Legislature(1993 - 1994)
03/29/1994 01:33 PM Senate L&C
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* first hearing in first committee of referral
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SENATE LABOR AND COMMERCE
March 29, 1994
1:33 P.M.
MEMBERS PRESENT
Senator Tim Kelly, Chairman
Senator Steve Rieger, Vice Chairman
Senator Georgianna Lincoln
Senator Judith Salo
MEMBERS ABSENT
Senator Bert Sharp
COMMITTEE CALENDAR
SENATE BILL NO. 193
"An Act relating to unfair discrimination under group disability
insurance; and providing for an effective date."
SENATE BILL NO. 340
"An Act relating to liquidated damages and attorney fees for
minimum wage and overtime compensation claims."
SENATE BILL NO. 359
"An Act relating to investment pools for public entities; and
providing for an effective date."
SENATE BILL NO. 361
"An Act relating to real estate appraisers and the Board of
Certified Real Estate Appraisers."
SENATE BILL NO. 362
"An Act relating to insurance, to the licensing, accreditation,
examination, regulation, and solvency of persons engaged in the
insurance business, including insurers, nonadmitted insurers,
purchasing groups, risk retention groups, and United States
branches of alien insurers; relating to the management of and the
filing of reports by persons licensed or otherwise doing business
under the insurance code; amending Alaska Rule of Civil Procedure
45; and providing for an effective date."
PREVIOUS ACTION
SB 193 - See Labor & Commerce minutes dated 3/24/94.
SB 340 - No previous action to record.
SB 361 - See Labor & Commerce minutes dated 3/31/94.
SB 362 - See Labor & Commerce minutes dated 3/31/94. See
Judiciary minutes dated 4/11/94.
WITNESS REGISTER
Ken Erickson
c/o Senator Pearce
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Commented on SB 193.
Dixie Hood, MA Counselor
222 Seward St., Suite 210
Juneau, Ak. 99801
POSITION STATEMENT: Supported SB 193.
Mercy Dennis, Co-Chairman
Legislative Committee for the Alaska Division of the American
Association for Marriage and Family Therapy
Anchorage, Ak.
POSITION STATEMENT: Supported SB 193.
Parry Grover
Anchorage, Ak.
POSITION STATEMENT: Supported SB 340
Howard Joyce, Legislative Aide
c/o Representative Mulder
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Commented on SB 340.
Dave Rose, Financial Advisor
Alaska Municipal League Investment Pool
Anchorage, Ak.
POSITION STATEMENT: Supported SB 359.
Wendy Mulder, Legislative Liaison
Department of Commerce
P.O. Box 110800
Juneau, Ak. 99811-0800
POSITION STATEMENT: Supported SB 361.
Dave Walsh, Director
Division of Insurance
Department of Commerce
P.O. Box 110805
Juneau, Ak. 99811-0805
POSITION STATEMENT:
ACTION NARRATIVE
TAPE 94-21, SIDE A
Number 001
CHAIRMAN KELLY called the Labor and Commerce meeting to order at
1:33 p.m. and announced SB 193 (DISCRIMINATION UNDER HEALTH
INSURANCE) to be up for consideration.
KEN ERICKSON, Staff to Senator Pearce, said SB 193 prevent health
insurance companies from discriminating against state licensed
marital and family therapists whenever the company offers coverage
for mental health services. This bill does not mandate any new
coverage, he said. It does provide freedom of choice for the
consumer and passes on cost savings to both the patient and the
insuring companies. He said that marital and family therapists
were awarded professional status last year and they have formed
their professional licensing board has been formed.
DIXIE HOOD, licensed marriage and family therapist, supported SB
193, because it would provide professional parity with other
licensed health care professionals in Alaska. She said adding them
to the list of options will not expand the number of clients or the
cost and would add an alternative level of treatment. This is
comparable to nurse/practitioners vs. physicians for medical
treatment. It can actually decrease costs of service since
marriage and family therapists are qualified to do much of the same
work as other licensed mental health professionals and can do it
cheaper.
MERCY DENNIS, Co-Chairman, Legislative Committee for the Alaska
Division of the Association for Marriage and Family Therapy,
supported SB 193. She said they have received significant federal
recognition as one of the five core mental health professions.
This type of therapy is often cost effective, because by definition
it tends to emphasize active, short term mental health treatment.
This is consistent with managed health care focus on shorter term
treatment as a way to protect escalating costs. Marriage and
family counseling fees are significantly less than psychologists
and psychiatrists. MS. DENNIS explained that marriage and family
counselors treat individuals in the context of their families,
providing service for 2 or more persons at the cost of individual
treatment.
SENATOR RIEGER asked what the qualifications are for becoming a
marriage and family therapist. MS. DENNIS answered that in Alaska
one has to have a minimum of a masters degree in marriage and
family therapy or a like field which has to be documented. They
have to take a written exam or come in with credentials from
another state.
SENATOR SALO said she was supportive of this legislation, and asked
if on page 1, the word "licensed" applied to all the categories and
asked if each of those providers was licensed in the state
separately. Someone in the audience responded that the list of
providers are all licensed health care providers in the state of
Alaska.
Number 233
JOSH FINK, Aide to Senator Kelly, explained they had received an
amendment from Greg Pease who wanted to insert "acupuncturist"
after "naturopath" on page l, line 12. Acupuncturists are licensed
in Alaska.
SENATOR LINCOLN and SENATOR RIEGER thought it was a good idea to
make sure "state licensed" applies to all the professions listed.
SENATOR KELLY said they would look into that issue and have the
bill and have the bill back before the committee at a later date.
SENATOR KELLY announced SB 340 (DAMAGES & ATTY FEES FOR UNPAID
WAGES) to be up for consideration.
SENATOR LINCOLN noted that "liquidated damages" was removed from
the title, but on page 2 of the CS, line 23, it appears again and
asked why. MR. FINK explained that a draft of the original bill
deals with settlements that go beyond liquidated damages to
attorney's fees, specifically, and the drafter said the title
didn't fit. Because section (e) of the CS goes beyond the scope of
simple liquidated damages and attorney's fees, the title can't be
that narrow, but the amendment he handed out does tighten it up
considerably, he said.
PARRY GROVER, Anchorage, said he was an attorney in private
practice and he had mainly represented management in all aspects of
employment law. He said in many respects the Alaska wage and hour
act is more stringent than the federal law on which it was based.
SB 340 corrects some things that have crept into the Alaska law
over the years that really isolate it from the rest of the states
and has the effect of making it harsher than employers face in
other states. In section 2, as the law presently stands, only the
prevailing plaintiff can recover full attorney's fees. The result
is that if an employer is sued and the case is frivolous, they
don't recover their attorney's fees. Under Alaska Civil Rule 82,
the prevailing party recovers at least partial attorney's fees.
There is no reason the wage and hour law should not have that same
provision, MR. GROVER said.
Section 3 (d) brings into Alaska law a limited exception that has
been available under federal law for many years and is available in
most other states, for employers who can show good faith in trying
to follow the law.
Mr. Grover said subsection (e) was requested by the Alaska
Department of Labor. It would restore to the Commissioner the
power to settle cases without requiring liquidated damages.
Subsection (f) allows private settlements of these cases.
SENATOR KELLY asked what organized labor thought of this bill.
MR. JOYCE, Aide to Representative Mulder, said organized labor has
"bought off" on this compromise, but they are not in support of
this bill. It doesn't really affect their constituency.
SENATOR LINCOLN asked if the statute of limitations was addressed
in this bill. MR. JOYCE said it doesn't now. He said he would
have to consult with the Department of Labor and legal staff.
SENATOR KELLY said they would hold SB 340 until they get the House
version and see how it addresses that issue.
SENATOR KELLY announced SB 359 (INVESTMENT POOLS FOR PUBLIC
ENTITIES) to be up for consideration.
DAVE ROSE, Financial Advisor, Alaska Municipal League Investment
Pool, said they are seeking clarification of what investment pools
can do. AS 37.23. permits cities and boroughs to place money into
an investment pool for the purpose of trying to enhance their yield
or provide liquidity, and to secure professional funds management.
Section 1 clarifies the use of floating rate securities which are
reviewed annually or more frequently for rate. The second change
in section 1 deals with the purchase of securities which are issued
by domestic branch banks whose parent may be a foreign bank. These
are called Yankee securities which are denominated in dollars.
Section 2 is a new section which deals with lending of securities
providing collateral is received. This is pretty much conventional
in the industry under the prudent investor rule; they are just
seeking explicit language.
Section 3 removes a restriction which limits the amount of bank
paper that can be held by the portfolio, MR. ROSE said.
SENATOR LINCOLN noted in a letter from Commissioner Rexwinkle there
was is a language change in section 2 that used "provided such
securities are fully collateralized" not "if the securities are..."
and asked the reason for that. MR. ROSE said there was no reason
that he knew of and that the drafting attorneys did that. He did
not think that was a major change.
Number 460
SENATOR RIEGER moved to pass SB 359 from committee with individual
recommendations. There were no objections and it was so ordered.
SENATOR KELLY asked if this bill affected the Permanent Fund. MR.
ROSE said it has no affect on it or any other state entity.
SENATOR KELLY announced SB 361 (REAL ESTATE APPRAISERS) to be up
for consideration.
WENDY MULDER, Department of Commerce, said SB 361 takes from
statute the state requirement for the number of instruction hours
for a state certified appraiser which the federal government keeps
changing. This is so that the state does not have to keep coming
back and amending the statute to comply with the federal the
Financial Institutions Reform and Recovery Act. Unless we meet
federal requirements, federally financed programs are in trouble,
she said.
SENATOR RIEGER asked why we should have appraisals since it appears
in some cases that the appraisal is lower than what the property
actually sells for. MS. MULDER said from the Department's
perspective, they need to have a state certified program in order
to receive federal money.
SENATOR KELLY asked Mr. Fink to contact the State Appraiser's
Association to testify Thursday and announced SB 362 (OMNIBUS
INSURANCE REFORM) to be up for consideration. He announced a
recess from 2:20 through 2:25 p.m.
DAVE WALSH, Director, Division of Insurance, said there was one
change in the bill that affected Lloyds of London and Mr. Gussi
would answer questions regarding that issue. He said this bill has
a $0 fiscal note and gives them the authority to respond to
catastrophic situations.
TAPE 94-21, SIDE B
Number 580
MR. WALSH said it provides them with the authority to suspend a
certificate of an insurance company if they don't renew it and
provides for the voluntary surrender of a certificate of authority
without going through a full liquidation process. Another
provision allows them to grant a refund or tax credits for
overpayment of premium tax. Industry does not object to this.
SB 362 restores their ability to promulgate regulations for
continuing education for agents and brokers. The Agents and
Brokers Association is in support of this. The bill also clarifies
fiduciary accounts, saying they must be in Alaska if it's an Alaska
broker, but that a single bond can cover multiple offices.
The bill also allows incorporated insurers into the definition of
a group of unincorporated insurers to reflect a recent change at
Lloyds of London. As they have reorganized, they have gone from
allowing only individual members to allowing corporate members.
This provision is key to continued participation of Lloyds in our
market.
SB 362 strengthens the consumer protection and enforcement laws
with regards to false statements made when filing an insurance
claim. A couple of other miner provisions allows the Director to
specify the format and content of rate and policy form filings. It
clarifies health insurance coverage for newborn and adopted kids.
It allows electronic transfer of funds, makes "housekeeping"
corrections and conforming amendments.
Number 500
SENATOR KELLY asked if there were any objections to adopting the CS
to SB 362. There were none and it was so ordered.
SENATOR RIEGER asked in reference to page 8, line 24 if somewhere
in statute you can have filings, but not be subject to subpoena.
MR. WALSH explained that the depth of a filing a company must make
really reveals everything. In the past, frivolous lawsuits have
been filed just to obtain this information. If any of the
information is ruled to be material to a lawsuit, it is
discoverable, but not from the Department of Commerce.
SENATOR RIEGER asked at the top of page 37 what it meant that an
insurer may not increase the premium on auto insurance, unless it
applies to all insurance in the same class. MR. WALSH said that
means that if you as a company set up your classes by age, type of
vehicle, etc., you may not have a discriminatory rate.
SENATOR RIEGER said there were several references to credit
insurance which, he thought, were bad deals, anyhow. MR. WALSH
agreed and said their loss ratios are so low, you can't hold them
to a 20% standard. This bill gives them the power to correlate the
premium to the losses.
SENATOR SALO asked him to explain on page 3, closing an examination
hearing to the public. MR. WALSH responded that when they examine
a company, they hold a hearing on the examination report. At times
the reports can be highly critical and sometimes there are
mistakes. This is an opportunity where those things can get
straightened out. If the hearing officer disagrees, it becomes
public, but it gives an individual or company the right to come in
and be heard in a fashion that would do them the least harm, if a
mistake had been made.
Number 430
SENATOR LINCOLN asked what section 12 does. MR. WALSH explained
that insurers pay a premium tax to the state based upon the type of
line they write. SB 362 would allow them to give tax credit, if
the figures were found to be wrong, so that the Department would
not have to come up with cash it didn't have, if it was a large
sum. Although it has not come up, yet, he said they would have no
way of dealing with a big figure.
SENATOR LINCOLN asked what right we had to keep someone's money, so
they have to wait over a period to get it back. MR. WALSH said if
it took longer than 1 year to pay back, he would come to the
legislature for an appropriation. This measure would give them
more flexibility to deal with an accidental overpayment to the
state.
SENATOR LINCOLN said she would feel better if it said "to be used
in the next calendar year to the fullest extent possible and then
have a monetary refund" rather than saying "in each succeeding year
until no credit remains." MR. WALSH said that would be fine with
him.
SENATOR KELLY told Mr. Fink to put that language in the bill and
asked if there were any objections to adopting CSSB 362(L&C). There
were none and it was so ordered.
Number 508
SENATOR KELLY adjourned the meeting at 2:50 p.m.
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