CSSB 132(L&C): "An Act relating to insurance; and providing for an effective date."
00 CS FOR SENATE BILL NO. 132(L&C) 01 "An Act relating to insurance; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 12.10.020 is amended by adding a new subsection to read: 04 (d) Even if the general time limitation has expired, a prosecution for any 05 offense related to life insurance may be commenced within one year after discovery of 06 the offense by an aggrieved party or by a person who has legal capacity to represent an 07 aggrieved party or a legal duty to report the offense and who is not a party to the 08 offense, but in no case shall this provision extend the period of limitation otherwise 09 applicable by more than 20 years. 10 * Sec. 2. AS 21.07.030(a) is amended to read: 11 (a) If a health care insurer offers a health care insurance policy that provides 12 for coverage of medical care services only if the services are furnished through a 13 network of health care providers that have entered into a contract with the health care 14 insurer, the health care insurer shall also offer a non-network option to covered 15 persons at initial enrollment, as provided under (c) of this section. The non-network
01 option may require that a covered person pay a higher deductible, copayment, or 02 premium for the plan if the higher deductible, copayment, or premium results from 03 increased costs caused by the use of a non-network provider. This subsection does not 04 apply to 05 (1) a covered person who is offered non-network coverage through 06 another health care insurance policy or through another health care insurer; or 07 (2) a health maintenance organization licensed under AS 21.86. 08 * Sec. 3. AS 21.07.030 is amended by adding a new subsection to read: 09 (i) A health care insurer that offers a health care insurance policy that provides 10 different levels of coverage for health care services based on network status and 11 performs utilization review shall include details on a prior authorization request form 12 on how a health care provider or covered person may request a benefit-level 13 exception. If the health care insurer approves the prior authorization, the insurer shall 14 detail whether the claim will be processed as a network or non-network claim. If the 15 benefit will be paid based on a non-network reimbursement level and a benefit-level 16 exception requires an application process separate from the prior authorization 17 process, the prior authorization must include instructions for requesting the benefit- 18 level exception. In this subsection, a "benefit-level exception" means an exception to 19 medical care coverage where a health care insurer applies network health care benefit 20 levels to services received from an out-of-network health care provider or facility. 21 * Sec. 4. AS 21.09.200(g) is amended to read: 22 (g) An insurer shall file with the director or the director's designee an annual 23 audited financial report for the previous year by June 1 of each year [UNLESS, 24 UNDER A REGULATION ADOPTED BY THE DIRECTOR, THE DIRECTOR 25 GRANTS AN EXEMPTION BASED ON A FINDING THAT FILING AN 26 ANNUAL AUDITED FINANCIAL REPORT WOULD CONSTITUTE A 27 FINANCIAL OR ORGANIZATIONAL HARDSHIP ON THE INSURER. THE 28 FILING DATE FOR THE ANNUAL AUDITED FINANCIAL REPORT MAY BE 29 EXTENDED BY THE DIRECTOR UPON SHOWING THAT THE STANDARDS 30 ESTABLISHED BY REGULATION HAVE BEEN MET]. If the director gives the 31 insurer 90 days' advance notice, and for good cause, the director may require an
01 insurer to file an audited financial report earlier than June 1 of each year. The annual 02 audited financial report must be prepared by a qualified independent certified public 03 accountant. An insurer shall notify the director of the certified public accountant 04 engaged to conduct the audit and issue the annual audited financial report. 05 * Sec. 5. AS 21.09.200 is amended by adding a new subsection to read: 06 (m) An insurer may apply to the director for an exemption from compliance 07 with a requirement of this section if compliance would cause the insurer to suffer a 08 financial or organizational hardship. The director may, in the director's discretion, 09 approve an exemption. If the director denies an insurer's application for exemption, the 10 insurer may, within 15 days after the date of the denial, submit a request in writing to 11 the director for a hearing as provided under AS 21.06.180 - 21.06.240. 12 * Sec. 6. AS 21.09.210(b) is amended to read: 13 (b) Each insurer, and each formerly authorized insurer with respect to 14 premiums written while an authorized insurer in this state, shall pay a tax on the total 15 direct premium written during the year ending on the preceding December 31 and paid 16 for the insurance of property or risks resident or located in the state [, OTHER THAN 17 WET MARINE AND TRANSPORTATION INSURANCE,] after deducting from the 18 total direct premium income the applicable cancellations, returned premiums, the 19 unabsorbed portion of any deposit premium, all policy dividends, unabsorbed 20 premiums refunded to policyholders, refunds, savings, savings coupons, and other 21 similar returns paid or credited to policyholders with respect to their policies. 22 Deductions may not be made of cash surrender value of policies. Considerations 23 received on annuity contracts are not included in the direct premium income and are 24 not subject to tax. The tax shall be paid to the director at least annually but not more 25 often than once each quarter on the dates specified by the director. The method of 26 payment must be by the electronic or other payment method specified by the director. 27 Except as provided under (m) of this section, the tax is computed at the rate of 28 (1) for domestic and foreign insurers, except hospital and medical 29 service corporations, 2.7 percent; 30 (2) for hospital and medical service corporations, six percent of their 31 gross premiums less claims paid;
01 (3) for wet marine and transportation insurance, three-quarters of 02 one percent. 03 * Sec. 7. AS 21.09.242(a) is amended to read: 04 (a) Each [AN] insurer and [, INCLUDING A] pharmacy benefits manager 05 shall, with respect to a medical assistance program [PROGRAMS] under AS 47.07, 06 [SHALL] cooperate with the Department of Health to 07 (1) provide, with respect to an individual who is eligible for or is 08 provided medical assistance under AS 47.07, at [ON] the request of the department, 09 information to determine during what period the individual or the individual's spouse 10 or dependents may be or may have been covered by the insurer and the nature of the 11 coverage that is or was provided by the insurer, including the name and address of the 12 insurer and the identifying number of the health care insurance plan; 13 (2) accept the department's right of recovery and the assignment to the 14 department of any right of an individual or other entity to payment from the party for 15 an item or service for which payment has been made under AS 47.07; 16 (3) respond within 60 days to any inquiry by the department regarding 17 a claim for payment for any health care item or service that is submitted not later than 18 three years after the date of the provision of the health care item or service; and 19 (4) agree not to deny a claim submitted by the department solely on the 20 basis of the date of submission of the claim, the type or format of the claim form, a 21 failure to obtain prior authorization, or a failure to present proper documentation at 22 the point-of-sale that is the basis of the claim if 23 (A) the claim is submitted by the department within the three- 24 year period beginning on the date on which the item or service was furnished; 25 and 26 (B) any action by the department to enforce its rights with 27 respect to the claim is commenced within six years after the department's 28 submission of the claim. 29 * Sec. 8. AS 21.12.020(h) is amended to read: 30 (h) The director shall consider the list of reciprocal jurisdictions published 31 through the National Association of Insurance Commissioners committee process in
01 determining a reciprocal jurisdiction and has the discretion to defer to the list. The 02 director may approve a jurisdiction not on the list in accordance with criteria 03 developed under regulations adopted by the director. The director may remove a 04 jurisdiction from the list of reciprocal jurisdictions upon determination that the 05 jurisdiction no longer meets the requirements of a reciprocal jurisdiction in accordance 06 with a process set out in regulation by the director. Upon removal of a reciprocal 07 jurisdiction from the list, credit for reinsurance ceded to an assuming insurer that has a 08 home office or is domiciled in that jurisdiction shall be allowed if otherwise allowed 09 under this section. The director shall timely create and publish a list of assuming 10 insurers that have satisfied the conditions set out in this subsection and to which 11 cessions shall be granted credit in accordance with (a) of this section. The director 12 may add an assuming insurer to a list if a National Association of Insurance 13 Commissioners accredited jurisdiction has added the assuming insurer to a list of 14 assuming insurers or, if upon initial eligibility, the assuming insurer submits the 15 information to the director as required under (a)(6)(D) of this section and complies 16 with any additional requirements the director may impose by regulation. If the director 17 determines that an assuming insurer no longer meets one or more of the requirements 18 of (a)(6) of this section, the director may revoke or suspend the eligibility of the 19 assuming insurer under (a)(6) of this section in accordance with procedures set out in 20 regulation. While an assuming insurer's eligibility is suspended, a reinsurance 21 agreement issued, amended, or renewed after the effective date of the suspension does 22 not qualify for credit except to the extent that the assuming insurer's obligations under 23 the contract are secured in accordance with (c) of this section. If an assuming insurer's 24 eligibility is revoked, a credit for reinsurance may not be granted after the effective 25 date of the revocation with respect to any reinsurance agreement entered into by the 26 assuming insurer, including a reinsurance agreement entered into before the date of 27 revocation, except to the extent that the assuming insurer's obligations under the 28 contract are secured in a form acceptable to the director and consistent with (c) of this 29 section. Upon entry of an order of rehabilitation, liquidation, or conservation against 30 the ceding insurer, the supervising court may [SHALL] require an assuming insurer 31 under (a)(6) of this section to post 100 percent security for the benefit of the ceding
01 insurer or its estate. Nothing in this subsection shall limit or in any way alter the 02 capacity of parties to a reinsurance agreement to agree on requirements for security or 03 other terms in that reinsurance agreement consistent with this section. Credit under 04 (a)(6) of this section may be taken only for reinsurance agreements entered into, 05 renewed, or amended on or after the date the director has determined that the assuming 06 insurer is eligible for credit, and may not be taken for reinsurance of losses incurred or 07 reserves reported before that date. Credit under (a)(6) of this section may not apply to 08 reinsurance agreements entered into, to losses incurred, or to reserves posted before 09 application under (a)(6) of this section. 10 * Sec. 9. AS 21.12.020(i)(2) is amended to read: 11 (2) "reciprocal jurisdiction" means a jurisdiction that 12 (A) is not a United States jurisdiction that is subject to an in- 13 force covered agreement with the United States, each within its legal authority, 14 or in the case of a covered agreement between the United States and the 15 European Union, is a member state of the European Union; in this 16 subparagraph, "covered agreement" is an agreement entered into under 31 17 U.S.C. 313 - 314 (Dodd-Frank Wall Street Reform and Consumer Protection 18 Act) that is currently in effect or in a period of provisional application and 19 addresses the elimination, under specified conditions, of collateral 20 requirements as a condition for entering into any reinsurance agreement with a 21 ceding insurer domiciled in this state or for allowing the ceding insurer to 22 recognize credit for reinsurance; 23 (B) is a United States jurisdiction that meets the requirements 24 for accreditation under the National Association of Insurance Commissioners 25 financial standards and accreditation program; or 26 (C) is a qualified jurisdiction, as determined by the director 27 under (a)(5)(C) of this section, that is not otherwise described in (A) and (B) of 28 this paragraph and that meets certain additional requirements, consistent with 29 the terms and conditions of in-force covered agreements, as specified by the 30 director in regulation; 31 * Sec. 10. AS 21.18.112(e) is amended to read:
01 (e) An insurer shall establish reserves using a principle-based valuation that 02 meets the following conditions for policies or contracts as specified in the valuation 03 manual: 04 (1) quantify the benefits, guarantees, and funding associated with the 05 contracts and their risks at a level of conservatism that reflects conditions that include 06 unfavorable events that have a reasonable probability of occurring during the lifetime 07 of the contracts and, for policies or contracts with significant tail risk, that reflect 08 conditions appropriately adverse to quantify the tail risk; 09 (2) incorporate assumptions, risk analysis methods, and financial 10 models and management techniques that are consistent with, but not necessarily 11 identical to, those used in the insurer's overall risk assessment process while 12 recognizing potential differences in financial reporting structures and prescribed 13 assumptions or methods; 14 (3) incorporate assumptions that are derived in one of the following 15 manners: 16 (A) the assumptions are prescribed in the valuation manual; 17 (B) for assumptions that are not prescribed, the assumptions 18 shall be established using the insurer's available experience, to the extent it is 19 relevant and statistically credible; to the extent that data is not available, 20 relevant, or statistically credible, the assumptions shall be established using 21 other relevant or statistically credible experience; 22 (4) provide margins for uncertainty, including adverse deviation and 23 estimation error, so that the greater the uncertainty the larger the margin and resulting 24 reserve; 25 (5) for an insurer using a principle-based valuation for one or more 26 policies or contracts subject to this subsection as specified in the valuation manual, 27 (A) establish procedures for corporate governance and 28 oversight of the actuarial valuation function consistent with those described in 29 the valuation manual and a process for appropriate waiver or modification 30 of the established procedures; 31 (B) provide to the director an annual certification of the
01 effectiveness of the internal controls with respect to the principle-based 02 valuation; the controls shall be designed to ensure that all material risks 03 inherent in the liabilities and associated assets subject to the valuation are 04 included in the valuation and that valuations are made in accordance with the 05 valuation manual; the certification shall be based on the controls in place as of 06 the end of the preceding calendar year; 07 (C) develop and file with the director upon request a principle- 08 based valuation report that complies with standards prescribed in the valuation 09 manual; 10 (6) a principle-based valuation may include a prescribed formulaic 11 reserve component. 12 * Sec. 11. AS 21.18.900(12) is amended to read: 13 (12) "policyholder behavior" means a lapse, withdrawal, transfer, 14 deposit, premium payment, loan, annuitization, or election of a policy benefit by 15 the terms of a policy or contract, or another [AN] action of a policyholder, contract 16 holder, or another person with the right to elect options; "policyholder behavior" 17 does not include events of mortality or morbidity that result in a benefit 18 prescribed by the terms of a policy or contract; 19 * Sec. 12. AS 21.27.020(c) is amended to read: 20 (c) To qualify for issuance or renewal of a license as a firm insurance 21 producer, a firm managing general agent, a firm reinsurance intermediary broker, a 22 firm reinsurance intermediary manager, a firm surplus lines broker, or a firm 23 independent adjuster, an applicant or licensee shall 24 (1) comply with (b)(4) and (5) of this section; 25 (2) maintain a lawfully established place of business in this state, 26 except when licensed as a nonresident under AS 21.27.270; 27 (3) designate one or more compliance officers for the firm, except that 28 not more than one compliance officer may be designated for each line [CLASS] of 29 authority under AS 21.27.115; 30 (4) provide to the director documents necessary to verify the 31 information contained in or made in connection with the application; and
01 (5) notify the director, in writing, not later than 30 days after a change 02 in the firm's compliance officer. 03 * Sec. 13. AS 21.27.020(f) is amended to read: 04 (f) The director may adopt regulations establishing additional education or 05 experience requirements for applicants, licensees, and continuing education providers 06 under this chapter upon due consideration of the availability and accessibility of 07 education and training opportunities in rural areas of the state. Regulations adopted 08 under this subsection are subject to the following provisions: 09 (1) additional educational or experience requirements may not apply to 10 a licensee who has been licensed by the division of insurance before January 1, 1980; 11 (2) a licensee shall complete at least 24 credit hours of approved 12 continuing education courses during each two-year license period; 13 (3) if a licensee has accumulated more credit hours than required under 14 (2) of this subsection by the end of the license period, a maximum of eight hours may 15 be carried over to meet the requirements of (2) of this subsection in the next license 16 period; 17 (4) a program or seminar may not be approved as an acceptable 18 continuing education program unless it is a formal program of learning that 19 contributes to the professional competence of the licensee; individual study programs 20 or correspondence courses may be used to fulfill continuing education requirements if 21 approved by the director; 22 (5) a nonresident licensee is exempt from the requirements of this 23 subsection, except for a nonresident independent adjuster who designates this 24 state as the adjuster's home state. 25 * Sec. 14. AS 21.27.025(a) is amended to read: 26 (a) A licensee shall notify the director in writing not later than 30 days after a 27 change in residence, place of business, legal name, fictitious name or alias, mailing 28 address, electronic mailing address, telephone number, or compliance officer. A 29 licensee shall report to the director in writing any administrative action taken against 30 the licensee by a governmental agency [OF ANOTHER STATE, BY A 31 GOVERNMENTAL AGENCY OF ANOTHER JURISDICTION,] or by a financial
01 industry regulatory authority sanction or arbitration proceeding not later than 30 days 02 after the final disposition of the action. A licensee shall submit to the director the final 03 order and other relevant legal documents in the action. A licensee shall report to the 04 director in writing any criminal prosecution of the licensee in this or another state or 05 jurisdiction not later than 30 days after the date of filing of the criminal complaint, 06 indictment, information, or citation in the prosecution. The licensee shall submit to the 07 director a copy of the criminal complaint, calendaring order, and other relevant legal 08 documents in the prosecution. 09 * Sec. 15. AS 21.27.115 is amended to read: 10 Sec. 21.27.115. Lines of authority. If a person has met the applicable 11 requirements of AS 21.27.020 and 21.27.270, the director shall issue a license for one 12 or more of the following lines of authority: 13 (1) life insurance coverage on natural persons; in this paragraph, "life 14 insurance coverage" 15 (A) includes benefits of endowment and annuities; and 16 (B) may include benefits in the event of death or 17 dismemberment by accident and benefits for disability income; 18 (2) accidental and health or sickness insurance coverage for sickness, 19 bodily injury, or accidental death; in this paragraph, "accidental and health or 20 sickness insurance coverage" includes health insurance, as defined in 21 AS 21.12.050(a), and may include benefits for disability income; 22 (3) property insurance coverage for the direct or consequential loss for 23 damage to property of every kind; 24 (4) casualty insurance coverage against legal liability, including that 25 for death, injury, or disability or damage to real or personal property; in this 26 paragraph, "casualty insurance" includes surety insurance as defined in AS 21.12.080; 27 (5) variable life and variable annuity products insurance coverage; 28 (6) personal lines property and casualty insurance coverage sold to 29 individuals and families for primarily noncommercial purposes; 30 (7) limited lines credit insurance; 31 (8) [REPEALED
01 (9) REPEALED 02 (10)] any insurance for which a limited lines license may be issued 03 under AS 21.27.150. 04 * Sec. 16. AS 21.27.270(b) is amended to read: 05 (b) Unless the director denies or refuses to renew a license under 06 AS 21.27.410, the director shall issue a nonresident producer, limited lines, surplus 07 lines broker, managing general agent, reinsurance intermediary broker, independent 08 adjuster, or reinsurance intermediary manager license to a person who is not a 09 resident of this state if 10 (1) the person is currently licensed and is in good standing in the 11 person's home state; the director may verify the person's licensing status through the 12 producer licensing database records maintained by the National Association of 13 Insurance Commissioners or its affiliates or subsidiaries; 14 (2) the person has paid the fees required under AS 21.06.250 and has 15 submitted to the director 16 (A) the license application the person submitted to the person's 17 home state; or 18 (B) if the person is not a firm, a completed uniform application 19 or, if a firm, the uniform business entity application; and 20 (3) the person's home state awards nonresident producer, limited lines, 21 surplus lines broker, managing general agent, reinsurance intermediary broker, 22 independent adjuster, and reinsurance intermediary manager licenses to residents of 23 this state on the same basis as does this state. 24 * Sec. 17. AS 21.27.270(h) is amended to read: 25 (h) A nonresident applicant for an independent adjuster license who [ONLY 26 ADJUSTS CLAIMS RELATED TO PORTABLE ELECTRONICS INSURANCE 27 UNDER AS 21.36.515 AND WHO] is licensed as an independent adjuster and in 28 good standing in the applicant's home state does not have to meet the requirements of 29 AS 21.27.060 or 21.27.830 to be licensed under this section. [A RESIDENT OF 30 CANADA MAY NOT BE LICENSED AS AN INDEPENDENT ADJUSTER 31 UNDER THIS SECTION UNLESS THE APPLICANT HAS OBTAINED A
01 RESIDENT INDEPENDENT ADJUSTER LICENSE IN ANOTHER STATE OR 02 DECLARED ANOTHER STATE THE APPLICANT'S HOME STATE AND 03 OBTAINED AN INDEPENDENT ADJUSTER LICENSE IN THAT STATE.] 04 * Sec. 18. AS 21.27.270(i) is amended to read: 05 (i) If a nonresident independent [PORTABLE ELECTRONICS] adjuster 06 applicant's home state does not license independent adjusters, the independent 07 [PORTABLE ELECTRONICS] adjuster applicant may designate the applicant's home 08 state as any state in which the applicant is licensed in good standing. 09 * Sec. 19. AS 21.27.270 is amended by adding a new subsection to read: 10 (j) A nonresident applicant for issuance or renewal of an independent adjuster 11 license or firm independent adjuster license who designates this state as the applicant's 12 home state must qualify for licensure under AS 21.27.020 and apply for the issuance 13 or renewal of the license in accordance with AS 21.27.040. 14 * Sec. 20. AS 21.27.380(d) is amended to read: 15 (d) The director shall send [MAIL] a notice of license expiration stating the 16 reason for the expiration to a licensee at the licensee's most current electronic mail 17 address or mailing [LAST] address on record with the director. [THE DIRECTOR 18 SHALL OBTAIN A CERTIFICATE OF MAILING FROM THE UNITED STATES 19 POSTAL SERVICE.] 20 * Sec. 21. AS 21.27.630(d) is amended to read: 21 (d) A third-party administrator may not use a fictitious name or alias unless 22 the third-party administrator's [LICENSEE'S] legal name and fictitious name or 23 alias are on the registration. 24 * Sec. 22. AS 21.27.640(b) is amended to read: 25 (b) To qualify for issuance or renewal of a registration, an applicant or 26 registrant shall comply with this title, regulations adopted under AS 21.06.090, and 27 (1) be a trustworthy person; 28 (2) have active working experience in administrative functions that, in 29 the director's opinion, exhibits the ability to competently perform the administrative 30 functions of a third-party administrator; 31 (3) not have committed an act that is a cause for denial, nonrenewal,
01 suspension, or revocation of a registration or license in this state or another 02 jurisdiction; 03 (4) maintain a lawfully established place of business [AS 04 DESCRIBED IN AS 21.27.330] in this state, unless licensed as a nonresident under 05 AS 21.27.270; 06 (5) disclose to the director all owners, officers, directors, or partners, if 07 any; 08 (6) designate a compliance officer for the firm; 09 (7) provide in or with its application 10 (A) all basic organizational documents of the third-party 11 administrator, including articles of incorporation, articles of association, 12 partnership agreement, trade name certificate, trust agreement, shareholder 13 agreement, and other applicable documents and all endorsements to the 14 required documents; 15 (B) the bylaws, rules, regulations, or similar documents 16 regulating the internal affairs of the administrator; 17 (C) the names, mailing addresses, physical addresses, official 18 positions, and professional qualifications of persons who are responsible for 19 the conduct of affairs of the third-party administrator, including the members 20 of the board of directors, board of trustees, executive committee, or other 21 governing board or committee; the principal officers in the case of a 22 corporation, or the partners or members in the case of a partnership, limited 23 liability company, limited liability partnership, or association; shareholders 24 holding directly or indirectly 10 percent or more of the voting securities of the 25 third-party administrator; and any other person who exercises control or 26 influence over the affairs of the third-party administrator; 27 (D) certified financial statements for the preceding two years, 28 or for each year and partial year that the applicant has been in business if less 29 than two years, prepared by an independent certified public accountant 30 establishing that the applicant is solvent, that the applicant's system of 31 accounting, internal control, and procedure is operating effectively to provide
01 reasonable assurance that money is promptly accounted for and paid to the 02 person entitled to the money, and any other information that the director may 03 require to review the current financial condition of the applicant; and 04 (E) a statement describing the business plan, including 05 information on staffing levels and activities proposed in this state and in other 06 jurisdictions and providing details establishing the third-party administrator's 07 capability for providing a sufficient number of experienced and qualified 08 personnel in the areas of claims handling, underwriting, and record keeping; 09 (8) provide to the director documents necessary to verify the 10 statements contained in or in connection with the application; and 11 (9) notify the director, in writing, not later than 30 days after 12 (A) a change in compliance officer, residence, place of 13 business, mailing address, or phone number; 14 (B) the final disposition of an administrative action taken 15 against the registrant by a governmental agency [OF ANOTHER STATE, BY 16 A GOVERNMENTAL AGENCY OF ANOTHER JURISDICTION,] or by a 17 financial industry regulatory authority sanction or arbitration proceeding; in 18 addition, a registrant shall submit to the director documents relating to the final 19 disposition on, including the final order and other relevant legal documents in, 20 the action; or 21 (C) a conviction of a misdemeanor or felony of the third-party 22 administrator, its officers, directors, partners, owners, or employees. 23 * Sec. 23. AS 21.27.990(8) is amended to read: 24 (8) "compliance officer" means a licensee designated for a specific line 25 [AND CLASS] of authority under AS 21.27.115 [THIS CHAPTER] who is 26 responsible for a firm's compliance with the insurance statutes and regulations of this 27 state; 28 * Sec. 24. AS 21.27.990(12) is amended to read: 29 (12) "home state," with respect to 30 (A) an insurance producer, means the District of Columbia or a 31 state or territory of the United States in which an insurance producer maintains
01 the producer's principal place of residence or principal place of business and is 02 licensed to act as an insurance producer; 03 (B) an independent [PORTABLE ELECTRONICS] adjuster, 04 means the District of Columbia or a state or territory of the United States in 05 which an independent [PORTABLE ELECTRONICS] adjuster maintains the 06 independent [PORTABLE ELECTRONICS] adjuster's principal place of 07 residence or principal place of business and is licensed to act as an independent 08 adjuster or, if the state or territory of the United States of the independent 09 [PORTABLE ELECTRONICS] adjuster's principal place of residence or 10 principal place of business does not license independent adjusters, the state or 11 territory of the United States designated by the independent [PORTABLE 12 ELECTRONICS] adjuster where the independent [PORTABLE 13 ELECTRONICS] adjuster is licensed; 14 * Sec. 25. AS 21.27.990(13) is amended to read: 15 (13) "independent [PORTABLE ELECTRONICS] adjuster" means a 16 person [AN INDEPENDENT ADJUSTER] who investigates, negotiates, or settles 17 property, casualty, or workers' compensation claims for insurers or self-insurers 18 [COLLECTS, FURNISHES, OR ENTERS CLAIM INFORMATION FOR 19 PORTABLE ELECTRONICS INSURANCE ISSUED UNDER AS 21.36.515]; 20 * Sec. 26. AS 21.27.990(20) is amended to read: 21 (20) "limited lines" means those lines of insurance defined in 22 AS 21.27.150 [OR ANY OTHER LINE OF INSURANCE THAT THE DIRECTOR 23 DESIGNATES BY ORDER AS A LIMITED LINE]; 24 * Sec. 27. AS 21.33.055(d) is amended to read: 25 (d) On default of a nonadmitted insurer in the payment of the tax, the insured 26 shall pay the tax within 30 days after written notice from the director of the default by 27 the nonadmitted insurer. For wet marine and transportation insurance, a surplus 28 lines broker may pay the tax on behalf of the nonadmitted insurer or the insured. 29 If the tax prescribed by this section is not paid [BY THE NONADMITTED 30 INSURER] within the time stated [OR BY THE INSURED WITHIN THE TIME 31 STATED] after notice of default from the director [BY THE NONADMITTED
01 INSURER], the tax may be increased by 02 (1) a late payment fee of $1,000 or 10 percent of the tax due, 03 whichever is greater; 04 (2) interest at the rate of one percent a month or part of a month from 05 the date the payment was originally due to the date paid; and 06 (3) a penalty not to exceed $100 a day or 25 percent of the tax due, 07 whichever is greater, from the date the payment was due to the date paid. 08 * Sec. 28. AS 21.34.035 is amended to read: 09 Sec. 21.34.035. Health care insurance and disability insurance. (a) Except 10 for a multiple employer welfare arrangement, health care insurance and disability 11 insurance may be placed in and written by a nonadmitted insurer if 12 (1) the director finds it is in the best interest of the public and issues an 13 order to that effect; and 14 (2) the insurance is in compliance with this chapter. 15 (b) The rates and rating methods for health care insurance and disability 16 insurance placed and written under this section are subject to AS 21.51.405 and 17 AS 21.54.015. The surplus lines broker shall make the filings required under 18 AS 21.51.405 and AS 21.54.015 and maintain the records and accounts as required 19 under AS 21.87.230. 20 (c) Health care insurance and disability insurance may not be procured under 21 this chapter 22 (1) for the purpose of obtaining a lower premium rate than acceptable 23 by an authorized insurer; or 24 (2) for obtaining a competitive advantage. 25 (d) Health care insurance and disability insurance [INSURANCE] placed 26 in or written by a nonadmitted insurer and the activities of the surplus lines broker 27 relating to that transaction are subject to this title. 28 (e) In this section, 29 (1) "disability insurance" means disability insurance as defined in 30 AS 21.12.052 that is excess insurance or for individuals unable to obtain disability 31 insurance with any admitted insurer;
01 (2) "health care insurance" has the meaning given in AS 21.12.050(b). 02 * Sec. 29. AS 21.34.040(d) is amended to read: 03 (d) An insurer, including a nonadmitted insurer, not domiciled in a state 04 or territory of the United States and not listed on the Quarterly Listing of Alien 05 Insurers maintained by the National Association of Insurance Commissioners 06 International Insurers Department [A NONADMITTED INSURER] may be 07 eligible to provide coverage in this state if it files with the director or the director's 08 designee a copy of its current annual financial statement that has been certified by the 09 insurer. The financial statement must be filed with and approved by the regulatory 10 authority in the domicile of the [NONADMITTED] insurer [,] or certified by an 11 accounting or auditing firm licensed in the jurisdiction of the insurer's domicile. The 12 [A FOREIGN] insurer shall file [PROVIDE] the approved or certified financial 13 statement with the director or director's designee not more than nine [SIX] months 14 after the close of the reporting period. [AN ALIEN INSURER SHALL PROVIDE 15 THE APPROVED OR CERTIFIED FINANCIAL STATEMENT NOT MORE THAN 16 NINE MONTHS AFTER THE CLOSE OF THE REPORTING PERIOD. IN THE 17 CASE OF AN INSURANCE EXCHANGE, THE STATEMENT MAY BE AN 18 AGGREGATE COMBINED STATEMENT OF ALL UNDERWRITING 19 SYNDICATES OPERATING DURING THE PERIOD REPORTED UPON.] 20 * Sec. 30. AS 21.34.170(a) is amended to read: 21 (a) A surplus lines broker shall file with the director, on forms prescribed by 22 the director, a report of all surplus lines insurance, by type of insurance as required to 23 be reported in the annual statement that must be filed with the director by admitted 24 insurers. The report must include all surplus lines insurance transactions during the 25 preceding period showing the aggregate gross premiums written, the aggregate return 26 premiums, and the amount of aggregate tax remitted to this state [, AND THE 27 AMOUNT OF AGGREGATE TAX REMITTED TO EACH OTHER STATE FOR 28 WHICH AN ALLOCATION IS MADE UNDER AS 21.34.180]. The surplus lines 29 broker [FORMS] shall file the report [BE FILED] quarterly on March 1, June 1, 30 September 1, and December 1 of each year. 31 * Sec. 31. AS 21.34.190 is amended to read:
01 Sec. 21.34.190. Filing fee. (a) The fee for filing the statement under 02 AS 21.34.180(e) is an amount equal to one percent on gross premium charged less any 03 return premiums as reported on the statement. The surplus lines broker shall pay the 04 fee at the time of filing [OF] the statement and in a form and manner required by 05 the director. 06 (b) If the surplus lines broker does not pay the filing fee [IS NOT PAID] 07 when due, the surplus lines broker shall pay an additional late payment fee of $50 a 08 month [$250] plus two percent of the fee due per month, or part of a month, during 09 which the surplus lines broker fails to pay the full amount of the filing fee. The 10 late payment fee may not exceed $250 plus 10 percent of the filing fee due. If the 11 surplus lines broker does not pay the filing fee in the form or manner required by 12 the director, a penalty fee will be assessed equal to 25 percent of the filing fee due, 13 not to exceed $1,000, with a minimum penalty of $50. In addition to any other 14 penalty provided by law, the director may assess a penalty of not more than 15 $10,000 for a violation of this section. The director may suspend or revoke the 16 license of a surplus lines broker that fails to pay a fee under this section [SHALL 17 BECOME DUE AND PAYABLE BY THE SURPLUS LINES BROKER]. 18 * Sec. 32. AS 21.34.900(8) is amended to read: 19 (8) "home state," for purposes of determining the home state of an 20 insured in a multistate or multinational placement of nonadmitted insurance, is 21 defined as follows: 22 (A) except as provided in (B) or (C) of this paragraph, "home 23 state" means, with respect to an insured, 24 (i) the state in which an insured maintains its principal 25 place of business or, in the case of an individual, the individual's 26 principal residence; or 27 (ii) if 100 percent of the insured risk is located out of 28 the state referred to in (i) of this subparagraph, the state to which the 29 greatest percentage of the insured's taxable premium for that insurance 30 contract is allocated; 31 (B) if two or more insureds from an affiliated group are named
01 insureds on a single policy, "home state" under (A) of this paragraph is based 02 on the member of the affiliated group that has the largest percentage of 03 premium attributed to it under the insurance contract; 04 (C) if two or more insureds are named insureds on a 05 nonaffiliated group policy, "home state" under (A) of this paragraph 06 (i) is based on the group policyholder if the group 07 policyholder pays 100 percent of the premium; or 08 (ii) is based on the named insured of the group 09 policy if the group policyholder does not pay 100 percent of the 10 premium from the policyholder's own funds; 11 (D) for purposes of (A) of this paragraph, the principal place of 12 business of an insured is 13 (i) the state where the insured maintains its headquarters 14 and where the insured's high-level officers direct, control, and 15 coordinate the business activities of the insured; or 16 (ii) if an insured's high-level officers direct, control, 17 and coordinate the business activities of the insured in more than 18 one state or if the insured maintains its headquarters in a 19 jurisdiction outside the United States, the state where the greatest 20 percentage of the insured's taxable premium for the insurance 21 contract is allocated; 22 (E) for purposes of (A) of this paragraph, the principal 23 residence of an insured is 24 (i) the state where the insured resides for the 25 greatest number of days in a calendar year; or 26 (ii) if the insured resides for the greatest number of days in a calendar 27 year in a jurisdiction outside the United States, the state where the greatest 28 percentage of the insured's taxable premium for the insurance contract is 29 allocated; 30 * Sec. 33. AS 21.34.900(15) is amended to read: 31 (15) "wet marine and transportation insurance" has the meaning given
01 in AS 21.12.090(b) [MEANS ONE OR MORE OF THE FOLLOWING: 02 (A) INSURANCE UPON, OF INTEREST IN, OR RELATING 03 TO VESSELS, CRAFTS, HULLS, EXCEPT VESSELS OF 50 04 DISPLACEMENT TONS OR LESS; 05 (B) INSURANCE OF MARINE BUILDERS RISKS, 06 MARINE WAR RISKS, AND CONTRACTS OF MARINE PROTECTION 07 AND INDEMNITY INSURANCE; 08 (C) INSURANCE OF FREIGHT AND DISBURSEMENTS 09 PERTAINING TO A SUBJECT OF INSURANCE COMING WITHIN THIS 10 PARAGRAPH; OR 11 (D) INSURANCE OF PERSONAL PROPERTY AND 12 INTERESTS IN PERSONAL PROPERTY, IN COURSE OF 13 EXPORTATION FROM OR IMPORTATION INTO A COUNTRY OR IN 14 THE COURSE OF COASTAL OR INLAND WATER TRANSPORTATION, 15 INCLUDING TRANSPORTATION BY LAND, WATER, OR AIR FROM 16 POINT OF ORIGIN TO FINAL DESTINATION IN CONNECTION WITH 17 ANY AND ALL RISKS OR PERILS OF NAVIGATION, TRANSIT, OR 18 TRANSPORTATION, AND WHILE BEING REPAIRED FOR AND WHILE 19 AWAITING SHIPMENT, AND DURING ANY DELAYS, 20 TRANSSHIPMENT, OR RESHIPMENT INCIDENT TO THEM]. 21 * Sec. 34. AS 21.36.125(a) is amended to read: 22 (a) A person may not commit any of the following acts or practices: 23 (1) misrepresent facts or policy provisions relating to coverage of an 24 insurance policy; 25 (2) fail to acknowledge and act promptly upon communications 26 regarding a claim arising under an insurance policy; 27 (3) fail to adopt and implement reasonable standards for prompt 28 investigation of claims; 29 (4) refuse to pay a claim without a reasonable investigation of all of 30 the available information and an explanation of the basis for denial of the claim or for 31 an offer of compromise settlement;
01 (5) fail to affirm or deny coverage of claims within a reasonable time 02 of the completion of proof-of-loss statements; 03 (6) fail to attempt in good faith to make prompt and equitable 04 settlement of claims in which liability is reasonably clear; 05 (7) engage in a pattern or practice of compelling insureds to litigate for 06 recovery of amounts due under insurance policies by offering substantially less than 07 the amounts ultimately recovered in actions brought by those insureds; 08 (8) compel an insured or third-party claimant in a case in which 09 liability is clear to litigate for recovery of an amount due under an insurance policy by 10 offering an amount that does not have an objectively reasonable basis in law and fact 11 and that has not been documented in the insurer's file; 12 (9) attempt to make an unreasonably low settlement by reference to 13 printed advertising matter accompanying or included in an application; 14 (10) attempt to settle a claim on the basis of an application that has 15 been altered without the consent of the insured; 16 (11) make a claims payment without including a statement of the 17 coverage under which the payment is made; 18 (12) make known to an insured or third-party claimant a policy of 19 appealing from an arbitration award in favor of an insured or third-party claimant for 20 the purpose of compelling the insured or third-party claimant to accept a settlement or 21 compromise less than the amount awarded in arbitration; 22 (13) delay investigation or payment of claims by requiring submission 23 of unnecessary or substantially repetitive claims reports and proof-of-loss forms; 24 (14) fail to promptly settle claims under one portion of a policy for the 25 purpose of influencing settlements under other portions of the policy; 26 (15) fail to promptly provide a reasonable explanation of the basis in 27 the insurance policy in relation to the facts or applicable law for denial of a claim or 28 for the offer of a compromise settlement; [OR] 29 (16) offer a form of settlement or pay a judgment in any manner 30 prohibited by AS 21.96.030; 31 (17) violate a provision contained in AS 21.07; or
01 (18) offer a valuation that depreciates the expense of labor in 02 violation of AS 21.60.030. 03 * Sec. 35. AS 21.36.225(a) is amended to read: 04 (a) An [EXCEPT FOR A HEALTH CARE INSURANCE POLICY 05 SUBJECT TO AS 21.51.400 OR AS 21.54.130, AN] insurer may not cancel a health 06 insurance policy unless the insurer provides written notice to a policyholder at least 45 07 days before the effective date of the cancellation. 08 * Sec. 36. AS 21.36.235(a) is amended to read: 09 (a) Except as provided in AS 21.36.305, if the renewal premium is increased 10 more than 10 percent for a reason other than an increase in coverage or exposure base, 11 or if after renewal there will be a material restriction or reduction in coverage not 12 specifically requested by the insured, written notice shall be mailed to the insured and 13 to the agent or broker of record as required by AS 21.36.260 14 [(1) AT LEAST 20 DAYS BEFORE EXPIRATION OF A 15 PERSONAL INSURANCE POLICY; OR 16 (2)] at least 45 days before expiration of the [A BUSINESS OR 17 COMMERCIAL] policy. 18 * Sec. 37. AS 21.36.240(a) is amended to read: 19 (a) An insurer may only fail to renew a personal insurance policy on the 20 policy's annual anniversary. An insurer may not fail to renew a policy unless a written 21 notice of nonrenewal is mailed to the named insured under AS 21.36.260 at least [20 22 DAYS FOR A PERSONAL INSURANCE POLICY, AND AT LEAST] 45 days 23 [FOR A BUSINESS OR COMMERCIAL INSURANCE POLICY,] before the date 24 the policy expires or the anniversary date of a policy written for a term longer than one 25 year or with no fixed expiration date. 26 * Sec. 38. AS 21.36.240 is amended by adding a new subsection to read: 27 (e) For purposes of this section, an offer of placement with an affiliate insurer 28 does not constitute a failure by an insurer to renew coverage. 29 * Sec. 39. AS 21.36 is amended by adding a new section to Article 4 to read: 30 Sec. 21.36.245. Cancellation of and failure to renew property and casualty 31 insurance. An insurer may not cancel or fail to renew a property insurance policy, or a
01 casualty insurance policy insuring a business or commercial property, as a result of a 02 claim to an insurer made solely to meet a local, state, or federal aid requirement where 03 the insurer does not apply coverage and does not pay a benefit. 04 * Sec. 40. AS 21.36.475(a) is amended to read: 05 (a) An owner controlled insurance program or a contractor controlled 06 insurance program is subject to both AS 21.39 and AS 21.42, must be approved by the 07 director, and shall be allowed only for a major construction project or a major multi- 08 owner residential construction project. Owner controlled and contractor controlled 09 insurance programs are limited to property insurance as defined in AS 21.12.060 and 10 casualty insurance as defined in AS 21.12.070. 11 * Sec. 41. AS 21.36.475(b) is amended to read: 12 (b) In this section, an owner controlled or contractor controlled insurance 13 [INSURED] program does not include 14 (1) builder's risk or course of construction insurance; 15 (2) insurance relating to the transportation of cargo or other property; 16 (3) insurance covering one or more affiliates, subsidiaries, partners, or 17 joint venture partners of a person; or 18 (4) insurance policies endorsed to name one or more persons as 19 additional insureds if naming a person as an additional insured is a term required 20 by a contract; this paragraph does not apply to an owner controlled or 21 contractor controlled insurance program for a major construction project. 22 * Sec. 42. AS 21.36.475(c) is amended by adding a new paragraph to read: 23 (7) "major multi-owner residential construction project" means a 24 construction project for condominiums, townhouses, cooperative housing 25 developments, or other residential housing involving at least 50 units and three or 26 more property owners with a total cost of $25,000,000 or more. 27 * Sec. 43. AS 21.36.505(a) is amended to read: 28 (a) A person may not sell, market, promote, advertise, or otherwise distribute a 29 health discount plan unless 30 (1) each advertisement, policy, document, information, statement, or 31 other communication regarding the health discount plan and the plan itself contain a
01 statement, in bold and prominent type, that the health discount plan is not insurance; 02 (2) [THE DISCOUNTS OFFERED UNDER THE HEALTH 03 DISCOUNT PLAN ARE SPECIFICALLY AUTHORIZED BY A CONTRACT 04 WITH EACH PROVIDER OF THE SERVICES OR SUPPLIES LISTED IN 05 CONJUNCTION WITH THE PLAN; 06 (3)] the health discount plan states the name, address, and telephone 07 number of the administrator of the plan; 08 (3) [(4)] the person makes readily available to the consumer a 09 complete, accurate, and up-to-date list of providers participating in the plan that offer 10 discounted health care services or supplies in the consumer's local area and the 11 discounts offered by the providers; 12 (4) [(5)] the person provides the consumer the right to cancel the health 13 discount plan within 30 days after purchase of the plan; 14 (5) [AND (6)] the person provides the consumer with a full refund of 15 all payments made, except for a nominal processing fee, within 30 days after 16 notification of cancellation of the plan under (5) of this subsection; 17 (6) the person registers the health discount plan in accordance 18 with regulations adopted by the director; and 19 (7) the person renews the health discount plan when required 20 under regulations adopted by the director. 21 * Sec. 44. AS 21.36 is amended by adding a new section to article 5 to read: 22 Sec. 21.36.525. Decisions based on elected official status. (a) A person 23 transacting insurance in this state may not, solely because of a person's status as an 24 elected official, 25 (1) refuse to issue or renew insurance coverage; 26 (2) limit the scope of insurance coverage; 27 (3) cancel an existing policy of insurance; 28 (4) deny a covered claim; or 29 (5) increase the premium, policy fees, or rates charged on an insurance 30 policy. 31 (b) The provisions of (a) of this section do not apply if the refusal, limitation,
01 cancellation, denial, or increase is 02 (1) based on sound underwriting or actuarial principles reasonably 03 related to actual or anticipated loss experience; or 04 (2) required or authorized by law or regulation. 05 (c) In this section, "elected official" means a member of the legislature, the 06 governor, the lieutenant governor, a member of the state's congressional delegation, a 07 constitutional convention delegate, a borough or city mayor, or a member of a borough 08 or city assembly, council, or school board. 09 * Sec. 45. AS 21.36.910(d) is amended to read: 10 (d) In addition to an order issued under (c) of this section, the director may, 11 after a hearing, order restitution, assess a penalty of not more than $2,500 for each 12 violation or $25,000 for engaging in a general business practice in violation of this 13 chapter. The director may include interest calculated under AS 09.30.070 in an 14 order for restitution entered under this subsection. 15 * Sec. 46. AS 21.39.155(c) is amended to read: 16 (c) An insurer may impose a surcharge not to exceed 25 percent of the 17 premium for assigned risk pool insurance, except that a surcharge may not be applied 18 to the first $6,000 [$3,000] in premium in any policy year. 19 * Sec. 47. AS 21.42.250(a) is amended to read: 20 (a) An insurer shall provide a policy or endorsement to the insured or to the 21 person entitled to it by mail or electronic mail [DELIVERY] or by posting on the 22 insurer's Internet website under (c) of this section within a reasonable period of time 23 after its issuance. The insurer is not required to mail, deliver, or post the policy or 24 endorsement until all conditions required by the insurer have been met by the insured. 25 * Sec. 48. AS 21.42.377(c) is amended to read: 26 (c) Coverage provided under this section applies to a covered individual who 27 is 28 (1) at least 45 [50] years of age; or 29 (2) less than 45 [50] years of age and at high risk for colorectal cancer. 30 * Sec. 49. AS 21.45.305(c)(2) is amended to read: 31 (2) The interest rate used in determining minimum nonforfeiture
01 amounts shall be an annual rate of interest determined as the lesser of three percent a 02 year or the following, which shall be specified in the contract if the interest rate will be 03 reset: (A) the five-year constant maturity treasury rate reported by the federal reserve 04 as of a date, or average over a period, rounded to the nearest 1/ 20 of one percent, 05 specified in the contract not more than 15 months before the contract issue date or 06 redetermination date under (D) of this paragraph; (B) reduced by 125 basis points; (C) 07 where the resulting interest rate is not less than 0.15 [ONE] percent; and (D) the 08 interest rate must apply for an initial period and may be redetermined for additional 09 periods; the redetermination date, basis, and period, if any, must be stated in the 10 contract; the basis is the date or average over a specified period that produces the 11 value of the five-year constant maturity treasury rate to be used at each 12 redetermination date. 13 * Sec. 50. AS 21.48.010(f) is amended to read: 14 (f) An insurer shall submit to the director information demonstrating 15 [SATISFACTORY TO THE DIRECTOR] that the group meets the requirements of 16 (a) or (e) of this section. If the director finds the information to be satisfactory, the 17 director shall [, AND THE DIRECTOR MUST AFFIRMATIVELY] approve [OF] 18 the [GROUP BEFORE AN] insurer to [MAY] issue a group life policy to a group 19 under (a) or (e) of this section. The director's approval is not required for a single 20 employer group, labor union group, or multiple employer welfare arrangement 21 authorized under AS 21.85. 22 * Sec. 51. AS 21.51.060(b) is amended to read: 23 (b) A policy in which the insurer reserves the right to refuse renewal shall 24 have, at the beginning of the provision in (a) of this section, 25 "Unless not less than 45 [30] days before the premium due date the insurer has 26 delivered to the insured or has mailed to the last address of the insured as shown by the 27 records of the insurer written notice of its intention not to renew this policy beyond the period 28 for which the premium has been accepted." 29 * Sec. 52. AS 21.57.160(1) is amended to read: 30 (1) "agricultural [AGRICULTURE] credit transaction commitment" 31 means a binding agreement to loan money up to a fixed amount as needed for
01 agricultural purposes; 02 * Sec. 53. AS 21.59 is amended by adding a new section to read: 03 Sec. 21.59.125. Motor vehicle service contract approval. (a) A provider may 04 not deliver or issue for delivery a motor vehicle service contract unless the provider 05 files the contract with the division and receives approval from the director for the 06 contract. 07 (b) If a change is made to a motor vehicle service contract after it has been 08 approved, the provider shall file and receive approval for the changed contract in 09 accordance with (a) of this section. 10 * Sec. 54. AS 21.59.140(c) is amended to read: 11 (c) A licensee shall report to the director in writing any administrative action 12 taken against the licensee by a governmental agency [OF ANOTHER STATE OR BY 13 A GOVERNMENTAL AGENCY OF ANOTHER JURISDICTION] within 30 days 14 after the final disposition of the action. A licensee shall submit to the director the final 15 order and other relevant legal documents in the action. A licensee shall report to the 16 director any criminal prosecution of the licensee within 30 days after the date of filing 17 of the criminal complaint, indictment, or citation in the prosecution. The licensee shall 18 submit to the director a copy of the criminal complaint, calendaring order, and other 19 relevant legal documents in the prosecution. 20 * Sec. 55. AS 21.60 is amended by adding a new section to read: 21 Sec. 21.60.030. Depreciation of labor. In a residential property policy, the 22 valuation of the expense of labor may not be depreciated, except where offered as a 23 stand-alone endorsement that specifically identifies the nontangible items subject to 24 depreciation. An endorsement offered under this section must be an optional coverage 25 and provide a proportionate reduction in premium. 26 * Sec. 56. AS 21.76.070 is amended to read: 27 Sec. 21.76.070. Excess insurance. A cooperative agreement may authorize the 28 board of directors to purchase excess or catastrophic insurance on behalf of the joint 29 insurance arrangement. The cost of the insurance shall be apportioned in the manner 30 specified in the joint insurance agreement. The board may purchase insurance under 31 this section only from an insurer authorized to do business in the state, except that an
01 arrangement formed by municipalities or school districts may purchase insurance 02 under this section from a risk-sharing pool established by a national association of 03 similar entities if the risk-sharing pool meets the qualifications for a nonadmitted 04 [AN UNAUTHORIZED] insurer under AS 21.34.040(d) [AS 21.34.040(b) AND (d) 05 AND 21.34.220] and has capital and policyholders surplus in an amount at least as 06 great as would be required if the association were a domestic multiple line insurer. An 07 arrangement may purchase insurance under this section for property and liability risks 08 from unauthorized insurers allowed for use by licensed Alaska surplus lines brokers. 09 * Sec. 57. AS 21.79.020(c) is amended to read: 10 (c) This chapter does not apply to 11 (1) that part of a policy or contract that is not guaranteed by the 12 member insurer; 13 (2) that part of the risk borne by the policy or contract owner; 14 (3) a policy or contract of reinsurance, unless an assumption certificate 15 has been issued; 16 (4) that part of a policy or contract, except for part of a policy or 17 contract, including a rider, that provides long-term care or other health insurance 18 benefits, to the extent that the rate of interest on which it is based, or the interest rate, 19 crediting rate, or similar factor determined by use of an index or other external 20 reference stated in the policy or contract employed in calculating returns or changes in 21 value, 22 (A) averaged over the period of four years before the date on 23 which the member insurer becomes an impaired or insolvent insurer under this 24 chapter, whichever occurs first, exceeds the rate of interest determined by 25 subtracting two percentage points from the published monthly average for that 26 same four-year period or for a lesser period if the policy or contract was issued 27 less than four years before the member insurer becomes an impaired or 28 insolvent insurer under this chapter, whichever occurs first; and 29 (B) on and after the date on which the member insurer becomes 30 an impaired or insolvent insurer under this chapter, whichever occurs first, 31 exceeds the rate of interest determined by subtracting three percentage points
01 from the most recent published monthly average; 02 (5) a portion of a policy or contract issued to a plan or program of an 03 employer, association, or similar entity to provide life, health, or an annuity benefit to 04 an employee, member, or other person, to the extent that the plan or program is self- 05 funded or uninsured, including a benefit payable by the employer, association, or 06 similar entity under 07 (A) a multiple employer welfare arrangement as defined in 29 08 U.S.C. 1002 (Employee Retirement Income Security Act of 1974); 09 (B) a minimum premium group insurance plan; 10 (C) a stop-loss group insurance plan; or 11 (D) an administrative services only contract; 12 (6) that part of a policy or contract that provides a dividend or 13 experience rating credit or voting rights, or provides that a fee or allowance be paid to 14 a person, including the policy or contract owner, in connection with the service to or 15 administration of the policy or contract; 16 (7) a policy or contract issued in this state by a member insurer at a 17 time when it was not licensed or did not have a certificate of authority to issue the 18 policy or contract in this state; 19 (8) a person who is a payee or beneficiary of a contract owner who is a 20 resident of this state if the payee or beneficiary is provided coverage by the association 21 of another state; 22 (9) a person covered under (d) of this section if any coverage is 23 provided by the association of another state to that person; 24 (10) an unallocated annuity contract issued to or in connection with a 25 benefit plan protected under the United States Pension Benefit Guaranty Corporation, 26 regardless of whether the United States Pension Benefit Guaranty Corporation has 27 become liable to make any payments with respect to the benefit plan; 28 (11) that part of an unallocated annuity contract that is not issued to or 29 in connection with a specific employee, union, or association of natural persons 30 benefit plan or a government lottery; 31 (12) that part of a policy or contract to the extent that assessments
01 required by AS 21.79.070 with respect to the policy or contract are preempted by law; 02 (13) an obligation that does not arise under the express written terms of 03 the policy or contract issued by the member insurer to the enrollee, certificate holder, 04 contract owner, or policy owner, including, without limitation, 05 (A) a claim based on marketing materials; 06 (B) a claim based on a side letter or other document that was 07 issued by the member insurer without meeting applicable policy or contract 08 form filing or approval requirements; 09 (C) a misrepresentation of or regarding policy or contract 10 benefits; 11 (D) an extra contractual claim; or 12 (E) a claim for penalties or consequential or incidental 13 damages; 14 (14) a contractual agreement that establishes the member insurer's 15 obligations to provide a book value accounting guaranty for defined contribution 16 benefit plan participants by reference to a portfolio of assets that is owned by the 17 benefit plan or its trustee, which, in each case, is not an affiliate of the member 18 insurer; 19 (15) that part of a policy or contract to the extent the part of the policy 20 or contract provides for interest or other changes in value to be determined by the use 21 of an index or other external reference stated in the policy or contract, but that have 22 not been credited to the policy or contract, or as to which the policy or contract 23 owner's rights are subject to forfeiture, as of the date the member insurer becomes an 24 impaired or insolvent insurer under this chapter, whichever is earlier; if a policy's or 25 contract's interest or changes in value are credited less frequently than annually, then, 26 for purposes of determining the values that have been credited and are not subject to 27 forfeiture under this paragraph, the interest or change in value determined by using the 28 procedures defined in the policy or contract shall be credited as if the contractual date 29 of crediting interest or changing values was the date of impairment or insolvency, 30 whichever is earlier, and will not be subject to forfeiture; 31 (16) a policy or contract providing a hospital, medical, prescription
01 drug, or other health care benefit in accordance with 42 U.S.C. 1395w-21 - 42 U.S.C. 02 1395w-28, 42 U.S.C. 1395w-101 - 42 U.S.C. 1395w-154, 42 U.S.C. 1396 - 42 U.S.C. 03 1396w-8, [42 U.S.C. 1395w-21 - 1395w-154] or federal regulations adopted under 04 those sections; 05 (17) a person who acquires rights to receive payments through a 06 structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), 07 regardless of whether the transaction occurred before, on, or after 26 U.S.C. 08 5891(c)(3)(A) became effective; or 09 (18) structured settlement annuity benefits to which a payee or 10 beneficiary has transferred the payee's or beneficiary's rights in a structured settlement 11 factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the 12 transaction occurred before, on, or after 26 U.S.C. 5891(c)(3)(A) became effective. 13 * Sec. 58. AS 21.86.040(a) is amended to read: 14 (a) The governing body of a health maintenance organization may include 15 providers, or other individuals, or both. At least one member [ONE-THIRD] of the 16 governing body must be a consumer to represent [CONSIST OF CONSUMERS 17 WHO ARE SUBSTANTIALLY REPRESENTATIVE OF] enrollees. 18 * Sec. 59. AS 21.86.060(b) is amended to read: 19 (b) In addition to basic health care services, a health maintenance organization 20 may provide, or arrange for, other health care services on a prepayment, fixed fee, or 21 other financial basis. 22 * Sec. 60. AS 21.86.060 is amended by adding new subsections to read: 23 (d) A health maintenance organization shall provide coverage for emergency 24 services, as that term is defined in AS 21.07.250, that are necessary to screen and 25 stabilize a covered person at the health maintenance organization provider employee 26 or contracted provider level of cost sharing when the services are not provided by a 27 health maintenance organization provider. The health maintenance organization may 28 require the transfer of a hospitalized covered person upon stabilization. 29 (e) A health maintenance organization shall provide coverage at the health 30 maintenance organization provider employee or contracted provider level of cost 31 sharing upon referral from a health maintenance organization provider that states the
01 covered person requires medically necessary services from a provider that is not a 02 health maintenance organization provider. The health maintenance organization may 03 deny the referral when an in-network provider is available to provide the medically 04 necessary services. 05 * Sec. 61. AS 21.96.090 is amended by adding a new subsection to read: 06 (g) A risk retention group shall file a report in accordance with 07 AS 21.09.210(a) and pay the tax required for a domestic and foreign insurer under 08 AS 21.09.210(b). 09 * Sec. 62. AS 21.96.120 is amended to read: 10 Sec. 21.96.120. Waiver for state innovation. The director may apply to a 11 federal agency for a waiver of federal law that relates to a health insurance 12 requirement, including applying to the United States Secretary of Health and 13 Human Services under 42 U.S.C. 18052, as amended, for a waiver of applicable 14 provisions of P.L. 111-148 (Patient Protection and Affordable Care Act), as amended, 15 with respect to health insurance [COVERAGE] in the state for a plan year beginning 16 on or after January 1, 2017. The director may implement a state plan meeting the 17 waiver requirements in a manner consistent with state and federal law and as approved 18 by the United States Secretary of Health and Human Services. 19 * Sec. 63. AS 21.97.900 is amended by adding a new paragraph to read: 20 (48) "motor vehicle" means a motor vehicle subject to registration 21 under AS 28.10.011. 22 * Sec. 64. AS 21.09.210(d); AS 21.27.020(g), 21.27.330(a); AS 21.34.030(d); 23 AS 21.39.020(b)(4); AS 21.59.290(2); and AS 21.86.078 are repealed. 24 * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 APPLICABILITY. (a) AS 21.36.475(b), as amended by sec. 41 of this Act, applies to 27 contracts entered into on or after the effective date of this Act. 28 (b) AS 21.36.525, added by sec. 44 of this Act, applies to an insurance policy or 29 contract issued, delivered, or renewed on or after the effective date of this Act. 30 * Sec. 66. This Act takes effect immediately under AS 01.10.070(c).