Legislature(1993 - 1994)
04/12/1994 01:40 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.