Legislature(2015 - 2016)BELTZ 105 (TSBldg)
02/26/2015 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB15 | |
| SB47 | |
| SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 15 | TELECONFERENCED | |
| *+ | SB 47 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 39 | TELECONFERENCED | |
SB 47-LIFE INSURANCE/ANNUITY EXEMPTIONS
1:50:11 PM
CHAIR COSTELLO announced the consideration of SB 47. "An Act
relating to exemptions for cash surrender values, accrued
dividends, and loan values of life insurance and annuity
contracts."
1:50:41 PM
GERMAN BAQUERO, Intern, Senator John Coghill, introduced SB 47
on behalf of the sponsor. He spoke to the following sponsor
statement: [Original punctuation provided.]
Under the Alaska Exemptions Act under Chapter 38 of
Title 9 in the Code of Civil Protections there are
currently six exemptions that exist from attachment,
garnishment, or execution by a creditor in civil
actions. One of these exemptions under AS 09.38.025(a)
is an exemption of up to $500,000 on un-matured life
insurance. SB 47 goes in and repeals the $500,000
limit in AS 09.38.025(a).
In effect SB 47 brings AS 09.38.025(a) in line with
other exemptions found in the Alaska Exemption Act,
such as: burial plots, longevity bonuses, tuition
credits, the permanent fund dividend, medical
benefits, liquor licenses, payments found under the
Senior Benefits Payment Program, compensation of
benefits exempt under federal law, and retirement plan
interests and payments.
While the law currently provides protection of non-
estate assets up to $500,000, having a limit in the
first place clearly does not assist in the protection
of assets or pre-bankruptcy planning. While states
like South Carolina, Wisconsin, and New York expressly
define cash surrender values from life insurance as
exempt, still many states ultimately rely on judicial
interpretation of a debtor's intent. This bill will
provide people with a better security and planning for
their families after they have passed on.
This bill encourages personal responsibility and
protects the future of Alaskan families.
1:54:17 PM
SENATOR JOHN COGHILL, Sponsor of SB 47, described the
legislation as an estate planning tool that extends the
exemption to someone who is investing his/her own money. He
noted that the bill provides fraud protections.
SENATOR STEVENS asked who the bill benefits and who it harms.
SENATOR COGHILL replied it helps people who are building an
estate through industry-based planning.
MR. BAQUERO added that it will provide security to those who
seek insurance as part of their estate management and it will
help the beneficiaries of these insurance policies while the
policies are unmatured. Once the policy is matured and the
assets have been transferred to the beneficiaries, they are
subject to restitution or garnishment.
CHAIR COSTELLO asked Lori Wing-Heier to discuss the fiscal note.
1:59:38 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), stated
that the bill amends Title 9 and doesn't directly impact the
insurance statutes in Title 21. The division submitted a zero
fiscal note in the belief that it will not impact what the
division collects on premium taxes.
CHAIR COSTELLO asked if the administration has a position on the
bill.
MS. WING-HEIER replied she hasn't heard that the administration
had taken a position.
CHAIR COSTELLO asked Mr. Blattmachr to provide his perspective
of the bill.
2:01:08 PM
MATHEW BLATTMACHR, Vice President and Trust Officer, Alaska
Trust Company, stated that SB 47 helps keep Alaska in the top
tier of states for estate planning and financial planning in
general.
CHAIR COSTELLO asked him to discuss the fraud protections
provided by the four-year look-back at the state level and ten-
year look-back at the federal level for bankruptcy proceedings.
MR. BLATTMACHR clarified that the legislation wouldn't change
the fact that these policies are assignable as collateral, and
could be attached if assigned. He also pointed out that Alaska's
estate planning laws protect individuals who engage in estate
and financial planning, but only to the extent that they do not
willfully defraud a creditor. He opined that the four-year state
look-back to review bankruptcy proceedings and the ten-year
federal look-back are ample procedures to prevent that type of
malicious activity.
CHAIR COSTELLO asked if he had information about other states'
policies regarding creditors.
MR. BLATTMACHR recounted that South Dakota and Nevada have a
two-year look-back, Ohio is 18 months, Delaware is three years,
and Alaska matches a number of other states with a four-year
look-back.
2:04:32 PM
LINDA HULBERT, representing herself, said she's worked in the
insurance industry for 25 years and she supports SB 47. It will
help people to legitimately plan for their future and help
Alaska come on par for planning purposes with states such as New
York, Florida, Texas, and Arizona. She recounted that many
Alaskans who have businesses put any extra money back into their
business in the early years rather than putting it away for
retirement. SB 47 provides a means for these people to save for
their retirement when they can by putting money into life
insurance. She opined that the bill could raise revenue for the
state by encouraging people to save, because for every $100,000
the state would receive $2,700.
2:07:48 PM
CHAIR COSTELLO announced she would hold SB 47 in committee for
further consideration.