Legislature(2017 - 2018)
2018-02-09 Senate Journal
Full Journal pdf2018-02-09 Senate Journal Page 1969 SB 181 SENATE BILL NO. 181 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: "An Act relating to examination of premium finance companies." was read the first time and referred to the Labor and Commerce and State Affairs Committees. The following fiscal information was published today: Fiscal Note No. 1, zero, Department of Commerce, Community and Economic Development Governor's transmittal letter dated February 8: Dear President Kelly: Under the authority of Article III, Section 18 of the Alaska Constitution, I am transmitting a bill relating to the examination of premium financing companies. This bill makes a change to the banks and financial institutions code relating to the examination of financial institutions (AS 06.01). The bill amends section AS 06.01.015 by exempting premium finance companies from the required examination, at least every 18 months, of financial institutions licensed under the banks and financial institutions code. Premium finance companies are licensed and regulated under AS 06.40 and are defined under AS 06.40.190(4) as "a person engaged in the business of entering into premium finance agreements with borrowers or of acquiring premium finance agreements from insurance agents, brokers or other premium finance companies." A premium finance agreement is defined in AS 06.40.190(3) as an agreement where the borrower agrees to pay a premium finance company for an amount advanced by the premium finance company to an insurer, or agent, or broker, in payment of premiums on an insurance policy. 2018-02-09 Senate Journal Page 1970 Historically, premium finance companies are located outside of Alaska; the Division of Banking and Securities staff have found no substantive problems with violations of Alaska law by these companies. Additionally, premium finance companies primarily fund commercial insurance premiums, not premiums for individual consumers. Under this bill, premium finance companies would no longer be subject to the mandatory examination requirement of AS 06.01.015, but would still be subject to examination as needed under AS 06.40.100. This would reduce the regulatory burden on both the companies and division of banking and securities staff and resources to focus on higher risk areas. I urge your prompt and favorable action on this measure. Sincerely, /s/ Bill Walker Governor