SCS CSHB 147(FIN): "An Act relating to notice of suspension or revocation of an insurer's certificate of authority and the effect of the suspension or revocation upon the authority of agents and managing general agents of the insurer; relating to certain deposits under AS 21; relating to the yielding of assets and securities held on deposit; relating to third-party administrators under AS 21; relating to insurance agents, managing general agents, reinsurance intermediary managers, and insurance producers; requiring the director of insurance to notify a licensee of a license renewal before the renewal date; defining the term 'appointment' as used in part of AS 21; relating to the eligibility to provide coverage by a nonadmitted insurer and alien insurer; relating to surplus lines insurance and brokers; relating to misrepresentations and false advertising concerning insurance; relating to health discount plans; providing for limitations on owner controlled and contractor controlled insurance programs and limiting the coverage of those programs; prohibiting excessive, inadequate, or unfairly discriminatory rate charges for health insurance; defining the term 'plan administrator' as used in part of AS 21; defining the term 'transact' as used in AS 21; authorizing the director of insurance to designate a person to receive annual reports from companies; reducing the period for filing a quarterly financial statement; and providing for an effective date."
00 SENATE CS FOR CS FOR HOUSE BILL NO. 147(FIN) 01 "An Act relating to notice of suspension or revocation of an insurer's certificate of 02 authority and the effect of the suspension or revocation upon the authority of agents and 03 managing general agents of the insurer; relating to certain deposits under AS 21; 04 relating to the yielding of assets and securities held on deposit; relating to third-party 05 administrators under AS 21; relating to insurance agents, managing general agents, 06 reinsurance intermediary managers, and insurance producers; requiring the director of 07 insurance to notify a licensee of a license renewal before the renewal date; defining the 08 term 'appointment' as used in part of AS 21; relating to the eligibility to provide 09 coverage by a nonadmitted insurer and alien insurer; relating to surplus lines insurance 10 and brokers; relating to misrepresentations and false advertising concerning insurance; 11 relating to health discount plans; providing for limitations on owner controlled and 12 contractor controlled insurance programs and limiting the coverage of those programs;
01 prohibiting excessive, inadequate, or unfairly discriminatory rate charges for health 02 insurance; defining the term 'plan administrator' as used in part of AS 21; defining the 03 term 'transact' as used in AS 21; authorizing the director of insurance to designate a 04 person to receive annual reports from companies; reducing the period for filing a 05 quarterly financial statement; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 21.06.130(a) is amended to read: 08 (a) To determine compliance with this title, the director may, as often as the 09 director has reasonable cause, [CONSIDERS ADVISABLE] examine or require a 10 written report from a person of the accounts, records, documents, and transactions 11 pertaining to or affecting the insurance affairs or proposed insurance affairs of 12 (1) an insurance producer or independent adjuster; or 13 (2) a person engaged in or proposing to be engaged in or assisting in 14 the promotion or formation of a domestic insurer or insurance holding corporation, or 15 corporation to finance a domestic insurer or the production of its business. 16 * Sec. 2. AS 21.09.160 is amended to read: 17 Sec. 21.09.160. Notice of suspension or revocation and effect upon agent's 18 authority. (a) Upon suspending or revoking an insurer's certificate of authority the 19 director shall immediately give notice to the insurer and [TO ITS AGENTS OF 20 RECORD IN THIS STATE IN THE DIRECTOR'S OFFICE. THE DIRECTOR] shall 21 also publish notice of the revocation in one or more newspapers of general circulation 22 in this state. 23 (b) The suspension or revocation shall automatically suspend or revoke, as the 24 case may be, the authority of all its agents and managing general agents to act as 25 agents or managing general agents of the insurer in this state, and the insurer 26 [DIRECTOR] shall so state in the notice to agents and managing general agents 27 provided for in (c) [(a)] of this section. 28 * Sec. 3. AS 21.09.160 is amended by adding a new subsection to read: 29 (c) Upon notification of suspension or revocation of an insurer's certificate of
01 authority, the insurer shall immediately give notice of the suspension or revocation to 02 its agents and managing general agents operating in this state. 03 * Sec. 4. AS 21.24.040(a) is amended to read: 04 (a) Deposits made in this state under this title shall be made through the office 05 of the director [IN SAFE DEPOSIT OR] under custodial arrangements as required or 06 approved by the director consistent with the purposes of the deposit, with an 07 established safe deposit institution, bank, or trust company located in this state 08 selected by the insurer with the director's approval. 09 * Sec. 5. AS 21.24.040(c) is amended to read: 10 (c) If of convenience to the insurer in the buying, selling, and exchange of 11 securities making up [COMPRISING] its deposit, and in the collection of interest and 12 other income currently accruing on the securities [THEREON], the insurer may, with 13 the director's advance written approval, deposit a portion of the securities under 14 custodial arrangements with an established bank or trust company located outside this 15 state, if receipts representing all the securities are issued by the custodial bank or trust 16 company and are held in [SAFE DEPOSIT OR] custody subject to the requirements of 17 (a) [AND (b)] of this section. 18 * Sec. 6. AS 21.24.130(d) is amended to read: 19 (d) If the insurer is subject to delinquency proceedings as defined in AS 21.78, 20 upon the order of a court of competent jurisdiction, the director shall yield the assets 21 and securities held on deposit under AS 21.09.090(b) to the receiver, conservator, 22 rehabilitator, or liquidator of the insurer, or to any other properly designated official or 23 officials who succeed to the management and control of the insurer's assets. The 24 director may release the deposit directly to the guaranty fund of which the 25 insurer is a member if the right to receive all or a portion of the deposit is 26 assigned to the guaranty fund. 27 * Sec. 7. AS 21.27.010(c) is amended to read: 28 (c) A third-party administrator [PERSON WHO FOR A RESIDENT OF 29 THIS STATE, OR FOR A RESIDENT OF ANOTHER JURISDICTION FROM A 30 PLACE OF BUSINESS IN THIS STATE, PERFORMS ADMINISTRATIVE 31 FUNCTIONS, INCLUDING CLAIMS ADMINISTRATION AND PAYMENT,
01 MARKETING ADMINISTRATIVE FUNCTIONS, PREMIUM ACCOUNTING, 02 PREMIUM BILLING, COVERAGE VERIFICATION, UNDERWRITING 03 AUTHORITY, OR CERTIFICATE ISSUANCE ONLY IN REGARD TO LIFE 04 INSURANCE, HEALTH INSURANCE, OR ANNUITIES] is not required to be 05 licensed as a managing general agent if the third-party administrator [PERSON] 06 (1) is registered under AS 21.27.630 - 21.27.660 [THIS CHAPTER 07 AS A THIRD-PARTY ADMINISTRATOR]; or 08 (2) only investigates and adjusts claims and is licensed under this 09 chapter as an independent adjuster. 10 * Sec. 8. AS 21.27.100 is repealed and reenacted to read: 11 Sec. 21.27.100. Appointment of insurance producer, managing general 12 agent, and reinsurance intermediary manager; acts of agent. (a) An appointment 13 is required to be made in accordance with this section when one or more of the 14 following has occurred: 15 (1) an admitted insurer appoints a managing general agent in this state 16 or relative to a subject resident, located, or to be performed in this state; 17 (2) a managing general agent appoints an insurance producer as its 18 subagent in this state or relative to subjects resident, located, or to be performed in this 19 state; 20 (3) a domestic reinsurer appoints a reinsurance intermediary manager; 21 (4) a reinsurance intermediary manager appoints an insurance producer 22 as its subagent in this state. 23 (b) An admitted insurer shall appoint an insurance producer as its agent in this 24 state or relative to a subject resident, located, or to be performed in this state not later 25 than 30 days after the date that a written agency contract is executed or the first 26 insurance application is submitted to the admitted insurer by the licensed insurance 27 producer. 28 (c) An individual in a firm who acts solely on behalf of a firm that is 29 appointed as an agent or a managing general agent on behalf of an admitted insurer 30 under this section may not be required to also have an appointment under this section 31 if the individual in the firm is licensed with that firm for a specific class of authority.
01 (d) The authorized or apparently authorized acts on behalf of an appointing 02 insurer of an insurance producer appointed under this section are considered the acts 03 of that insurer. 04 (e) An insurer and managing general agent shall maintain a current list of all 05 appointments made or required to be made under this section that identifies the 06 licensee's name, licensee's mailing address, license number, and effective date of 07 appointment. 08 (f) An insurance producer shall maintain a list of all appointments made or 09 required to be made under this section that identifies the insurer's name, insurer's 10 mailing address, and effective date of appointment. 11 (g) An insurer, managing general agent, or insurance producer shall reply in 12 writing within three working days to an inquiry of the director regarding an 13 appointment. 14 * Sec. 9. AS 21.27.110 is repealed and reenacted to read: 15 Sec. 21.27.110. Term of appointment. (a) An appointment under 16 AS 21.27.100 continues in force until the appointment is terminated in writing. 17 (b) If an insurer, reinsurer, or authorized representative discovers information 18 showing that the appointee whose appointment was terminated has engaged in an 19 activity identified in AS 21.27.410 during the period of the appointment, the insurer, 20 reinsurer, or authorized representative shall, on a form or in a format prescribed by the 21 director, promptly notify the director. 22 (c) Within 15 days after providing notification in accordance with (b) of this 23 section, the insurer, reinsurer, or authorized representative shall mail a copy of the 24 notification to the appointee at the last address on record with the insurer, reinsurer, or 25 authorized representative. The notice must be provided by certified mail, return 26 receipt requested, postage prepaid, or by overnight delivery using a nationally 27 recognized mail carrier. 28 (d) Within 30 days after the appointee receives notification in accordance with 29 (c) of this section, the appointee may file written comments concerning the substance 30 of the notification with the director and shall provide a copy of the written comments 31 to the insurer, reinsurer, or authorized representative. The written comments filed
01 with the director must be included with each report distributed or disclosed concerning 02 a reason about the termination of the appointment. 03 (e) If requested by the director, an insurer, a reinsurer, or an authorized 04 representative shall provide to the director additional information, documents, records, 05 or other data pertaining to a termination or activity of a licensee under this title. 06 (f) A notice of termination submitted to the director under this section must 07 include a statement of the reasons for the termination. A statement of the reasons for 08 termination is confidential and not subject to inspection and copying under 09 AS 40.25.110. A statement of reasons for the termination may not be admitted as 10 evidence in a civil action or an administrative proceeding against an insurer, reinsurer, 11 or authorized representative by or on behalf of a person affected by the termination, 12 except when the action or proceeding involves perjury, unsworn falsification, fraud, or 13 failure to comply with this subsection. 14 (g) If an insurer, a reinsurer, or an authorized representative fails to report as 15 required under this section or is found by a court to have knowingly or intentionally 16 falsely made that report, the director may, after notice and hearing, suspend or revoke 17 the license or certificate of authority of the insurer, reinsurer, or authorized 18 representative and may impose a penalty in accordance with AS 21.27.440. 19 * Sec. 10. AS 21.27.380(a) is amended to read: 20 (a) Except as provided in this title, the director may renew a license biennially 21 on a date set by the director if the licensee continues to be qualified under this chapter 22 and, on or before the close of business of the renewal date, meets all renewal 23 requirements established by regulation and pays the renewal license fees set under 24 AS 21.06.250 for each license to the director. A licensee is responsible for knowing 25 the date that a license lapses and for renewing a license before expiration. The 26 director shall notify the licensee of the license renewal [MAIL A RENEWAL 27 NOTICE TO THE LICENSEE'S CURRENT ADDRESS ON FILE WITH THE 28 DIRECTOR] 30 days before the renewal date. 29 * Sec. 11. AS 21.27.630(b) is amended to read: 30 (b) A third-party administrator may not transact business for a kind or class of 31 authority [INSURANCE] for which the person is not registered.
01 * Sec. 12. AS 21.27.630(c) is amended to read: 02 (c) Except as otherwise provided in this chapter, a third-party 03 administrator [A PERSON WHO PERFORMS ADMINISTRATIVE FUNCTIONS, 04 INCLUDING CLAIMS ADMINISTRATION AND PAYMENT, MARKETING 05 ADMINISTRATIVE FUNCTIONS, PREMIUM ACCOUNTING, PREMIUM 06 BILLING, COVERAGE VERIFICATION, UNDERWRITING AUTHORITY, OR 07 CERTIFICATE ISSUANCE IN REGARD TO INSURANCE AS A THIRD-PARTY 08 ADMINISTRATOR] shall be registered under AS 21.27.630 - 21.27.660 [AS A 09 THIRD-PARTY ADMINISTRATOR] unless the third-party administrator 10 [PERSON] only investigates and adjusts claims and is licensed under this chapter as 11 an independent adjuster. 12 * Sec. 13. AS 21.27.630 is amended by adding new subsections to read: 13 (k) An insurer that holds a certificate of authority issued by the director and is 14 in good standing under this title is not required to be registered as a third-party 15 administrator in this state. 16 (l) A person that is not required to be registered as a third-party administrator 17 under (e) - (k) of this section must file a certification with the director that the person 18 meets the requirements for exemption. 19 * Sec. 14. AS 21.27.650(a) is amended to read: 20 (a) An insurer may not transact business with a third-party administrator 21 unless 22 (1) the insurer holds a certificate of authority in this state, if required 23 under this title; 24 (2) the third-party administrator is registered under this chapter or the 25 third-party administrator has filed a certification with the director certifying that 26 [, WHEN] the third-party administrator is operating only for a foreign insurer other 27 than a self-funded multiple employer welfare arrangement regulated under 28 AS 21.85 and [,] is registered as a third-party administrator by the third-party 29 administrator's resident insurance regulator in a state that the director has determined 30 has enacted provisions substantially similar to those contained in AS 21.27.630 - 31 21.27.650 and that is accredited by the National Association of Insurance
01 Commissioners; 02 (3) the third-party administrator provides the director on January 1, 03 April 1, July 1, and October 1 of each year 04 (A) a list of current employees, identifying those transacting 05 business in this state or upon a subject resident, located or to be performed in 06 this state; 07 (B) a list of current insurers under contract; and 08 (C) other information the director may require; 09 (4) a written contract is in effect between the parties that establishes 10 the responsibilities of each party, indicates both parties' share of responsibility for a 11 particular function, and specifies the division of responsibilities; 12 (5) there is in effect a written contract between the insurer and third- 13 party administrator that contains the following provisions: 14 (A) the insurer may terminate the contract for cause upon 15 written notice sent by certified mail to the third-party administrator and may 16 suspend the underwriting authority of the third-party administrator during a 17 dispute regarding the cause for termination; but the insurer must fulfill all 18 lawful obligations with respect to policies affected by the written agreement, 19 regardless of any dispute between the insurer and the third-party administrator; 20 (B) the third-party administrator shall render accounts to the 21 insurer detailing all transactions and remit all money due under the contract to 22 the insurer at least monthly; 23 (C) all money collected for the account of an insurer shall be 24 held by the third-party administrator as a fiduciary; 25 (D) all payments on behalf of the insurer shall be held by the 26 third-party administrator as a fiduciary; 27 (E) the third-party administrator may not retain more than three 28 months estimated claims payments and allocated loss adjustment expenses; 29 (F) the third-party administrator shall maintain separate records 30 for each insurer in a form usable by the insurer; the insurer or its authorized 31 representative shall have the right to audit and the right to copy all accounts
01 and records related to the insurer's business; the director, in addition to other 02 authority granted in this title, shall have access to all books, bank accounts, and 03 records of the third-party administrator in a form usable to the director; any 04 trade secrets contained in books and records reviewed by the director, 05 including the identity and addresses of policyholders and certificate holders, 06 shall be kept confidential, except that the director may use the information in a 07 proceeding instituted against the third-party administrator or the insurer; 08 (G) the contract may not be assigned in whole or in part by the 09 third-party administrator; 10 (H) if the contract permits the third-party administrator to do 11 underwriting, the contract must include the following: 12 (i) the third-party administrator's maximum annual 13 premium volume; 14 (ii) the rating system and basis of the rates to be 15 charged; 16 (iii) the types of risks that may be written; 17 (iv) maximum limits of liability; 18 (v) applicable exclusions; 19 (vi) territorial limitations; 20 (vii) policy cancellation provisions; 21 (viii) the maximum policy term; and 22 (ix) that the insurer shall have the right to cancel or not 23 renew a policy of insurance subject to applicable state law; 24 (I) if the contract permits the third-party administrator to 25 administer claims on behalf of the insurer, the contract must include the 26 following: 27 (i) written settlement authority must be provided by the 28 insurer and may be terminated for cause upon the insurer's written 29 notice sent by certified mail to the third-party administrator or upon the 30 termination of the contract, but the insurer may suspend the settlement 31 authority during a dispute regarding the cause of termination;
01 (ii) claims shall be reported to the insurer within 30 02 days; 03 (iii) a copy of the claim file shall be sent to the insurer 04 upon request or as soon as it becomes known that the claim has the 05 potential to exceed an amount determined by the director or exceeds the 06 limit set by the insurer, whichever is less, involves a coverage dispute, 07 may exceed the third-party administrator's claims settlement authority, 08 is open for more than six months, involves extra contractual 09 allegations, or is closed by payment in excess of an amount set by the 10 director or an amount set by the insurer, whichever is less; 11 (iv) each party to the contract shall comply with unfair 12 claims settlement statutes and regulations; 13 (v) transmission of electronic data must occur at least 14 monthly if electronic claim files are in existence; and 15 (vi) claim files shall be the sole property of the insurer; 16 upon an order of liquidation of the insurer, the third-party administrator 17 shall have reasonable access to and the right to copy the files on a 18 timely basis; and 19 (J) the contract may not provide for commissions, fees, or 20 charges contingent upon savings obtained in the adjustment, settlement, and 21 payment of losses covered by the insurer's obligations; but a third-party 22 administrator may receive performance-based compensation for providing 23 hospital or other auditing services or may receive compensation based on 24 premiums or charges collected or the number of claims paid or processed. 25 * Sec. 15. AS 21.27.650 is amended by adding a new subsection to read: 26 (q) The director may, without advance notice or hearing, immediately suspend 27 by order the registration of a third-party administrator if the director finds that one or 28 more of the following circumstances exist: 29 (1) the third-party administrator is insolvent or impaired; 30 (2) a proceeding for bankruptcy, receivership, conservatorship, or 31 rehabilitation, or another delinquency proceeding regarding the third-party
01 administrator has been commenced in any state or by a governmental agency of 02 another jurisdiction; 03 (3) the third-party administrator is in an unsound condition, or is in a 04 condition or using methods or practices that render its further transaction of insurance 05 injurious to policy holders or the public. 06 * Sec. 16. AS 21.27 is amended by adding a new section to article 4 to read: 07 Sec. 21.27.660. Definitions. In AS 21.27.630 - 21.27.660, 08 (1) "insurer" includes the Comprehensive Health Insurance 09 Association created under AS 21.55.010 and any person issued or required to obtain a 10 certificate of authority under this title to transact life insurance, annuities, and health 11 insurance or to provide coverage for the cost of medical care; 12 (2) "transact" has the meaning given in AS 21.90.900. 13 * Sec. 17. AS 21.27.900 is amended by adding a new paragraph to read: 14 (33) "appointment" means an act by a person evidencing a grant of 15 authority to another to act on the grantor's behalf. 16 * Sec. 18. AS 21.34.040(d) is amended to read: 17 (d) A nonadmitted insurer may be eligible to provide coverage in this state if it 18 furnishes to the director a copy of its current annual statement that has been certified 19 by the insurer. Except in the case of an alien insurer, the [THE] statement shall be 20 provided not [NO] more than six months after the close of the period reported upon 21 and that is either filed with and approved by the regulatory authority in the domicile of 22 the nonadmitted insurer, or certified by an accounting or auditing firm licensed in the 23 jurisdiction of the insurer's domicile. An alien insurer shall provide the statement 24 not later than nine months after the close of the reporting period. In the case of 25 an insurance exchange, the statement may be an aggregate combined statement of all 26 underwriting syndicates operating during the period reported upon. 27 * Sec. 19. AS 21.34.100(a) is amended to read: 28 (a) When surplus lines insurance is placed, the surplus lines broker shall 29 promptly deliver to the named insured or the producing broker the policy or, if the 30 policy is not then available, a [CERTIFICATE,] cover note, binder, or other evidence 31 of insurance. The [CERTIFICATE,] cover note, binder, or other evidence of
01 insurance for the named insured shall be executed by the surplus lines broker and must 02 contain a summary of all material facts that would regularly be included in the policy, 03 the description and location of the subject of insurance, a general description of the 04 coverages of the insurance, the premium and rate charged and taxes to be collected 05 from the insured, the name and address of the insured, the name of each surplus lines 06 insurer and the percentage of the entire risk assumed by each, the name of the surplus 07 lines broker, and the license number of the surplus lines broker. 08 * Sec. 20. AS 21.34.100(f) is amended to read: 09 (f) A producing broker or other licensee may issue to a person, other than 10 the named insured, a certificate [EVERY CERTIFICATE ISSUED BY THE 11 PRODUCING BROKER OR OTHER LICENSEE] as evidence of insurance 12 negotiated, placed, or procured under this chapter. The certificate must bear the 13 name of the surplus lines broker, which may not be covered, concealed, or obscured 14 by the producing broker, and the following legend in at least 10-point type: "This is 15 evidence of insurance procured and developed under the Alaska Surplus Lines Law, 16 AS 21.34. It is not covered by the Alaska Insurance Guaranty Association Act, 17 AS 21.80." 18 * Sec. 21. AS 21.36.030(a) is amended to read: 19 (a) A person may not make, issue, circulate, broadcast, or have made, issued, 20 circulated, or broadcast an estimate, circular, statement, illustration, comparison, 21 assertion, or other written, electronic, or oral presentation that 22 (1) misrepresents the benefits, advantages, conditions, sponsorship, 23 source, or terms of an insurance policy; 24 (2) misrepresents the dividends or share of the surplus to be received 25 on an insurance policy; 26 (3) misrepresents an insurance policy as being a share or shares of 27 stock; 28 (4) makes a false or misleading statement as to the dividends or shares 29 of the surplus previously paid on an insurance policy; 30 (5) misrepresents or makes a misleading statement as to the financial 31 condition of an insurer or as to the legal reserve system upon which a life insurer
01 operates; 02 (6) uses a name or title of an insurance policy or class of insurance 03 policies misrepresenting its true nature; 04 (7) is a misrepresentation for the purpose of inducing, or that tends to 05 induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy; 06 (8) is a misrepresentation for the purpose of effecting or tending to 07 effect a pledge or assignment of or loan against an insurance policy; 08 (9) appears to be an actual policy for a named individual when it is 09 merely an advertisement; 10 (10) does not clearly designate the name of the insurer providing the 11 coverage or about which the statements are made; or 12 (11) is in any other way misleading, false, or deceptive. 13 * Sec. 22. AS 21.36.030(a) is amended to read: 14 (a) A person may not make, issue, circulate, broadcast, or have made, issued, 15 circulated, or broadcast an estimate, circular, statement, illustration, comparison, 16 assertion, or other written, electronic, or oral presentation that 17 (1) misrepresents the benefits, advantages, conditions, sponsorship, 18 source, or terms of an insurance policy or a health discount plan; 19 (2) misrepresents the dividends or share of the surplus to be received 20 on an insurance policy; 21 (3) misrepresents an insurance policy as being a share or shares of 22 stock; 23 (4) makes a false or misleading statement as to the dividends or shares 24 of the surplus previously paid on an insurance policy; 25 (5) misrepresents or makes a misleading statement as to the financial 26 condition of an insurer or as to the legal reserve system upon which a life insurer 27 operates; 28 (6) uses a name or title of an insurance policy or class of insurance 29 policies misrepresenting its true nature; 30 (7) is a misrepresentation for the purpose of inducing, or that tends to 31 induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy;
01 (8) is a misrepresentation for the purpose of effecting or tending to 02 effect a pledge or assignment of or loan against an insurance policy; 03 (9) appears to be an actual policy for a named individual when it is 04 merely an advertisement; 05 (10) does not clearly designate the name of the insurer providing the 06 coverage or about which the statements are made; [OR] 07 (11) is in any other way misleading, false, or deceptive; 08 (12) misrepresents a health discount plan as a form or type of 09 insurance; 10 (13) describes a health discount plan using common insurance 11 terminology; or 12 (14) misrepresents that a health discount plan is underwritten by 13 or associated with an insurer. 14 * Sec. 23. AS 21.36 is amended by adding a new section to read: 15 Sec. 21.36.065. Limitation on owner controlled and contractor controlled 16 insurance programs. (a) An owner controlled insurance program or a contractor 17 controlled insurance program is subject to both AS 21.39 and AS 21.42, must be 18 approved by the director, and shall be allowed only for a major construction project. 19 Owner controlled and contractor controlled insurance programs are limited to property 20 insurance as defined in AS 21.12.060 and casualty insurance as defined in 21 AS 21.12.070. 22 (b) In this section, an owner controlled or contractor controlled insured 23 program does not include 24 (1) builder's risk or course of construction insurance; 25 (2) insurance relating to the transportation of cargo or other property; 26 (3) insurance covering one or more affiliates, subsidiaries, partners, or 27 joint venture partners of a person; or 28 (4) insurance policies endorsed to name one or more persons as 29 additional insureds. 30 (c) In this section, 31 (1) "contractor" means a person who meets the definition of
01 "contractor" in AS 08.18.171 and who undertakes the performance of a construction 02 project for a project owner, its agent, or its representative; 03 (2) "contractor controlled insurance program" means an insurance 04 program where one or more insurance policies are procured on behalf of a contractor, 05 its agent, or its representative, by its insurance producer, as defined in AS 21.27.900, 06 for the purpose of insuring the contractor and one or more of the following: 07 (A) the project owner; 08 (B) a subcontractor; 09 (C) an architect; 10 (D) an engineer; or 11 (E) a person performing professional services; 12 (3) "major construction project" means the process of constructing a 13 structure, building, facility, or roadway or major renovation of more than 50 percent of 14 an existing structure, building, facility, or roadway having a contract cost of more than 15 $50,000,000 of a definite term at a geographically defined project site; 16 (4) "owner controlled insurance program" means an insurance program 17 where one or more insurance policies are procured on behalf of a project owner, its 18 agent, or its representative, by its insurance producer, as defined in AS 21.27.900, for 19 the purpose of insuring the project owner and one or more of the following: 20 (A) the contractor; 21 (B) a subcontractor; 22 (C) an architect; 23 (D) an engineer; or 24 (E) a person performing professional services; 25 (5) "project owner" means a person who, in the course of the person's 26 business, engages the service of a contractor for the purpose of working on a 27 construction project; 28 (6) "subcontractor" means a person to whom a contractor sublets all or 29 part of a contractor's initial undertaking. 30 * Sec. 24. AS 21.36 is amended by adding a new section to read: 31 Sec. 21.36.155. Health discount plans. (a) A person may not sell, market,
01 promote, advertise, or otherwise distribute a health discount plan unless 02 (1) each advertisement, policy, document, information, statement, or 03 other communication regarding the health discount plan and the plan itself contain a 04 statement, in bold and prominent type, that the health discount plan is not insurance; 05 (2) the discounts offered under the health discount plan are specifically 06 authorized by a contract with each provider of the services or supplies listed in 07 conjunction with the plan; 08 (3) the health discount plan states the name, address, and telephone 09 number of the administrator of the plan; 10 (4) the person makes readily available to the consumer a complete, 11 accurate, and up-to-date list of providers participating in the plan that offer discounted 12 health care services or supplies in the consumer's local area and the discounts offered 13 by the providers; 14 (5) the person provides the consumer the right to cancel the health 15 discount plan within 30 days after purchase of the plan; and 16 (6) the person provides the consumer with a full refund of all payments 17 made, except for a nominal processing fee, within 30 days after notification of 18 cancellation of the plan under (5) of this subsection. 19 (b) The director may adopt regulations to implement this section and to 20 establish additional requirements intended to prohibit unfair or deceptive practices 21 relating to health discount plans. 22 * Sec. 25. AS 21.36.190 is amended by adding a new subsection to read: 23 (f) Except as provided in AS 21.36.065, an insurer, whether authorized or 24 unauthorized, may not underwrite an owner controlled insurance program or 25 contractor controlled insurance program. In this subsection, "owner controlled 26 insurance program" and "contractor controlled insurance program" have the meanings 27 given in AS 21.36.065. 28 * Sec. 26. AS 21.36.195 is amended to read: 29 Sec. 21.36.195. Surplus lines brokers and insurance producers; prohibited 30 acts. A surplus lines broker or an insurance producer may not fail to provide evidence 31 of insurance, [AFFIDAVITS,] filings, or reports, or fail to maintain the records, or fail
01 to pay the taxes and fees, required under AS 21.34. 02 * Sec. 27. AS 21.51 is amended by adding a new section to read: 03 Sec. 21.51.405. Rate requirements. Rates charged for a health insurance 04 policy may not be excessive, inadequate, or unfairly discriminatory. 05 * Sec. 28. AS 21.55.500(16) is amended to read: 06 (16) "plan administrator" means an [THE] eligible entity that is 07 licensed as a third-party administrator under AS 21.27 and is selected by the 08 board and approved by the director to administer a state plan; 09 * Sec. 29. AS 21.66.080(a) is amended to read: 10 (a) Every company, on or before March 1 of each year, shall furnish the 11 director or the director's designee a sworn statement of assets and liabilities, and of 12 all title premiums received by it during the preceding calendar year, setting out, among 13 other things, the amounts that have been set aside and held by it in an account required 14 under AS 21.18.073. The reporting format for a given year is the most recently 15 approved National Association of Insurance Commissioners Annual Financial 16 Statement blank form and instructions, supplemented for additional information as 17 required by the director. The director may require the statement to be filed on 18 electronic media. The statement must also show all unpaid losses and claims upon 19 title insurance policies of which the title insurance company has received due notice in 20 writing from or on behalf of the insured. With the filing of the statement, the title 21 insurance company shall pay a filing fee set under AS 21.06.250. 22 * Sec. 30. AS 21.66.085(b) is amended to read: 23 (b) A quarterly financial statement, if required, is due 45 [60] days after the 24 end of the quarter to which it applies. 25 * Sec. 31. AS 21.85 is amended by adding new sections to read: 26 Article 2. Self-Funded Governmental Plans. 27 Sec. 21.85.205. Applicability. A self-funded governmental plan that is 28 exempt from coverage under a group policy covering state employees and their 29 dependents under AS 39.30.090 and regulations adopted under that section shall 30 comply with the provisions of AS 21.85.210 - 21.85.230. 31 Sec. 21.85.210. Filing requirements. (a) A self-funded governmental plan
01 shall annually file 02 (1) an audited statement of financial condition and a statement of 03 change in financial condition for the fiscal year affirmed by a trustee of the plan; 04 (2) an actuarial memorandum from a qualified actuary that 05 (A) certifies to the adequacy of reserves, contribution rates and 06 stop-loss insurance coverage; 07 (B) describes the financial condition of the plan, including any 08 recommended actions the plan should take to improve the financial condition 09 of the plan if the qualified actuary believes the financial condition of the plan 10 needs to be improved to remain solvent; 11 (3) the name and contact information of each person providing 12 administrative and consulting services to the plan; 13 (b) A self-funded governmental plan shall file additional information as 14 requested by the director relating to the financial condition, transactions, and affairs of 15 the plan. 16 Sec. 21.85.215. Minimum standards. A self-funded governmental plan shall 17 (1) operate under a trust agreement under the governance of a board of 18 trustees that is responsible for all operations of the plan; a trustee may not be an 19 owner, officer, or employee of the administrator of the plan; 20 (2) maintain a fidelity bond issued by an authorized insurance 21 company covering each trustee of the plan in an amount not less than ten percent of 22 the benefits paid during the preceding fiscal year up to a maximum of $500,000; 23 (3) establish and maintain stop-loss coverage, reserves and 24 contribution rates at a level recommended and certified to by a qualified actuary for 25 the plan to remain financially solvent; 26 (4) maintain adequate facilities and competent personnel, as 27 determined by the director, to service the plan or contract with a third-party 28 administrator registered under AS 21.27 to service the plan; 29 (5) provide each participant a summary plan description as described 30 in 29 U.S.C. 1022, 29 CFR 2520.102-2, 29 CFR 2520.102-3, and 29 CFR 2520.102-4. 31 Sec. 21.85.225. Additional standards. In addition to the provisions
01 contained or referred to in AS 21.85.205 - 21.85.230, the following chapters and 02 provisions of this title also apply with respect to a self-funded governmental plan to 03 the extent applicable and not in conflict with the express provisions of AS 21.85.205 - 04 21.85.230 and the reasonable implications of the following chapters and provisions, 05 and, for the purposes of the application, the plan shall be considered to be a mutual 06 insurer: 07 (1) AS 21.03; 08 (2) AS 21.06; 09 (3) AS 21.07; 10 (4) AS 21.09.100, 21.09.300, and 21.09.320; 11 (5) AS 21.18.080 - 21.18.086, and 21.18.100; 12 (6) AS 21.36; 13 (7) AS 21.42.345 - 21.42.365, and 21.42.375 - 21.42.500; 14 (8) AS 21.54; 15 (9) AS 21.78; 16 (10) AS 21.90. 17 Sec. 21.85.230. Regulations. The director may adopt regulations to 18 implement AS 21.85.205 - 21.85.225, including a requirement that a self-funded 19 governmental plan includes coverages and standards that are required under this title 20 for insurance policies of the same type of risk or risks that the self-funded 21 governmental plan is intended to cover. 22 * Sec. 32. AS 21.85.500 is amended by adding a new paragraph to read: 23 (9) "self-funded governmental plan" means a governmental plan as 24 defined under 29 U.S.C. 1002 (Employee Retirement Income Security Act of 1974), 25 that 26 (A) is not a federal governmental plan as defined under 27 AS 21.54.500; and 28 (B) does not provide for payment of benefits under the plan 29 solely through a policy of insurance issued by one or more authorized 30 insurance companies. 31 * Sec. 33. AS 21.90.900(42) is amended to read:
01 (42) "third-party administrator" means a person who, for residents of 02 this state, or for residents of another jurisdiction from a place of business in this state, 03 performs administrative functions including claims administration and payment, 04 marketing administrative functions, premium accounting, premium billing, coverage 05 verification, underwriting authority, or certificate issuance in connection with life 06 insurance, annuities, health insurance, or the provision of coverage for the cost of 07 medical care [REGARD TO LIFE INSURANCE, HEALTH INSURANCE, OR 08 ANNUITIES]; 09 * Sec. 34. AS 21.90.900(43) is amended to read: 10 (43) "transact," with respect to insurance or the provision of coverage 11 for medical care, includes 12 (A) solicitation and inducement; 13 (B) preliminary negotiations; 14 (C) effectuation of a contract of insurance or the provision of 15 coverage for medical care; 16 (D) transaction of matters subsequent to effectuation of the 17 contract of insurance or the provision of coverage for medical care and 18 arising out of it; 19 * Sec. 35. AS 21.90.900 is amended by adding a new paragraph to read: 20 (45) "health discount plan" means a card, program, device, 21 arrangement, contract, or mechanism that purports to offer discounts or access to 22 discounts on health care services or supplies and that is not insurance or that does not 23 provide coverage for services or benefits regulated under AS 21.86 or AS 21.87. 24 * Sec. 36. AS 21.24.040(b); AS 21.27.330(b), and 21.27.650(p) are repealed. 25 * Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: REGULATIONS. The director of insurance may proceed to adopt 28 regulations to implement the changes made by secs. 22, 24, and 35 of this Act. The 29 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 30 effective date of secs. 22, 24, and 35 of this Act. 31 * Sec. 38. The uncodified law of the State of Alaska is amended by adding a new section to
01 read: 02 REVISOR'S INSTRUCTIONS. (a) The revisor of statutes is instructed to change the 03 heading of AS 21.85 from "Regulation of Multiple Employer Welfare Arrangements" to 04 "Regulation of Self-Funded Employer Plans." 05 (b) The revisor of statutes is instructed to designate AS 21.85.010 - 21.85.100 as 06 "Article 1. Self-funded Multiple Employer Welfare Arrangements" and to designate 07 AS 21.85.500 as "Article 3. General Provisions." 08 * Sec. 39. Sections 22, 24, and 35 of this Act take effect July 1, 2005. 09 * Sec. 40. Except as provided in sec. 39 of this Act, this Act takes effect immediately under 10 AS 01.10.070(c).