04/21/1997 09:10 AM Senate FIN

                                                                               
       CS FOR SENATE BILL NO. 104(L&C)                                         
                                                                               
       "An  Act  relating  to  regulation  and examination  of                 
  insurers and   insurance  agents;  relating   to  kinds   of                 
  insurance; relating to   payment of insurance  taxes and  to                 
  required insurance reserves;  relating      to     insurance                 
  policies; relating to regulation of     capital,    surplus,                 
  and investments by insurers; relating to     hospital    and                 
  medical service corporations; and providing for   a        n                 
  effective date."                                                             
                                                                               
  Senator Pearce introduced  SB 104 and  referred to the  work                 
  draft  version  O-LS0407\H  dated 4/14/97.    She  moved the                 
  version be adopted for discussion  purposes.  Senator Donley                 
  objected and  said he wanted to  know what was in  the bill.                 
  Co-chair  Sharp said  he would  hold it  pending before  the                 
  committee  and would take  testimony at this  time.  Senator                 
  Pearce noted for  the committee that  there was a  sectional                 
  analysis in each file.                                                       
                                                                               
  Marianne  K.   Burke,  Director,   Division  of   Insurance,                 
  Department of Commerce and Economic  Development was invited                 
  to  join the committee.   She gave  a brief overview  of the                 
  bill  and  then answered  questions  posed by  the committee                 
  members.   She said this bill would  make sure the rules for                 
  all insurance companies would be the  same.  It was proposed                 
  that the  requirements for  the certificate  of solvency  be                 
  removed.  She referred briefly to the Kassebaum-Kennedy bill                 
  passed in  U.S. Congress.   She  said wherever  there was  a                 
  conflict the federal  regulations were  adopted.    Consumer                 
  groups were in  favour of this  bill.  Senator Donley  asked                 
  which sections dealt specifically with Kassebaum-Kennedy and                 
  she noted they  were sections 3, 11,  12, 31 - 34,  and 43 -                 
  57.  These would adopt  the minimum standards required under                 
  federal law.  She further said  people did not buy insurance                 
  and pay premiums in anticipation of illness.  Senator Donley                 
  asked  if   there  were  specific  conditions  for  specific                 
  coverages.    Ms.  Burke  indicated  that section  59  would                 
  eliminate  barriers to  compliance.   She further  explained                 
  that if an individual changed their  job or terminated a new                 
  insurance company  could not  start individual  coverage all                 
                                                                               
                                                                               
  over again.  A grace period of 90 days was allowed between a                 
  break  and  reinstatement.    Senator  Donley   asked  about                 
  individual  health  insurance  and  Ms.  Burke said  it  was                 
  decided  by age  and  deductible  not  health.   He  further                 
  referred  to section  92  and  she  said  this  section  was                 
  requested by title insurance.  She explained the elements of                 
  title insurance that made  it unique.  Co-chair  Sharp asked                 
  what about those who chose not to live a healthy  life style                 
  (tobacco, alcohol, drugs, etc.) and Ms. Burke said there was                 
  not a concern  for life style.   Unfortunately the costs  of                 
  unhealthy life styles were passed on to others.  But she did                 
  note that  high risk  groups were  not cheap.   She  further                 
  noted that  alcohol and drugs were covered  under the mental                 
  health provision.   Alaska companies can set limits for drug                 
  and  alcohol  at  approximately $9,500  per  year.   Senator                 
  Donley asked how the  state viewed rates and Ms.  Burke said                 
  there was  no influence and  they adopted  only the  minimum                 
  requirements.    There  was  one  section  concerning  small                 
  employers  and  it was  proposed  not to  sunset  next year.                 
  Senator Donley requested this bill be held over.  He removed                 
  his objection to  the work draft and said he would have some                 
  amendments drafted.                                                          
                                                                               
  Michael Lessmeier, Esq.  was invited to join  the committee.                 
  He testified on behalf of State Farm insurance co.  He asked                 
  the 10 year record requirement on page 4, line 29 be lowered                 
  to 5 years of record keeping.                                                
                                                                               
  Co-chair Sharp asked that any amendments be handed in to the                 
  Senate  Finance Committee Secretary  within the next twenty-                 
  four hours and  held the bill  in committee.  Senator  Adams                 
  noted the title was open.