05/12/2025 01:30 PM Senate LABOR & COMMERCE

           HB 116-COMMERCIAL FISHING INSURANCE CO-OP                                                                        
                                                                                                                                
2:06:35 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."                                                                                                       
                                                                                                                                
2:07:04 PM                                                                                                                    
MATT GRUENING, Staff, Representative  Louise Stutes, Alaska State                                                               
Legislature, Juneau, Alaska, provided a  brief summary of HB 116.                                                               
He  stated   that,  following  recommendations  from   the  Joint                                                               
Legislative  Task  Force on  Alaska's  seafood  industry, HB  116                                                               
would  let   commercial  fishermen  form   cooperative  insurance                                                               
agreements  for vessel  liability  or  damage without  regulation                                                               
under AS  21. Currently,  three similar  pools operate  through a                                                               
Washington-based  organization.  Together   the  three  insurance                                                               
pools insure about  840 Alaska vessels. With  rising premiums and                                                               
limited coverage options, HB 116  aims to lower costs and improve                                                               
insurance access for  Alaska's aging fishing fleet at  no cost to                                                               
the state.                                                                                                                      
                                                                                                                                
2:08:37 PM                                                                                                                    
CHAIR BJORKMAN opened  public testimony on HB  116; finding none,                                                               
he closed public testimony.                                                                                                     
                                                                                                                                
2:08:58 PM                                                                                                                    
SENATOR  DUNBAR  asked  for  an   explanation  of  the  practical                                                               
differences for these  cooperatives if HB 116  passes compared to                                                               
the current system.                                                                                                             
                                                                                                                                
2:09:31 PM                                                                                                                    
MR. GRUENING replied  that these cooperatives would  no longer be                                                               
regulated under  AS 21, meaning no  minimum capital requirements,                                                               
no coverage by  the Alaska Guarantee Policy,  and no departmental                                                               
audits.  The   cooperatives  would  operate   as  self-governing,                                                               
member-owned cooperatives.  He said  the main  change is  that HB
 would allow Alaska based  organizations to legally form their                                                               
own insurance pools instead of relying on out-of-state ones.                                                                    
                                                                                                                                
2:11:30 PM                                                                                                                    
SENATOR DUNBAR asked if HB  116 legitimizes existing practices or                                                               
is  expected to  create new  insurance  pools and  are there  any                                                               
potential   negative  effects   from  the   division  giving   up                                                               
regulatory authority in this area.                                                                                              
                                                                                                                                
2:11:55 PM                                                                                                                    
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce,  Community and  Economic  Development (DCCED),  Juneau,                                                               
Alaska,  answered a  question on  HB 116.  She answered  that the                                                               
governing  board  is  expected to  self-regulate,  following  the                                                               
successful model of the Prince  William Sound purse seiners. Each                                                               
cooperative  should determine  its coverage  limits and  rates to                                                               
remain  solvent.   Most  vessels   aren't  covered   by  Alaska's                                                               
Guarantee Association  since they're insured through  London. She                                                               
said  complaints  would  likely  be  handled  internally  by  the                                                               
cooperative's executive director and  board, with the expectation                                                               
of similar success to the Seattle-area pools.                                                                                   
                                                                                                                                
2:13:15 PM                                                                                                                    
CHAIR BJORKMAN solicited the will of the committee.                                                                             
                                                                                                                                
2:13:17 PM                                                                                                                    
SENATOR MERRICK moved  to report HB 116,  work order 34-LS0616\I,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
2:13:33 PM                                                                                                                    
CHAIR BJORKMAN  found no objection  and HB 116 was  reported from                                                               
the Senate Labor and Commerce Standing Committee.