Enrolled HB 78: Relating to insurance; relating to an insurer's corporate governance; relating to insurance holding companies and insurance company holding systems; amending Rule 26, Alaska Rules of Civil Procedure, and Rules 402 and 501, Alaska Rules of Evidence; and providing for an effective date.
00Enrolled HB 78 01 Relating to insurance; relating to an insurer's corporate governance; relating to insurance 02 holding companies and insurance company holding systems; amending Rule 26, Alaska Rules 03 of Civil Procedure, and Rules 402 and 501, Alaska Rules of Evidence; and providing for an 04 effective date. 05 _______________ 06 * Section 1. AS 21.09 is amended by adding new sections to read: 07 Article 2. Corporate Governance Annual Disclosure. 08 Sec. 21.09.400. Corporate governance annual disclosure scope. (a) 09 AS 21.09.400 - 21.09.460 do not prescribe or impose a corporate governance standard 10 or internal procedure beyond that required under AS 10. Nothing in AS 21.09.400 - 11 21.09.460 limits the director's authority or the rights or obligations of a third party. 12 (b) AS 21.09.400 - 21.09.460 apply to an insurer domiciled in this state. 13 Sec. 21.09.410. Disclosure requirement. (a) An insurer, or an insurance group 14 of which the insurer is a member, shall submit to the director not later than June 1 of
01 each calendar year a corporate governance annual disclosure that contains the 02 information described in AS 21.09.430(b). In the event the director requests an insurer 03 to submit a disclosure under (c) of this section and the insurer is a member of an 04 insurance group, the insurer shall submit the disclosure to the lead state insurance 05 regulator of the insurance group, under the laws of the lead state, in accordance with 06 the procedures set out in the Financial Analysis Handbook adopted by the National 07 Association of Insurance Commissioners. 08 (b) A corporate governance annual disclosure must include a signature of the 09 insurer's or insurance group's chief executive officer or corporate secretary attesting 10 that, to the best of that individual's belief and knowledge, 11 (1) the insurer has implemented the corporate governance practices 12 required under AS 21.09.400 - 21.09.460; and 13 (2) a copy of the corporate governance annual disclosure has been 14 provided to the insurer's board of directors or the appropriate committee of the board. 15 (c) An insurer not required to submit a corporate governance annual disclosure 16 under (a) of this section shall submit a disclosure upon request of the director. 17 (d) For purposes of completing a corporate governance annual disclosure, an 18 insurer or insurance group, depending on the insurer's or insurance group's corporate 19 governance structure, may provide information regarding corporate governance at 20 (1) the ultimate controlling parent level; 21 (2) an intermediate holding company level; 22 (3) the individual legal entity level; or 23 (4) the ultimate controlling parent level, an intermediate holding 24 company level, and the individual legal entity level. 25 (e) An insurer or insurance group 26 (1) is encouraged to make the corporate governance annual disclosure 27 at the level at which 28 (A) the insurer's or insurance group's risk appetite is 29 determined; 30 (B) the earnings, capital, liquidity, operations, and reputation of 31 the insurer are overseen collectively and at which the supervision of those
01 factors are coordinated and exercised; or 02 (C) legal liability for failure of general corporate governance 03 duties would be placed; 04 (2) shall, if determining the level of reporting based on the criteria 05 under this section, 06 (A) indicate which of the three criteria under (1) of this 07 subsection was used to determine the level of reporting; and 08 (B) explain any subsequent change in the level of reporting. 09 (f) A review of the corporate governance annual disclosure and any additional 10 requests for information shall be made through the lead state in accordance with the 11 procedures set out in the Financial Analysis Handbook adopted by the National 12 Association of Insurance Commissioners. 13 (g) An insurer or insurance group providing information substantially similar 14 to the information required under AS 21.09.400 - 21.09.460 in other documents 15 provided to the director, including proxy statements filed in conjunction with Form B 16 requirements under regulations of the division, or other state or federal filings 17 provided to the division, is not required to duplicate that information in the corporate 18 governance annual disclosure; however, the insurer or insurance group shall include in 19 the disclosure a cross reference of the document in which the information is included. 20 Sec. 21.09.420. Regulations and orders. To carry out the provisions of 21 AS 21.09.400 - 21.09.460, the director may 22 (1) adopt regulations, including regulations substantially similar to the 23 regulations under the National Association of Insurance Commissioners' Corporate 24 Governance Annual Disclosure Model Regulation; and 25 (2) issue orders necessary to implement the provisions. 26 Sec. 21.09.430. Contents of corporate governance annual disclosure. (a) An 27 insurer or insurance group may have discretion in responding to a corporate 28 governance annual disclosure inquiry if the insurer's or insurance group's disclosure 29 contains the material necessary for the director to gain an understanding of the 30 insurer's or insurance group's corporate governance structure, policies, and practices. 31 The director may request additional information the director determines necessary for
01 the director to have a clear understanding of the insurer's or insurance group's 02 corporate governance policies, reporting or information system, or controls 03 implementing those policies. 04 (b) An insurer or insurance group shall prepare a corporate governance annual 05 disclosure consistent with regulations adopted by the director under AS 21.09.420. An 06 insurer or insurance group shall maintain documents and supporting information used 07 in preparing the insurer's or insurance group's disclosure and shall make the 08 documents and supporting information available upon examination or request of the 09 director. 10 Sec. 21.09.440. Confidentiality. Documents, materials, or other information, 11 including a corporate governance annual disclosure, in the possession or control of the 12 division that are obtained by, created by, or disclosed to the director or any person 13 under AS 21.09.400 - 21.09.460 are confidential and subject to the provisions of 14 AS 21.06.060. 15 Sec. 21.09.450. Agreements with National Association of Insurance 16 Commissioners and third-party consultants. (a) The director may retain, at the 17 insurer's or insurance group's expense and as consistent with this section, third-party 18 consultants, including attorneys, actuaries, accountants, and other experts not 19 otherwise a part of the director's staff, as may be reasonably necessary to assist the 20 director in reviewing the insurer's or insurance group's corporate governance annual 21 disclosure and related information or the insurer's or insurance group's compliance 22 with AS 21.09.400 - 21.09.460. 23 (b) A person retained under (a) of this section is under the direction and 24 control of the director and acts in a purely advisory capacity. 25 (c) As part of the retention process, a third-party consultant must verify to the 26 director in writing, with notice to the insurer or insurance group, that the consultant is 27 free of a conflict of interest, has internal procedures in place to monitor compliance 28 with a conflict, and will comply with the confidentiality standards and requirements 29 under AS 21.09.400 - 21.09.460. 30 (d) A written agreement with the National Association of Insurance 31 Commissioners, a third-party consultant, or both, governing sharing and use of
01 information provided under AS 21.09.400 - 21.09.460 must contain the following 02 provisions and expressly require the written consent of the insurer or insurance group 03 before making information under AS 21.09.400 - 21.09.460 public: 04 (1) a provision stating that the National Association of Insurance 05 Commissioners and third-party consultants are subject to the same confidentiality 06 standards and requirements as the director under AS 21.22.120 and any other relevant 07 law; 08 (2) specific procedures and protocols for maintaining the 09 confidentiality and security of information related to corporate governance annual 10 disclosures that is shared with the National Association of Insurance Commissioners 11 or the third-party consultant under AS 21.09.400 - 21.09.460; 12 (3) procedures and protocols that ensure the National Association of 13 Insurance Commissioners shares only with other state regulators from states in which 14 the insurer or insurance group has domiciled insurers; the agreement must provide that 15 the recipient agrees in writing to maintain the confidentiality of the documents, 16 materials, or other information related to corporate governance annual disclosures and 17 has verified in writing the legal authority to maintain confidentiality; 18 (4) a provision specifying that ownership of information related to 19 corporate governance annual disclosures that is shared with the National Association 20 of Insurance Commissioners or a third-party consultant remains with the division, and 21 the use of the information by the National Association of Insurance Commissioners or 22 the third-party consultant is subject to the direction of the director; 23 (5) a provision that prohibits the National Association of Insurance 24 Commissioners or the third-party consultant from storing the information shared under 25 AS 21.09.400 - 21.09.460 in a permanent database after the underlying analysis is 26 completed; 27 (6) a provision requiring the National Association of Insurance 28 Commissioners or the third-party consultant to provide prompt notice to the director 29 and the insurer or insurance group regarding any subpoena, request for disclosure, or 30 request for production of information related to the insurer's or insurance group's 31 corporate governance annual disclosure;
01 (7) a requirement that the National Association of Insurance 02 Commissioners or the third-party consultant consent to intervention by an insurer or 03 insurance group in any judicial or administrative action in which the National 04 Association of Insurance Commissioners or the third-party consultant may be required 05 to disclose confidential information about the insurer or insurance group shared with 06 the National Association of Insurance Commissioners or the third-party consultant 07 under AS 21.09.400 - 21.09.460. 08 Sec. 21.09.460. Penalties. Each day an insurer or insurance group fails, 09 without just cause, to file the corporate governance annual disclosure in the time 10 required under AS 21.09.410(a), the insurer or insurance group shall pay $1,000, not 11 to exceed $365,000. The director may reduce the penalty under this section if the 12 insurer or insurance group demonstrates to the director that the imposition of the 13 penalty is a financial hardship to the insurer or insurance group. 14 * Sec. 2. AS 21.22.085(a) is amended to read: 15 (a) Transactions involving a domestic insurer and a person in its insurance 16 holding company system, including amendments or modifications of affiliate 17 agreements previously filed under AS 21.22.080 that are subject to a materiality 18 standard in (1) - (7) of this subsection, may not be entered into unless the insurer has 19 notified the director in writing of the insurer's intention to enter into the transaction at 20 least 30 days before the transaction, or a shorter period if allowed by the director, and 21 the director has not disapproved the transaction within the required notice period. The 22 notice of amendments or modifications must include the reasons for the change and 23 the financial effect on the domestic insurer. A domestic insurer shall provide to the 24 director notice, within 30 days after a termination of a previously filed agreement, for 25 determination of the type of filing required, if any. The requirements in this section 26 apply to the following transactions: 27 (1) a sale, purchase, exchange, loan or extension of credit, or 28 investment, provided the transaction is equal to or exceeds 29 (A) with respect to insurers other than life insurers, the lesser of 30 three percent of the insurer's admitted assets or 25 percent of surplus that 31 pertains to policyholders, as of December 31 of the previous calendar year [IN
01 WHICH THE TRANSACTION TOOK PLACE]; or 02 (B) with respect to life insurers, three percent of the insurer's 03 admitted assets as of December 31 of the previous calendar year [IN WHICH 04 THE TRANSACTION TOOK PLACE]; 05 (2) a loan or extension of credit to a person who is not an affiliate, 06 where the insurer makes loans or extensions of credit with the agreement or 07 understanding that the proceeds of the transaction, in whole or in substantial part, are 08 to be used to make a loan or extension of credit to, purchase an asset of, or make an 09 investment in an affiliate of the insurer making the loan or extension of credit, 10 provided the transaction is equal to or exceeds 11 (A) with respect to insurers other than life insurers, the lesser of 12 three percent of the insurer's admitted assets or 25 percent of surplus that 13 pertains to policyholder surplus, as of December 31 of the previous calendar 14 year [IN WHICH THE TRANSACTION TOOK PLACE]; or 15 (B) with respect to life insurers, three percent of the insurer's 16 admitted assets as of December 31 of the previous calendar year [IN WHICH 17 THE TRANSACTION TOOK PLACE]; 18 (3) a reinsurance agreement or modification, including 19 (A) a reinsurance pooling agreement; 20 (B) an agreement in which the reinsurance premium or change 21 in the insurer's liabilities, or the projected reinsurance premium or a change in 22 the insurer's liabilities in any of the three years after entering into the 23 agreement or modification, equals or exceeds five percent of surplus that 24 pertains to policyholders as of December 31 of the previous calendar year [IN 25 WHICH THE TRANSACTION TOOK PLACE], including an agreement that 26 may require as consideration the transfer of assets from an insurer to a 27 nonaffiliate if an agreement or understanding exists between the insurer and 28 nonaffiliate that a portion of the assets will be transferred to one or more 29 affiliates of the insurer; 30 (4) a management agreement, service contract, tax allocation 31 agreement, guarantee, or cost-sharing arrangement;
01 (5) a material transaction specified by regulation that the director 02 determines may adversely affect the interests of the insurer's policyholders; 03 (6) a guarantee if made by a domestic insurer, except that a guarantee 04 that is quantifiable as to amount is not subject to the notice requirements of this 05 subsection unless it exceeds the lesser of one-half of one percent of the insurer's 06 admitted assets or 10 percent of surplus that pertains to policyholders as of 07 December 31 of the previous calendar year [IN WHICH THE TRANSACTION 08 TOOK PLACE]; a guarantee that is not quantifiable as to amount is subject to the 09 notice requirements of this subsection; and 10 (7) a direct or an indirect acquisition or investment in a person that 11 controls an insurer or in an affiliate of the insurer in an amount that, together with the 12 person's present holdings in the investment, exceeds two and one-half percent of 13 surplus that pertains to policyholders; direct or indirect acquisitions or investments in 14 subsidiaries authorized under this title or regulations adopted by the director or in 15 nonsubsidiary insurance affiliates that are subject to the provisions of this chapter are 16 exempt from this requirement. 17 * Sec. 3. AS 21.22 is amended by adding a new section to read: 18 Sec. 21.22.117. Group-wide supervision of internationally active insurance 19 groups. (a) The director may act as the group-wide supervisor for an internationally 20 active insurance group in accordance with this section. However, the director may 21 acknowledge another regulatory official as the group-wide supervisor if the 22 internationally active insurance group 23 (1) does not have substantial insurance operations in the United States; 24 (2) has substantial insurance operations in the United States but not in 25 this state; or 26 (3) has substantial insurance operations in the United States and this 27 state, but the director has determined under (b) or (f) of this section that the other 28 regulatory official is the appropriate group-wide supervisor; an insurance holding 29 company system that does not otherwise qualify as an internationally active insurance 30 group may request that the director make a determination or acknowledgment of a 31 group-wide supervisor under this section.
01 (b) In cooperation with other state, federal, and international regulatory 02 agencies, the director shall identify a single group-wide supervisor for an 03 internationally active insurance group. The director may determine that the director is 04 the appropriate group-wide supervisor for an internationally active insurance group 05 that conducts substantial insurance operations concentrated in this state. However, the 06 director may acknowledge that a regulatory official from another jurisdiction is the 07 appropriate group-wide supervisor for the internationally active insurance group. The 08 director shall consider the following factors when making a determination or 09 acknowledgment under this subsection: 10 (1) the place of domicile of the insurers within the internationally 11 active insurance group that hold the largest share of the group's written premiums, 12 assets, or liabilities; 13 (2) the place of domicile of the top-tiered insurer or insurers in the 14 insurance holding company system of the internationally active insurance group; 15 (3) the location of the executive offices or largest operational offices of 16 the internationally active insurance group; 17 (4) whether another regulatory official is acting or is seeking to act as 18 the group-wide supervisor under a regulatory system that the director determines to be 19 (A) substantially similar to the system of regulation provided 20 under the laws of this state; or 21 (B) otherwise sufficient in terms of providing for group-wide 22 supervision, enterprise risk analysis, and cooperation with other regulatory 23 officials; and 24 (5) whether another regulatory official acting or seeking to act as the 25 group-wide supervisor provides the director with reasonably reciprocal recognition 26 and cooperation; a regulatory official identified under this section as the group-wide 27 supervisor may determine that it is appropriate to acknowledge another supervisor to 28 serve as the group-wide supervisor; the regulatory official shall consider the factors 29 listed in this subsection when making an acknowledgment under this subsection and 30 shall make the acknowledgment in cooperation with, and subject to, the 31 acknowledgment of other regulatory officials involved with supervision of members
01 of the internationally active insurance group and in consultation with the 02 internationally active insurance group. 03 (c) Notwithstanding any other provision of law, when another regulatory 04 official is acting as the group-wide supervisor of an internationally active insurance 05 group, the director shall acknowledge that regulatory official as the group-wide 06 supervisor. However, the director shall make a determination or acknowledgment of 07 the appropriate group-wide supervisor for the internationally active insurance group 08 under (b) of this section in the event of a material change in the internationally active 09 insurance group that results in 10 (1) the internationally active insurance group's insurers domiciled in 11 this state holding the largest share of the group's premiums, assets, or liabilities; or 12 (2) this state being the place of domicile of the top-tiered insurer or 13 insurers in the insurance holding company system of the internationally active 14 insurance group. 15 (d) Under AS 21.22.110, the director may collect from an insurer registered 16 under AS 21.22.060 the information necessary to determine whether the director may 17 act as the group-wide supervisor of an internationally active insurance group or if the 18 director may acknowledge another regulatory official to act as the group-wide 19 supervisor. Before issuing a determination that an internationally active insurance 20 group is subject to group-wide supervision, the director shall notify the insurer 21 registered under AS 21.22.060 and the ultimate controlling person within the 22 internationally active insurance group. Upon notification, the internationally active 23 insurance group has a minimum of 30 days to provide the director with additional 24 information pertinent to the pending determination. The director may publish on the 25 division's Internet website the identity of internationally active insurance groups that 26 the director has determined are subject to group-wide supervision by the director. 27 (e) If the director is the group-wide supervisor for an internationally active 28 insurance group, the director may 29 (1) assess the enterprise risks in the internationally active insurance 30 group to ensure 31 (A) the material financial condition and liquidity risks to
01 members of the internationally active insurance group that are engaged in the 02 business of insurance are identified by management; and 03 (B) reasonable and effective mitigation measures are in place; 04 (2) request from a member of an internationally active insurance group 05 subject to the director's supervision information necessary and appropriate to assess 06 enterprise risk, including information about the members of the internationally active 07 insurance group regarding 08 (A) governance, risk assessment, and management; 09 (B) capital adequacy; and 10 (C) material intercompany transactions; 11 (3) coordinate and, through the authority of the regulatory officials of 12 the jurisdictions where members of the internationally active insurance group are 13 domiciled, compel development and implementation of reasonable measures designed 14 to ensure that the internationally active insurance group is able to timely recognize and 15 mitigate enterprise risks to members of the internationally active insurance group that 16 are engaged in the business of insurance; 17 (4) communicate with other state, federal, and international regulatory 18 agencies for members in the internationally active insurance group and share relevant 19 information subject to the confidentiality provisions under AS 21.22.120, through 20 supervisory colleges under AS 21.22.115 or otherwise; 21 (5) enter into agreements with, or obtain documentation from, an 22 insurer registered under AS 21.22.060, a member of the internationally active 23 insurance group, or a state, federal, or international regulatory agency for members of 24 the internationally active insurance group, providing the basis for, or otherwise 25 clarifying, the director's role as group-wide supervisor, including provisions for 26 resolving disputes with other regulatory officials; the agreements or documentation 27 may not serve as evidence in a proceeding against an insurer or person in an insurance 28 holding company system not domiciled or incorporated in this state or doing business 29 in this state or otherwise subject to jurisdiction in this state; and 30 (6) perform other group-wide supervision activities, consistent with the 31 authorities and purposes set out in this subsection.
01 (f) If the director acknowledges that another regulatory official from a 02 jurisdiction that is not accredited by the National Association of Insurance 03 Commissioners is the group-wide supervisor, the director may reasonably cooperate, 04 through supervisory colleges or otherwise, with group-wide supervision undertaken by 05 the group-wide supervisor under the following conditions: 06 (1) the director's cooperation is in compliance with the laws of this 07 state; and 08 (2) the regulatory official acknowledged as the group-wide supervisor 09 recognizes and cooperates with the director's activities as a group-wide supervisor for 10 other internationally active insurance groups, where applicable; if recognition and 11 cooperation is not reasonably reciprocal, the director may refuse recognition and 12 cooperation. 13 (g) The director may enter into agreements with, or obtain documentation 14 from, an insurer registered under AS 21.22.060, an affiliate of the insurer, or other 15 state, federal, and international regulatory agencies for members of the internationally 16 active insurance group, that provide the basis for, or otherwise clarify, a regulatory 17 official's role as group-wide supervisor. 18 (h) A registered insurer subject to this section is liable for and shall pay the 19 reasonable expenses of the director's participation in the administration of this section, 20 including the engagement of attorneys, actuaries, and other professionals, and all 21 reasonable travel expenses. 22 * Sec. 4. AS 21.22.120(a) is amended to read: 23 (a) All information, documents, holding company analyses, insurer profile 24 summaries, and copies of the information and documents obtained by or disclosed to 25 the director or any other person in the course of an examination or investigation made 26 under AS 21.22.110 and all information reported under AS 21.22.020(b), 21.22.060, 27 [AND] 21.22.085 - 21.22.105, and 21.22.117 and all preacquisition notification 28 information received under AS 21.22.065 shall be given confidential treatment under 29 AS 21.06.060. However, if the director, after giving the insurer and its affiliates who 30 would be affected by publication of the information notice and opportunity to be 31 heard, determines that the interests of policyholders, shareholders, or the public will be
01 served by the publication of the information, the director may publish all or part of the 02 information in the manner the director considers appropriate. 03 * Sec. 5. AS 21.22.120 is amended by adding new subsections to read: 04 (c) The director or a person who receives documents, materials, or other 05 information while acting under the authority of the director or with whom documents, 06 materials, or other information are shared under this chapter may not be permitted or 07 required to testify in any private civil action concerning confidential documents, 08 materials, or information subject to (a) of this section. 09 (d) The sharing of information by the director under this chapter does not 10 constitute a delegation of regulatory authority or rulemaking. The director is solely 11 responsible for the administration, execution, and enforcement of this chapter. 12 (e) A waiver of an applicable privilege or claim of confidentiality in the 13 documents, materials, or information under (a) of this section may not be given as a 14 result of disclosure to the director under this section or as a result of sharing as 15 authorized under (b) of this section. 16 (f) Documents, materials, or other information in the possession or control of 17 the National Association of Insurance Commissioners under this chapter 18 (1) are confidential by law; 19 (2) are not subject to 20 (A) AS 40.25.110 - 40.25.220; 21 (B) subpoena; or 22 (C) discovery or admissible in evidence in any private action. 23 * Sec. 6. AS 21.22.200 is amended by adding new paragraphs to read: 24 (17) "group-wide supervisor" means the regulatory official authorized 25 to engage in conducting and coordinating group-wide supervision activities who is 26 determined or acknowledged by the director under AS 21.22.117 to have sufficient 27 significant contacts with the internationally active insurance group; 28 (18) "internationally active insurance group" means an insurance 29 holding company system that includes an insurer registered under AS 21.22.060 and 30 that meets the following criteria: 31 (A) insurers that are part of the insurance holding company
01 system write premiums in at least three countries; 02 (B) the percentage of gross premiums written outside the 03 United States is at least 10 percent of the insurance holding company system's total 04 gross written premiums; and 05 (C) based on a three-year rolling average, the total assets of the 06 insurance holding company system are at least $50,000,000,000 or the total gross 07 written premiums of the insurance holding company system are at least 08 $10,000,000,000. 09 * Sec. 7. AS 21.97 is amended by adding a new section to read: 10 Sec. 21.97.030. Material incorporated by reference. The director may adopt 11 a regulation that incorporates by reference the Financial Analysis Handbook published 12 by the National Association of Insurance Commissioners. Under AS 44.62.245(a)(2), 13 in adopting or amending a regulation that incorporates the Financial Analysis 14 Handbook published by the National Association of Insurance Commissioners, the 15 director may incorporate future amended versions of the Financial Analysis Handbook 16 published by the National Association of Insurance Commissioners. 17 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 INDIRECT COURT RULE AMENDMENT. The provisions of secs. 3 and 5 of this 20 Act have the effect of changing the following court rules in the manner specified: 21 (1) Rule 26, Alaska Rules of Civil Procedure, by prohibiting discovery of 22 evidence in the possession or control of the National Association of Insurance Commissioners 23 relating to insurance holding companies and insurance holding company systems; 24 (2) Rules 402 and 501, Alaska Rules of Evidence, by 25 (A) creating a new privilege relating to insurance holding companies 26 and insurance holding company systems that would prevent a person from being 27 permitted or compelled to testify about confidential documents, materials, or 28 information in a private civil action; and 29 (B) precluding admissibility of evidence 30 (i) in a private action, of documents, materials, or other 31 information in the possession or control of the National Association of
01 Insurance Commissioners relating to insurance holding companies and 02 insurance holding company systems; and 03 (ii) in a proceeding against certain insurers or persons in an 04 insurance holding company system, of agreements or documentation relating 05 to insurance holding companies and insurance holding company systems. 06 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 CONDITIONAL EFFECT. AS 21.22.117(e)(5), enacted by sec. 3 of this Act, and 09 AS 21.22.120(c) and (f), enacted by sec. 5 of this Act, take effect only if secs. 3 and 5 of this 10 Act receive the two-thirds majority vote of each house required by art. IV, sec. 15, 11 Constitution of the State of Alaska. 12 * Sec. 10. This Act takes effect immediately under AS 01.10.070(c).