05/09/2019 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB11 | |
| SB106 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 11 | TELECONFERENCED | |
| += | SB 106 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
May 9, 2019
1:30 p.m.
MEMBERS PRESENT
Senator Lora Reinbold, Chair
Senator Mia Costello, Vice Chair
Senator Chris Birch
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Click Bishop
COMMITTEE CALENDAR
SENATE BILL NO. 11
"An Act relating to temporary courtesy licenses for certain
nonresident professionals; and relating to the Department of
Commerce, Community, and Economic Development."
- MOVED CSSB 11(L&C) OUT OF COMMITTEE
SENATE BILL NO. 106
"An Act relating to renewal of insurance coverage for homeowners
and renters; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 11
SHORT TITLE: MILITARY SPOUSE COURTESY LICENSE
SPONSOR(s): SENATOR(s) KAWASAKI
01/16/19 (S) PREFILE RELEASED 1/7/19
01/16/19 (S) READ THE FIRST TIME - REFERRALS
01/16/19 (S) L&C, FIN
03/07/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/07/19 (S) Heard & Held
03/07/19 (S) MINUTE(L&C)
03/12/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/12/19 (S) Heard & Held
03/12/19 (S) MINUTE(L&C)
05/07/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/07/19 (S) Heard & Held
05/07/19 (S) MINUTE(L&C)
05/09/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 106
SHORT TITLE: HOMEOWNER/RENTER INSURANCE RENEWAL
SPONSOR(s): SENATOR(s) BEGICH
04/10/19 (S) READ THE FIRST TIME - REFERRALS
04/10/19 (S) L&C
05/07/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/07/19 (S) Heard & Held
05/07/19 (S) MINUTE(L&C)
05/09/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR SCOTT KAWASAKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of SB 11.
REPRSENTATIVE SHARON JACKSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 113, incorporated
into Version M.
BRIG. GEN. TORRENCE SAXE
Commissioner
Adjutant General
Alaska Department of Military and Veterans Affairs
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 11.
ROBERT DOLE, representing himself
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 11.
SENATOR TOM BEGICH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of SB 106.
LORI WING-HEIER
Director
Division of Insurance
Department of Commerce, Community and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions on SB 106.
ACTION NARRATIVE
1:30:27 PM
CHAIR LORA REINBOLD called the Senate Labor and Commerce
Standing Committee meeting to order at 1:30 p.m. Present at the
call to order were Senators Costello, Gray-Jackson, Birch and
Chair Reinbold.
SB 11-MILITARY SPOUSE COURTESY LICENSE
1:31:13 PM
CHAIR REINBOLD announced that the first order of business would
be SENATE BILL NO. 11, "An Act relating to temporary courtesy
licenses for certain nonresident professionals; and relating to
the Department of Commerce, Community, and Economic
Development."
[Before the committee was CSSB 11(L&C), work order 31-LS0262\M,
Fisher, 5/3/19, Version M]
CHAIR REINBOLD made opening remarks.
1:32:39 PM
SENATOR SCOTT KAWASAKI, Alaska State Legislature, Juneau, made
closing remarks. He stated that the legislature just had a Joint
Armed Services Committee that showed the legislature's
tremendous support for the military. One thing discussed in
prior years was how to engage military families. Military
spouses often have skills and professional licenses in other
states, so offering temporary expedited courtesy licenses to
military spouses is one way to encourage involvement. The second
part of the bill would extend the current hiring preferences to
military spouses and dependent children. He characterized the
efforts for SB 11 as a big collaboration. Passage of SB 11 would
approve two existing policies for military spouses. He said he
respectfully requested committee members' support.
1:34:04 PM
REPRSENTATIVE SHARON JACKSON, Alaska State Legislature, Juneau,
as sponsor of HB 113, incorporated into Version M, said that
military families represent a significant part of Alaska's
population. SB 11 will make a difference, benefiting not only
the military families but our state's economy. Many private
sector employers have expressed encountering recruitment
problems in Alaska, especially in the education, health care,
and law enforcement fields. She explained that expanding hiring
preferences to military families can help fill this gap. She
thanked Senator Kawasaki for working with her to incorporate HB
113 into the committee substitute (CS) for SB 11, Version M.
1:35:49 PM
CHAIR REINBOLD opened public testimony on SB 11.
1:36:17 PM
BRIG. GEN. TORRENCE SAXE, Commissioner, Adjutant General, Alaska
Department of Military and Veterans Affairs, Anchorage, stated
his support for SB 11, because it provides family readiness. He
emphasized the importance of family support to soldiers,
sailors, and marines because it helps them to focus on the job
at hand.
1:37:04 PM
ROBERT DOLE, representing himself, Anchorage, said that as the
former state coordinator to the Association of Defense
Communities, he heard military service secretaries echo
Brigadier General Saxe's view that our greatest asset is our
people. The greatest asset in retaining military members is
related to their families and a key aspect of that is finding
meaningful work for military spouses. This bill will move this
goal forward in Alaska, he said. He thanked the committee for
its efforts.
1:38:00 PM
CHAIR REINBOLD closed public testimony on SB 11. She remarked
that this bill was especially important to her because of her
experiences as a military spouse when her husband was stationed
in Norway. She recalled how supportive the military spouses were
to her. She said she wants military families to know Alaska
welcomes and supports them. This bill would require a preference
to military and dependents and departments must report to ensure
preferences were granted. The bill also has an outreach and
educational component.
1:40:27 PM
SENATOR COSTELLO moved to report the committee substitute (CS)
for SB 11(L&C), work order 31-LS0262\M, Version M, from
committee with individual recommendations and attached fiscal
note.
There being no objection, the CSSB 11(L&C) was reported from the
Senate Labor and Commerce Standing Committee.
1:41:11 PM
At-ease.
SB 106-HOMEOWNER/RENTER INSURANCE RENEWAL
1:43:22 PM
CHAIR REINBOLD reconvened the committee. She announced that the
final order of business would be SENATE BILL NO. 106, "An Act
relating to renewal of insurance coverage for homeowners and
renters; and providing for an effective date."
[Before the committee was the committee substitute (CS) SB 106,
work order 31-LS0476, Version M.]
CHAIR REINBOLD made opening remarks.
1:44:17 PM
SENATOR TOM BEGICH, Alaska State Legislature, Juneau, as sponsor
of SB 106, recapped the bill. He said that SB 106 would not
allow an insurance company to not renew a homeowner's policy,
simply based on a claim made due to a break-in robbery, through
no fault of the claimant. This bill would apply whether the
policy was for renters insurance or homeowners insurance. SB 106
would provide a time limit for non-renewal, such that a person
could make at least one claim without it being used as a
condition of non-renewal. He said he has worked with the
insurance industry. Although the industry has expressed concerns
about some language, he offered his belief that this could be
resolved comfortably. He said he was unaware of opposition to
the bill in its present form, but some minor changes may need to
be made. These provisions would clarify the intent around claims
arising from criminal acts. He thanked members for reviewing the
unintended consequence of the crime wave in Alaska.
He remarked that one person who wanted to testify is
unavailable, but provided written comments, which should be in
members' packets.
1:47:39 PM
CHAIR REINBOLD, after first determining no one wished to
testify, closed public testimony on SB 106.
CHAIR REINBOLD reviewed the fiscal note from the Department of
Commerce, Community and Economic Development (DCCED) prepared by
Lori-Wing Heier, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED). She read
the analysis:
The bill attempts to protect consumers of homeowner's
or renter's insurance policies from having their
insurance policy non-renewed due to filing a claim, if
the claim is the first or only claim made within the
three years prior to the policy's anniversary date.
The Division does not anticipate fiscal impact from
this legislation.
1:48:29 PM
SENATOR COSTELLO moved to adopt Amendment 1, work order 31-
LS0476\M.2, Marx, 5/8/19.
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR COSTELLO
TO: CSSB 106( ), Draft Version "M"
Page 1, line 1, following "Act":
Insert "relating to cancellation and renewal of
commercial property insurance coverage;"
Page 1, following line 3:
Insert a new bill section to read:
"* Section 1. AS 21.36.210 is amended by adding a
new subsection to read:
(g) An insurer may not exercise its right to
cancel a policy of commercial property insurance
solely based on notice, receipt, or payment of a claim
under the policy unless the insurer has paid a claim
under the policy within the three-year period
immediately preceding the notice, receipt, or
payment."
Page 1, line 4:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Page 2, line 12, following "homeowner's":
Insert "or commercial property"
Page 3, following line 13:
Insert a new bill section to read:
"* Sec. 5. AS 21.36.310 is amended by adding a new
paragraph to read:
(6) "commercial property insurance" means
property insurance as described in AS 21.12.060 that
is "business or commercial insurance" as defined in
this section."
Renumber the following bill sections accordingly.
Page 3, lines 16 - 18:
Delete all material and insert:
"APPLICABILITY. AS 21.36.210(g), enacted by sec.
1 of this Act, AS 21.36.240, as amended by secs. 2 and
3 of this Act, AS 21.36.310(4), as amended by sec. 4
of this Act, and AS 21.36.310(6), enacted by sec. 5 of
this Act, apply to an insurance policy or contract
entered into or renewed on or after the effective date
of secs. 1 - 5 of this Act."
Page 3, line 25:
Delete "Section 5"
Insert "Section 7"
Page 3, line 26:
Delete "sec. 6"
Insert "sec. 8"
SENATOR REINBOLD objected for discussion purposes.
1:48:40 PM
SENATOR COSTELLO remarked that when the committee initially
heard the bill, members learned that it would allow homeowners
to file to claim without it being a reason for non-renewal. The
reason the sponsor brought the bill before the legislature was
due to the level of property crime experienced in the state.
This amendment would expand that to commercial property
insurance since commercial businesses are also affected by
crime.
1:49:40 PM
SENATOR BIRCH expressed concern since it was a significant
expansion to the bill. He referred to a letter of May 7, 2019 in
members' packets [from American Property Casualty Insurance
Association. He read:
Secondly, the bill prohibits the insurer from
considering the first claim within three years for
non-renewal purposes. There are no apparent exceptions
from this onerous underwriting and coverage mandate.
For example, what if the first claim is something
alarming like an alleged incident of arson or if the
insured's pit bulldog attacks a neighbor.
He said he was okay with the original intent of the bill, but he
was unsure the committee should expand this to include to
commercial property insurance. He said it was a much broader
area.
1:51:02 PM
SENATOR COSTELLO explained that she submitted Amendment 1. She
said the Division of Insurance may wish to speak to the concern.
1:51:40 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, said she understood Senator Birch's concern. She offered
her belief that the insurers might have a concern. She offered
her belief that potential amendments that Senator Begich
previously mentioned would narrow the focus to claims related to
crimes, so the examples would not likely apply. She cautioned
that she did not wish to speak for the sponsor, but that was her
understanding of the intent.
SENATOR BIRCH identified that the letter was from the American
Property Casualty Insurance Association (APCIA). He understood
the impetus for the bill was related to criminal activity and
someone being denied insurance renewal. He asked whether she had
a sense of how much larger the pool would be if it were expanded
to include commercial property.
MS. WING-HEIER answered that it would expand it to all property
insurance, from stores and small businesses, to Native
corporations. She said that commercial property is not
unrestricted. She stated that the division has not received any
complaints related to commercial property. She recognized that
commercial properties have been victims of crimes. Further, she
has not heard from commercial insurers. She recalled that State
Farm or APCI had a concern which was addressed in their letters.
1:54:30 PM
CHAIR REINBOLD related her understanding that the concerns were
resolved in the committee substitute.
1:54:48 PM
SENATOR GRAY-JACKSON thanked Senator Begich for bringing this
forward because it is really important to our communities
because of crime. She said she appreciated Amendment 1, which
would affect commercial properties. She recalled serving on the
Anchorage Assembly, a working group of business owners who were
alarmed by the level of crime in the community.
1:55:41 PM
CHAIR REINBOLD asked whether this would have any fiscal impact
to the private sector, in terms of increased premiums.
MS. WING-HEIER answered that it was hard to say. This bill would
not limit an insurer from adding a surcharge to a policy or
raising the rates because of crime costs. However, the insurers
cannot triple it or make it egregious. She said the division
would consider those actions as excessive rate increases.
Consumers could see an increase, but the insurers will have
insurance, which is the tradeoff.
1:57:13 PM
CHAIR REINBOLD asked whether she anticipated any push back.
MS. WING-HEIER answered that she did not anticipate any concerns
from the private sector. She offered her belief that insurance
companies could make an argument with Version M. However, she
suggested that if the bill was narrowed to address crime, that
people could submit one claim due to a crime. She did not
imagine that insurers would have a major concern.
CHAIR REINBOLD emphasized the importance for the committee to
vet the bill, since it is the only committee of referral. She
said she like the concept, but as Chair, wants the committee to
do its due diligence and avoid any unintended consequences.
1:59:07 PM
CHAIR REINBOLD asked whether the administration supported the
bill.
MS. WING-HEIER said she had not discussed the bill with the
administration. She offered her belief that the administration
would be somewhat torn. The governor is a staunch supporter of
reducing crime but does not support increased regulation.
CHAIR REINBOLD asked her to predict the administration's view on
Amendment 1.
MS. WING-HEIER said she was unsure.
2:00:08 PM
SENATOR BIRCH said he did not see anything in Version M that
related solely to damages that resulted from criminal behavior.
SENATOR GRAY-JACKSON pointed out Ms. Wing-Heier mentioned a
future amendment that might address Senator Birch's concerns.
2:00:57 PM
SENATOR BEGICH said that he spoke to industry about the original
bill, not Amendment 1. The industry requested two slight
amendments, which are currently being drafted. He said that the
Senate Rules Committee is the next committee of referral. Since
he serves on that committee, he met with staff to request
offering the amendments. That language would do two things.
First, it would say [a claim] could not be the sole basis for a
non-renewal, which would give the industry additional latitude.
Second, it specifically would cite crime as an outcome of
criminal activity. The industry provided the language containing
these two changes to him. He reviewed the language and the
Legislature Legal Services drafted the amendment, which he
received today. He expressed concern about delaying the bill. He
wanted to reassure the Chair that staff indicated the two
tightening amendments would be done. Although he did not discuss
Amendment 1 with industry, he reported that industry met this
morning and agreed to the changes. He offered to read the two
lines. He noted Amendment 1 was before the committee.
2:03:31 PM
CHAIR REINBOLD stated her intention to take up Amendment 1. She
advised members she intends to hold another committee meeting to
hear another bill. She said she was not comfortable moving SB
106 today without that language.
SENATOR BEGICH said he is neutral on Amendment 1. The director's
comments about getting input from the industry would be useful.
He related his understanding informally, that the industry was
less comfortable expanding it to commercial properties, likely
because it would broaden the scope of the bill. He recalled
Chair Reinbold expressed an interest in expanding the bill to
cover business and other business properties. He offered his
belief that Amendment 1 would accomplish that goal. He was not
aware of any claims or interests in that regard. He respectfully
requested that she consider the industry's position on Amendment
1.
CHAIR REINBOLD said that Senator Birch raised a good point with
his concern. She asked for further clarification on whether
Amendment 1 contains any language that identifies it as crime
related.
2:06:04 PM
SENATOR COSTELLO said that when the bill was introduced, it was
as a bill to address crime. Based on the bill sponsor's
comments, that will be addressed in forthcoming amendments, to
clarify that these claims were limited to crime-related losses.
If Amendment 1 was adopted, it would expand it to crime-related
issues for the commercial property insurance.
CHAIR REINBOLD related her understanding that the answer was no,
that it would be addressed in an additional amendment.
SENATOR COSTELLO said that was correct.
2:06:55 PM
CHAIR REINBOLD removed her objection.
SENATOR BIRCH objected.
2:07:14 PM
A roll call vote was taken. Senators Gray-Jackson, Costello, and
Reinbold voted in favor of Amendment 1 and Senator Birch voted
against it. Therefore, Amendment 1 was adopted by a 3:1 vote.
2:08:00 PM
CHAIR REINBOLD remarked that she was interested in discussions
being held. She said she voted for this because businesses are
experiencing so much crime. She said she would rather be
cautious and know that the legislature is examining this issue.
2:08:22 PM
At-ease.
2:09:18 PM
CHAIR REINBOLD reconvened the committee and reviewed upcoming
committee announcements.
2:09:58 PM
SENATOR BEGICH said he has an amendment in final form and will
provide to the committee today.
2:10:15 PM
SENATOR BIRCH asked whether the committee could inform the
company [the American Property Casualty Insurance Association
(APCIA)] that had concerns of changes the committee considered.
CHAIR REINBOLD agreed to do so.
[SB 106 was held in committee.]
2:11:17 PM
There being no further business to come before the committee,
Chair Reinbold adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:11 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 106 Amendment M.2.pdf |
SL&C 5/9/2019 1:30:00 PM |
SB 106 |
| SB 106 Sponsor Statement VER. M.pdf |
SL&C 5/9/2019 1:30:00 PM |
SB 106 |
| SB 106 Fiscal Note - DCCED - DOI - 04-17-19.pdf |
SL&C 5/9/2019 1:30:00 PM |
SB 106 |
| SB 106 - Letter of Support.pdf |
SL&C 5/9/2019 1:30:00 PM |
SB 106 |
| SB 106 - Letter of Opposition VER A. - American Property Casualty Insurance Assoc..pdf |
SL&C 5/9/2019 1:30:00 PM |
SB 106 |
| SB 11 Fiscal Note - SB011 - DCCED -CBPL - 03-01-19.pdf |
SL&C 5/9/2019 1:30:00 PM |
SB 11 |