Legislature(2025 - 2026)BELTZ 105 (TSBldg)
05/09/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB147 | |
| SB117 | |
| SB158 | |
| HB116 | |
| SB159 | |
| SB172 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 147 | TELECONFERENCED | |
| += | SB 117 | TELECONFERENCED | |
| += | SB 158 | TELECONFERENCED | |
| *+ | HB 116 | TELECONFERENCED | |
| += | SB 159 | TELECONFERENCED | |
| *+ | SB 172 | TELECONFERENCED | |
HB 116-COMMERCIAL FISHING INSURANCE CO-OP
2:39:16 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of HOUSE BILL NO. 116 "An Act exempting from
insurance regulation cooperative agreements entered into by two
or more persons engaged in commercial fishing for the purpose of
paying claims or losses."
2:39:43 PM
REPRESENTATIVE LOUISE STUTES, District 5, Alaska State
Legislature, Juneau, Alaska, as sponsor of HB 116 she read the
following:
[Original punctuation provided.]
• Before you is HB 116, sponsored by the House
Special Committee on Fisheries by request of the
Joint Legislative Task Force on Evaluating
Alaska's Seafood Industry.
• As a member of the that task force, along with
you Mr. Chairman, it is my honor to bring this
bill forward on behalf of the fishing industry.
2:40:24 PM
REPRESENTATIVE STUTES continued with the summary of HB 116:
Pursuant recommendation 10 (a) of task force, House
Bill 116 would allow for member-owned commercial
fishing insurance cooperatives based in Alaska to form
without being considered an insurer.
• Specifically, the bill would allow commercial
fishermen to enter into a cooperative insurance
agreement to pay claims arising from liability or
damage to a vessel without being regulated under
Title 21, the State's insurance code.
• There are already three such insurance pools
operating in Alaska, but they're umbrellaed under
an organization based in Washington State, which
has a commercial fishing carve out in its
insurance code. Those pools, managed by the Purse
Seine Vessel Owners' Association, include the
Seine Vessel's Reserve, which provides insurance
to seiners in Alaska, the Southeast Alaska
Fishermen's Alliance Reserve which insures
gillnetters and trollers in Southeast and Central
Alaska, and finally the Bristol Bay Reserve which
insures gillnetters in their area. Combined, the
three pools insure around 840 vessels.
• Rising premiums and availability of insurance
serve as a barrier to operating for Alaska's
aging commercial fishing fleet.
• Underwriters have been raising premiums on
individual vessels and have become increasingly
selective of which vessels they insure.
• Insurance pooling can provide a more attractive,
lower risk alternative for underwriters than
insuring individual vessels, as well as lower
costs for our fishermen.
• Some of the benefits of a commercial fishermen
owned pool could be:
2:42:29 PM
REPRESENTATIVE STUTES continued with the summary of HB 116:
-Lower premiums
-The ability to structure itself to meet the
needs of the Alaska Fishing Industry. For
example, the pool could have underwriting
guidelines that allow for the insurance for
wooden vessels, older vessels, and/or vessels
that have been unable to purchase insurance in
the commercial market.
-These pools would have a board of directors
comprised of fishermen that are members of the
pool who make the decisions for which
applications are accepted into the pool,
providing smart local control, as well as an
additional layer of knowledge about vessels who
apply.
-Pools can also offer dividends for good loss
experience or credits against future premiums in
years where the pool performs well against vessel
claims and losses.
• With operating costs at an all-time high and
fishing markets at an all-time low, House Bill
116 seeks to provide lower cost and easier to
access insurance alternatives for Alaska's
commercial fishing fleet
• This bill comes at no cost to the state and
supports our fishing industry by simply allowing
Alaska based commercial fishing insurance
cooperatives to form.
• Again, this is a direct recommendation of the
joint Legislative Task Force Evaluating Alaska's
seafood industry.
2:44:49 PM
CHAIR BJORKMAN announced invited testimony on HB 116.
2:45:07 PM
TRACY WELCH, Executive Director, United Fisherman of Alaska,
testified by invitation on HB 116. She said rising insurance
costs have become one of the industry's biggest challenges,
making coverage unaffordable for some vessel owners. She added
that allowing cooperative insurance pools to operate in Alaska,
as HB 116 proposes, would lower costs and reduce risk for small
fishing businesses.
2:46:50 PM
SENATOR YUNDT commented that HB 116 is great legislation.
2:47:29 PM
CHAIR BJORKMAN asked if HB 116 simply allows a group of
fishermen to pool funds to cover losses and whether HB 116 is
any more complex than that.
2:47:46 PM
LORI WING-HEIER, Director, Division of Insurance, Anchorage,
Alaska, answered questions on HB 116. She confirmed that HB 116
mirrors Washington's insurance code, allowing fishermen to form
cooperative insurance pools that they manage and control
collectively, including decisions on underwriting, rates, and
reinsurance.
2:48:18 PM
CHAIR BJORKMAN asked whether an insurance pool could refuse to
cover a member's losses if that member caused problems for
others, and whether the individual would have any recourse to
the state for payment.
2:48:34 PM
MS. WING-HEIER explained that the pool could not refuse to pay a
member's losses, but the insurance pool could decide not to
insure that person.
2:48:49 PM
SENATOR YUNDT asked how many other industries in Alaska have
implemented a similar approach.
2:48:54 PM
MS. WING-HEIER replied that several nontraditional insurance
models exist in Alaska, such as the Alaska Municipal League's
Joint Insurance Association, small insurers like URICA Energy
Management, and captives purchased out of state. However, Alaska
has not yet authorized or established captive insurance within
the state.
2:50:02 PM
BOB KEHOE, Executive Director, Purse Seine Vessel Owners
Association, Seattle, Washington testified in support of HB 116.
He said the bill is a good alternative, noting that his
organization already manages three insurance pools for Alaska
vessels. He encouraged other fishing groups to collaborate,
consult marine insurance brokers, and consider forming similar
pools.
[CHAIR BJORKMAN concluded invited testimony on HB 116.]
[CHAIR BJORKMAN held HB 116 in committee.]