04/06/2013 09:00 AM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB71 | |
| HB175 | |
| HB168 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 71 | TELECONFERENCED | |
| + | HB 175 | TELECONFERENCED | |
| + | HB 168 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 6, 2013
9:01 a.m.
MEMBERS PRESENT
Senator Mike Dunleavy, Chair
Senator Peter Micciche, Vice Chair
Senator Donald Olson
Senator Bert Stedman
MEMBERS ABSENT
Senator Johnny Ellis
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 71(FIN)
"An Act requiring the Department of Commerce, Community, and
Economic Development to file an annual report to the legislature
regarding statewide and regional economic development projects
and regional development organizations; extending the
termination date of the Alaska regional economic assistance
program; and providing for an effective date."
- MOVED CSHB 71(FIN) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 175(L&C)
"An Act allowing, under certain conditions, a property or
casualty insurer to provide policies and endorsements to an
insured by posting the policies and endorsements on the
insurer's Internet website."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 168(L&C)
"An Act amending the definition of travel insurance for the
purpose of describing a person eligible for a travel insurance
limited producer license; and authorizing a person selling
travel services to transact the business of travel insurance on
behalf of and under the direction of a person licensed as a
travel insurance limited producer."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 71
SHORT TITLE: AK REGIONAL ECONOMIC ASSISTANCE PROGRAM
SPONSOR(s): REPRESENTATIVE(s) HUGHES
01/16/13 (H) READ THE FIRST TIME - REFERRALS
01/16/13 (H) L&C, FIN
02/18/13 (H) L&C AT 3:15 PM BARNES 124
02/18/13 (H) Heard & Held
02/18/13 (H) MINUTE(L&C)
03/04/13 (H) L&C AT 3:15 PM CAPITOL 106
03/04/13 (H) MILITARY TRAINING CREDIT/TEMP. LICENSE
03/05/13 (H) L&C AT 8:00 AM BARNES 124
03/05/13 (H) -- Meeting Continued from 3/4/13 --
03/07/13 (H) L&C RPT CS(L&C) 1DP 5NR
03/07/13 (H) DP: JOSEPHSON
03/07/13 (H) NR: MILLETT, REINBOLD, HERRON,
CHENAULT, OLSON
03/18/13 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/18/13 (H) Moved CSHB 71(FIN) Out of Committee
03/18/13 (H) MINUTE(FIN)
03/20/13 (H) FIN RPT CS(FIN) NT 10DP 1AM
03/20/13 (H) DP: T.WILSON, EDGMON, THOMPSON, NEUMAN,
MUNOZ, HOLMES, COSTELLO, GARA, STOLTZE,
03/20/13 (H) AUSTERMAN
03/20/13 (H) AM: KAWASAKI
03/27/13 (H) TRANSMITTED TO (S)
03/27/13 (H) VERSION: CSHB 71(FIN)
03/28/13 (S) READ THE FIRST TIME - REFERRALS
03/28/13 (S) L&C, FIN
04/04/13 (S) L&C AT 5:00 PM BELTZ 105 (TSBldg)
04/04/13 (S) Heard & Held
04/04/13 (S) MINUTE(L&C)
04/06/13 (S) L&C AT 9:00 AM BELTZ 105 (TSBldg)
BILL: HB 175
SHORT TITLE: ELECTRONIC POSTING OF INSURANCE POLICIES
SPONSOR(s): LABOR & COMMERCE
03/18/13 (H) READ THE FIRST TIME - REFERRALS
03/18/13 (H) L&C
03/27/13 (H) L&C AT 3:15 PM BARNES 124
03/27/13 (H) Moved CSHB 175(L&C) Out of Committee
03/27/13 (H) MINUTE(L&C)
03/28/13 (H) L&C RPT CS(L&C) 4DP 3NR
03/28/13 (H) DP: SADDLER, MILLETT, JOSEPHSON, OLSON
03/28/13 (H) NR: CHENAULT, HERRON, REINBOLD
04/03/13 (H) TRANSMITTED TO (S)
04/03/13 (H) VERSION: CSHB 175(L&C)
04/04/13 (S) READ THE FIRST TIME - REFERRALS
04/04/13 (S) L&C
04/06/13 (S) L&C AT 9:00 AM BELTZ 105 (TSBldg)
BILL: HB 168
SHORT TITLE: TRAVEL INSURANCE
SPONSOR(s): LABOR & COMMERCE
03/15/13 (H) READ THE FIRST TIME - REFERRALS
03/15/13 (H) L&C
03/25/13 (H) L&C AT 3:15 PM BARNES 124
03/25/13 (H) Moved CSHB 168(L&C) Out of Committee
03/25/13 (H) MINUTE(L&C)
03/26/13 (H) L&C RPT CS(L&C) 4DP 2NR
03/26/13 (H) DP: REINBOLD, SADDLER, JOSEPHSON, OLSON
03/26/13 (H) NR: CHENAULT, HERRON
04/04/13 (H) TRANSMITTED TO (S)
04/04/13 (H) VERSION: CSHB 168(L&C)
04/05/13 (S) READ THE FIRST TIME - REFERRALS
04/05/13 (S) L&C
04/06/13 (S) L&C AT 9:00 AM BELTZ 105 (TSBldg)
WITNESS REGISTER
REPRESENTATIVE SHELLY HUGHES
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 71.
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Introduced HB 175 on behalf of the sponsor.
MARTIN HESTER, Deputy Director
Division of Insurance
Department of Commerce, Community and Economic Development
Juneau, AK
POSITION STATEMENT: Answered questions related to HB 168 and HB
175 and testified that DCCED did not object to either bill.
ANNA LATHAM, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 168 on behalf of the sponsor.
JOHN FIELDING, Attorney
Steptoe & Johnson, LLP
Washington, D.C.
POSITION STATEMENT: Testified in support of HB 168.
ACTION NARRATIVE
9:01:43 AM
CHAIR MIKE DUNLEAVY called the Senate Labor and Commerce
Standing Committee meeting to order at 9:01 a.m. Present at the
call to order were Senators Stedman, Olson, Micciche, and Chair
Dunleavy.
HB 71-AK REGIONAL ECONOMIC ASSISTANCE PROGRAM
9:02:06 AM
CHAIR DUNLEAVY announced the consideration of HB 71."An Act
requiring the Department of Commerce, Community, and Economic
Development to file an annual report to the legislature
regarding statewide and regional economic development projects
and regional development organizations; extending the
termination date of the Alaska regional economic assistance
program; and providing for an effective date." He noted that
this was the second hearing. [CSHB 71(FIN) was before the
committee.]
9:02:45 AM
REPRESENTATIVE SHELLY HUGHES, sponsor of HB 71, noted that she
presented the bill yesterday and asked if the committee wanted
her to review what she stated previously.
SENATOR STEDMAN suggested the sponsor provide a description of
the bill for the listening public.
REPRESENTATIVE HUGHES explained that the Alaska Regional
Economic Assistance (ARDOR) program expires June 30, 2013 and
the bill extends it to July 1, 2016. The bill also adds a new
feature that requires the Department of Commerce, Community and
Economic Development (DCCED) to submit an annual report to the
legislature. The purpose of the report is to improve the
accountability of the 12 ARDOR organizations, and ensure that
state funds are properly used. DCCED will report on both
statewide and regional projects as well as the financial
information and strategies of the individual ARDORs. She
explained that the ARDORs were developed on the premise that
local initiatives with local leadership are best to understand
regional conditions, challenges and opportunities of the region.
SENATOR STEDMAN asked for a discussion of the political boundary
between ARDORS, which are substantially funded by the state, and
political advocacy on statewide issues.
REPRESENTATIVE HUGHES explained that each ARDOR has a
nonpartisan board and community leaders are represented. She
wasn't aware of any problem associated with the structure.
SENATOR STEDMAN asked her to follow up on the separation,
because one ARDOR is interested in addressing political matters
on a statewide level. He said he wasn't comfortable with a
subsidiary of a state agency being a political advocate. He
added that he would also have a discussion with the finance
chair.
REPRESENTATIVE HUGHES said that in addition to the added
accountability reporting, Legislative Budget and Audit (LB&A)
was authorized to conduct the first ever audit of the ARDOR
program. The agency would look at that sort of thing. She agreed
that public funds should not be used for political advocacy.
9:08:25 AM
CHAIR DUNLEAVY closed public testimony.
SENATOR MICCICHE said he had extensive experience with the ARDOR
program and he supported the concept.
CHAIR DUNLEAVY solicited a motion.
9:09:20 AM
SENATOR MICCICHE moved to report CSHB 71, 28-LS0288\C, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR DUNLEAVY announced that without objection, CSHB 71(L&C)
moved from the Senate Labor and Commerce Standing Committee.
9:09:44 AM
At ease
HB 175-ELECTRONIC POSTING OF INSURANCE POLICIES
9:11:15 AM
CHAIR DUNLEAVY announced the consideration of HB 175. "An Act
allowing, under certain conditions, a property or casualty
insurer to provide policies and endorsements to an insured by
posting the policies and endorsements on the insurer's Internet
website." He noted that CSHB 175(L&C) was before the committee
and that this was the first hearing.
9:11:50 AM
KONRAD JACKSON, Staff, Representative Kurt Olson, explained that
HB 175 would permit insurers to post standard property and
casualty insurance policies and endorsements on the insurer's
website. Current law in all 50 states requires companies to mail
or deliver policies to their customers. These on-line documents
would contain no personally identifiable information. Consumers
would have easy access to those documents which would make it
easy to shop for coverage or file a claim. A change from the
original version clarifies that paper contracts will continue to
be available without an additional fee.
9:14:09 AM
SENATOR MICCICHE asked where the bill says there wouldn't be an
additional charge for mailing.
MR. JACKSON clarified that the bill doesn't attempt to change
anything about mailing costs. The intent is to make sure there
is no fee to receive a paper copy.
SENATOR STEDMAN asked if Alaska was the first of the 50 states
to do this.
MR. JACKSON replied that all states require the mailing or
delivery of policies, and about 16 states are currently
providing an electronic option.
9:16:03 AM
CHAIR DUNLEAVY opened public testimony.
9:16:32 AM
MARTIN HESTER, Deputy Director, Division of Insurance,
Department of Commerce, Community and Economic Development
(DCCED), introduced himself.
SENATOR STEDMAN asked the department's position on the
legislation and if there had been input from the public.
MR. HESTER affirmed that this legislation has been enacted in
several other states. He explained that it does not remove the
requirement for the insurer to provide the insured their
declarations page, which has personal information. The bill
provides an additional method of delivery for the insured to
access the policy, although the insured may still request a
paper copy. He relayed that the Division of Insurance sees no
difficulty with the language proposed in HB 175.
9:18:13 AM
CHAIR DUNLEAVY stated he would hold HB 175 in committee and keep
public testimony open.
HB 168-TRAVEL INSURANCE
9:18:25 AM
CHAIR DUNLEAVY announced the consideration of HB 168. "An Act
amending the definition of travel insurance for the purpose of
describing a person eligible for a travel insurance limited
producer license; and authorizing a person selling travel
services to transact the business of travel insurance on behalf
of and under the direction of a person licensed as a travel
insurance limited producer." He noted that this was the first
hearing and that CSHB 168(L&C) was before the committee.
9:19:05 AM
ANNA LATHAM, Staff, Representative Kurt Olson, sponsor of HB
168, stated that HB 168 is based on National Council of
Insurance Legislators (NCOIL) model legislation that is being
implemented nationwide. It has a goal of improving consumer
protection and creating consistency in travel insurance sales.
Section 1 redefines travel insurance so that the definition is
standardized in all 50 states. She noted that Alaska's
definition was slightly modified. Section 2 adds a new section
defining travel insurance, and who may transact travel
insurance. It allows a person that transacts travel services the
ability to sell those products under the direction of a person
holding a travel insurance limited producer license. It requires
a travel insurance limited lines producer to maintain a register
of all persons selling insurance on their behalf, and to provide
a training program. The bill limits the information that a
person transacting travel insurance may and may not provide to a
customer. It makes the travel insurance limited producer liable
for the acts of a person selling travel insurance on their
behalf.
MS. LATHAM explained that NCOIL developed this model legislation
to streamline the process for selling travel insurance on the
Internet or across state lines. The problem is that there are 41
different licensing qualification codes to become licensed to
sell travel insurance in all 50 states and many states do not
accept the same electronic application. As a result, it takes
about six months to become licensed. This is burdensome for this
high turnover industry when insurance sales account for just two
percent of travel agents overall revenue.
The NCOIL model establishes a licensing framework that reflects
the unique distribution system of travel insurance in the
industry and places the regulatory burden on the insurer who
develops and distributes the product. This improves consumer
protection by requiring clear accountability and notice to the
consumer and regulator regarding who is responsible for the
sale. To date, a version of this model legislation has been
enacted in eight states and is awaiting governor signatures in
two other states. Legislation is pending in 16 other states,
including Alaska.
MS. LATHAM said the only difference between the original bill
and the committee substitute (CS) appears on page 5, line 7. The
phrase "an employee of the person transacting travel insurance"
was changed to "a person transacting travel insurance" because
the former lacked clarity.
9:23:08 AM
SENATOR OLSON asked how many people purchase travel insurance.
MS. LATHAM said there are 259 resident and non-resident licensed
producers within the state, and she could get that information
from them.
SENATOR OLSON asked if the trend was up, down, or stable.
MS. LATHAM said the trend is toward on-line sales. She estimated
that up to 90 percent of policies are purchased that way.
SENATOR MICCICHE commented that most people don't realize that
the option to purchase insurance is available whenever a person
purchases a ticket.
9:26:18 AM
MARTIN HESTER, Deputy Director, Division of Insurance,
Department of Commerce, Community and Economic Development
(DCCED), Juneau, AK, introduced himself.
SENATOR STEDMAN asked if the department had received any
complaints about travel insurance.
MR. HESTER replied he wasn't aware of any. He said this
legislation allows an employee to sell insurance under their
employer's limited producer license, and the Division of
Insurance has no problems with the language. It is model
legislation.
SENATOR STEDMAN asked if the model included recommendations for
the training program and how that comports with the division's
regulatory responsibilities.
9:28:24 AM
MR. HESTER offered to follow up with information, but his
understanding was that the legislation does not lay out the
training regimen. It simply states that the employer must
implement a training program for employees.
SENATOR STEDMAN requested the information.
9:29:50 AM
VICE-CHAIR MICCICHE, acting as chair, asked if this was any
different than purchasing travel insurance from an employee at a
rental car counter.
MR. HESTER said that scenario is similar to what this
legislation would do. His understanding was that the employee at
the rental car counter is acting under the authority of the
limited producer license that belongs to the rental car company.
SENATOR OLSON asked the administration's position on the bill.
MR. HESTER reiterated that DCCED has no objection to the
language in HB 168.
9:31:22 AM
VICE-CHAIR MICCICHE opened public testimony, and noted it would
remain open through the next meeting.
9:31:37 AM
JOHN FIELDING, Attorney, Steptoe & Johnson, LLP, stated that his
firm represents U. S. Travel Insurance Association (USTIA). He
urged the committee to support HB 168, describing it as a step
forward for consumers, regulators and industry players. The
legislation is good for consumers because it requires employee
training and disclosures to the consumers, neither of which is
currently required. With regard to the question about training,
he said that some states have asked the insurers to provide
copies of the training materials to the regulatory department to
ensure that the training is sufficiently robust. He suggested
that Alaska might do that in the future. The legislation is good
for the regulators because it provides a more streamlined
process. It is also good for the industry because it places much
of the regulatory burden on the insurers or intermediaries that
develop and distribute the products. He urged the committee to
support HB 168.
9:35:34 AM
SENATOR OLSON asked about the penalties for noncompliance.
MR. FIELDING said the current authority of the insurance
department remains intact.
SENATOR OLSON questioned the need for the legislation since Mr.
Hester said there have been no complaints. He commented that it
appeared to add to bureaucracy.
MR. FIELDING said this lessens the bureaucracy. It streamlines
the process by focusing on the insurers and intermediaries that
put the product together and provide it. It's a process his firm
has worked through with other stakeholders as it was debated by
NCOIL and other states. They all thought it would be helpful,
less burdensome, and more effective.
SENATOR OLSON asked where training would be held.
MR. FIELDING said there is a requirement for a training program
to be in place, but it doesn't dictate the type of training or
location. The training could take place on-line.
SENATOR OLSON maintained that it was another level of
bureaucracy and quite possibly unnecessary since there have been
no complaints.
9:39:23 AM
VICE-CHAIR MICCICHE noted that Paul Brown with AIG was available
for questions. Finding no further questions or public testimony,
he stated that he would hold HB 168 in committee.
9:40:03 AM
There being no further business to come before the committee,
Vice-Chair Micciche adjourned the Senate Labor and Commerce
Standing Committee meeting at 9:40 a.m.