04/22/2006 09:00 AM Senate FINANCE

                                                                                                                                
     CS FOR HOUSE BILL NO. 394(L&C) am                                                                                          
     "An Act  relating to allowing  insurance policy forms  to be                                                               
     filed and  approved in  languages other  than English  if an                                                               
     official  English  language  version   is  also  filed,  and                                                               
     authorizing  use of  insurance policy  forms and  associated                                                               
     materials in languages other than English."                                                                                
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
11:39:43 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KEVIN  MEYER, the  bill's sponsor,  testified that                                                               
more than  80,000 Alaskans speak  a language other  than English.                                                               
Statute does not specify which  version of an insurance policy or                                                               
information about a policy published  in both English and another                                                               
language  was  the  official  version.  State  statute  currently                                                               
prohibits  information  and advertisements  concerning  insurance                                                               
and  insurance  policies from  being  published  in any  language                                                               
besides English.  Since there is  never a  "perfect" translation,                                                               
and  any translation  is easily  challenged  in Court,  insurance                                                               
companies  are reluctant  to produce  translated documents.  This                                                               
law  would allow  insurance companies  to  publish materials  and                                                               
advertise in a language other  than English, provided the English                                                               
version was deemed the official document.                                                                                       
                                                                                                                                
Representative  Meyer claimed  this  bill  would allow  insurance                                                               
companies in the  state to provide services to  a growing portion                                                               
of Alaskans,  while clarifying their responsibilities  to protect                                                               
the consumer.                                                                                                                   
                                                                                                                                
11:41:48 AM                                                                                                                   
                                                                                                                                
Senator  Bunde observed  that insurance  policies may  already be                                                               
written in a foreign language.                                                                                                  
                                                                                                                                
Co-Chair Green  declared a conflict  of interest, as  her husband                                                               
owns  an insurance  company.  His company  employs  a person  who                                                               
speaks  Spanish as  well  as another  foreign  language, and  the                                                               
office  has  greatly  benefited   from  her  ability  to  explain                                                               
policies  and answer  questions in  a language  more familiar  to                                                               
their customers.                                                                                                                
                                                                                                                                
11:42:50 AM                                                                                                                   
                                                                                                                                
Senator Stedman disclosed that he  also owns part of an insurance                                                               
agency.  He  would support  the  bill,  and  felt it  would  help                                                               
explain some of the complications of insurance.                                                                                 
                                                                                                                                
Co-Chair  Green referenced  the  importance of  the inclusion  of                                                               
"associated  material"  as  defined  by subsection  (d)  of  Sec.                                                               
21.42.175. Non-English  translations. added  by Section 1  of the                                                               
bill.                                                                                                                           
                                                                                                                                
Co-Chair Wilken  asked how  this bill  would affect  an insurance                                                               
agent.                                                                                                                          
                                                                                                                                
Representative Meyer  replied that  there was an  insurance agent                                                               
in the  room to testify  who could answer specific  questions. He                                                               
cited the primary  impact of the bill would be  to allow a policy                                                               
to  be  written in  Spanish  or  another language.  However,  the                                                               
official version  provided to Division  of Insurance would  be in                                                               
English.                                                                                                                        
                                                                                                                                
11:44:47 AM                                                                                                                   
                                                                                                                                
MICHAEL PAWLOWSKI,  Staff to Representative Meyer,  inferred that                                                               
the bill  would not require  an agent  to do anything,  but would                                                               
allow insurance  information to  be printed  in a  language other                                                               
than English.                                                                                                                   
                                                                                                                                
Co-Chair Wilken  understood that this legislation  would remove a                                                               
prohibition currently in statute  on printing insurance documents                                                               
in another language.                                                                                                            
                                                                                                                                
Mr. Pawlowski  clarified that insurance companies  are not barred                                                               
from providing translations,  but are reluctant to  do so because                                                               
there is  no provision in  statute to guarantee that  the English                                                               
version  would be  the official  version. This  bill would  allow                                                               
insurance  companies  to  provide translations  of  the  official                                                               
documents with  the security  that the  English version  would be                                                               
the official version.                                                                                                           
                                                                                                                                
Co-Chair Wilken surmised  that the bill would  allow an insurance                                                               
company  to produce  a policy  in  a foreign  language, and  that                                                               
policy would then become the official policy.                                                                                   
                                                                                                                                
Mr. Pawlowski  corrected that the  foreign language  policy would                                                               
be  for  informational purposes  only,  and  the English  version                                                               
would be official version.                                                                                                      
                                                                                                                                
Representative Meyer concurred.                                                                                                 
                                                                                                                                
11:46:28 AM                                                                                                                   
                                                                                                                                
Senator Olson  asked if a  policy written in two  languages could                                                               
be challenged in court based  on an interpretation of the foreign                                                               
language version.                                                                                                               
                                                                                                                                
11:47:23 AM                                                                                                                   
                                                                                                                                
Mr. Pawlowski responded that the  English version would always be                                                               
the official  version. The version  in another language  would be                                                               
for informational purposes only.  The consumer protection portion                                                               
of  the bill  is  contained in  subsection (c)  of  the bill  and                                                               
provides  that   an  insurance  company  may   not  "misrepresent                                                               
information"  in  any  of the  foreign  language  information  it                                                               
provides.                                                                                                                       
                                                                                                                                
11:47:57 AM                                                                                                                   
                                                                                                                                
JEFFREY   TROUT,   Deputy   Director,  Division   of   Insurance,                                                               
Department  of  Commerce,  Community  and  Economic  Development,                                                               
spoke in  support of  the bill. He  concurred with  the sponsor's                                                               
remarks.  The  Division viewed  this  legislation  as a  consumer                                                               
protection bill  that would assist  consumers. While  some people                                                               
may argue  that all Americans should  speak English proficiently,                                                               
that is, in reality, unlikely for first generation immigrants.                                                                  
                                                                                                                                
Mr.  Trout  set  forth  that  there  are  currently  no  laws  or                                                               
regulations  to  address  how   the  insurance  industry  handles                                                               
foreign  language translations.  In  the past,  the Division  has                                                               
accepted   foreign  language   policies,   as   long  they   were                                                               
accompanied by  an English translation.  He predicted  the affect                                                               
on the average  insurance agent would be  "nominal". The proposed                                                               
legislation  is directed  at insurance  companies, in  clarifying                                                               
what  information they  can publish  in  other languages.  Agents                                                               
could choose to  opt in, or continue operating  as they currently                                                               
do.                                                                                                                             
                                                                                                                                
11:51:12 AM                                                                                                                   
                                                                                                                                
SHELDON WINTERS, representative,  State Farm Insurance, testified                                                               
that the  insurance industry  is in  support of  this legislation                                                               
and in support of providing information to consumers.                                                                           
                                                                                                                                
11:52:09 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken  offered  a  motion  to  report  the  bill  from                                                               
Committee  with   individual  recommendations   and  accompanying                                                               
fiscal note.                                                                                                                    
                                                                                                                                
There being no  objection, CS HB 394 (L&C) am,  was REPORTED from                                                               
Committee  with  zero  fiscal  note #1  from  the  Department  of                                                               
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
11:52:41 AM