03/05/1997 01:48 PM Senate JUD

        SB  14 INS:DOMESTIC VIOL. VICTIMS & DISCLOSURES                       
                                                                              
  SENATOR DAVE DONLEY , sponsor of the measure, gave the following             
 overview.  SB 14 is similar to legislation that passed both houses            
 last year.  It prohibits discrimination by insurers against victims           
 of domestic violence based solely on that fact.  The bill still               
 allows appropriate underwriting based on objective criteria.  In              
 the lower 48 there has been a problem with insurance companies                
 redlining victims of domestic violence.  The Division of Insurance            
 has proposed one technical amendment (Amendment #1).                          
                                                                               
 Number 044                                                                    
                                                                               
  SENATOR PARNELL  moved to adopt Amendment #1 (0-LS0160\A.2) which            
 reads as follows.                                                             
  Page 2, line 14:                                                             
   Delete "a writing carrier, as defined in AS 21.55.500"                      
   Insert "the Comprehensive Health Insurance Association,                     
 established in AS 21.55.010"                                                  
                                                                               
  CHAIRMAN TAYLOR  objected for the purpose of taking further                  
 testimony.                                                                    
                                                                               
  MARIANNE BURKE , Director of the Division of Insurance, explained SB
, as drafted, contains a reference to a "writing carrier."  No              
 such entity exists within insurance terminology.  The entity being            
 referred to is defined in AS 21.55.010, and is known as "the                  
 Comprehensive Health Insurance Association."  Amendment #1 uses               
 that term.                                                                    
                                                                               
  CHAIRMAN TAYLOR  asked if anyone in attendance opposed Amendment #1          
 or wanted to testify on it.  There being no response,  CHAIRMAN               
 TAYLOR  removed his objection to Amendment #1, and it was adopted.            
                                                                               
  SENATOR DONLEY  explained a second amendment (Amendment #2)                  
 clarifies the intent of the legislation that a rate adjustment or             
 denial of coverage based on a known frequency of loss, as would               
 occur if the client was not a victim of domestic violence, is                 
 permissible.  The intent of the bill is to prevent discrimination             
 against clients simply because he/she has been a victim of domestic           
 violence, not to prevent ratings by insurers based on objective               
 facts.                                                                        
                                                                               
 Number 124                                                                    
                                                                               
  CHAIRMAN TAYLOR  asked if a person was a victim of domestic violence         
 eight times over a ten-year period, the insurance company could               
 take into account frequency when determining rates, because each              
 time the person got medical attention.   SENATOR DONLEY  replied that         
 is correct and noted if an insurer's underwriting criteria can base           
 rates on eight claims over a ten-year period for non-domestic                 
 violence medical claims, that criteria can be used for a domestic             
 violence victim.  The rating policy must be consistent.                       
                                                                               
  SENATOR PARNELL  asked whether SB 14 will allow the insurance                
 industry to objectively look at a person's injury, regardless of              
 the cause, and adjust rates and premiums based on that injury, or             
 would that criteria be prohibited if the person is a victim of                
 domestic violence.   SENATOR DONLEY  answered the purpose of                  
 Amendment #2 is to make crystal clear that it can not be argued at            
 a later time, that if the results of the objective criteria were              
 domestic violence, the insurer could not use the objective criteria           
 in rating someone.                                                            
                                                                               
 Number 164                                                                    
                                                                               
  MS. BURKE  commented there are a lot of legitimate underwriting              
 criteria.  If a person had seven car accidents in two years, the              
 insurance company would have a legitimate reason to cancel the                
 policy.  If a person submits seven claims because the damage to the           
 car was caused by the person's partner during domestic violence               
 disputes, frequency is the issue, not the person's status as a                
 domestic violence victim.                                                     
                                                                               
  CHAIRMAN TAYLOR  felt it will be difficult to establish, in the              
 future, that the insurance raters used objective facts rather than            
 a bias toward this category of victim.                                        
                                                                               
  MS. BURKE  said the Division conducts market examinations and                
 reviews insurance company files.  If a person's coverage was denied           
 or cancelled, the cited reason is reviewed and compared with the              
 company's written policies and procedures to verify compliance with           
 criteria.                                                                     
                                                                               
  Number 215                                                                   
                                                                               
 CHAIRMAN TAYLOR  expressed concern that an insurance company can              
 write altruistic policies but carry out something different.                  
                                                                               
  SENATOR PARNELL  moved to adopt Amendment #2 (0-LS0160\A.3).                 
                                                                               
  LAUREE HUGONIN , Director of the Alaska Network on Domestic Violence         
 and Sexual Assault, echoed Chairman Taylor's concern that policies            
 and procedures could be drawn by insurance companies to appear to             
 apply evenly but would, in fact, apply to victims of domestic                 
 violence more often or strenuously than other customers,                      
 particularly in the property and casualty lines.  Underwriting is             
 not consistent among companies.  She stated she supports SB 14 but            
 prefers the language "only a victim of domestic violence" because             
 then a victim could determine the reasons he/she was denied                   
 coverage.                                                                     
                                                                               
  JAYNE ANDREEN , Executive Director of the Council on Domestic                
 Violence and Sexual Assault, agreed with Ms. Hugonin's testimony.             
                                                                               
  CHAIRMAN TAYLOR  removed his objection to Amendment #2, therefore it         
 was adopted.                                                                  
                                                                               
 There being no further testimony or opposition to SB 14,  SENATOR             
 PARNELL  moved SB 14 as amended from committee with individual                
 recommendations and its accompanying zero fiscal note.  There being           
 no objection, the motion carried.