Legislature(1997 - 1998)

03/25/1997 01:30 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SENATE LABOR AND COMMERCE COMMITTEE                             
                         March 25, 1997                                        
                           1:30 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Loren Leman, Chairman                                                 
 Senator Mike Miller                                                           
 Senator Tim Kelly                                                             
 Senator Lyman Hoffman                                                         
  MEMBERS ABSENT                                                               
 Senator Jerry Mackie                                                          
  COMMITTEE CALENDAR                                                           
 Confirmation Hearings:                                                        
  Board of Barbers and Hairdressers                                            
   Ms. Rosalyn Wyche - Anchorage                                               
   Ms. Sheryl Sutton - Juneau                                                  
 SENATE BILL NO. 89                                                            
 "An Act relating to regulation of barbers and hairdressers;                   
 extending the termination date of the Board of Barbers and                    
 Hairdressers; and providing for an effective date."                           
  - MOVED CSSB 89(L&C) OUT OF COMMITTEE                                        
 SENATE BILL NO. 137                                                           
 "An Act exempting certain volunteer emergency medical technicians             
 and volunteer fire fighters from state wage and hour laws; and                
 providing for an effective date."                                             
  - MOVED CSSB 137 OUT OF COMMITTEE                                            
 SENATE BILL NO. 104                                                           
 "An Act relating to regulation and examination of insurers and                
 insurance agents; relating to kinds of insurance; relating to                 
 payment of insurance taxes and to required insurance reserves;                
 relating to insurance policies; relating to regulation of capital,            
 surplus, and investments by insurers; relating to hospital and                
 medical service corporations; and providing for an effective date."           
  - HEARD AND HELD                                                             
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 89 - No previous action to consider.                                       
 SB 137 - No previous action to consider.                                      
 SB 104 - No previous action to consider.                                      
  WITNESS REGISTER                                                             
 Ms. Mariann Stoffel, Chairman                                                 
 Board of Barbers and Hairdressers                                             
 1352 Pioneer Peak Dr.                                                         
 Wasilla, AK 99654                                                             
  POSITION STATEMENT:   Supported the CSSB 89.                                 
 Ms. Barb Gabier, Program Coordinator                                          
 Division of Occupational Licensing                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110806                                                               
 Juneau, AK 99811-0806                                                         
  POSITION STATEMENT:   Supported CSSB 89.                                     
 Mr. Craig Lewis                                                               
 Interior Region Emergency Medical Services Council                            
 3522 Industrial Ave.                                                          
 Fairbanks, AK 99701                                                           
  POSITION STATEMENT:   Supported SB 137.                                      
 Mr. Randy Carr, Chief                                                         
 Division of Labor Standards                                                   
 Department of Labor                                                           
 P.O. Box 107021                                                               
 Anchorage, AK 99510-7021                                                      
  POSITION STATEMENT:   Supported SB 137.                                      
 Ms. Martha Moore                                                              
 Division of Community Health and Emergency Medical Services                   
 Department Health and Social Services                                         
 P.O. Box 110610                                                               
 Juneau, AK 99811-0610                                                         
  POSITION STATEMENT:   Supported SB 137.                                      
 Ms. Virginia Mccarthy                                                         
 P.O. Box 303                                                                  
 Tok, AK 99780                                                                 
  POSITION STATEMENT:   Supported SB 137.                                      
 Mr. Dwight Perkins, Special Assistant                                         
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau, AK 99802-1149                                                         
  POSITION STATEMENT:   Commented on SB 137.                                   
 MS. Annette Kreitzer, Staff                                                   
 Senator Leman                                                                 
 State Capitol Bldg.                                                           
 Juneau, AK 99811-1182                                                         
  POSITION STATEMENT:   Commented on SB 89 and SB 137.                         
 Ms. Marianne Burke, Director                                                  
 Division of Insurance                                                         
 Department of Commerce and Economic Development                               
 P.O. Box 110805                                                               
 Juneau, AK 99811-0805                                                         
  POSITION STATEMENT:   Gave overview and supported SB 104.                    
 Mr. Kevin Smith                                                               
 Risk Manager                                                                  
 Alaska Municipal League                                                       
 217 2nd                                                                       
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supported SB 104.                                      
 Mr. Reed Stoops                                                               
 240 Main Street, #600                                                         
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Commented on SB 104.                                   
  ACTION NARRATIVE                                                             
  TAPE 97-13, SIDE A                                                           
 Number 001                                                                    
                SB  89 BARBERS AND HAIRDRESSERS                               
  CHAIRMAN LEMAN  called the Senate Labor and Commerce Committee               
 meeting to order at 1:30 p.m. and after no response from Ms. Wyche,           
 Board of Barbers and Hairdressers, announced  SB 89  to be up for             
  MS. MARIANN STOFFEL,  Board of Barbers and Hairdressers, thanked             
 Senator Leman for contacting her about the meeting today and said             
 the Board supported the version of the bill with two licensed                 
 barbers and two licensed hairdressers, one of which was also a                
 licensed cosmetologist.                                                       
  SENATOR MILLER  moved to adopt the Lauterback 3/24/97 2\E version.           
 There were no objections and it was so ordered.                               
  MS. BARB GABIER,  Program Coordinator, Division of Occupational              
 Licensing, said she supported the CS.                                         
 SENATOR MILLER moved to pass CSSB 89(L&C) from committee with                 
 individual recommendations.  There were no objections and it was so           
        SB 137 EXEMPT VOL. EMT/FIRE FGTR WAGE & HOUR LAW                      
 CHAIRMAN LEMAN announced  SB 137  to be up for consideration.                 
  MS. ANNETTE KREITZER,  Staff to Senator Leman, explained that SB 137         
 is a result of problems that some volunteer organizations, EMS and            
 fire fighting organizations in particular, are having with                    
 determining what is an employee and what is not an employee.                  
  MR. CRAIG LEWIS,  Interior Region Emergency Medical Services                 
 Council, supported SB 137.  The State's definition of                         
 employer/employee is more restrictive than the Federal Labor and              
 Standards Act (FLSA)'s definition.  Exemptions include religious              
 organizations, cemetery workers, and educational organizations to             
 name a few, but exclude humanitarian agencies or EMTs or other                
 volunteers.  This causes problems in terms of determining whether             
 a person is really a volunteer or an employee.  If a person is told           
 when to come to work, is provided with a uniform, is provided with            
 a vehicle to respond from, is provide the supplies and materials to           
 do the job, and then also receives pay in some form (although that            
 pay is just reimbursement from their own pocket to buy medical                
 supplies or gasoline), that customarily causes an interpretation to           
 be made by the wage and hour folks that that person is really an              
 employee when, in fact, the entire intention of that individual is            
 to volunteer.  It is hard to recruit people because of this problem           
 and makes it difficult from an organizational basis for there to be           
 private, non-profit corporations to help with the administrative              
 load to then be, in turn, identified as employers and then be                 
 encumbered with the large list of regulatory mandates they have to            
 include like worker's compensation.                                           
 MR. LEWIS said he has communicated with the Department of Labor in            
 Fairbanks and this is their language.                                         
 Number 192                                                                    
  MR. RANDY CARR,  Department Labor, said this bill primarily affects          
 those private non-profit organizations that provide fire and rescue           
 squad services in some of the less populated areas of the State.              
 About seven of those organizations would be affected by this bill.            
 The private non-profit organizations are at a disadvantage because            
 all the other volunteer fire departments and rescue operations are            
 under the auspicious of a political subdivision and they already              
 enjoy an exemption from the State Wage and Hour Act.  He noted that           
 they do not have any wage claims against the private for-profit               
 entities; nor have they had any because they try to work with them.           
  MS. MARTHA MOORE,  Community Health and Emergency Medical Services,          
 said they supported SB 137.                                                   
 Number 226                                                                    
  MS. VIRGINIA MCCARTHY,  Tok EMS, said their Chief, Tom Dean, had to          
 make an unexpected run to Fairbanks, and she was filling in.  She             
 explained that they make Anchorage and Fairbanks runs; the                    
 Fairbanks run takes 8 - 10 hours and the Anchorage run takes 12 -             
 15 hours and it's all voluntary.                                              
  SENATOR KELLY  asked how this interacts with the Worker's                    
 Compensation statute.                                                         
  MR. DWIGHT PERKINS,  Department of Labor, said he would have to              
 check to see if there is a correlation between the two.  He didn't            
 think there would be a problem.                                               
  MS. KREITZER  noted that she checked with the drafter and the                
 Department of Labor and there isn't any impact on Worker's                    
  SENATOR MILLER  moved to pass SB 137 from committee with individual          
 recommendations.  There were no objections and it was so ordered.             
                SB 104 OMNIBUS INSURANCE REFORM                               
  CHAIRMAN LEMAN  announced  SB 104  to be up for consideration.               
  MS. MARIANNE BURKE,  Director, Division of Insurance, testified that         
 SB 104 is designed to bring some efficiency and effectiveness to a            
 number of existing sections in the code, to eliminate some                    
 unintended barriers that had been created over the years, to add              
 some clarification, remove some redundancy, and to even the playing           
 field for insurers doing business in the State of Alaska.                     
 The first section recognizes the fact that the Division of                    
 Insurance routinely requests input from volunteers from industry,             
 the community, and producers.  Historically they have served on               
 task forces at no cost to the Division and they might be challenged           
 on that unless the intent was clarified to not pay transportation             
 and per diem, etc. to these individuals.  In many cases these                 
 people are paid for their time and expenses by the industry.  This            
 will just clarify what is and has been the practice for many years.           
 Section 2 requires their annual report to contain certain                     
 information and is amended to reflect current practices which are             
 far more complete and detailed.                                               
 CHAIRMAN LEMAN apologized for the interruption to MS. BURKE and               
 said they had Ms. Wyche on teleconference for the Board of Barbers            
 and Hairdressers.                                                             
 Number 334                                                                    
  MS. ROSALYN WYCHE  said she had been doing hair for the last 18              
 years and it's something she really loves and she thought she could           
 bring her experience and expertise to the Board.                              
 CHAIRMAN LEMAN asked her if there were any issues the legislature             
 should hear about.  MS. BURKE replied that there were none.                   
 CHAIRMAN LEMAN thanked her and said her confirmation would be taken           
 up at a joint session of the legislature.                                     
  MS. BURKE  said section 3 deals with the cost of the examination             
 given to insurers.  This section recognizes what is currently being           
 done which is paying properly documented out-of-pocket expenses and           
 allows the Division to charge for a portion of the overhead that              
 occurs in the examination process.                                            
 Sections 4 and 5 address premium tax, which approaches $30 million            
 to the general fund, and is collected by the Division of Insurance            
 on March 1 of each year.  It was determined that by moving the                
 collection date to a quarterly basis, as well as recognizing                  
 technology, and allowing electronic transfers of the funds, the               
 State would be able to generate a significant amount of interest              
 income.  She added that she has personally talked to every                    
 "domestic" in the State and they have all known it was inevitable             
 that they would pay on a quarterly basis.  This is the norm in                
 other states.  Based on current rates of interest, this translates            
 into more than $450,000 of interest revenue to the State each year.           
 CHAIRMAN LEMAN asked if any companies were unable to make the                 
 transfer electronically.  MS. BURKE replied that there were none.             
 Section 6 just updates the statute and requests that if anyone                
 holds a certificate of authority to do business in this State, that           
 they provide the division with current information.  There is                 
 currently no requirement on the books to inform the division of               
 changes in Articles of Incorporation, addresses, etc.  They feel              
 that in order to regulate they need to know where the people are              
 located that they are regulating.                                             
 Number 403                                                                    
 Section 7 spells out that all insurers must retain their records              
 and they must be available for examination.  Currently, all                   
 domestics are subject to this and they are just requesting that it            
 is extended to all insurers who do business up here.  This is                 
 consistent through-out the states.                                            
 Section 8 basically requires that an alien insurance company who              
 wants to do business in Alaska must get a particular certification            
 from their country.  They found that only one country provides that           
 certification, the U.K., and it was never the intention to exclude            
 every other insurer in the world.  She pointed out that they are              
 still subject to certification by their independent auditors and              
 independent verification.  It is not their intent to treat one                
 country differently from another.                                             
 Section 9 defines the fact that stop loss insurance is health                 
 insurance which is a barrier they have in statute.  Right now only            
 property and casualty companies can write stop loss insurance and             
 it is a very frequently used form of insurance in health.                     
  SENATOR KELLY  asked her to define stop loss insurance.  MS. BURKE           
 explained it means that an individual or company can decide they              
 will cover all of their losses up to some predetermined amount,               
 then they want to be insured for everything that goes over that               
 SENATOR KELLY asked if it was like reinsurance.  MS. BURKE said               
 there were some significant differences in that this will never               
 kick in unless you hit a specific dollar amount on each claim or in           
 the aggregate.                                                                
 SENATOR KELLY asked if the State receives the 2.7% premium tax on             
 stop loss insurance.  MS. BURKE replied that now we do not unless             
 it is reported by the company.  There is a massive debate going on            
 in the states on whether or not stop loss is insurance.  However,             
 the division is defining it as insurance.                                     
 SENATOR KELLY asked if they currently regulate self insureds.  MS.            
 BURKE replied no, that they are preempted by ERISA.                           
 SENATOR KELLY asked if stop loss insurance was defined as                     
 insurance, would they begin to regulate the self-insureds.  MS.               
 BURKE answered no, and said it is specifically designed not to do             
 that because they would run head on into the federal preemption.              
 She noted that right now it is not legal to buy stop loss insurance           
 in the State of Alaska that is sold by a health writer.  But they             
 do it and it's a common practice.  She can see no regulatory reason           
 why the State should hang the availability on a technicality like             
 SENATOR KELLY asked if the legislature defined stop loss insurance            
 as insurance, would the Division be able to collect the 2.7%                  
 premium tax.  MS. BURKE said she couldn't answer that definitively,           
 but she would pursue the legality of doing that without bringing              
 down the preemption of the federal government.  She said she has              
 been in contact with other states on this issue and the problem has           
 been the dollar amount at which it becomes insurance.  For instance           
 at $250 it becomes merely a deductible.  There have been a number             
 of cases heard in court and so far they have all gone against the             
 states and for as high as $10,000.  She said they are continuing to           
 push this through the NAIC.                                                   
 SENATOR KELLY asked if they passed this would they still have to go           
 to court to try to collect the premium tax.  MS. BURKE responded              
 that passing this would help.                                                 
 CHAIRMAN LEMAN asked if the $10,000 was per person per incident or            
 per year, or what.  MS. BURKE replied that the case she was citing            
 was in Illinois and was $10,000 per occurrence.                               
 Number 475                                                                    
 Section 10 defines the stop loss as she has just discussed with               
 Section 11 brings some efficiencies by deleting the need for the              
 Division to formally request a risk based capital report.  She said           
 they need one every year.                                                     
 Section 12 also brings some efficiencies by making it clear that              
 instructions for filing a risk based capital report that are                  
 adopted by the NAIC are the ones that should be used instead of               
 doing instructions by regulation every year.                                  
 CHAIRMAN LEMAN asked what supplemental information the director               
 might request on these filings.  MS. BURKE said there is some State           
 specific information they request.  For example they require that             
 the companies let them know of investments in the State of Alaska.            
 CHAIRMAN LEMAN asked if there had been any challenge regarding the            
 risk based capital instructions.  MS. BURKE replied no and most               
 states are moving toward this more efficient way of doing business.           
 Section 13 sets up minimum reserves for health insurance.                     
 Sections 14 and 15 are highly technical actuarial requirements for            
 the policy and claims reserves.  She noted that some claims are not           
 filed and they should be accounted for.                                       
 SENATOR KELLY said regarding section 14 he gets awfully nervous               
 when something is repealed and reenacted and there's generally a              
 reason for that like a major change that someone doesn't want you             
 to see.  He asked if this section conforms to provisions of other             
 states or is it special to Alaska.  MS. BURKE replied that this is            
 a minimum standard in all the states.                                         
 Section 16 is to assist the domestics because there is nothing in             
 statute that requires the custodian of a trust to indemnify the               
 insurer if there's a loss from theft, defalcation, or negligence              
 and this requires the custodian to replace the asset or the value             
 of that asset.  It additionally provides that a bank, a trust                 
 company, or a securities firm may serve as a custodian if it's                
 authorized by the insurer and approved by the director.                       
 CHAIRMAN LEMAN asked what the difference was between defalcation              
 and embezzlement.  MS. BURKE said for both it gets down to the fact           
 that it has been misappropriated.  She said she would get the                 
 definitions to him.                                                           
  TAPE 97-13, SIDE B                                                           
 MS. BURKE said that Section 17 is an editorial revision.                      
 Section 18 removes a redundancy.  It clarifies that an attorney-in-           
 fact of a reciprocal insurer who meets the qualifications to be               
 exempt from licensure as an attorney-in-fact is not required to be            
 licensed again under AS 21.27.                                                
 CHAIRMAN LEMAN asked if Section 17 has created any challenges.  MS.           
 BURKE said it did not.                                                        
 Section 19 codifies a current procedure that requires an applicant            
 to certify under oath that the information provided on a license              
 application is true and correct.  CHAIRMAN LEMAN asked if this took           
 in to account certain religious beliefs against swearing.  MS.                
 BURKE responded that they use the word "oath" to avoid that.                  
 Section 20 says if you are a licensee there are certain                       
 requirements that you can't do kick-backs, but they want it to                
 apply to all people, not just licensees.  So they want to change              
 the word "licensee" to "person."  She said they have had one                  
 complaint where that was the case.                                            
 Section 21 conforms temporary licensing procedures with what's                
 necessary to issue the temporary license under the welfare reform             
 bill that was passed last year.                                               
 Section 22 updates procedures to allow the director the flexibility           
 to provide service of notice to a person in the most effective and            
 efficient way.  Right now they are required to serve notice with a            
 certificate of mailing.                                                       
 Section 23 asks for authority to fine a person who illegally                  
 transacts business of insurance in Alaska.  She said that usually             
 industry informs them of this, but they have no recourse other than           
 to ask them politely to please not do that.  CHAIRMAN LEMAN asked             
 what happened if the financial benefit involved more than $25,000.            
 MS. BURKE said there were several things that could happen.  If               
 they are licensed in another state, which is usually the case, they           
 notify the other state which takes action against them.  If they              
 are just an individual who is not licensed in any state, there                
 isn't any way they can take action on an administrative level.                
 However, they can be reported to appropriate authorities for                  
 criminal prosecution if they took the money under false pretenses.            
 Section 24 is another catch-22 they have discovered.  Third-party             
 administrators are an organization that provides administrative               
 services to a self-insured entity and are currently required to               
 have two-years of audited financial statements before they can be             
 licensed in the State.  There are a number of entities that are               
 spin-offs from highly reputable companies that have not been in               
 business for two-years and are precluded from coming into the State           
 of Alaska.  They want to remove that barrier and apply the same               
 rigorous review process they do to any licensee and have them                 
 provide them with financial statements for all the time they have             
 been in business.                                                             
 Section 25 establishes solvency requirements for each syndicate or            
 insurer of Lloyds or a similar operation.  Right now if a syndicate           
 is going to do business in the U.S., they must have in trust in an            
 American Bank the equivalent of the premium dollars spent so it               
 won't be tied up in a foreign court.                                          
 Number 456                                                                    
 Section 26 clearly indicates that if you are part of a syndicate              
 that's part of an insurance exchange, the change in the name from             
 Lloyds to syndicates does not get you out of the requirements.                
 Sections 27 and 28 addresses the premium tax issue and applies to             
 surplus lines tax of 1% which is in addition to the 2.7% premium              
 tax.  They would like it collected on a quarterly basis and with              
 electronic payments.  She explained that surplus lines are usually            
 paid as incurred and many of them pay electronically now.                     
  SENATOR KELLY  asked if industry disagreed with these two prepay             
 provisions.  MS. BURKE said she has had no complaints at all; they            
 are already set-up to pay on a quarterly basis.  Some states do it            
 on a monthly basis.                                                           
 Section 29 is to replace a generic term with a specific term.                 
 Section 30 incorporates a requirement established by the NAIC Model           
 Unfair Trade Practices Act for an insurer to maintain records                 
 regarding the complaints it receives.  The record will assist the             
 division in evaluating an insurer's consumer practices.                       
 Section 31 clarifies that an insurance policy may only be non-                
 renewed on an anniversary date.  This applies to property and                 
 Section 32 states that rates on personal auto insurance cannot be             
 changed more often than every six months even if its written for a            
 shorter term and says that an anniversary period is one year six              
 months.   SENATOR KELLY  asked what happens in the case of a DWI.             
 MS. BURKE replied your rates would go up at renewal time.                     
 Section 33 adds a requirement that insurers and other licensees               
 report producer defalcations, embezzlements, or violations to the             
 director in much the same manner as currently is required for                 
 reporting claim fraud.  Currently, licensees are not required to              
 Section 34 clarifies that the credit scale recognizing differences            
 in wages paid applies only to the construction industry.   SENATOR            
 KELLY  asked what the purpose was.  MS. BURKE explained that                  
 construction workers, because of their high wages and their                   
 overtime, were actually paying higher worker's comp premiums than             
 would be indicated based on their risk basis.  She said the                   
 construction industry pushed for this section.                                
 Section 35 clarifies that rates for individual health insurance are           
 not subject to approval consistent with current statutes that do              
 not provide a mechanism or guidelines for such rate review.  They             
 do review, as required by federal law, the medicare supplemental              
 Section 36 requires that benefits provided under health insurance             
 contracts be coordinated.  This coordination is applicable only               
 when an individual is covered under more than one health insurance            
 contract.  This will help prevent individuals receiving                       
 reimbursement from more than one company for the same thing.  She             
 explained that companies have the data bases already.  If it's big            
 dollars, they coordinate.  She said industry is very embarrassed              
 about this when it's pointed out.                                             
 Section 37 clarifies that insurance coverage changes required by a            
 law change become effective at renewal unless the law provides an             
 earlier effective date for the changes.                                       
 Number 225                                                                    
 Section 38   requires that rates for group health insurance contracts         
 not be excessive, inadequate, or unfairly discriminatory to provide           
 a consistent standard for all group health insurers.   SENATOR KELLY          
  asked who makes the determination of unfairly discriminatory.  MS.           
 BURKE replied that insurance by its nature is discriminatory and              
 there are some discriminatory actions that are permitted by                   
 statute, like a 17-year old male driver or a 55-year old driver,              
 for instance.  You can't be unfairly discriminatory; it has to have           
 a statistical basis to spread risk.                                           
 Section 39 allows the director to determine the method of payment             
 of premium taxes to reflect technology changes such as electronic             
 payments and to collect premium taxes quarterly.                              
 Section 40 adds investment income as one of the elements to be                
 considered when evaluating the rates charged by title insurers.               
 Section 41 is specifically for a domestic insurance company located           
 in Barrow, but their business address is in Anchorage.  The law               
 says they must have their annual meeting where their principal                
 business is conducted.  They have asked to have it in Barrow and              
 this section would allow the director, upon showing of good cause,            
 to allow an annual to be held in another location within the State.           
 Section 42 requires director approval for an insurer to borrow                
 funds when a written agreement requires that the money be repaid              
 only out of the insurer's excess surplus and removes permission for           
 an insurer to borrow money in this manner for any purpose of the              
 insurer's business.                                                           
 Section 43 expands the exception for being licensed as an attorney-           
 in-fact to all reciprocal insurers.                                           
  TAPE 97-14, SIDE A                                                           
  Number 001                                                                   
 The exemption is allowed when the attorney-in-fact is a wholly-               
 owned subsidiary of the reciprocal insurer who only acts for the              
 one reciprocal.  Attorneys-in-fact who operate more than one                  
 reciprocal insurer must be licensed under this section.                       
 Section 45 allows for the report filed by the joint insurance                 
 arrangement with its board of directors and the director to be an             
 audit based on generally accepted accounting principles rather than           
 requirements established by the director.  A report filed with the            
 director is open to public inspection unless specifically precluded           
 by statute.                                                                   
 Section 46 extends the period of disapproving claims to 120 days.             
 She said this language was developed by the NAIC and has been                 
 enacted in many states to reduce litigation over claims.                      
 Sections 47 and 48 update terminology to reflect the fact that                
 there are some managed care compensation arrangements.                        
 Number 100                                                                    
 Section 49 conforms filing requirements for medical and hospital              
 service corporations to similar requirements for their insurers               
 subject to form filing.                                                       
 Section 50 allows the director discretion to protect medical and              
 hospital service corporations from competitive disadvantage that              
 may arise from disclosing rating formulas when other health                   
 insurers are not required to file rates for approval and disclose             
 rating formulas.                                                              
 Section 51 requires that hospital or medical service corporations             
 have minimum reserve standards and reporting consistent with other            
 health insurers.                                                              
 Section 52 clarifies that the requirements of AS 21.36.210 -                  
 21.36.310 do not apply to seven-day policies.                                 
 Section 53 is important for Alaskans, because some insurance                  
 companies are saying they are not issuing policies, but they are              
 issuing certificates of insurance and, therefore, they are not                
 subject to Alaska's Title 21.                                                 
 Title 54 specifies what "certified financial statement" means in              
 licensing requirements.                                                       
  MR. KEVIN SMITH,  Risk Manager, Alaska Municipal League Joint                
 Insurance Association, supported a proposed amendment to section 45           
 which would be impossible to comply with if adopted as written                
 because 60-days is an inadequate amount of time for the actuaries             
 to do their magic.  He suggested either picking December 1 of each            
 year which would be easy for them to comply with or to pick a                 
 number like 150-days as a time to provide an annual report to the             
 Division of Insurance.                                                        
 CHAIRMAN LEMAN asked if there were any other anticipated changes.             
 MS. BURKE replied that they supported 150-days because it would               
 depend on what the year-end was.                                              
 Number 232                                                                    
  MR. REED STOOPS,  Aetna, said he hadn't had a chance to review his           
 client's questions with the director, but he would come back when             
 the bill was heard again with suggestions.  CHAIRMAN LEMAN said               
 they would probably have it back next Thursday.                               
  SENATOR KELLY  remarked that there was a proposal floating around            
 dealing with rental car insurance and making certain that the                 
 primary responsibility for the rental car insurance was the rentee.           
 MS. BURKE responded that the wording for that would make the                  
 personal policy primary and the rental car company's insurance                
 secondary.  The Division does not object to that, but she thought             
 it would detract from the current bill.                                       
 SENATOR KELLY asked her to get that language for the committee.  He           
 said he was also concerned that the title to HB 104 was so broad.             
 CHAIRMAN LEMAN said there was nothing more to come before the                 
 committee and adjourned the meeting at 3:32 p.m.                              

Document Name Date/Time Subjects