HCS CSSB 53(L&C) AM H: "An Act relating to insurance; amending Alaska Rule of Civil Procedure 45; and providing for an effective date."
00HOUSE CS FOR CS FOR SENATE BILL NO. 53(L&C) am H 01 "An Act relating to insurance; amending Alaska Rule of Civil Procedure 45; 02 and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 06.20.260(a) is amended to read: 05 (a) A further or other charge or amount for an examination, service, brokerage 06 commission, expense, fee, bonus, or other thing may not be directly or indirectly 07 charged, contracted for, or received except 08 (1) lawful fees actually paid out by the licensee to a public officer for 09 filing, recording, or releasing any instrument securing the loan, or for transferring 10 certificate of title to a motor vehicle securing the lien or noting a lien on that 11 certificate; 12 (2) premiums actually paid out for insurance on any one or combination 13 of the following: pledged property of the borrower, or consumer credit [LIFE] 14 insurance; in this paragraph "consumer credit insurance" has the meaning given
01 in AS 21.57.160 [ON THE LIFE OF ONE OR MORE BORROWERS, CREDIT LOSS 02 OF INCOME INSURANCE, OR CREDIT DISABILITY INSURANCE TO PROVIDE 03 INDEMNITY FOR PAYMENTS BECOMING DUE ON THE INDEBTEDNESS]; 04 (3) taxable costs and expenses to which the licensee becomes entitled 05 under general law in any court proceedings to collect a loan or to realize on the 06 security after default; 07 (4) reasonable fees paid by a licensee for appraisals, surveys, and title 08 insurance or reports if the loan is secured by an interest in real estate; 09 (5) a late payment fee of not more than 10 percent of the payment that 10 is due or $15, whichever is less. 11 * Sec. 2. AS 06.20.287(a) is amended to read: 12 (a) A licensee may obtain consumer credit [LIFE, CREDIT DISABILITY,] 13 and property insurance on open-end loans under this chapter. The consumer credit 14 [LIFE AND CREDIT DISABILITY] insurance obtained by a licensee shall satisfy the 15 requirements of AS 21.57. The property insurance obtained by a licensee shall satisfy 16 the requirements of AS 21.39 and AS 21.42. The licensee shall comply with 17 AS 21.36.160 and 21.36.165 during all transactions with borrowers involving 18 consumer credit [LIFE, CREDIT DISABILITY] and property insurance. 19 * Sec. 3. AS 21.03.010 is amended by adding a new subsection to read: 20 (c) A person who transacts insurance in this state, or relative to a subject 21 resident, located, or to be performed in this state as or on behalf of a risk retention 22 group or purchasing group formed under and in compliance with 15 U.S.C. 3901 - 23 3906 (Liability Risk Retention Act), shall comply with the provisions of this title not 24 preempted by federal law. 25 * Sec. 4. AS 21.03.060 is amended to read: 26 Sec. 21.03.060. PRE-EMPTION. The state hereby pre-empts the field of 27 regulating insurers and their managing general agents, insurance producers 28 [AGENTS], and representatives. All political subdivisions of the state, including home 29 rule boroughs or cities, are prohibited from requiring of an insurer, managing general 30 agent, insurance producer [AGENT], or representative regulated under this title an 31 authorization, permit, or registration of any kind for conducting transactions lawful
01 under the authority granted by the state under this title. 02 * Sec. 5. AS 21.06.080 is amended by adding a new subsection to read: 03 (e) If the director determines that a catastrophe has occurred in this state and 04 in good faith believes that the governor or the President of the United States has issued 05 or is about to issue a declaration of disaster, the director may take the action that the 06 director considers necessary to assure that a contract of insurance already issued will 07 be honored under the terms of the contract. Actions that the director may take include 08 emergency orders permitting the immediate licensing of adjusters to facilitate handling 09 of claims, permitting a licensee to open or close an office, permitting a licensee to 10 move or remove a record as required by the existence of the catastrophe, or permitting 11 the issuance by an insurer of checks or drafts drawn on an out-of-state bank in 12 payment of a claim. Until a declaration of the disaster has been lifted, the director 13 may take action to respond to a disaster without a hearing. An action taken under this 14 subsection may not remain in effect more than six months from the date that the 15 director determines that a catastrophe has occurred unless, after a hearing, the director 16 determines that the action is still necessary to respond to the disaster. 17 * Sec. 6. AS 21.06.120(c) is amended to read: 18 (c) In place of an examination by the director, the director may accept a full 19 report of the last recent examination of a foreign or alien insurer, certified to by the 20 insurance supervisory official of another state, territory, commonwealth, or district of 21 the United States. The director may require that the [IF] 22 (1) [THE] insurance regulatory agency conducting the examination be, 23 [WAS] at the time of the examination, accredited by the National Association of 24 Insurance Commissioners; 25 (2) [THE] examination be [IS] performed under the supervision of an 26 insurance regulatory agency accredited by the National Association of Insurance 27 Commissioners; and the supervising examiner, after a review of the examination work 28 papers and report, state [STATES] under oath that the examination and report comply 29 with the standards and procedures required by their accredited state insurance 30 regulatory agency; or 31 (3) [THE] examiner conducting the examination be [WAS] employed
01 by an insurance regulatory agency accredited at the time of the examination by the 02 National Association of Insurance Commissioners and that the examiner, after review 03 of the examination work papers and report, state [STATES] under oath that the 04 examination and report comply with the standards and procedures required by the 05 accredited insurance regulatory agency. 06 * Sec. 7. AS 21.06.150(g) is amended to read: 07 (g) The director may withhold a document, information, account, record, 08 examination, or report from the public inspection for as long as the director finds the 09 withholding is necessary to protect a person against unwarranted injury or is in the 10 public interest. The director may close an examination hearing to the public when 11 the director finds the closure is necessary to protect a person against unwarranted 12 injury or is in the public interest. The director may publish the examination report 13 or a summary of it in a newspaper in the state if the director determines that the 14 publication is in the public interest. 15 * Sec. 8. AS 21.09.110 is amended to read: 16 Sec. 21.09.110. APPLICATION FOR CERTIFICATE OF AUTHORITY. To 17 apply for an original certificate of authority an insurer shall file with the director its 18 application, [(] accompanied by the applicable fees set under AS 21.06.250, [)] 19 showing its name, location of its home office, or principal office in the United States 20 [(] if an alien insurer [)], kinds of insurance to be transacted, date of organization or 21 incorporation, form of organization, state or country of domicile, and additional 22 information that the director may reasonably require, together with the following 23 documents, as applicable: 24 (1) if a foreign insurer, a copy of its corporate charter or articles of 25 incorporation, with all amendments certified by the public officer with whom the 26 originals are on file in the state or country of domicile; 27 (2) if a reciprocal insurer, copies of the power of attorney of its 28 attorney-in-fact and of its subscribers' agreement, if any, certified by its 29 attorney-in-fact; 30 (3) a copy of its financial statement as of the preceding December 31, 31 and all subsequent quarterly financial statements, sworn to by at least two executive
01 officers of the insurer, or certified by the public insurance supervisory official of the 02 insurer's state of domicile or of entry into the United States; 03 (4) a copy of the report of last examination, if any, made of the insurer, 04 certified by the insurance supervisory official of its state of domicile or of entry into 05 the United States; 06 (5) appointment of the director under AS 21.09.180, as its attorney to 07 receive service of legal process; 08 (6) if a foreign or alien insurer, a certificate of the public official 09 having supervision of insurance in its state or country of domicile, or state of entry 10 into the United States, showing that it is authorized to transact the kinds of insurance 11 proposed to be transacted in this state; 12 (7) if an alien insurer, a copy of the appointment and authority of its 13 United States manager, certified by its officer having custody of its records; and 14 (8) if a foreign insurer, a certificate as to deposit if it is to be tendered 15 under AS 21.09.090 [; 16 (9) SPECIMEN COPIES OF POLICIES PROPOSED TO BE 17 OFFERED IN THIS STATE IF THEN AVAILABLE, TOGETHER WITH 18 PREMIUMS OR PREMIUM RATES APPLICABLE IF THEN KNOWN, OR A 19 DECLARATION THAT THE RATES AS APPLICABLE WILL BE THOSE 20 PROMULGATED BY DESIGNATED RATING ORGANIZATIONS AUTHORIZED 21 TO FILE RATES IN THIS STATE ON BEHALF OF THE INSURER OR BY THE 22 INSURER]. 23 * Sec. 9. AS 21.09.110 is amended by adding a new subsection to read: 24 (b) Policy forms and rates that require approval under AS 21.39 or AS 21.42 25 shall be submitted under AS 21.39.040(j) or AS 21.42.120(g) and may not be 26 submitted with the application for a certificate of authority. 27 * Sec. 10. AS 21.09.130(b) is amended to read: 28 (b) If not continued by the insurer, its certificate of authority shall be 29 suspended [EXPIRES] at midnight on June 30 following the failure of the insurer to 30 continue it in force. The certificate of authority shall expire on June 30 one year 31 following its suspension due to failure to continue the certificate of authority. The
01 director shall promptly notify the insurer of the occurrence of a failure that may result 02 in suspension [RESULTING IN IMPENDING EXPIRATION] of its certificate of 03 authority. 04 * Sec. 11. AS 21.09 is amended by adding a new section to read: 05 Sec. 21.09.135. VOLUNTARY SURRENDER OF CERTIFICATE OF 06 AUTHORITY. (a) A foreign admitted insurer may apply for voluntary surrender of 07 its certificate of authority and the director may accept the application, if the foreign 08 admitted insurer 09 (1) is in compliance with the applicable sections of this title, or the 10 director waives in writing each condition of noncompliance; 11 (2) provides written confirmation that obligations incurred before the 12 voluntary surrender of the certificate of authority shall be paid to guarantee funds or 13 insurance pools established by law; and 14 (3) is domiciled in a state that is 15 (A) accredited by the National Association of Insurance 16 Commissioners at the time of the request for voluntary surrender; or 17 (B) not accredited by the National Association of Insurance 18 Commissioners at the time of the request and agrees in writing to be subject 19 to 20 (i) AS 21.09.200 and 21.09.205 for a period of two 21 years, including payment of any fee related to filing information with 22 the director; and 23 (ii) any other provision of this title that may be required 24 in writing by the director and for the period of time the director may 25 specify. 26 (b) If a foreign admitted insurer who surrenders a certificate of authority 27 ceases to exist, all business written and in force relative to a risk resident, located, or 28 to be performed in this state shall be lawfully cancelled or reinsured. A reinsurance 29 agreement covering all or a part of a risk described in this subsection shall be 30 approved by the director before accepting the certificate of authority for surrender if 31 the agreement meets the following criteria:
01 (1) insurance coverage has not deteriorated from the policies existing 02 at the time of the transfer; 03 (2) the assuming insurer is of equal or better financial standing; and 04 (3) the assuming insurer is admitted to do business in this state, unless 05 this requirement is waived by the director. 06 * Sec. 12. AS 21.09.200(f) is amended to read: 07 (f) In addition to the requirements of (a) of this section, an authorized [A 08 DOMESTIC] insurer shall file its annual statement with the National Association of 09 Insurance Commissioners on electronic media acceptable to the association by the 10 due date established by the association, and shall pay the applicable filing fee. The 11 director may waive the filing requirement if the insurer only transacts business 12 in this state and only accepts risks relative to a subject resident, located, or to be 13 performed in this state. An insurer that fails to comply with this subsection is 14 subject to the penalties specified in (e) of this section, calculated from the filing and 15 fee due date established by the National Association of Insurance Commissioners. 16 * Sec. 13. AS 21.09.205 is amended by adding a new subsection to read: 17 (d) In addition to the requirements of (a) of this section, an authorized insurer 18 shall file its quarterly statement with the National Association of Insurance 19 Commissioners on electronic media acceptable to the association by the due date 20 established by the association, and shall pay the applicable filing fee. The director 21 may waive the filing requirement if the insurer only transacts business in this state and 22 only accepts risks relative to a subject resident, located, or to be performed in this 23 state. An insurer that fails to comply with this subsection is subject to the penalties 24 specified in (c) of this section, calculated from the filing and fee due date established 25 by the National Association of Insurance Commissioners. 26 * Sec. 14. AS 21.09.210 is amended by adding new subsections to read: 27 (k) If, within three years after the date the tax under this section was due, an 28 insurer discovers a mistake or misinterpretation that resulted in an overpayment of the 29 tax in an amount exceeding $250 in any one calendar year, the insurer may make a 30 written request to the director for a refund. If the director determines a valid mistake 31 or misinterpretation has occurred, the director shall refund to the insurer the amount
01 of the excess tax by granting, at the director's discretion, a monetary refund or 02 premium tax credit. A premium tax credit shall be used in the next calendar year to 03 the extent possible and any unused credit shall be paid as a monetary refund. A 04 premium tax credit may not reduce the payable tax, calculated without use of the 05 credit, to less than zero. 06 (l) A premium tax credit granted under (k) of this section may not carry over 07 as an attribute in a transaction under AS 21.69.610, 21.69.620, AS 21.78, or a similar 08 transaction entered into by a foreign insurer. 09 (m) In this section, "premium tax credit" means an amount that an insurer may 10 use as an offset against a premium tax payment. 11 * Sec. 15. AS 21.09.250 is amended to read: 12 Sec. 21.09.250. PROHIBITED ACTS. An insurer doing business in this state 13 may not make, write, place, or cause to be made, written, or placed in this state a 14 policy, duplicate policy, or contract of insurance of any kind or character, or general 15 or floating policy upon persons or property resident, situated, or located in this state, 16 from or through a [BROKER, AGENT, GENERAL AGENT, SURPLUS LINE 17 BROKER, OR] person required to be licensed who has not secured a license in this 18 state. An insurer may not pay a commission or any form of remuneration to a person, 19 firm, or organization for the writing or placing of insurance coverage in this state 20 unless that person, firm, or organization holds a license issued by the director. 21 * Sec. 16. AS 21.09 is amended by adding new sections to read: 22 Sec. 21.09.290. RISK RETENTION GROUPS. (a) A risk retention group 23 formed in this state shall 24 (1) comply with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act); 25 and 26 (2) qualify for and hold in good standing a certificate of authority under 27 this chapter, limited to liability insurance only. 28 (b) A risk retention group shall submit with its application for a certificate of 29 authority 30 (1) the identity of 31 (A) the initial members of the risk retention group;
01 (B) all persons who organized the risk retention group; 02 (C) all persons who will provide administrative services to the 03 risk retention group; 04 (D) all persons who will influence or control the activities of 05 the risk retention group; 06 (2) the amount and nature of initial capitalization; 07 (3) a plan of operation or a feasibility study that includes the coverage, 08 deductible, coverage limit, rate, and rating classification system for the type or class 09 of liability insurance the group intends to offer; and 10 (4) the states in which the risk retention group intends to operate. 11 (c) At least 30 days before a domestic risk retention group implements a 12 material change or revision to an approved plan of operation or feasibility study, the 13 material change or revision shall be filed with the director. A material change or 14 revision may not be implemented unless the domestic risk retention group receives the 15 director's written approval. In this subsection, "material change or revision" includes 16 an offering of an additional type or class of liability insurance. 17 (d) In this section, 18 (1) "liability" means legal liability for damages, including costs of 19 defense, legal costs and fees, and other claims expenses, because of injury to another 20 person, damage to property, or other damage or loss to a person resulting from or 21 arising out of a business, whether profit or nonprofit, trade, product, service, including 22 a professional service, or an activity of a state or local government, or an agency or 23 political subdivision of a state or local government; "liability" does not include 24 personal risk liability or employer's liability with respect to its employees other than 25 legal liability under 45 U.S.C. 51 (Federal Employers' Liability Act); 26 (2) "personal risk liability" means liability for damages because of 27 injury to a person, damage to property, or other loss or damage resulting from a 28 personal, familial, or household responsibility or activity and that is not a responsibility 29 or activity described under (1) of this subsection. 30 Sec. 21.09.300. DISCLOSURE OF MATERIAL TRANSACTIONS. (a) A 31 domestic insurer shall file a report with the director disclosing a material acquisition
01 and disposition of assets or a material nonrenewal, cancellation, or revision of ceded 02 reinsurance agreements unless the acquisition and disposition of assets or material 03 nonrenewal, cancellation, or revision of ceded reinsurance agreements have been 04 submitted to the director for review, approval, or information purposes as required by 05 this title. 06 (b) The report required under (a) of this section is due 15 days after the end 07 of the calendar month in which a reportable transaction occurs. 08 (c) Except as provided in this section, a report obtained by or disclosed to the 09 director under this section is confidential, is not subject to subpoena, and may not be 10 made public by the director, or another person, without the prior written consent of the 11 insurer submitting the report. A report under this section may be disclosed to an 12 insurance regulatory agency of another state or to the National Association of 13 Insurance Commissioners, with notice of the disclosure sent to the insurer. If the 14 director, after giving an insurer notice and an opportunity to be heard, determines that 15 the interest of policyholders, shareholders, or the public will be served by publication 16 of the report, the director may publish all or any part of the report in a manner the 17 director determines appropriate. 18 (d) A domestic insurer's report of an acquisition or disposition of an asset 19 (1) shall be made under (a) of this section if the acquisition or 20 disposition is material; for purposes of this subsection, an acquisition or disposition, 21 or the aggregate of a series of related acquisitions or related dispositions during any 22 30-day period is material if it is nonrecurring, not in the ordinary course of business, 23 and involves more than five percent of the reporting insurer's total admitted assets as 24 reported in its most recent financial statement required by law that is filed with the 25 division; 26 (2) shall be made on asset acquisition, including a purchase, lease, 27 exchange, merger, consolidation, succession, or other acquisition other than the 28 (A) construction or development of real property by or for the 29 reporting insurer; or 30 (B) acquisition of material for construction or development of 31 real property;
01 (3) shall be made on asset disposition including a sale, lease, exchange, 02 merger, consolidation, mortgage, hypothecation, assignment for the benefit of creditors, 03 or abandonment; 04 (4) must include information on the 05 (A) date of transaction; 06 (B) manner of acquisition or disposition; 07 (C) description of the assets involved; 08 (D) nature and amount of the consideration given or received; 09 (E) purpose of, or reason for, the transaction; 10 (F) manner by which the amount of consideration was 11 determined; 12 (G) gain or loss recognized or realized as a result of the 13 transaction; and 14 (H) names of persons from whom the assets were acquired or 15 to whom the assets were disposed. 16 (e) A domestic insurer's report of nonrenewal, cancellation, or revision of a 17 ceded reinsurance agreement 18 (1) shall be made under (a) of this section if the nonrenewal, 19 cancellation, or revision is material; for purposes of this subsection, a material 20 nonrenewal, cancellation, or revision is one that affects (A) for property and casualty 21 business, including accident and health business when written as property and casualty 22 business, more than 50 percent of an insurer's ceded written premium; or (B) for life, 23 annuity, and accident and health business, more than 50 percent of the total reserve 24 credit taken for business ceded, on an annualized basis as indicated in the insurer's 25 most recently filed statutory statement; however, a filing is not required if the insurer's 26 ceded written premium or the total reserve credit taken for business ceded represents, 27 on an annual basis, less than 10 percent of direct written premiums and assumed 28 written premiums or 10 percent of the statutory reserve requirement before a cession; 29 (2) shall be filed without regard to which party has initiated the 30 nonrenewal, cancellation, or revision of ceded reinsurance whenever any of the 31 following conditions exist:
01 (A) the entire cession has been cancelled, nonrenewed, or 02 revised and ceded indemnity and loss adjustment expense reserves after a 03 nonrenewal, cancellation, or revision represent less than 50 percent of the 04 comparable reserves that would have been ceded had the nonrenewal, 05 cancellation, or revision not occurred; 06 (B) an admitted or accredited reinsurer has been replaced on an 07 existing cession by an unauthorized reinsurer; however, a report shall be filed 08 only if the result of the revision affects more than 10 percent of the cession; 09 or 10 (C) collateral requirements previously established for 11 unauthorized reinsurers have been reduced; however, a report shall be filed 12 only if the result of the revision affects more than 10 percent of the cession; 13 and 14 (3) must include 15 (A) the effective date of the nonrenewal, cancellation, or 16 revision; 17 (B) a description of the transaction with an identification of the 18 initiator of the transaction; 19 (C) the purpose of, or reason for, the transaction; and 20 (D) if applicable, the identity of the replacement reinsurers. 21 (f) An insurer is required to report under (a) of this section on a 22 nonconsolidated basis unless the insurer is part of a consolidated group of insurers that 23 utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the 24 solvency and integrity of the insurer's reserves and the insurer ceded substantially all 25 of its direct and assumed business to the pool. An insurer is presumed to have ceded 26 substantially all of its direct and assumed business to a pool if the insurer has less than 27 $1,000,000 total direct written premiums and assumed written premiums during a 28 calendar year that is not subject to a pooling arrangement and the net income of the 29 business not subject to the pooling arrangement represents less than five percent of the 30 insurer's capital and surplus. 31 Sec. 21.09.310. AUTHORIZATION OF UNITED STATES BRANCHES OF
01 ALIEN INSURERS AND GENERAL REQUIREMENTS. (a) This section applies 02 to all United States branches of alien insurers using this state as a state of entry to 03 transact the business of insurance in the United States. Except as provided elsewhere 04 in this title, a United States branch is subject to all state laws applicable to an insurer 05 domiciled in this state. 06 (b) An alien insurer may apply for a certificate of authority to use this state 07 as a state of entry to transact the business of insurance in the United States by 08 (1) qualifying as an insurer licensed to do business in this state; 09 (2) establishing a trust under a trust agreement approved in writing by 10 the director with a United States bank acceptable to the director in an amount not less 11 than the greater of 12 (A) the minimum basic capital or basic guarantee surplus and 13 additional maintained surplus required under AS 21.09.070; or 14 (B) the authorized control level risk based capital under 15 AS 21.14; 16 (3) submitting a copy of its charter and bylaws, if any, currently in 17 force, and other documents necessary to show the kind of business it is authorized to 18 transact in its domiciliary jurisdiction; documents submitted under this paragraph must 19 be attested to as accurate and complete by the insurance supervisory official in the 20 domiciliary jurisdiction, and must include an English translation, if in a language other 21 than English; 22 (4) submitting a full statement, subscribed and affirmed as true by two 23 officers or equivalent responsible representatives in a manner that the director 24 prescribes, of its financial condition as of the close of its latest fiscal year, showing 25 its assets, liabilities, income disbursements, business transacted, and other facts 26 required to be shown in its annual statement, as reported to the insurance supervisory 27 official in its domiciliary jurisdiction; all documents submitted under this paragraph 28 must include an English translation if in a language other than English; 29 (5) submitting to an examination under AS 21.06.120(b) at its principal 30 office within the United States, and elsewhere if necessary, unless the director accepts 31 a report of the insurer's recent examination and the report has been certified by the
01 insurance supervisory official of the insurer's domiciliary jurisdiction; and 02 (6) payment of fees established under AS 21.06.250. 03 (c) Before issuing or renewing a certificate of authority for a United States 04 branch, the director may require satisfactory proof that the insurer does not intend to 05 transact insurance business in violation of the provisions of this title or that is not 06 authorized by its charter. Proof required under this subsection may include the alien 07 insurer's charter, an agreement evidenced by a duly certified resolution of its board of 08 directors, or other proof that the director may require. 09 (d) The director may renew a certificate of authority for a United States branch 10 if satisfied, by proof the director may require, that the insurer is not delinquent with 11 respect to a requirement or qualification imposed by this title and that its continuance 12 to transact the business of insurance in this state will not be hazardous or prejudicial 13 to the best interest of the people of this state. 14 (e) A United States branch may not receive or renew a certificate of authority 15 in this state 16 (1) to transact a kind of insurance or a combination of kinds of 17 insurance that are not permitted to be transacted by domestic insurers in this state; 18 (2) if it transacts business other than the business of insurance 19 anywhere else within the United States unless the business, in the opinion of the 20 director, is necessarily or properly incidental to the kind of insurance that it is 21 authorized to transact in this state; 22 (3) if it fails to keep full and correct entries of its transactions; records 23 of entries shall at all times be maintained in its principal office within this state; or 24 (4) if it fails to comply with a requirement or limitation of this title that 25 it is not exempted from by another provision of this title and that is applicable to 26 similar domestic insurers and if, in the judgment of the director, the requirement or 27 limitation is necessary to protect the interest of the policyholders. 28 (f) A United States branch that transacts a kind or combination of kinds of 29 insurance outside this state that is not permitted to be done in this state by similar 30 domestic insurers may not have a certificate of authority issued or renewed in this state 31 unless, in the judgment of the director, the transaction of that kind of insurance is not
01 prejudicial to the best interest of the people of this state. 02 (g) A United States branch shall maintain assets in a trust account in an 03 amount not less than the United States branch's reserves and other liabilities, plus the 04 greater of 05 (1) the minimum basic capital or basic guaranteed surplus and 06 additional maintained surplus required under AS 21.09.070; or 07 (2) the authorized control level risk based capital under AS 21.14. 08 (h) A written trust agreement must contain provisions that 09 (1) vest legal title to trusteed assets in the trustees, and their lawfully 10 appointed successors; 11 (2) require that all assets deposited in the trust be continuously kept 12 within the United States; 13 (3) provide for substitution of a new trustee in case of a vacancy by 14 death, resignation, or other reason, subject to the prior written approval of the director; 15 (4) require that the trustee continuously maintain a record sufficient to 16 identify the assets of the trust fund; 17 (5) require that trusteed assets consist only of cash, investments eligible 18 for investment of the funds of domestic insurers, and accrued interest on the assets, if 19 collectible by the trustee, subject to the limits on investment of funds by domestic 20 insurers under this title; 21 (6) require that the trust be for the exclusive benefit, security, and 22 protection of the policyholders, or policyholders and creditors, of the United States 23 branch in the United States and that the trust be maintained as long as there is an 24 outstanding liability of the alien insurer arising out of its transaction of insurance in 25 the United States; and 26 (7) provide that withdrawal of an asset may not be made or permitted 27 by a trustee without the prior written approval of the director except 28 (A) to make deposits required by law in a state for the security 29 or benefit of all policyholders, or policyholders and creditors, of the United 30 States branch in the United States; 31 (B) to withdraw funds deposited in another state under (A) of
01 this paragraph if 02 (i) the written trust agreement requires prior written 03 approval of the insurance supervising official of that other state; 04 (ii) written notice of the nature and extent of the 05 withdrawal is provided to the director within 30 days of the withdrawal; 06 and 07 (iii) the total trusteed assets remaining are in excess of 08 the total assets required to be maintained in trust under (g) of this 09 section; 10 (C) upon the specific written direction of the United States 11 manager, who is duly authorized and is acting under either general or specific 12 written authority previously given or delegated by the board of directors, to 13 substitute other assets as permitted by this title if the substituted assets are of 14 at least equal value and quality to those withdrawn; 15 (D) to transfer assets to an official liquidator or rehabilitator 16 under an order of a court of competent jurisdiction; or 17 (E) if provided under the terms of the written trust agreement, 18 to pay over to the United States manager of the United States branch, upon 19 request, income, dividends, or interest accumulations of the assets of the trust 20 fund that are in excess of the total assets required to be maintained in trust 21 under (g) of this section. 22 (i) A written trust agreement and all amendments to it shall be authenticated 23 in a form and manner that the director may prescribe and may not take effect until 24 approved by the director. The director may not approve a trust agreement unless the 25 director makes a written finding that 26 (1) the written trust agreement or its amendments are sufficient in form 27 and in conformity with law; 28 (2) a person designated as a trustee is eligible to act in that capacity; 29 and 30 (3) the written trust agreement is adequate to protect the interests of the 31 beneficiaries of the trust.
01 (j) The director may approve written modifications of, or variations in, a 02 written trust agreement upon a finding that the proposed changes are not prejudicial 03 to the interests of the people of this state or the United States policyholders and 04 creditors of the United States branch. 05 (k) The director may conduct examinations of the trusteed assets of an 06 authorized United States branch at the insurer's expense and may require the trustee 07 or trustees to file a statement, in a form as prescribed by the director, certifying the 08 assets and amounts of the trust fund. 09 (l) The director, upon finding that the requisites for the approval of the trust 10 agreement no longer exist, may issue an order that withdraws approval of a written 11 trust agreement and amendments to it. An order issued under this subsection takes 12 effect 10 days after being issued. 13 (m) In addition to all other actions permitted under this title, refusal or neglect 14 of a trustee to comply with the requirements of this title is a cause for suspension or 15 revocation of the United States branch's certificate of authority or the liquidation of the 16 alien insurer's United States branch. 17 (n) Annual statements under AS 21.09.200 and quarterly statements under 18 AS 21.09.205 (1) may only relate to insurance transactions and affairs within the 19 United States, assets held by or for the United States branch for the protection of 20 policyholders and creditors within the United States, and liabilities incurred against 21 those assets; and (2) may not contain a statement in regard to assets and business 22 transacted in a place not described in this subsection. The annual and quarterly 23 statements shall be signed and verified by the United States manager, attorney-in-fact, 24 or a duly empowered assistant United States manager of the United States branch. 25 (o) In a form prescribed by the director, an authorized United States branch 26 shall file with its annual and quarterly statements a statement of trusteed surplus 27 covering the same time period. The trusteed surplus shall consist of the aggregate 28 value of the United States branch's general state deposits and assets deposited with a 29 trustee under this section, plus accrued interest income if the interest were collected 30 by the states for the trustees, less the aggregate net amount of all its reserves and other 31 liabilities in the United States as determined under this subsection. The items of
01 securities and other property held under trust deeds shall be certified by the United 02 States trustee. To determine the net amount of the United States branch's liabilities in 03 the United States to be reported in the statement of trusteed surplus, the United States 04 branch shall adjust its total liabilities reported on its accompanying annual or quarterly 05 statement as follows: 06 (1) by adding back liabilities used to offset admitted assets reported in 07 the accompanying annual or quarterly statement; and 08 (2) by deducting 09 (A) unearned premiums on agent's balances or uncollected 10 premiums not more than 90 days past due; 11 (B) reinsurance on losses with authorized insurers, less unpaid 12 reinsurance premiums; 13 (C) reinsurance recoverables on paid losses from unauthorized 14 insurers that are included as an asset in the annual statement, but only to the 15 extent a liability for unauthorized recoverables as described in this paragraph 16 are included in the liabilities report in the trusteed surplus statement; 17 (D) special state deposits held for the exclusive benefit of 18 policyholders, or policyholders and creditors, of a particular state not exceeding 19 net liabilities reported for that state; 20 (E) secured accrued retrospective premiums; 21 (F) if a life insurer, 22 (i) the amount of its policy loans to policyholders within 23 the United States, not exceeding the amount of legal reserve required 24 on an affected policy; and 25 (ii) the net amount of uncollected and deferred 26 premiums; and 27 (G) other nontrusteed assets, upon a written finding by the 28 director that the other nontrusteed assets secure liabilities in a substantially 29 similar manner to those permitted under this subsection. 30 (p) In addition to the annual and quarterly statements and the statements of 31 trusteed surplus, the director may require additional information relating to total
01 business or assets, or any portion of them, of the alien insurer or its United States 02 branch. 03 (q) In addition to the general statement of the financial condition of the United 04 States branch, a report of examination must include a trusteed surplus statement as of 05 the date of the examination. 06 (r) In this section, 07 (1) "trusteed assets" are the assets maintained in a trust account under 08 (g) of this section; 09 (2) "United States branch" means the business unit through which 10 business is transacted within the United States by an alien insurer and the assets and 11 liabilities of the insurer within the United States applicable to that business. 12 * Sec. 17. AS 21.12.020(a) is amended to read: 13 (a) Credit for reinsurance transactions shall be allowed a domestic ceding 14 insurer as either an asset or a deduction from liability on account of reinsurance ceded 15 only if the reinsurance is ceded to an 16 (1) assuming insurer that is licensed to transact insurance or reinsurance 17 in this state; 18 (2) assuming insurer that is accredited as a reinsurer in this state; an 19 accredited reinsurer is one that 20 (A) files evidence of submission [SUBMITS] to this state's 21 jurisdiction, submits to this state's authority to examine its books and records 22 under AS 21.06.120, is licensed to transact insurance or reinsurance in at least 23 one state that is accredited by the National Association of Insurance 24 Commissioners, or, in the case of a United States branch of an alien 25 admitted insurer, is entered through and licensed to transact insurance or 26 reinsurance in at least one state that is accredited by the National 27 Association of Insurance Commissioners; [AND FILES ANNUALLY WITH 28 THE DIRECTOR A COPY OF THE REINSURER'S ANNUAL STATEMENT 29 FILED WITH THE INSURANCE DEPARTMENT OF THE REINSURER'S 30 STATE OF DOMICILE AND A COPY OF THE REINSURER'S MOST 31 RECENT AUDITED FINANCIAL STATEMENT; OR]
01 (B) [IN THE CASE OF A UNITED STATES BRANCH OF 02 AN ALIEN ASSUMING INSURER, IS ENTERED THROUGH, AND 03 LICENSED TO TRANSACT INSURANCE OR REINSURANCE IN, AT 04 LEAST ONE STATE ACCREDITED BY THE NATIONAL ASSOCIATION 05 OF INSURANCE COMMISSIONERS, FILES ANNUALLY WITH THE 06 DIRECTOR A COPY OF ITS ANNUAL FINANCIAL STATEMENT THAT 07 IS FILED WITH THE INSURANCE REGULATORY AGENCY OF ITS 08 STATE OF DOMICILE, AND] maintains at least $20,000,000 in policyholder 09 surplus and whose accreditation has not been denied by the director within 10 90 days of application to the director, or maintains less than $20,000,000 11 in policyholder surplus and whose application for accreditation has been 12 approved by the director; and 13 (C) files annually with the director a copy of the reinsurer's 14 annual financial statement filed with the insurance department of the 15 reinsurer's state of domicile or state of entry and a copy of the reinsurer's 16 most recent audited financial statement [THE SURPLUS REQUIREMENTS 17 IN THIS SUBPARAGRAPH DO NOT APPLY TO REINSURANCE CEDED 18 AND ASSUMED UNDER A POOLING ARRANGEMENT AMONG 19 INSURERS IN THE SAME HOLDING COMPANY SYSTEM]; 20 (3) assuming insurer that is domiciled in a state, or in the case of a 21 United States branch of an alien assuming insurer, is entered through a state accredited 22 by the National Association of Insurance Commissioners that employs standards 23 regarding credit for reinsurance ceded substantially similar to those applicable under 24 (1) and (2) of this subsection, the assuming insurer maintains a policyholder surplus 25 of at least $20,000,000, and the assuming insurer submits to the authority of this state 26 to examine its books and records; the surplus requirements in this paragraph do not 27 apply to reinsurance ceded and assumed under a pooling arrangement among insurers 28 in the same holding company system; 29 (4) assuming alien insurer that 30 (A) maintains a trust fund in a qualified United States financial 31 institution for the payment of the valid claims of its United States policyholders
01 and ceding insurers, and their assigns and successors in interest, that conforms 02 to the following requirements: 03 (i) the trust shall be established in a form approved by 04 the director; the trust instrument must provide that contested claims are 05 valid and enforceable upon the final order of any court of competent 06 jurisdiction in the United States; the trust shall vest legal title to its 07 assets in the trustees of the trust for its United States policyholders and 08 ceding insurers, their assigns, and successors in interest; the trust and 09 the assuming insurer are subject to examination as determined by the 10 director; the trust must remain in effect for so long as the assuming 11 insurer has outstanding liabilities due under the reinsurance agreements 12 subject to the trust; 13 (ii) on or before March 1 of each year the trustees shall 14 report in writing to the director on the balance of the trust and list the 15 trust's investments at the end of the preceding year, and shall certify the 16 date of termination of the trust, if so planned, or certify that the trust 17 does not expire before the following December 31; 18 (iii) in the case of a single assuming insurer, the trust 19 shall consist of trust money representing the assuming insurer's 20 liabilities attributable to business written in the United States and, in 21 addition, include a trust surplus of not less than $20,000,000; the single 22 assuming insurer shall make available to the director an annual 23 certification of the insurer's solvency by the insurer's domiciliary 24 regulator and by an independent certified public accountant or an 25 accountant holding a substantially equivalent designation as 26 determined by the director; 27 (iv) in the case of a group, including incorporated and 28 [OF] individual unincorporated insurers, the trust shall consist of trust 29 money representing the group's liabilities attributable to business written 30 in the United States and, in addition, include a trust surplus not less 31 than $100,000,000; the incorporated members of the group may not
01 be engaged in any business other than underwriting as a member 02 of the group and are subject to the same level of solvency 03 regulation and control by the group's domiciliary regulator as are 04 the unincorporated members; the group shall make available to the 05 director an annual certification of the solvency of each insurer [OF 06 THE INDIVIDUAL UNINCORPORATED INSURERS] by the group's 07 domiciliary regulator and by an independent certified public accountant, 08 or an accountant holding a substantially equivalent designation as 09 determined by the director; 10 (v) in the case of a group of incorporated insurers under 11 common administration that complies with the reporting requirements 12 contained in (ii) of this subparagraph, that has continuously transacted 13 an insurance business outside the United States for at least three years 14 immediately before making application for accreditation, that submits 15 to this state's authority to examine its books and records and bears the 16 expense of the examination, and that has aggregate policyholders' 17 surplus of $10,000,000,000, the trust shall be in an amount equal to the 18 group's several liabilities attributable to business ceded by United States 19 ceding insurers to a member of the group under reinsurance contracts 20 issued in the name of the group, and the group shall maintain a joint 21 trustee surplus, of which $100,000,000 shall be held jointly for the 22 benefit of United States ceding insurers of a member of the group as 23 additional security for the group's liabilities, and each member of the 24 group shall make available to the director an annual certification of the 25 member's solvency by the member's domiciliary regulator and the 26 member's independent certified public accountant, or an accountant 27 holding a substantially equivalent designation as determined by the 28 director; and 29 (B) reports annually to the director information substantially the 30 same as that required to be reported on the National Association of Insurance 31 Commissioners' annual statement form by licensed insurers to enable the
01 director to determine the sufficiency of the trust fund; 02 (5) assuming insurer that does not meet the requirements of (1) - (4) 03 of this subsection, but only with respect to the insurance of risks located in 04 jurisdictions where the reinsurance is required by applicable law or regulation of that 05 jurisdiction. 06 * Sec. 18. AS 21.12.020(g) is amended to read: 07 (g) An [A LIFE] insurer may receive credit for reinsurance transactions if the 08 reinsurance agreement meets all applicable requirements established by the director. 09 * Sec. 19. AS 21.14.040 is amended to read: 10 Sec. 21.14.040. AUTHORIZED CONTROL LEVEL EVENT. If an authorized 11 control level event occurs, the director shall take the action necessary 12 (1) under AS 21.14.030(a) [AS 21.14.030(b)] against the insurer; or 13 (2) to place the insurer under regulatory control under AS 21.78 if, 14 after a hearing under AS 21.06.180 - 21.06.240, the director determines it to be in the 15 best interest of the policyholders and creditors of the insurer, and of the public. 16 * Sec. 20. AS 21.18.060(b) is amended to read: 17 (b) The director may require that the reserves be equal to the unearned 18 portions of the gross premiums in force after deducting applicable reinsurance in 19 solvent insurers as computed on each respective risk from the policy's date of issue. 20 [EXCEPT AS REQUIRED BY THE DIRECTOR UNDER THIS SUBSECTION, THE 21 PORTIONS OF THE GROSS PREMIUM IN FORCE, LESS APPLICABLE 22 REINSURANCE IN SOLVENT INSURERS, TO BE HELD AS AN UNEARNED 23 PREMIUM RESERVE SHALL BE COMPUTED ACCORDING TO THE 24 FOLLOWING TABLE: 25 TERM FOR WHICH POLICY RESERVE FOR UNEARNED 26 WAS WRITTEN PREMIUM 27 1 YEAR OR LESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1/2 28 2 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 3/4 29 2ND YEAR 1/4 30 3 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 5/6 31 2ND YEAR 1/2
01 3RD YEAR 1/6 02 4 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 7/8 03 2ND YEAR 5/8 04 3RD YEAR 3/8 05 4TH YEAR 1/8 06 5 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1ST YEAR 9/10 07 2ND YEAR 7/10 08 3RD YEAR 1/2 09 4TH YEAR 3/10 10 5TH YEAR 1/10 11 OVER 5 YEARS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PRO RATA.] 12 * Sec. 21. AS 21.18.060(c) is amended to read: 13 (c) An [IN LIEU OF COMPUTATION ACCORDING TO THE TABLE IN 14 (b) OF THIS SECTION, THE] insurer shall [AT ITS OPTION MAY] compute all of 15 the reserves on a monthly or more frequent pro rata basis. 16 * Sec. 22. AS 21.18.090 is amended to read: 17 Sec. 21.18.090. LOSS RESERVES, LIABILITY INSURANCE, AND 18 WORKERS' COMPENSATION. Where required in the form of annual statement 19 required of the insurer, the reserve for outstanding losses under insurance against loss 20 or damage from accident to or injuries suffered by an employee or other person and 21 for which the insured is liable shall be computed as follows: 22 (1) for all liability claims under policies written more than three 23 years before the end of the calendar year covered by the annual statement, the 24 reserve shall be the undiscounted value of the determined and the estimated 25 future payments [SUITS BEING DEFENDED UNDER POLICIES WRITTEN MORE 26 THAN 27 (A) 10 YEARS BEFORE THE DATE THE STATEMENT IS 28 MADE, $1,500 FOR EACH SUIT; 29 (B) FIVE OR MORE AND LESS THAN 10 YEARS BEFORE 30 THE STATEMENT IS MADE, $1,000 FOR EACH SUIT; 31 (C) THREE OR MORE AND LESS THAN FIVE YEARS
01 BEFORE THE STATEMENT IS MADE, $850 FOR EACH SUIT]; 02 (2) for all liability policies written during the three years immediately 03 preceding the date the statement is made, the reserve shall be the greater of 60 04 percent of the earned liability premiums of each of the three years less all losses and 05 expense payments made under liability policies written in the corresponding years or 06 the undiscounted value of the known and unknown claims; [BUT THE RESERVE, 07 FOR THE FIRST OF THE THREE YEARS, SHALL BE NOT LESS THAN $750 08 FOR EACH OUTSTANDING LIABILITY SUIT ON THE YEAR'S POLICIES]; 09 (3) for all workers' compensation claims under policies written more 10 than three years before the end of the calendar year covered by the annual 11 statement [IS MADE], the reserve may not [SHALL] be less than the present value 12 at four percent interest of the determined and the estimated future payments; 13 (4) for all workers' compensation claims under policies written in the 14 three years immediately preceding the end of the calendar year covered by [DATE] 15 the annual statement [IS MADE], the reserve may not [SHALL] be less than 65 16 percent of the earned workers' compensation premiums of each of the three years, less 17 all loss and loss expense payments made in connection with the claims under policies 18 written in the corresponding years; [BUT IN THE FIRST YEAR OF THE 19 THREE-YEAR PERIOD,] the reserve may not [SHALL] be [NOT] less than the 20 present value at four [4] percent interest of the determined and the estimated unpaid 21 compensation claims under policies written during the three-year period [YEAR]. 22 * Sec. 23. AS 21.18.110(a) is amended to read: 23 (a) The director shall annually value, or cause to be valued, the reserve 24 liabilities (hereinafter called reserves) for all outstanding life insurance policies and 25 annuity and pure endowment contracts of every life insurer doing business in this state, 26 and may certify the amount of the reserves, specifying the mortality table or tables, 27 rate or rates of interest, and methods (net level premium method or other) used in the 28 calculation of the reserves. In calculating the reserves, the director may use group 29 methods and approximate averages for fractions of a year or otherwise. For an alien 30 insurer, the valuation shall be limited to its insurance transactions in the United States. 31 For the purpose of making the valuation the director may employ a competent actuary
01 who shall be paid by the insurer for which the service is rendered [; BUT A 02 DOMESTIC INSURER MAY MAKE THE VALUATION AND IT MAY BE 03 RECEIVED BY THE DIRECTOR UPON SATISFACTORY PROOF OF ITS 04 CORRECTNESS]. For a foreign or alien insurer, the director may accept, in [IN] 05 lieu of the valuation of the reserves required of a foreign or alien insurer, [THE 06 DIRECTOR MAY ACCEPT] a valuation made, or caused to be made, by the 07 insurance supervisory official of a state or other jurisdiction if the valuation complies 08 with the minimum standard provided in this section and if the official of the state or 09 jurisdiction accepts as sufficient and valid for all legal purposes the certificate of 10 valuation of the director when the certificate states the valuation was made in a 11 specified manner in which the aggregate reserves would be at least as large as if they 12 had been computed in the manner prescribed by the law of that state or jurisdiction. 13 An insurer that at any time adopted a standard of valuation producing greater aggregate 14 reserves than those calculated according to the minimum standard provided in this 15 section may, with the approval of the director, adopt a lower standard of valuation, but 16 not lower than the minimum provided in this section. 17 * Sec. 24. AS 21.18.110(n) is amended to read: 18 (n) The actuarial opinion must 19 (1) be submitted with the annual statement reflecting the valuation of 20 the reserve liabilities; 21 (2) apply to all business in force, including individual and group health 22 insurance plans; 23 (3) be based on standards adopted by the Actuarial Standards Board; 24 and 25 (4) unless exempted by regulation, include an assessment as to 26 whether the reserves and related actuarial items held in support of the policies and 27 contracts, when considered in light of the assets held by an insurer with respect to the 28 reserves and related actuarial items, including investment earnings on the assets and 29 considerations anticipated to be received and retained under policies and contracts, 30 make adequate provision for an insurer's obligations under a policy or contract 31 including the benefits under and expenses associated with a policy or contract.
01 * Sec. 25. AS 21.18.110(q) is amended to read: 02 (q) A qualified actuary who submits an opinion under (m) of this section 03 (1) is not liable for damages to a person, other than the insurance 04 company and the director, for an act, error, omission, decision, or conduct with respect 05 to the actuary's opinion except in a case of fraud or wilful misconduct; 06 (2) is subject to disciplinary action by the director; and 07 (3) shall prepare [INCLUDE] a memorandum, in form and substance 08 acceptable to the director, to support the actuarial opinion. 09 * Sec. 26. AS 21.18.110(r) is amended to read: 10 (r) If the insurer fails to provide a supporting memorandum as requested by 11 the director [REQUIRED BY (q)(3) OF THIS SECTION] within a period specified 12 by regulation or the director determines that the supporting memorandum fails to meet 13 the standards adopted by regulation or is otherwise unacceptable to the director, the 14 director may engage a qualified actuary, at the expense of the insurer, to review the 15 opinion and the basis for the opinion and to prepare a supporting memorandum as 16 required under (q) of this section. 17 * Sec. 27. AS 21.21.230 is amended to read: 18 Sec. 21.21.230. SAVINGS AND LOAN. To the extent that the account is 19 insured by the Federal Deposit [SAVINGS AND LOAN] Insurance Corporation, an 20 insurer may invest in share or savings accounts of savings and loan and building and 21 loan associations. 22 * Sec. 28. AS 21.21.250(a) is amended to read: 23 (a) An insurer may make loans or investments not otherwise expressly 24 permitted under this chapter, in aggregate amount not over five percent of the insurer's 25 assets and not over one percent of the insurer's assets for [OF] any one loan or 26 investment, if the loan or investment fulfills the requirements of AS 21.21.030, and 27 otherwise qualifies as a sound investment. However, a loan or investment may not be 28 represented by 29 (1) an item described in AS 21.18.030, or a loan or investment 30 otherwise expressly prohibited; 31 (2) agents' balances, or amounts advanced to or owing by agents or
01 former agents of the insurer, whether or not secured; except policy loans, mortgage 02 loans, and collateral loans otherwise authorized under this chapter; 03 (3) a category of loans or investments eligible under other provisions 04 of this chapter; or 05 (4) an asset theretofore acquired or held by the insurer under any other 06 category of loans or investments eligible under this chapter. 07 * Sec. 29. AS 21.21.370(a) is amended to read: 08 (a) A domestic insurer may [NOT] acquire, directly or indirectly, a medium 09 grade or lower grade obligation of an institution if, after giving effect to the 10 acquisition, 11 (1) the aggregate amount of all medium grade and lower grade 12 obligations held by the domestic insurer does not exceed [EXCEEDS] 20 percent of 13 its admitted assets and if not more than 14 (A) 10 percent of its admitted assets consist of obligations rated 15 four, five, or six by the securities valuation office; 16 (B) three percent of its admitted assets consist of obligations 17 rated five or six by the securities valuation office; and 18 (C) one percent of its admitted assets consist of obligations 19 rated six by the securities valuation office; and [OR] 20 (2) the aggregate amount of all medium grade and [OR] lower grade 21 obligations held by the domestic insurer does not exceed [EXCEEDS] 30 percent of 22 its policyholders' surplus account as shown by the insurer's most recent report filed 23 under AS 21.06.150, AS 21.09.200, or 21.09.205. 24 * Sec. 30. AS 21.22.010(g) is amended to read: 25 (g) The provisions of this section do not apply to 26 (1) an offer of, request for, invitation for, or agreement regarding [, 27 OR] acquisition of a voting security that, immediately before the consummation of the 28 offer, request, invitation, agreement, or acquisition, was not issued and outstanding; or 29 (2) an offer, request, invitation, agreement, or acquisition that the 30 director by order may exempt as not having been made or entered into for the purpose 31 and not having the effect of changing or influencing the control of the domestic
01 insurer. 02 * Sec. 31. AS 21.22.030 is amended by adding a new subsection to read: 03 (d) The director may retain at the acquiring person's expense an attorney, 04 actuary, accountant, or other expert not otherwise a part of the director's staff, if 05 reasonably necessary to assist the director in reviewing the proposed acquisition of 06 control. 07 * Sec. 32. AS 21.22.060(b) is amended to read: 08 (b) Every insurer subject to registration shall file a registration statement on 09 a form provided by the director, that must contain current information about 10 (1) the capital structure, general financial condition, ownership, and 11 management of the insurer and any person controlling the insurer; 12 (2) the identity of every member of the insurance holding company 13 system; 14 (3) the following agreements in force, relationships subsisting, and 15 transactions currently outstanding between the insurer and its affiliates: 16 (A) loans, other investments, or purchases, sales, or exchanges 17 of securities of the affiliates by the insurer or of the insurer by its affiliates; 18 (B) purchases, sales, or exchanges of assets; 19 (C) transactions not in the ordinary course of business; 20 (D) guarantees or undertakings for the benefit of an affiliate that 21 result in an actual contingent exposure of the insurer's assets to liability, other 22 than insurance contracts entered into in the ordinary course of the insurer's 23 business; 24 (E) all management and service contracts and all cost-sharing 25 arrangements [, OTHER THAN COST ALLOCATION ARRANGEMENTS 26 BASED UPON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES]; 27 and 28 (F) reinsurance agreements [COVERING ALL OR 29 SUBSTANTIALLY ALL OF ONE OR MORE LINES OF INSURANCE OF 30 THE CEDING COMPANY]; and 31 (4) other matters concerning transactions between registered insurers
01 and any affiliates that may be included from time to time in a registration form 02 adopted or approved by the director. 03 * Sec. 33. AS 21.22.060(c) is amended to read: 04 (c) The director may permit an authorized insurer that is a member of a 05 holding company system subject to registration under the laws or regulations of its 06 state of domicile that are in the opinion of the director substantially similar to those 07 contained in this chapter to satisfy the requirements of (a) of this section by filing a 08 statement in accordance with the laws of its state of domicile [EXCEPT THAT THE 09 DIRECTOR MAY AT ANY TIME REQUIRE A COPY OF THAT STATEMENT BE 10 FILED WITH THE DIRECTOR]. 11 * Sec. 34. AS 21.22.060(d) is amended to read: 12 (d) Information [NO INFORMATION] need not be disclosed on the 13 registration statement filed under (b) of this section if that information is not material 14 for the purposes of this section. Unless the director by regulation or order provides 15 otherwise, sales, purchases, exchanges, loans or extensions of credit, [OR] investments, 16 or the aggregate of a series of related transactions, involving one-half of one 17 percent or less of an insurer's admitted assets or five percent or less of the 18 policyholder's surplus as of the 31st day of December of the calendar year in which 19 the transaction took place are not considered material for purposes of this section. 20 * Sec. 35. AS 21.22.060(k) is amended to read: 21 (k) An insurer subject to registration under (a) of this section shall register 22 annually by April 1 of each year for the previous calendar year unless, for good cause 23 shown, the director extends the time for registration. The director may require an 24 insurer [AUTHORIZED TO DO BUSINESS IN THE STATE, THAT IS A MEMBER 25 OF A HOLDING COMPANY SYSTEM AND] that is allowed to register as 26 provided [NOT SUBJECT TO REGISTRATION] under (c) [(a)] of this section, to 27 furnish a copy of 28 (1) the registration statement; 29 (2) [,] the summary specified in (l) of this section; [,] or 30 (3) other information filed by the insurer with the insurance regulatory 31 authority of the insurer's state of domicile.
01 * Sec. 36. AS 21.27.010(a) is amended to read: 02 (a) Except as provided otherwise in this chapter, a [A] person may not act 03 as or represent to be an insurance producer, managing general agent, reinsurance 04 intermediary broker, reinsurance intermediary manager, surplus lines broker, or 05 independent adjuster in this state or relative to a subject resident, located, or to be 06 performed in this state unless licensed under this chapter. A person may not act as or 07 represent to be a managing general agent, reinsurance intermediary broker, or 08 reinsurance intermediary manager representing an insurer domiciled in this state 09 regarding a risk located outside this state unless licensed by this state. 10 * Sec. 37. AS 21.27.020 is amended by adding new subsections to read: 11 (f) The director may adopt regulations establishing additional education or 12 experience requirements for applicants or licensees under this chapter upon due 13 consideration of the availability and accessibility of education and training 14 opportunities in rural areas of the state. Regulations adopted under this subsection are 15 subject to the following provisions: 16 (1) additional educational or experience requirements may not apply to 17 a licensee who has been licensed by the division of insurance before January 1, 1980; 18 (2) a licensee shall complete at least 24 credit hours of approved 19 continuing education courses during each two-year license period; 20 (3) if a licensee has accumulated more credit hours than required under 21 (2) of this subsection by the end of the license period, a maximum of eight hours may 22 be carried over to meet the requirements of (2) of this subsection in the next license 23 period; 24 (4) a program or seminar may not be approved as an acceptable 25 continuing education program unless it is a formal program of learning that contributes 26 to the professional competence of the licensee; individual study programs or 27 correspondence courses may be used to fulfill continuing education requirements if 28 approved by the director; 29 (5) a nonresident licensee is exempt from the requirements of this 30 subsection if the licensee submits evidence satisfactory to the director that the licensee 31 has satisfied any continuing education requirements of the licensee's domiciliary state.
01 (g) The director shall establish a continuing education advisory committee. 02 The committee consists of one representative from the division of insurance, one life 03 and disability insurance representative, one limited lines insurance representative, one 04 property and casualty insurance representative, and one independent insurance adjuster 05 representative. Each committee representative from the insurance industry must 06 possess a valid, current insurance license issued in this state for the field to be 07 represented. 08 (h) The director may make arrangements, including contracting with an outside 09 agency, for administrative services. 10 * Sec. 38. AS 21.27.025(a) is amended to read: 11 (a) A licensee shall notify the director within 30 days in writing by certified 12 mail of a change in residence, employment that is licensed under this chapter, place 13 of business, legal name, fictitious name or alias, mailing address, or phone number; 14 a suspension, [OR] revocation, or disciplinary action of a license by another state or 15 jurisdiction; or a conviction of a misdemeanor or felony. 16 * Sec. 39. AS 21.27.060(d) is amended to read: 17 (d) This section does not apply to an applicant 18 (1) for a limited license under AS 21.27.150(1), (2), or (6); 19 (2) who, at any time within the two-year period immediately preceding 20 the date the current pending application is received by the division, had been licensed 21 in good standing in this state under a license requiring substantially similar 22 qualifications as required by the license applied for; or 23 (3) whose license in its [THE] resident jurisdiction requires the same 24 qualifications as the license applied for in this state if the license in all jurisdictions 25 is in good standing [AND ITS RESIDENT JURISDICTION IS ACCREDITED BY 26 THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS]. 27 * Sec. 40. AS 21.27.100 is amended by adding a new subsection to read: 28 (e) An individual in a firm who acts solely on behalf of a firm that is 29 appointed as an agent on behalf of an admitted insurer under this section, may not be 30 required to also have an appointment if the individual in the firm is licensed with that 31 firm.
01 * Sec. 41. AS 21.27.130 is amended to read: 02 Sec. 21.27.130. FORM AND CONTENT OF LICENSES. A license shall be 03 in the form the director prescribes and must set out 04 (1) the name and [MAILING] address of the licensee, and, if the 05 licensee is required to have a place of business, the physical address of the place of 06 business; 07 (2) if for a firm, the name of the principal or manager of the firm; 08 (3) the kind or class of insurance the licensee is licensed to handle; 09 (4) the effective date and expiration date of the license; 10 (5) the condition under which the license is granted; 11 (6) the date of issuance of the license; 12 (7) each fictitious name and alias under which the licensee may do 13 business; and 14 (8) other information required by the director. 15 * Sec. 42. AS 21.27.360(b) is amended to read: 16 (b) All money, except that made payable to the insurer, representing premium 17 taxes and fees, premiums or return premiums received by the licensee, shall be 18 received in the fiduciary account of the licensee and shall be promptly accounted for 19 and paid to the person entitled to the money. The fiduciary account shall be located 20 in this state unless the licensee is licensed as a nonresident under AS 21.27.270. 21 For purposes of this section, the fiduciary account of the firm shall be considered the 22 fiduciary account of an individual licensee acting on behalf of the firm and shall be 23 the responsibility of the firm. Money deposited into a fiduciary account may not be 24 commingled or otherwise combined with other money, except as allowed under (d) of 25 this section and AS 21.27.365. 26 * Sec. 43. AS 21.27.380(a) is amended to read: 27 (a) Except as provided in this title, the director may renew a license biennially 28 on a date set by the director if the licensee continues to be qualified under this chapter 29 and on or before the close of business of the renewal date, meets all renewal 30 requirements established by regulation and pays the [IF] renewal license fees set 31 under AS 21.06.250 for each license to [ARE RECEIVED BY] the director [ON OR
01 BEFORE THE CLOSE OF BUSINESS OF THE RENEWAL DATE]. A licensee is 02 responsible for knowing the date that a license lapses and for renewing a license before 03 expiration. The director shall mail a renewal notice to the licensee's current address 04 on file with the director 30 days before the renewal date. 05 * Sec. 44. AS 21.27.420 is amended by adding a new subsection to read: 06 (c) With the consent of an applicant or licensee, the director may issue or 07 renew a license with restrictions upon the scope of the person's license or may 08 otherwise restrict or condition the activities of the licensee if the director determines 09 that the person has violated the provisions of this title or to protect the public from 10 injury or potential injury. 11 * Sec. 45. AS 21.27.530 is amended to read: 12 Sec. 21.27.530. INSURANCE PRODUCER QUALIFICATIONS. In addition 13 to the general qualifications under AS 21.27.020, to qualify for issuance or renewal of 14 an insurance producer license, an applicant or licensee 15 (1) must possess the competence necessary to fulfill the responsibilities 16 of an insurance producer; 17 (2) if previously licensed in good standing in this state as an insurance 18 producer, must not have had a license suspended or revoked within the previous four 19 calendar years; 20 (3) for a fraternal society limited insurance producer license, shall file 21 with the application a statement by an officer or director of the appointing fraternal 22 society that affirms that the society has satisfied itself that the applicant is trustworthy 23 and competent to act as its insurance agent; 24 (4) for a license with a scope that includes variable contracts, must 25 either be currently registered with the federal Securities and Exchange Commission as 26 a broker-dealer or personally take and pass, to the satisfaction of the director, tests of 27 the knowledge and competence of the applicant concerning securities; and 28 (5) except for an applicant or licensee who represents to be and acts 29 solely on behalf of admitted insurers as an agent and who does not receive money 30 required to be received in the fiduciary account of the licensee, shall file with the 31 application and maintain in force while licensed a bond in the amount of $10,000,
01 unless a greater amount is required by another provision of this title; a licensee who 02 maintains more than one place of business may satisfy the bond requirement with 03 a single bond. 04 * Sec. 46. AS 21.27.570(a)(3)(B) is amended to read: 05 (B) the controlling insurance producer shall render accounts to 06 the controlled insurer detailing all transactions, including information in the 07 accounts necessary to support compensation, commissions, charges, and other 08 fees received by, or owing to, the controlling producer; 09 * Sec. 47. AS 21.27.620(j) is amended to read: 10 (j) If the director determines after a hearing under AS 21.06.170 - 21.06.240 11 that a managing general agent caused loss or damage arising out of a violation of 12 AS 21.27.590 - 21.27.630 to an insurer, the director may order the managing general 13 agent to make restitution to the insurer, receiver, [THE] rehabilitator, or [THE] 14 liquidator of the insurer for the loss. Restitution ordered under this subsection is in 15 addition to any other liability of the managing general agent and does not affect the 16 rights of a policy holder, claimant, creditor, or third party. The director may, at the 17 request of the insurer, maintain or bring a civil action brought by or on behalf 18 of the insurer and its policyholders and creditors for recovery of compensatory 19 damages for the benefit of the insurer and its policyholders and creditors or seek 20 other appropriate relief. If an order of rehabilitation or liquidation of the insurer 21 has been entered under AS 21.78, the receiver appointed under the order 22 determines that a person has not materially complied with AS 21.27.590 - 23 21.27.630 or an order of the director, and the insurer suffers loss or damage from 24 the noncompliance, the receiver may bring a civil action for the recovery of 25 damages or other appropriate sanctions for the benefit of the insurer. 26 * Sec. 48. AS 21.27.690(b) is amended to read: 27 (b) An [A DOMESTIC] insurer may use a nonresident reinsurance 28 intermediary broker who is not licensed under this chapter if the person is licensed in 29 good standing as a resident reinsurance intermediary broker by an insurance regulator 30 of another state that is accredited by the National Association of Insurance 31 Commissioners. Upon written request, the director may grant written permission for
01 a domestic insurer to use an alien reinsurance intermediary broker not licensed by and 02 without a place of business in a jurisdiction subject to accreditation by the National 03 Association of Insurance Commissioners if the alien reinsurance intermediary broker 04 is licensed in good standing by its domiciliary insurance regulator. The domestic 05 insurer and unlicensed reinsurance intermediary broker are subject to all other 06 requirements of this section. 07 * Sec. 49. AS 21.27.690(e) is amended to read: 08 (e) If the director determines after a hearing under AS 21.06.170 - 21.06.240 09 that a reinsurance intermediary broker caused losses or damage arising out of a 10 violation of AS 21.27.670 - 21.27.700 to an insurer or reinsurer, the director may order 11 the reinsurance intermediary broker to make restitution to the insurer, reinsurer, 12 receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses 13 incurred by the insurer or reinsurer. Restitution ordered under this subsection is in 14 addition to any other liability of the reinsurance intermediary broker and does not 15 affect the rights of a policyholder, claimant, creditor, or third party. The director 16 may, at the request of the insurer, maintain or bring a civil action brought by or 17 on behalf of the reinsurer or insurer and its policyholders and creditors for 18 recovery of compensatory damages for the benefit of the reinsurer or insurer and 19 its policyholders and creditors or seek other appropriate relief. If an order of 20 rehabilitation or liquidation of the insurer has been entered under AS 21.78, the 21 receiver appointed under the order determines that a person has not materially 22 complied with AS 21.27.670 - 21.27.700 or an order of the director, and the 23 insurer suffers loss or damage from the noncompliance, the receiver may bring 24 a civil action for the recovery of damages or other appropriate sanctions for the 25 benefit of the insurer. 26 * Sec. 50. AS 21.27.760(j) is amended to read: 27 (j) If the director determines after a hearing under AS 21.06.170 - 21.06.240 28 that a reinsurance intermediary manager caused losses or damage arising out of a 29 violation of AS 21.27.730 - 21.27.770 to an insurer or reinsurer, the director may order 30 the reinsurance intermediary manager to make restitution to the insurer, reinsurer, 31 receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses
01 incurred by the insurer or reinsurer. Restitution ordered under this subsection is in 02 addition to any other liability of the reinsurance intermediary manager and does not 03 affect the rights of a policyholder, claimant, creditor, or third party. The director 04 may, at the request of the insurer, maintain or bring a civil action brought by or 05 on behalf of the reinsurer or insurer and its policyholders and creditors for 06 recovery of compensatory damages for the benefit of the reinsurer or insurer and 07 its policyholders and creditors or seek other appropriate relief. If an order of 08 rehabilitation or liquidation of the insurer has been entered under AS 21.78, the 09 receiver appointed under the order determines that a person has not materially 10 complied with AS 21.27.730 - 21.27.770 or an order of the director, and the 11 insurer suffers loss or damage from the noncompliance, the receiver may bring 12 a civil action for the recovery of damages or other appropriate sanctions for the 13 benefit of the insurer. 14 * Sec. 51. AS 21.34.040(c)(4) is amended to read: 15 (4) a Lloyd's or other similar group including incorporated and 16 individual unincorporated underwriters, [GROUP OF ALIEN INDIVIDUAL 17 INSURERS] may qualify if it maintains a trust fund in an amount not less than 18 $50,000,000, as security to the full amount, for the protection of all its policy holders 19 and creditors of each member of the group in the United States; the incorporated 20 members may not be engaged in any business other than underwriting as a 21 member of the group and shall be subject to the same level of solvency regulation 22 and control by the group's domiciliary regulator as are the unincorporated 23 members; the trust fund must consist of instruments of substantially the same 24 character and quality as those that are eligible investments for the capital and statutory 25 reserves of admitted insurers authorized to write like kinds of insurance in this state 26 or of irrevocable, clean, and unconditional letters of credit; the trust fund must have 27 an expiration date that at no time is less than five years; 28 * Sec. 52. AS 21.34.080(c) is amended to read: 29 (c) A producing broker shall execute and deliver to the surplus lines broker not 30 later than the end of each month on a form prescribed by the director, and a surplus 31 lines broker shall file with the director with the report required by (a) of this section
01 or with the surplus lines association with the evidence of insurance required by (b) of 02 this section, for surplus lines insurance first placed or renewed in the preceding 03 calendar month, an affidavit that shall be open to public inspection, as to the diligent 04 efforts to place the coverage with admitted insurers, and the results of those efforts. 05 The affidavit must contain a statement by the producing broker that the insured was 06 expressly informed in writing before the [PLACEMENT OF THE SURPLUS LINES] 07 insurance contract or coverage was bound that the surplus lines insurer with whom 08 the insurance was to be placed is not licensed in this state, is not subject to this state's 09 supervision, and, in the event of the insolvency of the surplus lines insurer, losses will 10 not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act). 11 * Sec. 53. AS 21.34.110 is amended to read: 12 Sec. 21.34.110. SURPLUS LINES BROKER'S DUTY TO NOTIFY 13 INSURED. (a) A contract of insurance placed by a surplus lines broker under this 14 chapter is not binding upon the insured and a premium charged is not due and payable 15 until 16 (1) the surplus lines broker has notified the insured in writing, a copy 17 of which shall be maintained by the licensee with the records of the contract, available 18 for examination, that the insurer with which the surplus lines broker places the 19 insurance does not hold a certificate of authority issued by this state and is not subject 20 to its supervision, and in the event of the insolvency of the surplus lines insurer, losses 21 will not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act); or 22 (2) the surplus lines broker has obtained the affidavit of the 23 producing broker that the notice required under AS 21.34.080(c) has been given 24 to the insured; a licensee shall maintain a copy of the affidavit with the record of 25 the contract available for examination. 26 (b) Nothing in this section may be construed as nullifying [SHALL 27 NULLIFY] an agreement by an insurer to provide insurance. 28 * Sec. 54. AS 21.34.190(a) is amended to read: 29 (a) The fee for filing the statement under AS 21.34.180(b) is an amount equal 30 to one percent on gross premium charged less any return premiums during the 31 preceding calendar year [QUARTER]. The surplus lines broker shall pay the fee at
01 the time of filing of the statement. 02 * Sec. 55. AS 21.36.120(d) is amended to read: 03 (d) Nothing in this section may be construed as prohibiting the payment of 04 commissions or other compensation to persons duly transacting business under 05 AS 21.27 [LICENSED AGENTS OR SOLICITORS], or as prohibiting an insurer from 06 allowing or returning to its participating policyholders, members, or subscribers, lawful 07 dividends, savings, or unabsorbed premium deposits. 08 * Sec. 56. AS 21.36.160 is amended to read: 09 Sec. 21.36.160. RIGHT OF DEBTOR OR BORROWER TO SELECT 10 INSURANCE PRODUCER [AGENT, BROKER,] AND INSURER. If property 11 insurance is required in connection with a debt or loan, the debtor or borrower has the 12 reasonable right to select the insurance producer [AGENT, BROKER,] and insurer 13 through whom the insurance is to be placed if (1) the insurance is provided for the 14 protection of the creditor's or lender's interest in the property at the commencement of 15 the risk; or (2) in the case of renewal of insurance, the renewal policy is delivered to 16 the creditor or lender no later than 30 days before the renewal date. 17 * Sec. 57. AS 21.36.195 is amended to read: 18 Sec. 21.36.195. SURPLUS LINES BROKERS AND INSURANCE 19 PRODUCERS; PROHIBITED ACTS. A surplus lines broker or an insurance 20 producer may not fail to provide evidence [THE EVIDENCES] of insurance, 21 affidavits, filings, or reports, or fail to maintain the records, or fail to pay the taxes and 22 fees, required under AS 21.34. 23 * Sec. 58. AS 21.36.235(a) is amended to read: 24 (a) Except as provided in AS 21.36.305 [AS 21.36.420], if the renewal 25 premium is increased more than 10 percent for a reason other than an increase in 26 coverage or exposure base, or if after renewal there will be a material restriction or 27 reduction in coverage not specifically requested by the insured, written notice shall be 28 mailed to the insured and to the agent or broker of record as required by AS 21.36.260 29 (1) at least 20 days before expiration of a personal insurance policy; 30 or 31 (2) at least 45 days before expiration of a business or commercial
01 policy. 02 * Sec. 59. AS 21.36.290 is amended to read: 03 Sec. 21.36.290. POLICY PERIOD. Except as described in (b) of this 04 section, a [A] policy with a policy period or term of less than 12 months shall, for the 05 purposes of AS 21.36.210 - 21.36.310, be considered to be written for a policy period 06 or term of 12 months except in case of cancellation under any of the circumstances 07 specified in AS 21.36.210, and a policy written for a term longer than one year or a 08 policy with no fixed expiration date shall be considered to be written for successive 09 policy periods or terms of one year and termination by an insurer effective on an 10 anniversary date of the policy shall be considered a failure to renew. 11 * Sec. 60. AS 21.36.290 is amended by adding a new subsection to read: 12 (b) For determining the appropriate rate or premium, a personal automobile 13 insurance policy with a policy period or term of less than six months shall, for the 14 purposes of AS 21.36.210 - 21.36.310, be considered to be written for a policy period 15 or term of six months. 16 * Sec. 61. AS 21.36 is amended by adding a new section to read: 17 Sec. 21.36.305. PREMIUM INCREASES ON PERSONAL AUTOMOBILE 18 INSURANCE POLICIES. (a) An insurer may not increase the premium on a personal 19 automobile insurance policy unless the increase applies to all insureds of the same 20 class. 21 (b) An insurer may not increase the premium or add a surcharge to a personal 22 automobile insurance policy because of the issuance of a citation for a moving traffic 23 violation unless the insured or another person who resides in the insured's household 24 and is covered by the policy has been convicted of the violation or has entered a plea 25 of no contest to the violation. 26 (c) The director shall adopt regulations to determine circumstances under 27 which an insurer may increase the premium or add a surcharge to a personal 28 automobile insurance policy. 29 (d) An insurer that increases the premium or adds a surcharge to a personal 30 automobile insurance policy may only make the increase or surcharge effective on the 31 renewal date of the policy.
01 (e) An insurer that increases the premium or adds a surcharge to a personal 02 automobile insurance policy shall give written notice of the increase or surcharge at 03 least 20 days before it takes effect, stating the reason for the change and the right of 04 appeal under AS 21.39.090. This subsection does not apply to 05 (1) premium increase resulting from a change requested by an insured, 06 if the insured is notified at the time the request is made that the amount of the 07 insured's premium will change as a result of the requested policy change; or 08 (2) rate approved by the director if the insurer gives written notice of 09 a premium increase to the insured at least 20 days before the renewal date of the 10 affected policy. 11 * Sec. 62. AS 21.36.360(i) is amended to read: 12 (i) A criminal insurance act is committed by a person [AN INSURER] doing 13 business in this state or relative to a subject resident, located, or to be performed 14 in this state who knowingly 15 (1) writes, places, or causes to be written or placed in this state or 16 relative to a subject resident, located, or to be performed in this state a policy, 17 duplicate policy, or contract of insurance of any kind or character, or general or 18 floating policy upon persons or property resident, situated, or located in this state, from 19 or through a person not authorized to transact business under AS 21.27 or a risk 20 retention group or purchasing group not registered under AS 21.89.070 21 [BROKER, AGENT, SURPLUS LINE BROKER, OR PERSON WHO HAS NOT 22 SECURED A GENERAL AGENT LICENSE IN THIS STATE]; or 23 (2) pays a commission or other form of remuneration to a person, firm, 24 or organization for the writing or placing of insurance coverage in this state or relative 25 to a subject resident, located, or to be performed in this state unless that person, 26 firm, or organization is authorized under AS 21.27 to transact [HOLDS A LICENSE 27 ISSUED BY THE DIRECTOR FOR] the kind or class of insurance written or placed, 28 or, in the case of a risk retention group or purchasing group, is registered under 29 AS 21.89.070. 30 * Sec. 63. AS 21.36.360(j) is amended to read: 31 (j) A criminal insurance act is committed by a person in this state or relative
01 to a subject resident, located, or to be performed in this state who acts as an 02 insurance producer, managing general agent, third-party administrator, 03 reinsurance intermediary broker, reinsurance intermediary manager, surplus lines 04 broker [SOLICITOR], or independent adjuster without being licensed by the director 05 as required under this title or as a risk retention group or purchasing group 06 without being registered as required under AS 21.89.070. A criminal insurance act 07 is committed by an insurance producer, managing general agent, third-party 08 administrator, reinsurance intermediary broker, reinsurance intermediary 09 manager, or surplus lines broker [OR SOLICITOR] who solicits or takes application 10 for, procures, or places for others any insurance for which the person is not licensed 11 as required under AS 21.27 or for which the license of the person has been 12 suspended or revoked. A criminal insurance act is committed by a person in this 13 state or relative to a subject resident, located, or to be performed in this state who 14 acts as or on behalf of a risk retention group or a purchasing group that is not 15 registered under AS 21.89.070 [THIS SUBSECTION DOES NOT APPLY TO A 16 PERSON DESCRIBED IN AS 21.90.910 OR TO A PERSON SECURING AND 17 FORWARDING INFORMATION REQUIRED FOR THE PURPOSE OF A GROUP 18 INSURANCE COVERING THE UNPAID BALANCE OR REMAINING PAYMENTS 19 PROPOSED TO BE MADE IN CONNECTION WITH THE PURCHASE OF 20 MERCHANDISE OR SERVICES IF NO COMMISSION OR OTHER 21 COMPENSATION IS PAYABLE ON ACCOUNT OF THE INSURANCE TO THE 22 PERSON]. 23 * Sec. 64. AS 21.36.360(k) is amended to read: 24 (k) A criminal insurance act is committed by an insurance producer, 25 managing general agent, [GENERAL AGENT,] third-party administrator, 26 reinsurance intermediary broker, reinsurance intermediary manager, or surplus 27 lines broker [OR SOLICITOR] who knowingly compensates or offers to compensate 28 in any manner a person other than an insurance producer, managing [AGENT,] 29 general agent, third-party administrator, reinsurance intermediary broker, 30 reinsurance intermediary manager, or surplus lines broker [OR SOLICITOR] 31 licensed as required under this title in this or another jurisdiction [STATE OR
01 PROVINCE], for procuring or in any manner helping to procure applications for or to 02 place insurance in this state. A criminal insurance act is committed by a person in 03 this state or relative to a subject resident, located, or to be performed in this state 04 who acts as or on behalf of a risk retention group or a purchasing group that is 05 not registered under AS 21.89.070. This subsection does not apply to the payment 06 of compensation that is not contingent upon volume of business transacted in the form 07 of salaries to the regular employees of the insurance producer, managing general 08 agent, third-party administrator, reinsurance intermediary [GENERAL AGENT,] 09 broker, reinsurance intermediary manager, or surplus lines broker [OR 10 SOLICITOR]. 11 * Sec. 65. AS 21.36.360(n) is amended to read: 12 (n) A criminal insurance act is committed by an agent, managing general 13 agent, third-party administrator, reinsurance intermediary broker, reinsurance 14 intermediary manager, or other representative of an insurer involved in the procuring 15 or issuance of an insurance contract who intentionally fails to report to the insurer the 16 exact amount of consideration charged as premium for the contract and to maintain 17 records showing that information. 18 * Sec. 66. AS 21.36.360(p) is amended to read: 19 (p) A fraudulent insurance act is committed by a person who 20 (1) violates a provision of this title or a regulation issued under it; 21 (2) falsely makes, completes, or alters a certificate of insurance or 22 other document relating to insurance; 23 (3) knowingly possesses a forged certificate of insurance or other 24 document relating to insurance; or 25 (4) knowingly issues a forged certificate of insurance or other 26 document relating to insurance. 27 * Sec. 67. AS 21.36.360(q) is amended to read: 28 (q) A fraudulent or criminal insurance act described in 29 (1) (b) of this section that is committed to obtain $10,000 or more is 30 a class B felony; 31 (2) (c) or (d) of this section is a class B felony;
01 (3) (b) of this section that is committed to obtain $500 or more but less 02 than $10,000 is a class C felony; 03 (4) (e), (f), (g), or (h), of this section is a class C felony; 04 (5) (b) of this section that is committed to obtain less than $500 is a 05 class A misdemeanor; 06 (6) (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor; 07 (7) (o) of this section is a class B misdemeanor; [AND] 08 (8) (p)(1) [(p)] of this section is a class B misdemeanor unless another 09 specific penalty is provided for the violation of the provision; and 10 (9) (p)(2) - (4) of this section may be prosecuted under AS 11.46. 11 * Sec. 68. AS 21.36.380 is amended to read: 12 Sec. 21.36.380. NOTICE ON CLAIM FORM. A claim form must contain a 13 statement that states in substance the following: "A person who knowingly and with 14 intent to injure, defraud, or deceive an insurance company files a claim containing 15 false, incomplete, or misleading information may be prosecuted under state law [IS 16 GUILTY OF A FELONY]." A lack of the statement on a claim form does not 17 constitute a defense to prosecution under this title. 18 * Sec. 69. AS 21.39.040 is amended by adding new subsections to read: 19 (j) An insurer who has submitted an application for a certificate of authority 20 under AS 21.09.110 and a filing of policy forms under AS 21.42.120 may file a 21 proposed rating system as described in this section. The director's approval of the 22 rating system is contingent upon the issuance of a certificate of authority under 23 AS 21.09.120. 24 (k) The director may adopt regulations detailing the format and content of a 25 rating system filing under this section. 26 * Sec. 70. AS 21.39 is amended by adding a new section to read: 27 Sec. 21.39.055. CANCELLATION OF APPROVED FILING. The voluntary 28 surrender of a certificate of authority or the failure of the surrendering admitted foreign 29 insurer to continue a certificate of authority in force has the effect of cancelling an 30 approval that the insurer may have received under this chapter, unless the approval has 31 been affirmed by the director at the time of the surrender or noncontinuation of the
01 certificate of authority. 02 * Sec. 71. AS 21.39.155(a) is amended to read: 03 (a) The director may require insurers [CARRIERS], except a reciprocal 04 insurer formed by and insuring only a group of municipalities or nonprofit public 05 utilities under AS 21.75 or a reciprocal insurer formed under AS 21.75 to provide 06 marine insurance, [OR A JOINT INSURANCE ARRANGEMENT FORMED UNDER 07 AS 21.76,] as a condition of writing a line of insurance dealing with medical 08 malpractice or workers' compensation, to participate in an assigned risk pool if the 09 director finds that mandatory carrier participation is in the public interest. 10 * Sec. 72. AS 21.42.120 is amended by adding new subsections to read: 11 (f) This section does not apply to a type of insurance subject to AS 21.57. 12 (g) An insurer who has submitted an application for a certificate of authority 13 under AS 21.09.110 may file a proposed policy form as described in this section. The 14 director's approval of the policy form is contingent upon the issuance of a certificate 15 of authority under AS 21.09.120. 16 (h) The director may adopt regulations detailing the format and content of the 17 filing of a policy form under this section. 18 * Sec. 73. AS 21.42.345 is amended by adding a new subsection to read: 19 (b) An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, 20 or renew an individual or group disability insurance policy for medical coverage on 21 an expense incurred basis in the state, a hospital or medical service corporation 22 authorized under AS 21.87 to offer or renew an individual or group subscriber's 23 contract for medical coverage in the state, or a health maintenance organization 24 authorized under AS 21.86 to offer an enrollee contract to provide health care services 25 on a prepaid basis shall offer coverage for family members, including newly born 26 children, adopted children, or children placed for adoption and is subject to the 27 conditions in (a) of this section, regardless of the marital status of the covered person. 28 * Sec. 74. AS 21.42.353 is amended to read: 29 Sec. 21.42.353. COVERAGE FOR COSTS OF ACUPUNCTURE 30 TREATMENT. An insurer authorized under AS 21.09 to offer, issue for delivery, 31 deliver, or renew a disability insurance policy in the state, [OR] a hospital or medical
01 service corporation authorized under AS 21.87 to offer or renew a subscriber's contract, 02 or a health maintenance organization authorized under AS 21.86 to offer an 03 enrollee contract to provide health care services on a prepaid basis may offer 04 coverage for services of an acupuncturist licensed under AS 08.06 if the policy or 05 contract covers acupuncture treatment by a health care provider who is subject to other 06 provisions of AS 08. 07 * Sec. 75. AS 21.42.355 is amended to read: 08 Sec. 21.42.355. COVERAGE FOR COST OF SERVICES PROVIDED BY 09 NURSE MIDWIVES. (a) If an individual or group disability insurance policy, 10 subscriber's contract, enrollee contract, or fraternal benefit society certificate provides 11 indemnity for the cost of services of a physician provided to women during pregnancy, 12 childbirth, and the period after childbirth, indemnity in a reasonable amount shall also 13 be provided for the cost of an advanced nurse practitioner who provides the same 14 services. Indemnity may be provided under this subsection only if the advanced nurse 15 practitioner is certified to practice as a nurse midwife in accordance with regulations 16 adopted under AS 08.68.100(a), and the services provided are within the scope of 17 practice authorized by that certification. 18 (b) If an individual or group disability insurance policy, [A] subscriber's 19 contract, enrollee contract, or fraternal benefit society certificate provides for 20 furnishing those services required of a physician in the care of women during 21 pregnancy, childbirth, and the period after childbirth, the contract shall also provide 22 that an advanced nurse practitioner may furnish those same services instead of a 23 physician. Services may be provided under this subsection only if the advanced nurse 24 practitioner is certified to practice as a nurse midwife in accordance with regulations 25 adopted under AS 08.68.100(a), and the services provided are within the scope of 26 practice authorized by that certification. 27 * Sec. 76. AS 21.42.375(a) is amended to read: 28 (a) An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, 29 or renew an individual or group disability insurance policy for medical coverage on 30 an expense incurred basis in the state, [OR] a hospital or medical service corporation 31 authorized under AS 21.87 to offer or renew a subscriber's contract for medical
01 coverage in the state, or a health maintenance organization authorized under 02 AS 21.86 to offer an enrollee contract to provide health care services on a prepaid 03 basis shall provide coverage for low-dose mammography screening under the schedule 04 described in (b) of this section if the policy or contract covers mastectomies and 05 prosthetic devices and reconstructive surgery incident to mastectomies. 06 * Sec. 77. AS 21.42.380 is amended to read: 07 Sec. 21.42.380. COVERAGE FOR TREATMENT OF PHENYLKETONURIA. 08 (a) An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, or 09 renew an individual or a group disability insurance policy for major medical coverage 10 on an expense-incurred basis in the state, [OR] a hospital or medical service 11 corporation authorized under AS 21.87 to offer or renew a group contract for major 12 medical coverage in the state, or a health maintenance organization authorized 13 under AS 21.86 to offer an enrollee contract to provide health care services on a 14 prepaid basis shall [MUST] provide coverage for the formulas necessary for the 15 treatment of phenylketonuria. This subsection does not apply to 16 (1) a Medicare supplement insurance policy; 17 (2) long-term care insurance; 18 (3) an insurance policy regulated under 5 U.S.C. 8901 - 8914 or 42 19 U.S.C. 1395mm; 20 (4) an insurance policy that provides services or reimbursement 21 exclusively for optometric or vision care, dental or orthodontic care, podiatric, 22 ambulance, mental health, or chiropractic care; 23 (5) an insurance policy that the director has, in writing, determined 24 should be excluded from this subsection. 25 (b) The insurer, hospital or medical service corporation, or health 26 maintenance organization providing coverage under this section may impose 27 reasonable contract limitations but may not refuse coverage based on a preexisting 28 condition of phenylketonuria or require that the insured or subscriber pay a higher 29 deductible or copayment for the cost of treating phenylketonuria than for the cost of 30 treating another condition or illness. 31 (c) In this section,
01 (1) "copayment" means the portion of the cost to be paid by the 02 insured, [OR] subscriber, or enrollee in excess of the deductible; 03 (2) "cost" means the lowest of the following: 04 (A) the actual charge for the treatment received for 05 phenylketonuria; 06 (B) the usual, customary, and reasonable charge for the 07 treatment as determined by the contract of coverage; or 08 (C) the charge agreed to by contract between the provider and 09 the insurer, hospital [SERVICE CORPORATION,] or medical service 10 corporation, or health maintenance organization; 11 (3) "deductible" means the portion of covered costs that must be 12 incurred before benefits become payable; 13 (4) "long-term care insurance" has the meaning given in AS 21.53.200; 14 (5) "major medical coverage" means a disability insurance contract, 15 [OR] a subscriber contract, or an enrollee contract that provides benefits for hospital 16 and medical care with potential lifetime maximum benefits for the insured, [OR] 17 subscriber, or enrollee of at least $10,000. 18 * Sec. 78. AS 21.56.180(c) is amended to read: 19 (c) Except as provided in this subsection, a small employer insurer may not, 20 directly or indirectly, enter into a contract, agreement, or arrangement with an 21 insurance producer [AGENT, BROKER], managing general agent, or third-party 22 administrator that provides for or results in the compensation paid to an insurance 23 producer [AGENT OR BROKER] for the sale of a health benefit plan to be varied 24 because of the health status, claims experience, industry, occupation, or geographic 25 location of the small employer. This subsection does not apply to a compensation 26 arrangement that provides compensation to an insurance producer [AGENT, 27 BROKER], managing general agent, or third-party administrator on the basis of a 28 percentage of premium, provided that the percentage does not vary because of the 29 health status, claims experience, industry, occupation, or geographic area of the small 30 employer. 31 * Sec. 79. AS 21.56.180(d) is amended to read:
01 (d) A small employer insurer 02 (1) shall provide reasonable compensation, as provided under the plan 03 of operation of the program, to an insurance producer [AGENT, BROKER], 04 managing general agent, or third-party administrator, if any, for the sale of a basic or 05 standard health benefit plan; 06 (2) or insurance producer [AGENT, BROKER], managing general 07 agent, or third-party administrator may not induce or otherwise encourage a small 08 employer to separate or otherwise exclude an employee from health coverage or 09 benefits provided in connection with the employee's employment; 10 (3) may only deny an application for coverage from a small employer 11 in writing and if the reasons for the denial are stated. 12 * Sec. 80. AS 21.57.010 is amended to read: 13 Sec. 21.57.010. PURPOSE. The purpose of this chapter is to promote the 14 public welfare by regulating consumer credit [LIFE INSURANCE AND CREDIT 15 DISABILITY] insurance. Nothing in this chapter is intended to prohibit or discourage 16 reasonable competition. The provisions of this chapter shall be liberally construed. 17 * Sec. 81. AS 21.57.020 is repealed and reenacted to read: 18 Sec. 21.57.020. APPLICABILITY. Consumer credit insurance transacted in 19 connection with a credit transaction for a personal, household, or family purpose is 20 subject to the provisions of this chapter except 21 (1) insurance written in connection with a credit transaction that is 22 (A) secured by a first mortgage or first deed of trust; and 23 (B) made to finance the purchase of real property, the 24 construction of a dwelling, or to refinance a prior credit transaction made for 25 that purpose; 26 (2) an isolated insurance transaction by the insurer not related to an 27 agreement or a plan for insuring debtors of the creditor; 28 (3) insurance for which no identifiable charge is made to the debtor; 29 or 30 (4) a loan or other credit transaction that exceeds $30,000. 31 * Sec. 82. AS 21.57.030 is repealed and reenacted to read:
01 Sec. 21.57.030. AUTHORIZED TYPES OF CONSUMER CREDIT 02 INSURANCE. A type of consumer credit insurance defined in AS 21.57.160 may be 03 written separately or in combination with other types of consumer credit insurance on 04 an individual or group basis. 05 * Sec. 83. AS 21.57.040 is repealed and reenacted to read: 06 Sec. 21.57.040. AMOUNT OF CONSUMER CREDIT INSURANCE. (a) The 07 amount of coverage for credit life insurance payable at the time of loss 08 (1) may not exceed the greater of the actual net debt or the scheduled 09 net debt, except insurance on an 10 (A) agricultural credit transaction commitment, not exceeding 11 one year in duration, may be written up to the amount of the loan commitment 12 on a nondecreasing or level term plan; and 13 (B) educational credit transaction commitment may be written 14 for the net outstanding balance plus any unused commitment; 15 (2) may not be less than the actual net debt less any payments more 16 than two months overdue if the coverage is written on the actual outstanding net debt; 17 (3) may not exceed the following if the coverage is written on the 18 scheduled outstanding net debt: 19 (A) the scheduled net debt if the actual net debt is less than or 20 equal to the scheduled net debt; 21 (B) the actual net debt if the actual net debt is greater than the 22 scheduled net debt but less than or equal to the scheduled net debt plus two 23 months of payments; or 24 (C) the scheduled net debt plus two months of payments if the 25 actual net debt is greater than the scheduled net debt plus two months of 26 payments; 27 (4) must equal the actual net debt on the date of death if a premium is 28 assessed to the debtor on a monthly basis and is based on the actual net debt; and 29 (5) may be less than the net debt when the partial coverage is 30 calculated using one of the following: 31 (A) the amount of insurance is the lesser of a stated amount and
01 the amount is determined by (2) of this subsection; 02 (B) the amount of insurance is the lesser of a stated amount and 03 the amount is determined by (3) of this subsection; 04 (C) the amount of insurance is a constant percentage of the 05 amount determined by (2) or (3) of this subsection; or 06 (D) in the absence of any preexisting condition exclusion, the 07 amount of insurance payable in the event of death due to natural causes is 08 limited to the balance as it existed six months before the date of death if 09 (i) there has been at least one increase in the outstanding 10 balance during that six-month period, other than an increase due to the 11 accrual of interest or late charges; and 12 (ii) evidence of individual insurability has not been 13 required during that six-month period. 14 (b) The director may provide for other patterns of insurance consistent with 15 (a) of this section by regulation. 16 (c) The total amount of periodic indemnity payable in the event of disability 17 or unemployment, as defined in the policy, may not exceed the sum of the periodic 18 scheduled unpaid installments of the gross debt. The amount of a periodic indemnity 19 payment may not exceed the original gross debt divided by the number of periodic 20 installments. 21 (d) If credit disability insurance or credit unemployment insurance is written 22 in connection with an open-end consumer credit agreement, the amount of insurance 23 may not exceed the gross debt that would accrue on the amount using the creditor's 24 minimum repayment schedule. The periodic indemnity need not relate to the creditor's 25 minimum repayment schedule. 26 * Sec. 84. AS 21.57.050 is repealed and reenacted to read: 27 Sec. 21.57.050. DURATION OF COVERAGE. (a) The effective date of 28 coverage for 29 (1) consumer credit insurance that is elected by the debtor before or 30 contemporaneous with a credit transaction is the date when the debtor becomes 31 obligated to the creditor, except that when evidence of individual insurability is
01 required and the evidence is furnished more than 30 days after the date when the 02 debtor becomes obligated to the creditor, the effective date may be the date on which 03 the insurance company determines the evidence to be satisfactory; 04 (2) insurance coverage that is elected by the debtor on a date 05 subsequent to the date of the credit transaction is, subject to acceptance by the insurer, 06 a date not earlier than the date the election is made by the debtor or later than 30 days 07 following the date on which the insurer accepts the risk for coverage; an insurer shall 08 determine if a risk is acceptable by an objective method, including one related to a 09 particular date within a billing or repayment cycle or a calendar month; and 10 (3) a group policy that provides coverage with respect to a debt existing 11 on the policy effective date, must be on or after the effective date of the group policy. 12 (b) A charge for insurance may not be made to the debtor and retained by the 13 creditor or insurer for a time before commencement of the consumer credit insurance 14 to which the charge is related. 15 (c) The duration of coverage for consumer credit insurance may not extend 16 (1) beyond the termination date specified in the policy; the termination 17 date of insurance may precede, coincide with, or follow the scheduled maturity date 18 of the debt to which it relates, subject to any other requirements and restrictions of this 19 chapter; and 20 (2) more than 15 days beyond the scheduled maturity date of the debt 21 except when extended 22 (A) without additional cost to the debtor; or 23 (B) under a written agreement signed by the debtor, in 24 connection with a variable interest rate credit transaction or a deferral, renewal, 25 refinancing, or consolidation of debt. 26 (d) If the debt is discharged due to renewal, refinancing, or consolidation 27 before the scheduled termination date of the insurance, insurance in force must be 28 terminated before new insurance may be written in connection with the renewed, 29 refinanced, or consolidated debt. 30 (e) If insurance coverage terminates before the scheduled termination of the 31 insurance, the insurer shall make an appropriate refund or credit to the debtor. The
01 refund or credit must consist of the unearned insurance charge paid by the debtor for 02 insurance after the date of the termination, except that a refund is not required of a 03 charge made for insurance if the insurance is terminated by performance of the 04 insurer's obligation with respect to the insurance. 05 (f) An insured debtor may terminate consumer credit insurance at any time by 06 providing advance notice to the insurer. The individual policy or group certificate may 07 require that the notice be in writing or that the debtor surrender the individual policy 08 or group certificate, or both. The debtor's right to terminate coverage may also be 09 subject to the terms of the credit transaction contract. 10 * Sec. 85. AS 21.57 is amended by adding a new section to read: 11 Sec. 21.57.055. DISCLOSURE TO DEBTORS. (a) Before a debtor elects to 12 purchase consumer credit insurance in connection with a credit transaction, the insurer 13 shall disclose the following in writing to the debtor: 14 (1) the purchase of consumer credit insurance is optional and not a 15 condition of obtaining credit approval; 16 (2) if more than one kind of consumer credit insurancer is being made 17 available to the debtor, whether the debtor can purchase the insurance separately or the 18 multiple coverage only as a package; 19 (3) the conditions of eligibility; 20 (4) if the debtor has other insurance that covers the risk, the debtor may 21 not want or need credit insurance; 22 (5) if the creditor requires consumer credit insurance as additional 23 security for a debt, the debtor has the option of furnishing the required amount of 24 insurance through existing policies owned or procured by the debtor or of procuring 25 and furnishing the required insurance through an insurer authorized to transact 26 insurance business in this state; 27 (6) the effective date of the coverage; 28 (7) the debtor may cancel the coverage within the first 30 days after 29 receiving the individual policy or group certificate and have a premium paid by the 30 debtor refunded or credited; thereafter, the debtor may cancel the policy at any time 31 during the term of the loan and receive a refund of unearned premium;
01 (8) a brief description of the coverage, including 02 (A) the amount; 03 (B) the term; 04 (C) any exceptions, limitations, or exclusions; 05 (D) the insured event; 06 (E) any waiting or elimination period; 07 (F) any deductible; 08 (G) any applicable waiver of premium provision; 09 (H) to whom the benefits would be paid; and 10 (I) the premium rate for a coverage or for multiple coverage in 11 a package; 12 (9) if the premium or insurance charge is financed, it is subject to 13 finance charges at the rate applicable to the credit transaction or at another specified 14 rate; and 15 (10) whether or not the benefits provided are sufficient to pay off the 16 debt in full, including finance charges unearned at the time of the claim. 17 (b) The disclosure required in (a) of this section shall be provided in the 18 following manner: 19 (1) in connection with consumer credit insurance offered 20 contemporaneously with the extension of credit or offered through direct mail 21 advertisements, the disclosure shall be presented to the consumer in a clear and 22 conspicuous manner; or 23 (2) in conjunction with the offer of credit insurance by telephone and 24 contemporaneously with the extension of credit or subsequent to the extension of credit 25 by other than direct mail advertisements, the initial disclosure may be provided orally 26 as long as written disclosure is provided to the debtor not later than 10 days after the 27 offer or the date any other written material is provided to the debtor, whichever occurs 28 first. 29 (c) If the debtor elects to purchase coverage, the delivery of the disclosure 30 required in (b) of this section shall be acknowledged by the debtor at the time of 31 delivery, and the insurer shall maintain the debtor's written acknowledgement for at
01 least five years. 02 * Sec. 86. AS 21.57.060 is repealed and reenacted to read: 03 Sec. 21.57.060. PROVISIONS OF POLICIES AND CERTIFICATES OF 04 INSURANCE. (a) Consumer credit insurance shall be evidenced by an individual 05 policy or a group certificate of insurance. 06 (b) The individual policy or group certificate must, in addition to other 07 requirements of law, set out 08 (1) the name and home office address of the insurer; 09 (2) the name of the debtor; 10 (3) the premium to be paid by the debtor disclosed separately for each 11 kind of coverage or for all coverage in a package, except that for open-ended loans, 12 the premium rate and the basis of premium calculation must be specified; 13 (4) a full description of the coverage including the amount, the term, 14 and any exceptions, limitations, or exclusions; 15 (5) a statement that the benefits shall be paid to the creditor to reduce 16 or extinguish the unpaid debt and that, whenever the amount of insurance benefit 17 exceeds the unpaid debt, the excess is payable to the debtor, a beneficiary other than 18 the creditor named by the debtor, or the debtor's estate; 19 (6) an explanation of how refunds are calculated in the event of policy 20 termination; and 21 (7) if the benefit is not adequate to completely pay off the debt existing 22 on the date of death or disability, a statement to that effect on the face of the 23 individual policy or group certificate in not smaller than 10 point, bold face type. 24 * Sec. 87. AS 21.57.070 is repealed and reenacted to read: 25 Sec. 21.57.070. REQUIREMENTS FOR EVIDENCE OF INSURANCE. (a) 26 Unless the individual policy or group certificate of insurance is delivered to the debtor 27 at the time the debt is incurred or when the debtor elects to purchase coverage, a copy 28 of the application for the policy or a notice of proposed insurance, signed by the 29 debtor and setting out (1) the name and home office address of the insurer, (2) the 30 name of the debtor, (3) the premium rate to be paid by the debtor for the insurance, 31 and (4) the amount, term, and a brief description of the coverage provided, shall be
01 delivered to the debtor at the time the debt is incurred or the election to purchase 02 coverage is made, or, within 10 days from the date of the election to purchase 03 coverage, if the election to purchase coverage is made by telephone. The copy of the 04 application for or notice of proposed insurance must refer exclusively to insurance 05 coverage and must be separate and apart from the loan, sale, other credit statement of 06 account, instrument, or agreement, unless the information required by this subsection 07 is prominently set out in it. Upon acceptance of the insurance by the insurer and 08 within 30 days of the date upon which the debt is incurred or the election to purchase 09 coverage is made, the insurer shall deliver the individual policy or group certificate of 10 insurance to the debtor. The application or notice of proposed insurance must state 11 that upon acceptance by the insurer, the insurance shall become effective as provided 12 in AS 21.57.050(a). 13 (b) The application or notice of proposed insurance may be used to fulfill all 14 of the requirements of AS 21.57.055(a) and 21.57.060(b) if it contains all of the 15 information required by those subsections. 16 (c) A debtor has 30 days from the date the debtor receives the individual 17 policy or the group certificate to review the coverage purchased. At any time within 18 the 30-day period, the debtor may contact the creditor or insurer issuing the policy or 19 certificate and request that the coverage be cancelled. An individual policy or group 20 certificate may require the request be in writing, that the policy or certificate be 21 returned to the insurer, or both. If a policy is cancelled, the insurer shall return a full 22 refund or credit of all premiums or insurance charges to the debtor within 30 days. 23 (d) If the named insurer does not accept the risk, the debtor shall receive a 24 policy or certificate of insurance listing the name and home office address of the 25 substituted insurer and the amount of the premium to be charged. If the amount of 26 premium is less than the amount in the notice of proposed insurance, the insurer shall 27 issue an appropriate refund within 30 days. If the risk is not accepted by an insurer, 28 a premium paid by the debtor shall be refunded or credited to the debtor within 30 29 days of the date of application. 30 (e) For the purposes of (a) of this section, an individual policy or group 31 certificate delivered in conjunction with an open-end consumer credit agreement or
01 consumer credit insurance requested by the debtor after the date of the debt is 02 considered to be delivered at the time the debt is incurred or election to purchase 03 coverage is made if the delivery occurs within 30 days of the date the insurance is 04 effective. 05 (f) An individual policy or group certificate delivered in conjunction with an 06 open-end consumer credit agreement shall continue from its effective date through the 07 term of the agreement unless the individual policy or group certificate is terminated 08 under its terms at an earlier date. 09 * Sec. 88. AS 21.57.080 is repealed and reenacted to read: 10 Sec. 21.57.080. FILING OF FORMS AND RATES. (a) An insurance policy, 11 certificate of insurance, notice of proposed insurance, insurance disclosure notice, 12 application for insurance, endorsement, and rider delivered or issued for delivery in 13 this state, and the applicable schedules of premium rates shall be filed with the director 14 before being used. 15 (b) A document required to be filed under (a) of this section must be on file 16 for a waiting period of 30 days before it is used or becomes effective, unless the 17 director gives prior written approval. This period may be extended for an additional 18 30 days if the director gives written notice within the waiting period to the insurer 19 making the filing. The director shall disapprove a filing if the premium rate charged 20 is not reasonable in relation to benefits or if it contains provisions that are unjust, 21 unfair, inequitable, misleading, deceptive, encourage misrepresentation of the policy, 22 or are contrary to a provision of this title or a regulation adopted under this title. A 23 filing is considered to be approved unless it is disapproved by the director within the 24 waiting period. In determining the reasonableness of premium rates in relation to 25 benefits, the director may consider claim costs, general and administrative expenses, 26 reasonable compensation to producers, profit, or other relevant data. 27 (c) If the director notifies the insurer that a document required to be filed 28 under (a) of this section is disapproved, the insurer may not issue or use any part of 29 the document. In providing notice of disapproval to the insurer, the director shall 30 specify the reason for disapproval and indicate that the insurer is entitled to a hearing. 31 (d) The director may, at any time after a hearing, withdraw approval of a filing
01 on the grounds specified under (b) of this section. The director shall provide the 02 insurer at least 20 days' prior written notice of a hearing scheduled by the director, and 03 the notice of the hearing must state the reason for the proposed withdrawal. 04 (e) An insurer may not issue or use a document required to be filed under (a) 05 of this section after the effective date of a withdrawal of approval under (d) of this 06 section. 07 (f) If a group policy of consumer credit insurance (1) has been delivered in 08 this state before July 1, 1995, or (2) has been or is delivered in another state before 09 or after July 1, 1995, the insurer shall be required to file only the group certificate and 10 notice of proposed insurance delivered or issued for delivery in this state as specified 11 in AS 21.57.060(b) and 21.57.070(a). 12 (g) Consumer credit insurance forms used for insurance described under (f) of 13 this section shall be approved by the director if they conform with the requirements 14 specified in this section and if the schedules of premium rates applicable to the 15 insurance evidenced by the certificate or notice are in accordance with the insurer's 16 schedules of premium rates filed with the director. An item required to be filed under 17 (a) of this section shall also be filed as specified in this chapter unless the item relates 18 to a group policy that is delivered in another state and the director has determined that 19 the other state has substantially similar statutes or regulations to this chapter. Upon 20 this determination, the items required to be filed under (a) of this section shall be filed 21 for informational purposes. If the director subsequently determines that the 22 informational filing is not in compliance with the requirements of this chapter, the 23 insurer may not use the insurance policy, form, certificate, notice of proposed 24 insurance, disclosure notice, advertisement, application for insurance, endorsement, or 25 rider. 26 * Sec. 89. AS 21.57.090 is amended to read: 27 Sec. 21.57.090. PREMIUMS AND REFUNDS. (a) An insurer may revise its 28 schedules of premium rates from time to time, and file the revised schedules with the 29 director. An insurer may not issue a consumer credit [LIFE INSURANCE POLICY 30 OR CREDIT DISABILITY] insurance policy for which the premium rate differs from 31 [EXCEEDS] that determined by the schedules of the insurer then approved by [ON
01 FILE WITH] the director. 02 (b) An [EACH] individual policy or group certificate must provide for a 03 refund of all unearned premiums [THAT] if the insurance is terminated before the 04 scheduled maturity date of the insurance and notice of termination is given to the 05 insurer. The [INDEBTEDNESS, ANY] refund of an amount paid by the debtor for 06 insurance shall be paid or credited promptly to the person entitled to it; provided, 07 however, that the director shall prescribe a minimum refund and a [NO] refund that 08 would be less than the minimum need not be made. A refund formula that an 09 insurer desires to use must provide refunds that are at least as favorable to the 10 debtor as refunds based on the rule of anticipation. The formula to be used in 11 computing refunds shall be filed with and approved by the director. 12 (c) If a creditor requires a debtor to make a payment for consumer credit 13 [LIFE INSURANCE OR CREDIT DISABILITY] insurance and an individual policy 14 or group certificate of insurance is not issued, the creditor shall immediately give 15 written notice to the debtor and shall promptly make an appropriate credit to the 16 account or issue a refund. 17 (d) The amount charged to a debtor for consumer credit [LIFE OR CREDIT 18 DISABILITY] insurance may not exceed the premium charged by the insurer, as 19 computed at the time the charge to the debtor is determined. 20 * Sec. 90. AS 21.57.090 is amended by adding a new subsection to read: 21 (e) Nothing in this chapter may be construed to authorize a payment for 22 insurance prohibited under other provisions of law governing credit transactions. 23 * Sec. 91. AS 21.57.120 is amended to read: 24 Sec. 21.57.120. SELECTION RIGHTS OF INSURED [EXISTING 25 INSURANCE]. When consumer credit [LIFE INSURANCE OR CREDIT 26 DISABILITY] insurance is required as additional security for a debt [AN 27 INDEBTEDNESS], the debtor shall, upon request to the creditor, have the option of 28 furnishing the required amount of insurance through existing policies of insurance 29 owned or controlled by the debtor or of procuring and furnishing the required coverage 30 through an insurer authorized to transact an insurance business in this state. 31 * Sec. 92. AS 21.57 is amended by adding a new section to read:
01 Sec. 21.57.125. DUTIES OF AN INSURER. Except as otherwise prohibited 02 by law, duties imposed upon an insurer by this chapter may be carried out by a 03 creditor if the creditor is licensed under AS 21.27 as an insurance producer, a 04 managing general agent, or a third-party administrator, and transacts business within 05 the scope of its license on behalf of the insurer. 06 * Sec. 93. AS 21.57.150 is repealed and reenacted to read: 07 Sec. 21.57.150. PENALTIES. (a) In addition to any other penalty provided 08 by law, a person licensed under AS 21.27 that the director determines under 09 AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to 10 (1) a civil penalty equal to the compensation promised, paid, or to be 11 paid, directly or indirectly, to the licensee in regard to a violation; 12 (2) either a civil penalty of not more than $10,000 for a violation or, 13 if the director determines that the person wilfully violated the provisions of this 14 chapter, a civil penalty of not more than $25,000 for a violation; and 15 (3) denial, nonrenewal, suspension, or revocation of a license. 16 (b) In addition to any other penalty provided by law, an insurer that the 17 director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this 18 chapter is subject to 19 (1) a civil penalty equal to the premium earned, directly or indirectly, 20 by the insurer in regard to a violation; 21 (2) either a civil penalty of not more than $10,000 for a violation or, 22 if the director determines that the insurer wilfully violated the provisions of this 23 chapter, a civil penalty of not more than $25,000 for a violation; and 24 (3) denial, suspension, or revocation of a certificate of authority. 25 (c) In addition to any other penalty provided by law, any person that the 26 director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this 27 chapter is subject to 28 (1) either a civil penalty of not more than $10,000 for a violation or, 29 if the director determines that the person wilfully violated the provisions of this 30 chapter, a civil penalty of not more than $25,000 for a violation; and 31 (2) denial of a license.
01 * Sec. 94. AS 21.57.160 is repealed and reenacted to read: 02 Sec. 21.57.160. DEFINITIONS. In this chapter, 03 (1) "agriculture credit transaction commitment" means a binding 04 agreement to loan money up to a fixed amount as needed for agricultural purposes; 05 (2) "compensation" means commissions, dividends, retrospective rate 06 credits, service fees, expense allowances or reimbursements, gifts, furnishing 07 equipment, facilities, goods, or services, or any other form of remuneration resulting 08 directly from the sale of consumer credit insurance; 09 (3) "consumer credit insurance" means credit life insurance, credit 10 disability insurance, or credit unemployment insurance; 11 (4) "credit disability insurance" means insurance on a debtor to provide 12 indemnity for payments or debt becoming due on a specific loan or other credit 13 transaction while the debtor is disabled; 14 (5) "credit life insurance" means insurance on the life of a debtor under 15 or in connection with all or a part of a specific loan or other credit transaction; 16 (6) "credit unemployment insurance" means insurance on a debtor to 17 provide indemnity for payments or debt becoming due on a specific loan or other 18 credit transaction while the debtor is involuntarily unemployed; 19 (7) "credit transaction" means a transaction by which the repayment for 20 money loaned or a loan commitment made or payment for goods, services, or 21 properties sold or leased is made at a future date; 22 (8) "creditor" means a person who lends money or who sells or leases 23 goods, services, property, rights, or privileges, for which payment is arranged through 24 a credit transaction, and includes a person who is a successor to the right, title, or 25 interest of the lender, seller, or lessor; 26 (9) "debtor" means a person who borrows money, or purchases or 27 leases goods, services, property, rights, or privileges for which payment is arranged 28 through a credit transaction; 29 (10) "educational credit transaction commitment" means a binding 30 agreement to loan money up to a fixed amount as needed for educational purposes; 31 (11) "gross debt" means the total of the remaining payments owed to
01 the creditor by the debtor; 02 (12) "identifiable charge" means a charge for consumer credit insurance 03 that is made to a debtor having the benefit of the insurance, including a charge for 04 insurance that is disclosed in the consumer credit agreement or other instrument 05 furnished to the debtor that sets out the financial elements of the credit transaction, and 06 any difference in the finance, interest, service, or other similar charge made to a debtor 07 in a like circumstance, except for their insured or noninsured status; 08 (13) "net debt" means the amount necessary to liquidate the remaining 09 debt in a single lump sum payment, excluding all unearned finance charges; 10 (14) "open-end consumer credit" means consumer credit extended by 11 a creditor under an agreement in which 12 (A) the creditor reasonably contemplates repeated transactions; 13 (B) the creditor imposes a periodic finance charge on an 14 outstanding unpaid balance; and 15 (C) the amount of consumer credit that may be extended to the 16 debtor during the term of the agreement, up to any limit set by the creditor, is 17 generally made available to the extent that any outstanding balance is repaid; 18 (15) "rule of anticipation" means a refund method that results in 19 refunds equal to the premium cost of scheduled benefits subsequent to the date of 20 cancellation or termination, computed at the schedule of premium rates in effect on the 21 date of issue. 22 * Sec. 95. AS 21.69 is amended by adding new sections to read: 23 Sec. 21.69.645. REDOMESTICATION. (a) An insurer organized under the 24 laws of another state and admitted to do business in this state may become a domestic 25 insurer of this state by complying with the requirements of this title relative to the 26 organization and licensing of a domestic insurer and by designating its principal place 27 of business at a place in this state. 28 (b) A domestic insurer may, upon approval of the director, transfer its domicile 29 to another state in which it is admitted to transact the business of insurance. Upon a 30 transfer as described in this subsection, the insurer shall cease to be a domestic insurer 31 of this state, but shall be considered admitted to this state. The insurer shall meet the
01 qualifications to remain admitted to this state for a period of three years or, if ordered 02 by the director, a longer period. The director may approve a proposed transfer unless 03 the transfer is not in the interest of the policyholders of the insurer or the insurance 04 marketplace of this state. 05 (c) Upon transfer of domestic status to or from this state, the certificate of 06 authority, appointments under AS 21.27.100, rates, and other items that the director 07 allows, and that are in existence at the time the insurer is licensed to transact the 08 business of insurance in this state, shall continue in full force and effect and the insurer 09 shall remain duly qualified to transact the business of insurance in this state. 10 Outstanding policies of a transferring insurer shall remain in full force and effect and 11 shall be endorsed with the new name of the company, its new location, and any other 12 information the director may require. A transferring insurer shall notify the director of 13 the details of the proposed transfer 30 days before the effective date of the transfer and 14 shall promptly file any resulting amendments to corporate documents filed or required 15 to be filed with the director. 16 (d) A transfer of domestic status by merger, consolidation, or any other lawful 17 method of combination must meet the requirements of AS 21.69.590 or 21.69.600. The 18 certificate of authority, appointments under AS 21.27.100, rates, and other items that the 19 director allows, and that are in existence at the time the insurer is licensed to transact the 20 business of insurance in this state, shall continue in full force and effect and the insurer 21 shall remain duly qualified to transact the business of insurance in this state. 22 Outstanding policies of a domestic insurer being merged, consolidated, or otherwise 23 combined shall remain in full force and effect and shall be endorsed with the new name 24 of the company, its new location, and any other information the director may require. 25 (e) An insurer that is transferring its domicile to this state shall file its revised 26 policy forms for approval under AS 21.42. 27 (f) A domestic insurer that is transferring its domicile to another state is not 28 required to file policy forms at the time of transfer if the forms have already been 29 approved under AS 21.42. 30 Sec. 21.69.648. VOLUNTARY SURRENDER OF CERTIFICATE OF 31 AUTHORITY. To voluntarily surrender the certificate of authority of a domestic insurer,
01 a request shall be made to the director to extinguish the certificate of authority six 02 months before the planned effective date of the extinguishment of the charter. Before 03 the request is granted, the director shall conduct an examination under AS 21.06.120. 04 The examination shall be completed within 12 months before the effective date of an 05 extinguishment and all issues contained in the examination report must be resolved to 06 the satisfaction of the director. Insurance business of the domestic insurer shall be 07 cancelled or reinsured as required under AS 21.69.610 or 21.69.620. 08 * Sec. 96. AS 21.72 is amended by adding a new section to read: 09 Sec. 21.72.125. QUARTERLY STATEMENTS. The director may require a 10 benevolent association to file quarterly financial statements as provided in AS 21.09.205. 11 The statements must exhibit the items and facts required under AS 21.72.120(a). 12 * Sec. 97. AS 21.75 is amended by adding a new section to read: 13 Sec. 21.75.135. QUARTERLY STATEMENTS. (a) The director may require 14 a reciprocal insurer's attorney-in-fact to file a quarterly financial statement as provided 15 in AS 21.09.205. 16 (b) A statement required under (a) of this section shall be supplemented by 17 information that may be required by the director relative to the affairs and transactions 18 of the attorney-in-fact that relate to the reciprocal insurer. 19 * Sec. 98. AS 21.75.170(e) is amended to read: 20 (e) Special meetings of the committee may be called by the attorney-in-fact, the 21 chair of the committee, three members of the committee, or a signed petition of at least 22 one percent of the subscribers or three individual subscribers, whichever is greater, 23 as of the most recent annual report of the reciprocal insurer. 24 * Sec. 99. AS 21.75.170 is amended by adding a new subsection to read: 25 (g) Notwithstanding (a) of this section, a domestic reciprocal insurer transacting 26 all of its insurance activities on a subject resident, located, or to be performed in this 27 state may, with the prior written approval of the director, have a subscriber's advisory 28 committee that consists of not less than five individuals who are elected by the 29 subscribers, and who otherwise meet the requirements of (a) of this section. 30 * Sec. 100. AS 21.78.130(g) is amended to read: 31 (g) If it appears to the receiver that there has been a violation of civil or criminal
01 law, or breach of a contractual or fiduciary obligation detrimental to the insurer by an 02 officer, manager, insurance producer [AGENT, BROKER], employee, or other person, 03 the receiver may pursue all appropriate legal remedies on behalf of the insurer. 04 * Sec. 101. AS 21.78.271(a) is amended to read: 05 (a) An 06 (1) insurance producer [AGENT, BROKER], premium finance 07 company, or any other person, other than the insured, responsible for the payment of a 08 premium is obligated to pay an unpaid earned premium due the insurer at the time of the 09 declaration of insolvency, as shown on the records of the insurer; neither a credit nor a 10 setoff is allowed to an insurance producer [AGENT, BROKER,] or premium finance 11 company for an amount advanced to the insurer by the insurance producer [AGENT, 12 BROKER,] or premium finance company on behalf of, but in the absence of a payment 13 by, the insured; 14 (2) insured is obligated to pay an unpaid earned premium due the insurer 15 at the time of the declaration of insolvency, as shown on the records of the insurer. 16 * Sec. 102. AS 21.79.900(6) is amended to read: 17 (6) "member insurer" means an insurer licensed to transact insurance in 18 the state that issues a policy described in AS 21.79.020(a) and (b), or a subscriber 19 contract providing benefits described in AS 21.87.120(a)(2) - (4) or 21.87.130(a)(2) and 20 (3), and includes an insurer whose license or certificate of authority in this state may 21 have been suspended, revoked, not renewed, or voluntarily withdrawn; "member insurer" 22 does not include 23 (A) a health maintenance organization licensed under AS 21.86; 24 (B) a fraternal benefit society licensed under AS 21.84; 25 (C) a mandatory state pooling plan; 26 (D) a mutual assessment company or an entity that operates on 27 an assessment basis; 28 (E) an insurance exchange licensed under AS 21.75; or 29 (F) a nonprofit hospital or medical service organization licensed 30 under AS 21.87; 31 * Sec. 103. AS 21.80.020 is amended by adding a new subsection to read:
01 (b) This chapter does not apply to a risk retention group formed under 15 U.S.C. 02 3901 - 3906 (Liability Risk Retention Act). 03 * Sec. 104. AS 21.84.340 is amended by adding a new subsection to read: 04 (d) The director may require a society to file quarterly financial statements. If 05 quarterly financial statements are required, the statements must follow for a given quarter 06 the reporting specified in the quarterly financial statement blank form and instructions 07 most recently approved by the National Association of Insurance Commissioners. 08 * Sec. 105. AS 21.86.080 is amended by adding new subsections to read: 09 (b) The director may require a health maintenance organization to file quarterly 10 financial statements. If quarterly financial statements are required, the statements must 11 follow for a given quarter the reporting specified in the quarterly financial statement 12 blank form and instructions most recently approved by the National Association of 13 Insurance Commissioners. 14 (c) A filing under this section is subject to AS 21.09.200 and 21.09.205. 15 * Sec. 106. AS 21.89.030 is amended to read: 16 Sec. 21.89.030. PAYMENT. An insurance company doing business in this state 17 may not pay a judgment or settlement of a claim in this state for a loss incurred in this 18 state with an instrument other than a negotiable bank check payable on demand and 19 bearing even date with the date of writing or by electronic funds transfer. 20 * Sec. 107. AS 21.89 is amended by adding new sections to read: 21 Sec. 21.89.080. ELECTRONIC DATA TRANSFER. The director may adopt 22 regulations to facilitate electronic data transfer. Electronic data transferred under 23 regulations may, at the discretion of the director, be in place of another method of filing 24 or communication otherwise required under this title. 25 Sec. 21.89.090. RISK RETENTION GROUPS AND PURCHASING GROUPS. 26 (a) A risk retention group or a purchasing group formed under and in compliance with 27 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act) shall register with the director and 28 shall at all times transact business in compliance with federal law and with the laws of 29 this state that are not preempted by federal law. 30 (b) A risk retention group or a purchasing group shall apply for initial 31 registration on forms prescribed by the director. Payment of a registration fee established
01 under AS 21.06.250 shall be submitted with the application. 02 (c) A risk retention group or a purchasing group may continue its registration 03 if it is in compliance with federal law. Payment of an annual continuation fee 04 established under AS 21.06.250 shall be submitted with the continuation application. 05 (d) A risk retention group holding a valid certificate of authority as a domestic 06 insurer or a purchasing group duly licensed under AS 21.27 as a resident license is not 07 required to be additionally registered under this section. 08 (e) In addition to any other penalty provided by law, a person that the director 09 determines under AS 21.06.170 - 21.06.240 has violated a provision of this title relative 10 to a risk retention group or a purchasing group is subject to a civil penalty of not more 11 than $10,000 for a violation or, if the director determines that the person wilfully 12 violated a provision of this title, a civil penalty of not more than $25,000 for a violation. 13 (f) The director may adopt regulations on the operation and reporting 14 requirements of a risk retention group that are not in conflict with 15 U.S.C. 3901 - 3906 15 (Liability Risk Retention Act). 16 Sec. 21.89.100. APPOINTMENT OF INDEPENDENT COUNSEL; 17 CONFLICTS OF INTEREST. (a) If an insurer has a duty to defend an insured under 18 a policy of insurance and a conflict of interest arises that imposes a duty on the insurer 19 to provide independent counsel to the insured, the insurer shall provide independent 20 counsel to the insured unless the insured in writing waives the right to independent 21 counsel. An insurance policy may contain a provision that provides a method of 22 selecting independent counsel if the provision complies with this section. 23 (b) For purposes of this section, the following do not constitute a conflict of 24 interest: 25 (1) a claim of punitive damages; 26 (2) a claim of damages in excess of the policy limits; 27 (3) claims or facts in a civil action for which the insurer denies coverage. 28 (c) Notwithstanding (b) of this section, if the insurer reserves the insurer's 29 rights on an issue for which coverage is denied, the insurer shall provide independent 30 counsel to the insured as provided under (a) of this section. 31 (d) If the insured selects independent counsel at the insurer's expense, the insurer
01 may require that the independent counsel have at least four years of experience in civil 02 litigation, including defense experience in the general subject area at issue in the civil 03 action, and malpractice insurance. Unless otherwise provided in the insurance policy, 04 the obligation of the insurer to pay the fee charged by the independent counsel is limited 05 to the rate that is actually paid by the insurer to an attorney in the ordinary course of 06 business in the defense of a similar civil action in the community in which the claim 07 arose or is being defended. A dispute between the insurer and insured regarding attorney 08 fees that is not resolved by the insurance policy or this section shall be resolved by 09 arbitration under AS 09.43. 10 (e) If the insured selects independent counsel at the insurer's expense, the 11 independent counsel and the insured shall consult with the insurer on all matters relating 12 to the civil action and shall disclose to the insurer in a timely manner all information 13 relevant to the civil action, except information that is privileged and relevant to disputed 14 coverage. A claim of privilege is subject to review in the appropriate court. Information 15 disclosed by the independent counsel or the insured does not waive another party's right 16 to assert privilege. 17 (f) An insured may waive the right to select independent counsel by signing a 18 statement that reads substantially as follows: 19 I have been advised of my right to select independent counsel to 20 represent me in this lawsuit and of my right under state law to 21 have all reasonable expenses of an independent counsel paid by 22 my insurer. I have also been advised that the Alaska Supreme 23 Court has ruled that when an insurer defends an insured under 24 a reservation of rights provision in an insurance policy, there are 25 various conflicts of interest that arise between an insurer and an 26 insured. I have considered this matter fully and at this time I am 27 waiving my right to select independent counsel. I have 28 authorized my insurer to select a defense counsel to represent me 29 in this lawsuit. 30 (g) If an insured selects independent counsel under this section, both the counsel 31 representing the insurer and independent counsel representing the insured shall be
01 allowed to participate in all aspects of the civil action. Counsel for the insurer and 02 insured shall cooperate fully in exchanging information that is consistent with ethical and 03 legal obligations to the insured. Nothing in this section relieves the insured of the duty 04 to cooperate fully with the insurer as required by the terms of the insurance policy. 05 * Sec. 108. AS 21.90.900(26) is amended to read: 06 (26) "managing general agent" means a person, firm, or corporation that 07 (A) has authority to exercise general supervision over the 08 business, or any part of the business, of one or more admitted insurers; and 09 (B) performs administrative functions normally performed by the 10 insurer including claims administration and payment, marketing administration, 11 agent appointment, premium accounting, premium billing, coverage verification, 12 final underwriting authority, or [AND] certificate issuance; 13 * Sec. 109. AS 21.90.900(28) is amended to read: 14 (28) "person" has the meaning given in AS 01.10.060 and includes an 15 insurer, Lloyd's, fraternal benefit society, medical service, or hospital service plan as 16 defined in AS 21.87, reciprocal or interinsurance exchange, syndicate, and any other 17 legal entity engaged in the business of transacting insurance [, INCLUDING AGENTS, 18 BROKERS, AND CLAIMS ADJUSTERS]; 19 * Sec. 110. AS 28.20.580 is amended to read: 20 Sec. 28.20.580. ASSIGNED RISK PLANS. After consultation with the 21 insurance companies authorized to issue motor vehicle liability policies in this state, the 22 director of the division of insurance shall approve a reasonable plan, fair to the insurers 23 and equitable to their policyholders, for the apportionment among these companies of 24 applicants for motor vehicle policies and other vehicle coverages who are in good faith 25 entitled to but are unable to procure policies through ordinary methods. When a plan is 26 approved, all the insurance companies shall subscribe to it and participate in it, except 27 a reciprocal insurer formed by and only insuring a group of municipalities or 28 nonprofit utilities under AS 21.75, or a reciprocal insurer formed under AS 21.75 29 to provide marine insurance. An applicant for an assigned risk policy, a person 30 insured under an assigned risk plan, and an insurance company affected may appeal to 31 the commissioner of commerce and economic development from a ruling or decision of
01 the authority designated to operate the plan. Failure to adopt an assigned risk plan does 02 not relieve any person from responsibility under this chapter. 03 * Sec. 111. AS 39.25.110 is amended by adding a new paragraph to read: 04 (30) a person employed as an actuary or assistant actuary by the division 05 of insurance in the Department of Commerce and Economic Development. 06 * Sec. 112. AS 21.18.110(b)(3); AS 21.27.650(f)(3); and AS 21.36.420 are repealed. 07 * Sec. 113. AS 21.57.110 and 21.57.170 are repealed. 08 * Sec. 114. AS 21.09.300(c), enacted in sec. 16 of this Act, has the effect of amending 09 Alaska Rule of Civil Procedure 45, by providing that certain insurer reports of material 10 transactions are not subject to subpoena. 11 * Sec. 115. TRANSITION. This Act applies to a policy of insurance that is entered into or 12 renewed on or after the effective date of the relevant provision of this Act. 13 * Sec. 116. Sections 71 and 110 of this Act are retroactive to January 1, 1983. 14 * Sec. 117. Sections 1, 2, 80 - 94, and 113 of this Act take effect October 1, 1995. 15 * Sec. 118. Except as provided in secs. 116 and 117 of this Act, this Act takes effect July 1, 16 1995.