Legislature(2005 - 2006)HOUSE FINANCE 519
04/15/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB71 | |
| HB33 | |
| HB147 | |
| HB71 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 147 | TELECONFERENCED | |
| + | HB 144 | TELECONFERENCED | |
| + | HB 33 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
HOUSE BILL NO. 147
"An Act relating to the regulation of insurance,
insurance licensing, surplus lines, insurer deposits,
motor vehicle service contracts, guaranteed automobile
protection products, health discount plans, third-party
administrators, self-funded multiple employer welfare
arrangements, and self-funded governmental plans; and
providing for an effective date."
LINDA HALL, DIVISION OF INSURANCE, DEPARTMENT OF COMMUNITY
AND ECONOMIC DEVELOPMENT, related that HB 147 proposes
statutory changes that would make the regulation of
insurance more efficient for the division, more uniform for
industry, and provide protection to consumers. The first
area of change is statutory changes in the licensing area of
individual agents and brokers. The proposed changes are to
streamline the licensing process and to conform to national
standards.
Ms. Hall explained that the second area of change deals with
surplus lines insurance, insurers who do not file to operate
in Alaska. A couple sections deal with insurance company
deposits: one removes the ability to use safety deposit
boxes, one permits the director to transfer and insure
deposit to the guarantee fund if that is assigned through
insolvency procedures. Several sections deal with a
commodity called Help Discount Plans, which look like
insurance but are not. From 2000-2002, nationally, over
200,000 of these plans were sold, which resulted in $252
million worth of unpaid claims. The bill seeks specific
authority to regulate these discount plans.
Ms. Hall related that there are a number of sections that
deal with third-party administrators, someone who provides
administrative services for health insurance plans. There
is language dealing with an owner-contractor insurance
program, written for large construction projects. Some of
the rules would be codified in statute in this bill.
3:10:07 PM
Ms. Hall noted that in Section 26, standards for ratemaking
in health insurance lines have been added. She spoke to
discrimination and financial statements. She offered to
answer questions from the committee.
3:10:52 PM
Representative Hawker suggested that this is an "esoteric"
bill.
3:11:34 PM
Co-Chair Meyer MOVED to ADOPT Amendment 1:
Page 15, line 25, following "whether":
Delete "an"
Page 15, line 26:
Delete "insurer"
Insert ","
Co-Chair Chenault OBJECTED for discussion purposes.
Ms. Hall stated that the amendment provides technical
changes and would require the use of a licensed third-party
administrator.
Co-Chair Chenault WITHDREW his OBJECTION adopt Amendment 1.
There being NO OBJECTION, Amendment 1 was adopted.
3:12:42 PM
Co-Chair Meyer MOVED to ADOPT Amendment 2:
Page 11, lines 28 - 29:
Delete "a self-funded multiple employer welfare
arrangement regulated under AS 21.85"
Insert "any person issued or required to obtain a
certificate of authority under this title to transact
life insurance, annuities, and health insurance or to
provide coverage for the cost of medical care"
Page 17, line 2, following "annuities,":
Delete "or"
Page 17, lines 2 - 5:
Delete "offered or provided by an insurer, or in
connection with coverage offered or provided by a self-
funded multiple employer welfare arrangement regulated
under AS 21.85 or the Comprehensive Health Insurance
Association created under AS 21.55"
Insert ", or the provision of coverage for the cost of
medical care"
Co-Chair Chenault OBJECTED.
Representative Weyhrauch suggested in Amendment 1, on page
15, line 25, to delete "and". Ms. Hall clarified that
Representative Weyhrauch was referring to Amendment 3.
Ms. Hall stated that Amendment 2 is a restatement of Section
3 in the current CS, version G, which was put in error in
Chapter 12. She said it was a technical amendment because
of an incorrect placement of the language. Co-Chair Meyer
pointed out that Ms. Hall was referring to Amendment 3.
Co-Chair Meyer clarified that the committee was talking
about page 11, lines 28-29. Ms. Hall noted that language
was removed on page 11 and new language was inserted.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 2 was adopted.
3:15:45 PM
Co-Chair Meyer MOVED to ADOPT Amendment 3:
Page 2, line 8, through page 3, line 21:
Delete all material.
Renumber the following bill sections accordingly.
Page 14, following line 31:
Insert a new bill section to read:
"* Sec. 22. AS 21.36 is amended by adding a new
section to read:
Sec. 21.36.065. Limitation on owner controlled
and contractor controlled insurance programs. (a) An
owner controlled insurance program or a contractor
controlled insurance program is subject to both
AS 21.39 and AS 21.42, must be approved by the
director, and shall be allowed only for a major
construction project. Owner controlled and contractor
controlled insurance programs are limited to property
insurance as defined in AS 21.12.060 and casualty
insurance as defined in AS 21.12.070.
(b) In this section, an owner controlled or
contractor controlled insured program does not include
(1) builder's risk or course of construction
insurance;
(2) insurance relating to the transportation
of cargo or other property;
(3) insurance covering one or more
affiliates, subsidiaries, partners, or joint venture
partners of a person; or
(4) insurance policies endorsed to name one
or more persons as additional insureds.
(c) In this section,
(1) "contractor" means a person who meets
the definition of "contractor" in AS 08.18.171 and who
undertakes the performance of a construction project
for a project owner, its agent, or its representative;
(2) "contractor controlled insurance
program" means an insurance program where one or more
insurance policies are procured on behalf of a
contractor, its agent, or its representative, by its
insurance producer, as defined in AS 21.27.900, for the
purpose of insuring the contractor and one or more of
the following:
(A) the project owner;
(B) a subcontractor;
(C) an architect;
(D) an engineer; or
(E) a person performing professional
services;
(3) "major construction project" means the
process of constructing a structure, building,
facility, or roadway or major renovation of more than
50 percent of an existing structure, building,
facility, or roadway having a contract cost of more
than $50,000,000 of a definite term at a geographically
defined project site;
(4) "owner controlled insurance program"
means an insurance program where one or more insurance
policies are procured on behalf of a project owner, its
agent, or its representative, by its insurance
producer, as defined in AS 21.27.900, for the purpose
of insuring the project owner and one or more of the
following:
(A) the contractor;
(B) a subcontractor;
(C) an architect;
(D) an engineer; or
(E) a person performing professional
services;
(5) "project owner" means a person who, in
the course of the person's business, engages the
service of a contractor for the purpose of working on a
construction project;
(6) "subcontractor" means a person to whom a
contractor sublets all or part of a contractor's
initial undertaking."
Renumber the following bill sections accordingly.
Page 15, line 25:
Delete "AS 21.12.140"
Insert "AS 21.36.065"
Page 15, line 29:
Delete "AS 21.12.140"
Insert "AS 21.36.065"
Page 17, line 26:
Delete "22"
Insert "21"
Page 17, line 28:
Delete "22"
Insert "21"
Page 17, line 29:
Delete "22"
Insert "21"
Co-Chair Chenault OBJECTED for discussion purposes.
3:16:33 PM
TOM BRICE, COUNCIL OF LABORERS 942 & 341, LOCAL 71, reported
that the unions have been tracking the legislation. He
stated that there was not an objection to the (L&C) version.
He indicated that there could be concerns with Amendment #2.
Representative Weyhrauch asked if Mr. Brice has seen the
amendments. Mr. Brice said he had.
Representative Weyhrauch asked if the portion of Amendment
2, lines 5-6, regarding the cost of medical care, affects
the medical trust administered by the union. Mr. Brice
thought that question would be better directed to Ms. Hall.
He wondered if "to provide coverage for the cost of medical
care" is incorporated under individuals that are required to
receive a certificate of authority to participate, or
whether that is a separate section. If it is a separate
section, that is redefining the public health trust.
Ms. Hall agreed with Mr. Brice's statement that the pieces
that are controversial regarding the health trust should be
removed. She added that there is no intent to require a
person to obtain a certificate of authority. It was
directed to self-funded multiple employer welfare
arrangements, which are currently required to have a
certificate of authority.
3:19:58 PM
Ms. Hall addressed Amendment 3, which limits owner
controlled insurance programs. She related that these
programs would not change within the current bill, but move
to AS 21.36. She offered to answer questions from the
committee.
Representative Hawker referenced to Section 24, "except as
provided in AS 21.12.140, an insurer, whether an authorized
or unauthorized insurer may not underwrite an owner
controlled insurance program or contractor controlled
insurance program." He requested clarification. Ms. Hall
responded that these programs are designed for major
construction projects. It is not something that does not
already occur. Currently, the rules and definitions are in
the Worker's Compensation manuals. It is not a change in
how these programs are used, but it is a prohibition against
expanding them into things other than large construction
projects. Typically, these do not happen.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 3 was adopted.
Representative Foster MOVED to report CSHB 147 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 147 (FIN) was REPORTED out of Committee with a "no
recommendation" recommendation and with a zero fiscal impact
note by the Department of Commerce, Community and Economic
Development.
3:24:28 PM
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