00 HOUSE BILL NO. 216 01 "An Act relating to insurance rate-making and form filing." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03  * Section 1. AS 21.09.110(b) is amended to read: 04 (b) Policy forms and rates that require approval under AS 21.39 or AS 21.42 05 shall be submitted under AS 21.39.041, AS 21.39.220, or AS 21.42.120(b) 06 [AS 21.39.040(j) OR AS 21.42.120(g)] and may not be submitted with the application 07 for a certificate of authority. 08  * Sec. 2. AS 21.39.040(a) is repealed and reenacted to read: 09 (a) Each insurer shall file with the director, except as to inland marine risks, 10 which by general custom of the business, are not written according to manual rates or 11 rating plans, and except for rates for commercial insurance for which the director, by 12 regulation authorizes an informational filing as set out in (k) of this section, every 13 manual, minimum, class rate, rating schedule, or rating plan and every other rating 14 rule, and each modification of any of them that it proposes to use. Each filing 15 (1) shall be made under the applicable filing procedures in 01 AS 21.39.041, 21.39.210, or 21.39.220; 02 (2) must state the proposed effective date; and 03 (3) must indicate the character and extent of the coverage 04 contemplated. 05  * Sec. 3. AS 21.39.040(d) is repealed and reenacted to read: 06 (d) When a filing is not accompanied by the information upon which the 07 insurer supports the filing, and the director does not have sufficient information to 08 determine whether the filing meets the requirements of this chapter, the director shall 09 require the insurer to furnish the information upon which the insurer supports the 10 filing. The information furnished in support of a filing may include (1) the experience 11 or judgment of the insurer or rating organization making the filing; (2) the insurer's 12 interpretation of the statistical data it relies upon; (3) the experience of other insurers 13 or rating organizations; (4) any other relevant factors. A filing and supporting 14 information shall be open to public inspection after the filing becomes effective. 15 Specific inland marine rates on risks specially rated, made by a rating organization, 16 shall be filed with the director. 17  * Sec. 4. AS 21.39.040(g) is amended to read: 18 (g) Upon the written application of the insured [,] stating the reasons for the  19 unusual or extrahazardous characteristics that are not otherwise contemplated in  20 the filed rating plan, [FILED WITH AND APPROVED BY THE DIRECTOR,] the  21 insurer may file a rate in excess of that provided by a filing otherwise applicable that 22 may be used on a specific risk. 23  * Sec. 5. AS 21.39 is amended by adding a new section to read: 24 Sec. 21.39.041. Prior approval. (a) Except for workers' compensation 25 prospective loss cost filings and workers' compensation assigned risk pool rates by a 26 rating organization under AS 21.39.043, an insurer or rating organization shall file 27 medical malpractice, workers' compensation and assigned risk plan rating systems as 28 specified in AS 21.39.040(a) with the director for review and approval prior to use. 29 Each filing shall be on file for a waiting period of 15 days before it becomes effective. 30 This period may be extended by the director for an additional period not to exceed 15 31 days if the director gives written notice within the waiting period to the insurer or 01 rating organization that made the filing stating that additional time for the 02 consideration of the filing is required. The director shall approve the filing upon a 03 determination that the filing meets the requirements of this chapter. 04 (b) The filing must include the effective date. In place of a specific date, the 05 insurer or rating organization may specify a reasonable time period after approval for 06 the filing to be effective. 07 (c) Upon written application by the insurer or rating organization, the director 08 may authorize a filing that the director has approved to become effective before the 09 expiration of the waiting period. A filing shall be considered to meet the requirements 10 of this chapter unless disapproved by the director within the waiting period. 11 (d) When a filing is not accompanied by the information that supports the 12 filing, and the director does not have sufficient information to determine whether the 13 filing meets the requirements of this chapter, the director shall require the insurer to 14 furnish the information that supports the filing, and, in that event, the waiting period 15 shall commence as of the date the information is furnished. The information furnished 16 in support of a filing may include (1) the experience or judgment of the insurer or 17 rating organization making the filing; (2) the interpretation of the statistical data relied 18 upon; (3) the experience of other insurers or rating organizations; (4) any other 19 relevant factors. If the insurer or rating organization fails to provide the information 20 within 30 days after the director requests the information relied upon, the waiting 21 period may be extended by the director for an additional 15 days upon written 22 application of the insurer or rating organization within the initial 30-day response 23 period. The director may deem the failure to provide information as a request by the 24 insurer or rating organization to withdraw the filing from further consideration. 25 (e) A filing and supporting information shall be open to public inspection after 26 the filing becomes effective. 27 (f) If within the review period provided for in (a) of this section, the director 28 finds that a filing does not meet the requirements of this chapter, the director shall 29 send to the insurer or rating organization that made the filing written notice of 30 disapproval of the filing specifying in what respects the filing fails to meet the 31 requirements of this chapter and stating that the filing may not become effective. 01  * Sec. 6. AS 21.39.050(c) is amended to read: 02 (c) If at any time subsequent to the applicable review period provided for in 03 AS 21.39.041(a) or 21.39.220(b) [(a) OR (b) OF THIS SECTION], the director finds 04 that a filing does not meet the requirements of this title [CHAPTER], the director 05 shall, after a hearing held upon not less than 10 days written notice[,] specifying the 06 matters to be considered at the hearing and [,] given to each insurer and rating 07 organization that made the filing, issue an order specifying in what respects the filing 08 fails to meet the requirements of this title [CHAPTER] and stating when, within a 09 reasonable period thereafter, the filing shall be considered no longer effective. Copies 10 of the order shall be sent to each insurer and rating organization that made the filing. 11 The order may [SHALL] not affect a contract or policy made or issued before the 12 expiration of the period set out in the order. 13  * Sec. 7. AS 21.39.070(b) is amended to read: 14 (b) Each deviation permitted to be filed shall remain in effect for a period of 15 not less than one year from the effective date unless withdrawn by the insurer with the 16 approval of the director or until terminated in accordance with AS 21.39.041,  17 21.39.210, or 21.39.220 [AS 21.39.050]. 18  * Sec. 8. AS 21.39.110(a) is amended to read: 19 (a) Each group, association, or other organization of insurers that engages in 20 joint underwriting or joint reinsurance is subject to regulation in accordance with this 21 section. In addition, joint underwriting is subject to all other provisions of this 22 chapter, except for AS 21.39.210, and joint reinsurance is subject to AS 21.39.120, 23 21.39.160, and 21.39.170. 24  * Sec. 9. AS 21.39 is amended by adding new sections to read: 25 Sec. 21.39.210. Flex-rating. (a) Except for workers' compensation, medical 26 malpractice, and assigned risk plan rates, an insurer's rate level increase or decrease 27 may take effect without prior approval if the cumulative rate level change for all 28 coverages combined, calculated from the effective date to 12 months before the 29 effective date, is not greater than 10 percent. 30 (b) An insurer may make multiple rate filings under this provision during any 31 12-month period if the cumulative rate level change is within the specified limitation 01 as described in (a) of this section. For an insurer adopting a rating organization 02 prospective loss cost filing, the cumulative rate level change includes both the rating 03 organization's prospective loss cost change as well as the insurer's loss cost adjustment 04 change. 05 (c) Notwithstanding any other provision of this chapter, for a policy governed 06 by this section, a filing that produces a rate level change within the limitations 07 provided in (a) of this section is effective without prior approval and may take effect 08 on the date specified in the filing, but not earlier than the date it is received by the 09 division. A rate level change within the limitation in (a) of this section may not be 10 applied to a policy until the beginning of the policy period. 11 (d) A filing submitted under (a) of this section must include an exhibit 12 showing the calculation of the overall rate level change and an exhibit showing the 13 insurer's expense provisions. An insurer submitting a loss cost adjustment filing shall 14 include supporting information showing how the loss cost adjustment is calculated. 15 The director may request additional supporting information if the director does not 16 have enough information upon which to determine if the filing meets the requirements 17 of this chapter. 18 (e) A filing submitted under (a) of this section is considered to comply with 19 this title. However, if the director determines that the filing does not meet the 20 requirements of this title, the director shall issue an order specifying in detail the 21 specific statutes the insurer has violated and the reasons the filing is not in compliance. 22 The order must state a reasonable future date on which the filing is to be considered no 23 longer effective. An order by the director under this subsection is prospective and 24 does not affect any contract issued or made before the effective date of the order. 25 (f) The director may adopt regulations implementing the provisions of this 26 section. 27 (g) This section does not apply to rating organizations or to any impaired or 28 insolvent insurer operating under a rehabilitation plan, an order of supervision, or an 29 impaired financial condition as determined by the director. 30 Sec. 21.39.220. File and use, filing of rates, supplementary rate  31 information, and supporting information. (a) An insurer's rate level increase or 01 decrease filing falling outside of the limitation provided in AS 21.39.210(a) is subject 02 to file and use provisions under this section, unless the filing is otherwise exempt from 03 those provisions under another provision in this chapter. A rate filing from a rating 04 organization shall be submitted to the director under the file and use provisions. A 05 rate filing from an insurer operating under a rehabilitation plan, an order of 06 supervision, or under an impaired financial condition as determined by the director 07 shall be submitted to the division under the prior approval provisions. The insurer 08 shall submit a filing for a new product or coverage introduction that does not have a 09 rate on file under the file and use provisions. 10 (b) Each insurer shall file with the director all rates, supplementary rate 11 information, and supporting information at least 30 days before the proposed effective 12 date. The director shall review the filing within 15 days. This period may be 13 extended by the director for an additional period not to exceed 15 days if the director 14 gives written notice within the initial 15 day period to the insurer or rating 15 organization that made the filing that states additional time for the consideration of the 16 filing is required. The waiting period is the 30-day period following the date the 17 director receives the filing. 18 (c) The filing must include the effective date that may not be before the end of 19 the waiting period. Upon written application by the insurer or rating organization, the 20 director may authorize a filing that the director has reviewed to become effective 21 before the expiration of the waiting period. 22 (d) A filing shall be considered to meet the requirements of this chapter and to 23 become effective unless disapproved by the director within the waiting period. 24 (e) The director shall disapprove a rate if the director finds that the rate does 25 not meet the requirements of this title. 26 (f) When a filing is not accompanied by the information that supports the 27 filing, and the director does not have sufficient information to determine whether the 28 filing meets the requirements of this title, the director shall require the insurer to 29 furnish the information upon which it supports the filing. If the support information is 30 requested, the waiting period commences on the date the information is furnished. 31 The information furnished in support of the filing may include (1) the experience or 01 judgment of the insurer or rating organization making the filing; (2) the interpretation 02 of the statistical data relied upon; (3) the experience of other insurers or rating 03 organizations; (4) any other relevant factors. If the insurer or rating organization is 04 unable to provide the information within 30 days after the director's request, the period 05 may be extended by the director for an additional 15 days upon written application of 06 the insurer or rating organization within the initial 30 day response period. The 07 director may disapprove the filing for failure to provide the requested information 08 during the response period. The disapproval notice must state a reasonable future date 09 on which the filing is to be considered no longer effective. 10 (g) A filing and supporting information shall be open to public inspection after 11 the director completes the review of the filing. 12 (h) If within the waiting period in (b) of this section, the director finds that a 13 filing does not meet the requirements of this chapter, the director shall send to the 14 insurer or rating organization which made the filing, written notice of disapproval of 15 the filing specifying in what respects the filing fails to meet the requirements of this 16 chapter and shall state a reasonable future date on which the filing is to be considered 17 no longer effective. 18  * Sec. 10. AS 21.42.120(b) is repealed and reenacted to read: 19 (b) Each insurer or rating organization shall submit a filing under one of the 20 following procedures, clearly specifying the filing procedure under which the filing is 21 being made: 22 (1) for prior approval under AS 21.42.123; or 23 (2) for file and use under AS 21.42.125. 24  * Sec. 11. AS 21.42.120 is amended by adding a new subsection to read: 25 (i) The director may by order require an insurance document, form, or type of 26 insurance document or form as specified in the order, to be submitted for prior 27 approval if in the opinion of the director the approval of the insurance document, 28 form, or type of insurance document or form is necessary for the protection of the 29 public. 30  * Sec. 12. AS 21.42 is amended by adding new sections to read: 31 Sec. 21.42.123. Form filing subject to prior approval. (a) A prior approval 01 filing shall be made not less than 30 days before the effective date. At the end of the 02 30-day period the form filed shall be considered approved unless before the end of the 03 30-day period it has been affirmatively disapproved by order of the director. Approval 04 of the form by the director before the end of the 30-day period constitutes a waiver of 05 the unexpired portion of the waiting period. The director may extend by not more 06 than an additional 30 days the period for approving or disapproving the form, by 07 giving notice of the extension during the initial 30-day period. At the expiration of the 08 extended period, and in the absence of a prior approval or disapproval, the form shall 09 be considered approved. The director may at any time after the notice, and for cause 10 shown, withdraw the approval. 11 (b) The director may require the insurer or rating organization to revise the 12 filing to meet the prior approval filing requirements in this title. Failure of the insurer 13 or rating organization to provide the information within 30 days after the director's 14 request, or an extension of the period by the director for an additional 15 days upon 15 written request of the insurer or rating organization within the waiting period, is 16 considered to be a request by the insurer or rating organization to withdraw the filing 17 from further consideration. 18 (c) The filing must state an effective date. In place of a specific date, the 19 insurer or rating organization may specify a reasonable time period after approval for 20 the filing to be effective. 21 (d) A prior approval filing shall be open to public inspection after the filing 22 becomes effective. 23 Sec. 21.42.125. Form filing subject to file and use; penalties. (a) A file and 24 use filing shall be filed with the director for a waiting period of not less than 30 days. 25 The period may be extended by the director or the insurer or rating organization for an 26 additional 30 days if notice is given within the initial 30-day period that additional 27 time is needed for the consideration of the filing. The filing may become effective at 28 the end of the waiting period unless disapproved by the director before the expiration 29 of the waiting period. 30 (b) The filing must state an effective date that must be after the waiting period. 31 Upon written notice by the insurer or rating organization, the director may authorize a 01 filing that has been reviewed to become effective before the expiration of the waiting 02 period. 03 (c) A file and use form filing must include a signed compliance certificate 04 certifying that the filing complies with this title. An authorized officer or state filings 05 manager of the insurer shall sign the compliance certificate stating that, to the best of 06 the individual's knowledge, the filing complies with this title. In addition to any other 07 penalty provided by law, the director may issue an order requiring an insurer who 08 submits a materially false or misleading compliance certificate to submit future form 09 filings for prior approval. The order must specify the conditions under which the 10 insurer may again submit filings under this section. In addition to any other penalty 11 provided by law, a person that the director finds has submitted a materially false or 12 misleading compliance certificate is subject to either a civil penalty of not more than 13 $10,000 for each violation, or a civil penalty of not more than $25,000 for each 14 violation if the director finds that the person knowingly violated the provisions of this 15 title. A filing that does not include the signed compliance certificate shall be reviewed 16 under the prior approval procedure under AS 21.42.123. In this subsection, 17 "knowingly" has the meaning given in AS 11.81.900. 18 (d) The director may require an insurer or rating organization to provide 19 additional information to demonstrate that a file and use filing meets the requirements 20 of this title or to revise the filing to meet the requirements of this title. If an insurer or 21 rating organization fails to provide the information within the waiting period described 22 in (a) of this section, the director shall consider the failure to request a withdrawal of 23 the filing from further consideration. 24 (e) A file and use filing shall be open to public inspection after the filing 25 becomes effective. 26  * Sec. 13. AS 21.39.050(a) is repealed.