
 are certain categories of people you cannot force to buy insurance            
 no matter what you do.                                                        
                                                                               
 Philosophically, they would prefer that the mandated offer be equal           
 to the amount of liability coverage a person chooses to purchase,             
 he said.                                                                      
                                                                               
 SENATOR KELLY asked if the Division would support a revision that             
 would remove the mandatory higher limits to a neutral position.               
                                                                               
 DAVID WALSH, Director, Division of Insurance, said the                        
 Administration has not taken a formal position on the bill.                   
                                                                               
 SENATOR DONLEY said he would support other consumer options and               
 deletion of the requirement in the present law that at each renewal           
 they would have to make this offer.  Even if we do make this                  
 change, there is no guarantee that new companies will come to                 
 Alaska.  There have been no words to that effect.                             
 Number 502                                                                    
                                                                               
 CHARLES MCGEE, Anchorage, said his I.D. number is 0334797 and he              
 would like to have his drivers license back.  SENATOR KELLY thanked           
 him for his comments.                                                         
                                                                               
 MR. JAEGER said it's important to remember we are not talking about           
 every accident, only the one where the other driver is at fault.              
                                                                               
 SENATOR LINCOLN noted that the references to underinsured and                 
 uninsured drivers was inconsistent.                                           
                                                                               
 SENATOR KELLY said they would hold the bill to work on the                    
 questions and bring it up at another time.                                    
 SENATOR KELLY announced  HB 439  (UNIFORM FRAUDULENT TRANSFER ACT) to    to   
 be up for consideration.                                                      
                                                                               
 DANIELLA LOPER, Legislative Aide to Representative Brian Porter,              
 said that HB 439 is the Uniform Fraudulent Transfer Act (UFTA).               
 Current law says if a transfer is fraudulent the plaintiff bears              
 the burden of proof which is difficult.  UFTA would eliminate the             
 present Alaska necessity of finding actual intent of a property               
 transfer to hinder, delay, or defraud a creditor in many situations           
 where transfers are obviously transferring assets solely to keep              
 them out of reach of the transferrer's creditors.  It establishes             
 three basic criteria that need to be met to prove fraudulent                  
 transfer.                                                                     
                                                                               
 MARY ELLEN BEARDSLY, Assistant Attorney General, said this bill is            
 beneficial because it makes it easier for creditors and harder for            
 debtors to do what they have been doing.                                      
                                                                               
 SENATOR RIEGER asked her to explain on page 2, lines 28 and 29 the            
 words: "assets of a debtor are unreasonably small in relation to a            
 business or transaction."                                                     
                                                                               
 MS. BEARDSLY explained that means a situation where the debtor                
 sells his assets to avoid paying his current debts.                           
                                                                               
 SENATOR LINCOLN asked how this bill protected individuals (the                
 innocent party) who are in a partnership.  MS. BEARDSLEY answered             
 that she didn't know how to answer that question, but she said                
 there are defenses in this act in situations where the transferee             
 is a relative of the debtor.  The creditor does not have a straight           
 shot at this, but it would be a little easier.                                
                                                                               
 Number 334                                                                    
                                                                               
 SENATOR SHARP moved to pass HB 439 with individual recommendations.           
 There were no objections and it was so ordered.                               
 SENATOR KELLY adjourned the meeting at 2:55 p.m.                              
                                                                               

Document Name Date/Time Subjects