Legislature(2025 - 2026)BELTZ 105 (TSBldg)
02/17/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB11 | |
| SB17 | |
| SB98 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 11 | TELECONFERENCED | |
| += | SB 17 | TELECONFERENCED | |
| *+ | SB 98 | TELECONFERENCED | |
SB 11-FLOOD INSURANCE
1:33:30 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 11
"An Act relating to flood insurance; relating to property
insurance; establishing the Alaska Flood Authority and the
Alaska flood insurance fund; and providing for an effective
date."
1:34:05 PM
SENATOR BERT STEDMAN, District A, Alaska State Legislature,
Juneau, Alaska, speaking as sponsor presented a brief recap of
SB 11 and stated that his office is working on a solution to
Alaska's challenges with the National Flood Insurance Program
for two main reasons:
• Alaskans pay far more in premiums than Alaskans receive in
claims.
• Federal building codes tied to the program are hindering
coastal development.
He said because this program is nationwide, Alaska is paying for
flood losses in high-risk areas like the Gulf Coast and East
Coast, even though Alaska has minimal exposure to floods losses.
He said Federal Emergency Management Agency's (FEMA) rules also
override local planning and zoning, placing heavy burdens on
communities. With Alaska's vast coastline and many fishing
towns, these restrictions are especially harmful. He stated that
Alaska is a large state with a small population, and Alaska is
not being treated fairly. He said his office is hoping to work
with the Division of Insurance and the committee to refine the
issue and find a solution that works for Alaskans without being
dragged down by FEMA's massive deficits.
1:38:19 PM
CHAIR BJORKMAN requested to know how the FEMA flood maps will
affect the concept of SB 11 and what is the connection between
the flood maps and those taking up insurance.
1:38:44 PM
SENATOR STEDMAN answered that if flood maps are going to include
hundreds or thousands of Alaskans, it raises concerns,
especially with how inconsistently zones are drawn. He stated
that the issue of flood zones is growing, not shrinking, with
more people and communities affected over time. He gave an
example of Ketchikan's new maps that add 1,100 people to the
flood zone, that's nearly 10 percent of the town despite little
to no flooding along its waterfront. Theres also very little
flooding along the waterfront in Wrangell, Sitka, and Juneau. He
said the FEMA flood maps are a longstanding and growing problem
that need attention.
1:40:09 PM
CHAIR BJORKMAN asked how an insurance program will ensure risk
is shared fairly among those truly at risk of flooding so
people's property that is unlikely to flood aren't just paying
premiums that end up subsidizing high-risk areas.
1:40:49 PM
SENATOR STEDMAN answered that the Division of Insurance would be
able to answer that more technical question. He stated that the
goal isn't to exclude the 1,100 people in Ketchikan, but to
include them in a better system with lower premiums, better
coverage, and less federal control over local zoning. He said
it's not about avoiding insurance but creating a more efficient
and fairer program.
1:42:21 PM
SENATOR YUNDT stated his belief that shifting control from
federal government to the state or local level usually leads to
a more efficient system that better serves residents. He asked
if a borough or community like Ketchikan, creates an insurance
captive, where residents in flood zones pool together and self-
insure and asked if this is something that has been explored.
1:43:10 PM
SENATOR STEDMAN answered that his office didn't look at
individual communities in isolation but considered a statewide
approach. A broader pool helps manage risk more fairly. He said
the Division of Insurance can give more insight regarding the
possibility of local captives. Some areas also face risks like
landslides and earthquakes, so SB 55 would lay the groundwork
for a broader solution if done right. He expressed that the new
program won't be a free ride, premiums won't be state-subsidized
and if the state can't run the program more economically than
the federal government, the State of Alaska would end up back in
the federal system: high premiums, few claims, and heavy
restrictions.
1:45:35 PM
SENATOR YUNDT asked if the insurance captive would be at the
state level or broken down by communities and would the captive
just be for those in the pool or would others outside of the
pool be involved.
1:45:57 PM
LORI WING-HEIER, Director, Division of Insurance, Anchorage,
Alaska, answered questions on SB 11 and responded that the
captive would be for those in the pool.
SENATOR YUNDT asked how many captives operate in Alaska and has
she ever seen it used for [flood coverage].
MS. WINGHEIER answered that she's not aware of any captives for
flood coverage. Alaska doesn't have a captive law, so the
individual would need to go to another jurisdiction to start
one. She stated that there are a few captives for transportation
companies like Lynden and Carlyle, but they're based elsewhere.
She said most flood insurance nationwide is still handled
through the National Flood Insurance Program, with limited
private options.
1:47:29 PM
SENATOR DUNBAR asked if Alaska currently owns any insurance
programs, like the old high-risk pool before Obama care and does
that still exist. Second, are there other industries, like
earthquake or flood, where insurance is federally mandated to
access financing.
1:48:26 PM
MS. WINGHEIER answered that the high-risk pool is still active
but only has about eight members. The division keeps it going
mainly because Alaska lacks Medicare supplements. She said
Alaska is too small to attract products like Medicare Advantage.
She stated that she is not aware of any lender or state
requiring flood or earthquake insurance. She said lenders
typically ask for general property insurance, but not for
specific coverage like flood or earthquake, even in disaster-
prone areas.
SENATOR DUNBAR stated for this instance it's not a private party
requesting insurance, it's the federal government. He asked if
the federal government is asking in the capacity of a lender and
how does that mandate work.
MS. WINGHEIER responded that the federal government is asking as
a lender. She stated that she's not aware of any federal mandate
requiring people in specific geographic areas to buy flood
insurance.
SENATOR DUNBAR asked that in practice, since the federal
government is so involved in home lending, the federal
government can effectively require everyone in certain areas to
carry this insurance.
MS. WINGHEIER answered that is correct.
SENATOR DUNBAR asked if she was aware of a time the federal
government has tried to force certain insurance.
MS. WINGHEIER answered that she is not aware of a time that the
insurance was forced by the federal government.
1:50:25 PM
CHAIR BJORKMAN asked what the options are to create a viable
insurance pool for those who've had or may have flood damage in
the future.
1:50:47 PM
MS. WINGHEIER answered that for this program to work, it depends
on how many people buy insurance. She said if only a few people
join and there's a major flood, the pool won't hold but, if
enough Alaskans statewide participate, the risk can be spread
out. She stated that right now, few people buy flood insurance,
often because it's not required or it's too expensive on top of
homeowners' coverage. The division hasn't set rates yet, but
success depends on strong participation to keep the program
self-sustaining.
1:51:55 PM
CHAIR BJORKMAN opened public testimony on SB 11.
1:52:24 PM
LISA BUSCH, representing self, Sitka, Alaska, testified in
support of SB 11 and stated that she led the Sitka Sound Science
Center (SSSC) during the 2015 landslide. SSSC formed a group of
researchers, agencies, and communities, stretching from Yakutat
to Prince of Wales, to address natural hazards, not just
landslides. The SSSC meets with communities to discuss risks,
warning systems, and monitoring. SB 11 would help those at risk
from landslides, mudflows, and atmospheric rivers by offering
potential insurance options. She said every public meeting the
SSSC holds the first question is always about insurance. The
Science Center and RAND corporation published a white paper on
landslide insurance that can be shared with the committee. She
stated that she is working with Central Council of the Tlingit &
Haida Indian Tribes of Alaska, supported by United States
Geological Survey (USGS), to create a regional landslide
information hub. People want to know if insurance is available
and how it works. She said the Alaska people are a coastal
people, vulnerable not only to floods but also to landslides
triggered by extreme weather.
1:55:45 PM
LAURA CURTIS, Assistant Vice President, American Property
Casualty Insurance Association (APCIA), Rocklin, California,
testified in opposition to SB 11 and stated that APCIA
respectfully opposes SB 11, as it would create an unnecessary
financial burden on the state and duplicate flood insurance
options already available. SB 11 proposes a state run flood
insurance program to increase access, but flood coverage is
already available through the National Flood Insurance Program
(NFIP) and private insurers. She said any area that participates
in the NFIP is eligible, but many Alaska communities don't
currently participate. NFIP participation is crucial for setting
minimum standards that help reduce flood losses and insurance
costs. SB 11 would also mandate property insurers to join a new
state-run residual market something no other state requires. She
said Alaska can't afford to take on the full burden of flood
losses, especially compared to NFIP, which spreads risk
nationwide and is backed by the federal government. She said
requiring insurers to take on this extra risk would reduce
availability, not improve it. That's one reason NFIP was created
is to avoid overwhelming states with risk. She stated that
instead of creating a new program, APCIA believes the state
should focus on encouraging communities to join NFIP and invest
in mitigation, planning, and stronger building codes to improve
resilience and reduce costs. SB 11 also proposes up to $10
million in state funds to cover losses if premiums fall short.
That money would be better spent on reducing risks and expanding
NFIP participation. She said while the APCIA understand the
concerns about flood insurance access, mandatory participation
in a potentially underpriced program would be financially
disastrous.
2:00:07 PM
CHAIR BJORKMAN closed public testimony on SB 11.
2:00:23 PM
CHAIR BJORKMAN held SB 11 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB98 ver. A.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 98 |
| SB98 Sponsor Statement ver A.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 98 |
| SB11 Public Testimony-Email-Susan Allmeroth 02.08.25.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 11 |
| SB11 Public Testimony-Letter-NAMIC 02.14.25.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 11 |
| SB11 Public Testimony-Letter-APCIA 02.14.25.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 11 |
| SB98 Supporting Documents-Audit Vets Examiners Brd.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 98 |