00                       CS FOR HOUSE BILL NO. 147(FIN)                                                                    
01 "An Act relating to the regulation of insurance, insurance licensing, surplus lines,                                    
02 insurer deposits, owner controlled and contractor controlled insurance programs, health                                 
03 discount plans, third-party administrators, and self-funded multiple employer welfare                                   
04 arrangements; and providing for an effective date."                                                                     
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1.  AS 21.09.160 is amended to read:                                                                     
07            Sec. 21.09.160.  Notice of suspension or revocation and effect upon agent's                                
08       authority.  (a)  Upon suspending or revoking an insurer's certificate of authority the                          
09       director shall immediately give notice to the insurer and [TO ITS AGENTS OF                                       
10       RECORD IN THIS STATE IN THE DIRECTOR'S OFFICE.  THE DIRECTOR] shall                                               
11       also publish notice of the revocation in one or more newspapers of general circulation                            
12       in this state.                                                                                                    
13            (b)  The suspension or revocation shall automatically suspend or revoke, as the                              
14       case may be, the authority of all its agents and managing general agents to act as                            
01       agents or managing general agents of the insurer in this state, and the insurer                           
02       [DIRECTOR] shall so state in the notice to agents and managing general agents                                 
03       provided for in (c) [(a)] of this section.                                                                    
04    * Sec. 2.  AS 21.09.160 is amended by adding a new subsection to read:                                             
05            (c)  Upon notification of suspension or revocation of an insurer's certificate of                            
06       authority, the insurer shall immediately give notice of the suspension or revocation to                           
07       its agents and managing general agents operating in this state.                                                   
08    * Sec. 3.  AS 21.24.040(a) is amended to read:                                                                     
09            (a)  Deposits made in this state under this title shall be made through the office                           
10       of the director [IN SAFE DEPOSIT OR] under custodial arrangements as required or                                  
11       approved by the director consistent with the purposes of the deposit, with an                                     
12       established safe deposit institution, bank, or trust company located in this state                                
13       selected by the insurer with the director's approval.                                                             
14    * Sec. 4.  AS 21.24.040(c) is amended to read:                                                                     
15            (c)  If of convenience to the insurer in the buying, selling, and exchange of                                
16       securities making up [COMPRISING] its deposit, and in the collection of interest and                          
17       other income currently accruing on the securities [THEREON], the insurer may, with                            
18       the director's advance written approval, deposit a portion of the securities under                                
19       custodial arrangements with an established bank or trust company located outside this                             
20       state, if receipts representing all the securities are issued by the custodial bank or trust                      
21       company and are held in [SAFE DEPOSIT OR] custody subject to the requirements of                                  
22       (a) [AND (b)] of this section.                                                                                    
23    * Sec. 5.  AS 21.24.130(d) is amended to read:                                                                     
24            (d)  If the insurer is subject to delinquency proceedings as defined in AS 21.78,                            
25       upon the order of a court of competent jurisdiction, the director shall yield the assets                      
26       and securities held on deposit under AS 21.09.090(b) to the receiver, conservator,                            
27       rehabilitator, or liquidator of the insurer, or to any other properly designated official or                      
28       officials who succeed to the management and control of the insurer's assets.  The                             
29       director may release the deposit directly to the guaranty fund of which the                                   
30       insurer is a member if the right to receive all or a portion of the deposit is                                
31       assigned to the guaranty fund.                                                                                
01    * Sec. 6.  AS 21.27.010(c) is amended to read:                                                                     
02            (c)  A third-party administrator [PERSON WHO FOR A RESIDENT OF                                           
03       THIS STATE, OR FOR A RESIDENT OF ANOTHER JURISDICTION FROM A                                                      
04       PLACE OF BUSINESS IN THIS STATE, PERFORMS ADMINISTRATIVE                                                          
05       FUNCTIONS, INCLUDING CLAIMS ADMINISTRATION AND PAYMENT,                                                           
06       MARKETING ADMINISTRATIVE FUNCTIONS, PREMIUM ACCOUNTING,                                                           
07       PREMIUM BILLING, COVERAGE VERIFICATION, UNDERWRITING                                                              
08       AUTHORITY, OR CERTIFICATE ISSUANCE ONLY IN REGARD TO LIFE                                                         
09       INSURANCE, HEALTH INSURANCE, OR ANNUITIES] is not required to be                                                  
10       licensed as a managing general agent if the third-party administrator [PERSON]                                
11                 (1)  is registered under AS 21.27.630 - 21.27.660 [THIS CHAPTER                                     
12       AS A THIRD-PARTY ADMINISTRATOR]; or                                                                               
13                 (2)  only investigates and adjusts claims and is licensed under this                                    
14       chapter as an independent adjuster.                                                                               
15    * Sec. 7.  AS 21.27.100 is repealed and reenacted to read:                                                         
16            Sec. 21.27.100.  Appointment of insurance producer, managing general                                       
17       agent, and reinsurance intermediary manager; acts of agent.  (a)  An appointment                                
18       is required to be made in accordance with this section when one or more of the                                    
19       following has occurred:                                                                                           
20                 (1)  an admitted insurer appoints a managing general agent in this state                                
21       or relative to a subject resident, located, or to be performed in this state;                                     
22                 (2)  a managing general agent appoints an insurance producer as its                                     
23       subagent in this state or relative to subjects resident, located, or to be performed in this                      
24       state;                                                                                                            
25                 (3)  a domestic reinsurer appoints a reinsurance intermediary manager;                                  
26                 (4)  a reinsurance intermediary manager appoints an insurance producer                                  
27       as its subagent in this state.                                                                                    
28            (b)  An admitted insurer shall appoint an insurance producer as its agent in this                            
29       state or relative to a subject resident, located, or to be performed in this state not later                      
30       than 30 days after the date that a written agency contract is executed or the first                               
31       insurance application is submitted to the admitted insurer by the licensed insurance                              
01       producer.                                                                                                         
02            (c)  An individual in a firm who acts solely on behalf of a firm that is                                     
03       appointed as an agent or a managing general agent on behalf of an admitted insurer                                
04       under this section may not be required to also have an appointment under this section                             
05       if the individual in the firm is licensed with that firm for a specific class of authority.                       
06            (d)  The authorized or apparently authorized acts on behalf of an appointing                                 
07       insurer of an insurance producer appointed under this section are considered the acts                             
08       of that insurer.                                                                                                  
09            (e)  An insurer and managing general agent shall maintain a current list of all                              
10       appointments made or required to be made under this section that identifies the                                   
11       licensee's name, licensee's mailing address, license number, and effective date of                                
12       appointment.                                                                                                      
13            (f)  An insurance producer shall maintain a list of all appointments made or                                 
14       required to be made under this section that identifies the insurer's name, insurer's                              
15       mailing address, and effective date of appointment.                                                               
16            (g)  An insurer, managing general agent, or insurance producer shall reply in                                
17       writing within three working days to an inquiry of the director regarding an                                      
18       appointment.                                                                                                      
19    * Sec. 8.  AS 21.27.110 is repealed and reenacted to read:                                                         
20            Sec. 21.27.110.  Term of appointment.  (a)  An appointment under                                           
21       AS 21.27.100 continues in force until the appointment is terminated in writing.                                   
22            (b)  If an insurer, reinsurer, or authorized representative discovers information                            
23       showing that the appointee whose appointment was terminated has engaged in an                                     
24       activity identified in AS 21.27.410 during the period of the appointment, the insurer,                            
25       reinsurer, or authorized representative shall, on a form or in a format prescribed by the                         
26       director, promptly notify the director.                                                                           
27            (c)  Within 15 days after providing notification in accordance with (b) of this                              
28       section, the insurer, reinsurer, or authorized representative shall mail a copy of the                            
29       notification to the appointee at the last address on record with the insurer, reinsurer, or                       
30       authorized representative.  The notice must be provided by certified mail, return                                 
31       receipt requested, postage prepaid, or by overnight delivery using a nationally                                   
01       recognized mail carrier.                                                                                          
02            (d)  Within 30 days after the appointee receives notification in accordance with                             
03       (c) of this section, the appointee may file written comments concerning the substance                             
04       of the notification with the director and shall provide a copy of the written comments                            
05       to the insurer, reinsurer, or authorized representative.  The written comments filed                              
06       with the director must be included with each report distributed or disclosed concerning                           
07       a reason about the termination of the appointment.                                                                
08            (e)  If requested by the director, an insurer, a reinsurer, or an authorized                                 
09       representative shall provide to the director additional information, documents, records,                          
10       or other data pertaining to a termination or activity of a licensee under this title.                             
11            (f)  A notice of termination submitted to the director under this section must                               
12       include a statement of the reasons for the termination.  A statement of the reasons for                           
13       termination is confidential and not subject to inspection and copying under                                       
14       AS 40.25.110.  A statement of reasons for the termination may not be admitted as                                  
15       evidence in a civil action or an administrative proceeding against an insurer, reinsurer,                         
16       or authorized representative by or on behalf of a person affected by the termination,                             
17       except when the action or proceeding involves perjury, unsworn falsification, fraud, or                           
18       failure to comply with this subsection.                                                                           
19            (g)  If an insurer, a reinsurer, or an authorized representative fails to report as                          
20       required under this section or is found by a court to have knowingly or intentionally                             
21       falsely made that report, the director may, after notice and hearing, suspend or revoke                           
22       the license or certificate of authority of the insurer, reinsurer, or authorized                                  
23       representative and may impose a penalty in accordance with AS 21.27.440.                                          
24    * Sec. 9.  AS 21.27.380(a) is amended to read:                                                                     
25            (a)  Except as provided in this title, the director may renew a license biennially                           
26       on a date set by the director if the licensee continues to be qualified under this chapter                        
27       and, on or before the close of business of the renewal date, meets all renewal                                
28       requirements established by regulation and pays the renewal license fees set under                                
29       AS 21.06.250 for each license to the director.  A licensee is responsible for knowing                             
30       the date that a license lapses and for renewing a license before expiration.  The                                 
31       director shall notify the licensee of the license renewal [MAIL A RENEWAL                                     
01       NOTICE TO THE LICENSEE'S CURRENT ADDRESS ON FILE WITH THE                                                         
02       DIRECTOR] 30 days before the renewal date.                                                                        
03    * Sec. 10.  AS 21.27.630(b) is amended to read:                                                                    
04            (b)  A third-party administrator may not transact business for a kind or class of                            
05       authority [INSURANCE] for which the person is not registered.                                                 
06    * Sec. 11.  AS 21.27.630(c) is amended to read:                                                                    
07            (c)  Except as otherwise provided in this chapter, a third-party                                         
08       administrator [A PERSON WHO PERFORMS ADMINISTRATIVE FUNCTIONS,                                                
09       INCLUDING CLAIMS ADMINISTRATION AND PAYMENT, MARKETING                                                            
10       ADMINISTRATIVE FUNCTIONS, PREMIUM ACCOUNTING, PREMIUM                                                             
11       BILLING, COVERAGE VERIFICATION, UNDERWRITING AUTHORITY, OR                                                        
12       CERTIFICATE ISSUANCE IN REGARD TO INSURANCE AS A THIRD-PARTY                                                      
13       ADMINISTRATOR] shall be registered under AS 21.27.630 - 21.27.660 [AS A                                       
14       THIRD-PARTY ADMINISTRATOR] unless the third-party administrator                                               
15       [PERSON] only investigates and adjusts claims and is licensed under this chapter as                               
16       an independent adjuster.                                                                                          
17    * Sec. 12.  AS 21.27.630 is amended by adding new subsections to read:                                             
18            (k)  An insurer that holds a certificate of authority issued by the director and is                          
19       in good standing under this title is not required to be registered as a third-party                               
20       administrator in this state.                                                                                      
21            (l)  A person that is not required to be registered as a third-party administrator                           
22       under (e) - (k) of this section must file a certification with the director that the person                       
23       meets the requirements for exemption.                                                                             
24    * Sec. 13.  AS 21.27.650(a) is amended to read:                                                                    
25            (a)  An insurer may not transact business with a third-party administrator                                   
26       unless                                                                                                            
27                 (1)  the insurer holds a certificate of authority in this state, if required                        
28       under this title;                                                                                             
29                 (2)  the third-party administrator is registered under this chapter or the                          
30       third-party administrator has filed a certification with the director certifying that                         
31       [, WHEN] the third-party administrator is operating only for a foreign insurer other                          
01       than a self-funded multiple employer welfare arrangement regulated under                                      
02       AS 21.85 and [,] is registered as a third-party administrator by the third-party                              
03       administrator's resident insurance regulator in a state that the director has determined                          
04       has enacted provisions substantially similar to those contained in AS 21.27.630 -                                 
05       21.27.650 and that is accredited by the National Association of Insurance                                         
06       Commissioners;                                                                                                    
07                 (3)  the third-party administrator provides the director on January 1,                                  
08       April 1, July 1, and October 1 of each year                                                                       
09                      (A)  a list of current employees, identifying those transacting                                    
10            business in this state or upon a subject resident, located or to be performed in                             
11            this state;                                                                                                  
12                      (B)  a list of current insurers under contract; and                                                
13                      (C)  other information the director may require;                                                   
14                 (4)  a written contract is in effect between the parties that establishes                               
15       the responsibilities of each party, indicates both parties' share of responsibility for a                         
16       particular function, and specifies the division of responsibilities;                                              
17                 (5)  there is in effect a written contract between the insurer and third-                               
18       party administrator that contains the following provisions:                                                       
19                      (A)  the insurer may terminate the contract for cause upon                                         
20            written notice sent by certified mail to the third-party administrator and may                               
21            suspend the underwriting authority of the third-party administrator during a                                 
22            dispute regarding the cause for termination; but the insurer must fulfill all                                
23            lawful obligations with respect to policies affected by the written agreement,                               
24            regardless of any dispute between the insurer and the third-party administrator;                             
25                      (B)  the third-party administrator shall render accounts to the                                    
26            insurer detailing all transactions and remit all money due under the contract to                             
27            the insurer at least monthly;                                                                                
28                      (C)  all money collected for the account of an insurer shall be                                    
29            held by the third-party administrator as a fiduciary;                                                        
30                      (D)  all payments on behalf of the insurer shall be held by the                                    
31            third-party administrator as a fiduciary;                                                                    
01                      (E)  the third-party administrator may not retain more than three                                  
02            months estimated claims payments and allocated loss adjustment expenses;                                     
03                      (F)  the third-party administrator shall maintain separate records                                 
04            for each insurer in a form usable by the insurer; the insurer or its authorized                              
05            representative shall have the right to audit and the right to copy all accounts                              
06            and records related to the insurer's business; the director, in addition to other                            
07            authority granted in this title, shall have access to all books, bank accounts, and                          
08            records of the third-party administrator in a form usable to the director; any                               
09            trade secrets contained in books and records reviewed by the director,                                       
10            including the identity and addresses of policyholders and certificate holders,                               
11            shall be kept confidential, except that the director may use the information in a                            
12            proceeding instituted against the third-party administrator or the insurer;                                  
13                      (G)  the contract may not be assigned in whole or in part by the                                   
14            third-party administrator;                                                                                   
15                      (H)  if the contract permits the third-party administrator to do                                   
16            underwriting, the contract must include the following:                                                       
17                           (i)  the third-party administrator's maximum annual                                           
18                 premium volume;                                                                                         
19                           (ii)  the rating system and basis of the rates to be                                          
20                 charged;                                                                                                
21                           (iii)  the types of risks that may be written;                                                
22                           (iv)  maximum limits of liability;                                                            
23                           (v)  applicable exclusions;                                                                   
24                           (vi)  territorial limitations;                                                                
25                           (vii)  policy cancellation provisions;                                                        
26                           (viii)  the maximum policy term; and                                                          
27                           (ix)  that the insurer shall have the right to cancel or not                                  
28                 renew a policy of insurance subject to applicable state law;                                            
29                      (I)  if the contract permits the third-party administrator to                                      
30            administer claims on behalf of the insurer, the contract must include the                                    
31            following:                                                                                                   
01                           (i)  written settlement authority must be provided by the                                     
02                 insurer and may be terminated for cause upon the insurer's written                                      
03                 notice sent by certified mail to the third-party administrator or upon the                              
04                 termination of the contract, but the insurer may suspend the settlement                                 
05                 authority during a dispute regarding the cause of termination;                                          
06                           (ii)  claims shall be reported to the insurer within 30                                       
07                 days;                                                                                                   
08                           (iii)  a copy of the claim file shall be sent to the insurer                                  
09                 upon request or as soon as it becomes known that the claim has the                                      
10                 potential to exceed an amount determined by the director or exceeds the                                 
11                 limit set by the insurer, whichever is less, involves a coverage dispute,                               
12                 may exceed the third-party administrator's claims settlement authority,                                 
13                 is open for more than six months, involves extra contractual                                            
14                 allegations, or is closed by payment in excess of an amount set by the                                  
15                 director or an amount set by the insurer, whichever is less;                                            
16                           (iv)  each party to the contract shall comply with unfair                                     
17                 claims settlement statutes and regulations;                                                             
18                           (v)  transmission of electronic data must occur at least                                      
19                 monthly if electronic claim files are in existence; and                                                 
20                           (vi)  claim files shall be the sole property of the insurer;                                  
21                 upon an order of liquidation of the insurer, the third-party administrator                              
22                 shall have reasonable access to and the right to copy the files on a                                    
23                 timely basis; and                                                                                       
24                      (J)  the contract may not provide for commissions, fees, or                                        
25            charges contingent upon savings obtained in the adjustment, settlement, and                                  
26            payment of losses covered by the insurer's obligations; but a third-party                                    
27            administrator may receive performance-based compensation for providing                                       
28            hospital or other auditing services or may receive compensation based on                                     
29            premiums or charges collected or the number of claims paid or processed.                                     
30    * Sec. 14.  AS 21.27.650 is amended by adding a new subsection to read:                                            
31            (q)  The director may, without advance notice or hearing, immediately suspend                                
01       by order the registration of a third-party administrator if the director finds that one or                        
02       more of the following circumstances exist:                                                                        
03                 (1)  the third-party administrator is insolvent or impaired;                                            
04                 (2)  a proceeding for bankruptcy, receivership, conservatorship, or                                     
05       rehabilitation, or another delinquency proceeding regarding the third-party                                       
06       administrator has been commenced in any state or by a governmental agency of                                      
07       another jurisdiction;                                                                                             
08                 (3)  the third-party administrator is in an unsound condition, or is in a                               
09       condition or using methods or practices that render its further transaction of insurance                          
10       injurious to policy holders or the public.                                                                        
11    * Sec. 15.  AS 21.27 is amended by adding a new section to article 4 to read:                                      
12            Sec. 21.27.660.  Definitions.  In AS 21.27.630 - 21.27.660,                                                
13                 (1)  "insurer" includes the Comprehensive Health Insurance                                              
14       Association created under AS 21.55.010 and any person issued or required to obtain a                              
15       certificate of authority under this title to transact life insurance, annuities, and health                       
16       insurance or to provide coverage for the cost of medical care;                                                    
17                 (2)  "transact" has the meaning given in AS 21.90.900.                                                  
18    * Sec. 16.  AS 21.27.900 is amended by adding a new paragraph to read:                                             
19                 (33)  "appointment" means an act by a person evidencing a grant of                                      
20       authority to another to act on the grantor's behalf.                                                              
21    * Sec. 17.  AS 21.34.040(d) is amended to read:                                                                    
22            (d)  A nonadmitted insurer may be eligible to provide coverage in this state if it                           
23       furnishes to the director a copy of its current annual statement that has been certified                          
24       by the insurer.  Except in the case of an alien insurer, the [THE] statement shall be                       
25       provided not [NO] more than six months after the close of the period reported upon                            
26       and that is either filed with and approved by the regulatory authority in the domicile of                         
27       the nonadmitted insurer, or certified by an accounting or auditing firm licensed in the                           
28       jurisdiction of the insurer's domicile.  An alien insurer shall provide the statement                         
29       not later than nine months after the close of the reporting period.  In the case of                           
30       an insurance exchange, the statement may be an aggregate combined statement of all                                
31       underwriting syndicates operating during the period reported upon.                                                
01    * Sec. 18.  AS 21.34.100(a) is amended to read:                                                                    
02            (a)  When surplus lines insurance is placed, the surplus lines broker shall                                  
03       promptly deliver to the named insured or the producing broker the policy or, if the                               
04       policy is not then available, a [CERTIFICATE,] cover note, binder, or other evidence                              
05       of insurance.  The [CERTIFICATE,] cover note, binder, or other evidence of                                        
06       insurance for the named insured shall be executed by the surplus lines broker and must                            
07       contain a summary of all material facts that would regularly be included in the policy,                           
08       the description and location of the subject of insurance, a general description of the                            
09       coverages of the insurance, the premium and rate charged and taxes to be collected                                
10       from the insured, the name and address of the insured, the name of each surplus lines                             
11       insurer and the percentage of the entire risk assumed by each, the name of the surplus                            
12       lines broker, and the license number of the surplus lines broker.                                                 
13    * Sec. 19.  AS 21.34.100(f) is amended to read:                                                                    
14            (f)  A producing broker or other licensee may issue to a person, other than                              
15       the named insured, a certificate [EVERY CERTIFICATE ISSUED BY THE                                             
16       PRODUCING BROKER OR OTHER LICENSEE] as evidence of insurance                                                      
17       negotiated, placed, or procured under this chapter.  The certificate must bear the                            
18       name of the surplus lines broker, which may not be covered, concealed, or obscured                                
19       by the producing broker, and the following legend in at least 10-point type: "This is                             
20       evidence of insurance procured and developed under the Alaska Surplus Lines Law,                                  
21       AS 21.34. It is not covered by the Alaska Insurance Guaranty Association Act,                                     
22       AS 21.80."                                                                                                        
23    * Sec. 20.  AS 21.36.030(a) is amended to read:                                                                    
24            (a)  A person may not make, issue, circulate, broadcast, or have made, issued,                               
25       circulated, or broadcast an estimate, circular, statement, illustration, comparison,                              
26       assertion, or other written, electronic, or oral presentation that                                        
27                 (1)  misrepresents the benefits, advantages, conditions, sponsorship,                                   
28       source, or terms of an insurance policy;                                                                          
29                 (2)  misrepresents the dividends or share of the surplus to be received                                 
30       on an insurance policy;                                                                                           
31                 (3)  misrepresents an insurance policy as being a share or shares of                                    
01       stock;                                                                                                            
02                 (4)  makes a false or misleading statement as to the dividends or shares                                
03       of the surplus previously paid on an insurance policy;                                                            
04                 (5)  misrepresents or makes a misleading statement as to the financial                                  
05       condition of an insurer or as to the legal reserve system upon which a life insurer                               
06       operates;                                                                                                         
07                 (6)  uses a name or title of an insurance policy or class of insurance                                  
08       policies misrepresenting its true nature;                                                                         
09                 (7)  is a misrepresentation for the purpose of inducing, or that tends to                               
10       induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy;                          
11                 (8)  is a misrepresentation for the purpose of effecting or tending to                                  
12       effect a pledge or assignment of or loan against an insurance policy;                                             
13                 (9)  appears to be an actual policy for a named individual when it is                                   
14       merely an advertisement;                                                                                          
15                 (10)  does not clearly designate the name of the insurer providing the                                  
16       coverage or about which the statements are made; or                                                               
17                 (11)  is in any other way misleading, false, or deceptive.                                              
18    * Sec. 21.  AS 21.36.030(a) is amended to read:                                                                    
19            (a)  A person may not make, issue, circulate, broadcast, or have made, issued,                               
20       circulated, or broadcast an estimate, circular, statement, illustration, comparison,                              
21       assertion, or other written, electronic, or oral presentation that                                                
22                 (1)  misrepresents the benefits, advantages, conditions, sponsorship,                                   
23       source, or terms of an insurance policy or a health discount plan;                                            
24                 (2)  misrepresents the dividends or share of the surplus to be received                                 
25       on an insurance policy;                                                                                           
26                 (3)  misrepresents an insurance policy as being a share or shares of                                    
27       stock;                                                                                                            
28                 (4)  makes a false or misleading statement as to the dividends or shares                                
29       of the surplus previously paid on an insurance policy;                                                            
30                 (5)  misrepresents or makes a misleading statement as to the financial                                  
31       condition of an insurer or as to the legal reserve system upon which a life insurer                               
01       operates;                                                                                                         
02                 (6)  uses a name or title of an insurance policy or class of insurance                                  
03       policies misrepresenting its true nature;                                                                         
04                 (7)  is a misrepresentation for the purpose of inducing, or that tends to                               
05       induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy;                          
06                 (8)  is a misrepresentation for the purpose of effecting or tending to                                  
07       effect a pledge or assignment of or loan against an insurance policy;                                             
08                 (9)  appears to be an actual policy for a named individual when it is                                   
09       merely an advertisement;                                                                                          
10                 (10)  does not clearly designate the name of the insurer providing the                                  
11       coverage or about which the statements are made; [OR]                                                             
12                 (11)  is in any other way misleading, false, or deceptive;                                          
13                 (12)  misrepresents a health discount plan as a form or type of                                     
14       insurance;                                                                                                    
15                 (13)  describes a health discount plan using common insurance                                       
16       terminology; or                                                                                               
17                 (14)  states or implies that a health discount plan is underwritten                                 
18       by or associated with an insurer.                                                                             
19    * Sec. 22.  AS 21.36 is amended by adding a new section to read:                                                   
20            Sec. 21.36.065.  Limitation on owner controlled and contractor controlled                                  
21       insurance programs.  (a)  An owner controlled insurance program or a contractor                                 
22       controlled insurance program is subject to both AS 21.39 and AS 21.42, must be                                    
23       approved by the director, and shall be allowed only for a major construction project.                             
24       Owner controlled and contractor controlled insurance programs are limited to property                             
25       insurance as defined in AS 21.12.060 and casualty insurance as defined in                                         
26       AS 21.12.070.                                                                                                     
27            (b)  In this section, an owner controlled or contractor controlled insured                                   
28       program does not include                                                                                          
29                 (1)  builder's risk or course of construction insurance;                                                
30                 (2)  insurance relating to the transportation of cargo or other property;                               
31                 (3)  insurance covering one or more affiliates, subsidiaries, partners, or                              
01       joint venture partners of a person; or                                                                            
02                 (4)  insurance policies endorsed to name one or more persons as                                         
03       additional insureds.                                                                                              
04            (c)  In this section,                                                                                        
05                 (1)  "contractor" means a person who meets the definition of                                            
06       "contractor" in AS 08.18.171 and who undertakes the performance of a construction                                 
07       project for a project owner, its agent, or its representative;                                                    
08                 (2)  "contractor controlled insurance program" means an insurance                                       
09       program where one or more insurance policies are procured on behalf of a contractor,                              
10       its agent, or its representative, by its insurance producer, as defined in AS 21.27.900,                          
11       for the purpose of insuring the contractor and one or more of the following:                                      
12                      (A)  the project owner;                                                                            
13                      (B)  a subcontractor;                                                                              
14                      (C)  an architect;                                                                                 
15                      (D)  an engineer; or                                                                               
16                      (E)  a person performing professional services;                                                    
17                 (3)  "major construction project" means the process of constructing a                                   
18       structure, building, facility, or roadway or major renovation of more than 50 percent of                          
19       an existing structure, building, facility, or roadway having a contract cost of more than                         
20       $50,000,000 of a definite term at a geographically defined project site;                                          
21                 (4)  "owner controlled insurance program" means an insurance program                                    
22       where one or more insurance policies are procured on behalf of a project owner, its                               
23       agent, or its representative, by its insurance producer, as defined in AS 21.27.900, for                          
24       the purpose of insuring the project owner and one or more of the following:                                       
25                      (A)  the contractor;                                                                               
26                      (B)  a subcontractor;                                                                              
27                      (C)  an architect;                                                                                 
28                      (D)  an engineer; or                                                                               
29                      (E)  a person performing professional services;                                                    
30                 (5)  "project owner" means a person who, in the course of the person's                                  
31       business, engages the service of a contractor for the purpose of working on a                                     
01       construction project;                                                                                             
02                 (6)  "subcontractor" means a person to whom a contractor sublets all or                                 
03       part of a contractor's initial undertaking.                                                                       
04    * Sec. 23.  AS 21.36 is amended by adding a new section to read:                                                   
05            Sec. 21.36.155.  Health discount plans.  (a)  A person may not sell, market,                               
06       promote, advertise, or otherwise distribute a health discount plan unless                                         
07                 (1)  each advertisement, policy, document, information, statement, or                                   
08       other communication regarding the health discount plan and the plan itself contain a                              
09       statement, in bold and prominent type, that the health discount plan is not insurance;                            
10                 (2)  the discounts offered under the health discount plan are specifically                              
11       authorized by a contract with each provider of the services or supplies listed in                                 
12       conjunction with the plan;                                                                                        
13                 (3)  the health discount plan states the name, address, and telephone                                   
14       number of the administrator of the plan;                                                                          
15                 (4)  the person makes readily available to the consumer a complete,                                     
16       accurate, and up-to-date list of providers participating in the plan that offer discounted                        
17       health care services or supplies in the consumer's local area and the discounts offered                           
18       by the providers;                                                                                                 
19                 (5)  the person provides the consumer the right to cancel the health                                    
20       discount plan within 30 days after purchase of the plan; and                                                      
21                 (6)  the person provides the consumer with a full refund of all payments                                
22       made within 30 days after notification of cancellation of the plan under (5) of this                              
23       subsection.                                                                                                       
24            (b)  The director may adopt regulations to implement this section and to                                     
25       establish additional requirements intended to prohibit unfair or deceptive practices                              
26       relating to health discount plans.                                                                                
27    * Sec. 24.  AS 21.36.190 is amended by adding a new subsection to read:                                            
28            (f)  Except as provided in AS 21.36.065, an insurer, whether authorized or                                   
29       unauthorized, may not underwrite an owner controlled insurance program or                                         
30       contractor controlled insurance program.  In this subsection, "owner controlled                                   
31       insurance program" and "contractor controlled insurance program" have the meanings                                
01       given in AS 21.36.065.                                                                                            
02    * Sec. 25.  AS 21.36.195 is amended to read:                                                                       
03            Sec. 21.36.195.  Surplus lines brokers and insurance producers; prohibited                                 
04       acts.  A surplus lines broker or an insurance producer may not fail to provide evidence                         
05       of insurance, [AFFIDAVITS,] filings, or reports, or fail to maintain the records, or fail                         
06       to pay the taxes and fees, required under AS 21.34.                                                               
07    * Sec. 26.  AS 21.51 is amended by adding a new section to read:                                                   
08            Sec. 21.51.405.  Rate requirements.  Rates charged for a health insurance                                  
09       policy may not be excessive, inadequate, or unfairly discriminatory.                                              
10    * Sec. 27.  AS 21.55.500(16) is amended to read:                                                                   
11                 (16)  "plan administrator" means an [THE] eligible entity that is                               
12       licensed as a third-party administrator under AS 21.27 and is selected by the                                 
13       board and approved by the director to administer a state plan;                                                    
14    * Sec. 28.  AS 21.66.080(a) is amended to read:                                                                    
15            (a)  Every company, on or before March 1 of each year, shall furnish the                                     
16       director or the director's designee a sworn statement of assets and liabilities, and of                       
17       all title premiums received by it during the preceding calendar year, setting out, among                      
18       other things, the amounts that have been set aside and held by it in an account required                      
19       under AS 21.18.073.  The reporting format for a given year is the most recently                                   
20       approved National Association of Insurance Commissioners Annual Financial                                         
21       Statement blank form and instructions, supplemented for additional information as                                 
22       required by the director.  The director may require the statement to be filed on                                  
23       electronic media.  The statement must also show all unpaid losses and claims upon                                 
24       title insurance policies of which the title insurance company has received due notice in                          
25       writing from or on behalf of the insured.  With the filing of the statement, the title                        
26       insurance company shall pay a filing fee set under AS 21.06.250.                                                  
27    * Sec. 29.  AS 21.66.085(b) is amended to read:                                                                    
28            (b)  A quarterly financial statement, if required, is due 45 [60] days after the                         
29       end of the quarter to which it applies.                                                                           
30    * Sec. 30.  AS 21.90.900(42) is amended to read:                                                                   
31                 (42)  "third-party administrator" means a person who, for residents of                              
01       this state, or for residents of another jurisdiction from a place of business in this state,                      
02       performs administrative functions including claims administration and payment,                                    
03       marketing administrative functions, premium accounting, premium billing, coverage                                 
04       verification, underwriting authority, or certificate issuance in connection with life                         
05       insurance, annuities, health insurance, or the provision of coverage for the cost of                          
06       medical care [REGARD TO LIFE INSURANCE, HEALTH INSURANCE, OR                                                  
07       ANNUITIES];                                                                                                       
08    * Sec. 31.  AS 21.90.900(43) is amended to read:                                                                   
09                 (43)  "transact," with respect to insurance or the provision of coverage                        
10       for medical care, includes                                                                                    
11                      (A)  solicitation and inducement;                                                                  
12                      (B)  preliminary negotiations;                                                                     
13                      (C)  effectuation of a contract of insurance or the provision of                               
14            coverage for medical care;                                                                               
15                      (D)  transaction of matters subsequent to effectuation of the                                      
16            contract of insurance or the provision of coverage for medical care and                                  
17            arising out of it;                                                                                           
18    * Sec. 32.  AS 21.90.900 is amended by adding a new paragraph to read:                                             
19                 (45)  "health discount plan" means a card, program, device,                                             
20       arrangement, contract, or mechanism that purports to offer discounts or access to                                 
21       discounts on health care services or supplies and that is not insurance or that does not                          
22       provide coverage for services or benefits regulated under AS 21.86 or AS 21.87.                                   
23    * Sec. 33.  AS 21.24.040(b); AS 21.27.330(b), and 21.27.650(p) are repealed.                                       
24    * Sec. 34.  The uncodified law of the State of Alaska is amended by adding a new section to                        
25 read:                                                                                                                   
26       TRANSITION:  REGULATIONS.  The director of insurance may proceed to adopt                                         
27 regulations to implement the changes made by secs. 21, 23, and 32 of this Act.  The                                     
28 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the                               
29 effective date of secs. 21, 23, and 32 of this Act.                                                                     
30    * Sec. 35.  Sections 21, 23, and 32 of this Act take effect July 1, 2005.                                          
31    * Sec. 36.  Except as provided in sec. 35 of this Act, this Act takes effect immediately under                     
01 AS 01.10.070(c).