03/05/2020 01:30 PM Senate LABOR & COMMERCE

           SB 195-BD OF DIRECTORS: DOMESTIC INSURERS                                                                        
                                                                                                                                
2:32:48 PM                                                                                                                    
CHAIR BISHOP announced the consideration  of SENATE BILL NO. 195,                                                               
"An Act  relating to  election of a  domestic insurer's  board of                                                               
directors." He noted  that public testimony was  noticed for this                                                               
hearing.                                                                                                                        
                                                                                                                                
2:33:19 PM                                                                                                                    
LORI WING  HEIER, Director Division  of Insurance,  Department of                                                               
Commerce, Community and  Economic Development (DCCED), Anchorage,                                                               
Alaska, stated that  in 2019, Moda Assurance  Company (MODA), the                                                               
state's  new  health  insurer,   applied  for  a  Certificate  of                                                               
Insurance.  She  described  the Certificate  of  Authority  (COA)                                                               
process as long  and tedious. Since the last COA  was issued more                                                               
than 35  years ago, the  division found that the  Alaska statutes                                                               
did not reflect  current business practices and  Moda's COA would                                                               
be  out of  compliance. Further  investigation revealed  that two                                                               
other domestic  insurers, Alaska  National and Umialik,  were out                                                               
of  compliance. These  certificates of  insurance were  issued in                                                               
the  1980s, but  this never  come to  light. Subsequent  national                                                               
research  indicates  that  44 other  states  eliminated  the  COA                                                               
requirement from their statutes and  that is what SB 195 proposes                                                               
to do, she said.                                                                                                                
                                                                                                                                
MS. WING  HEIER said SB  195 updates  the statute by  saying that                                                               
when  an insurance  company that  is  domiciled in  the State  of                                                               
Alaska  elects its  board of  directors, the  individuals do  not                                                               
need  to  be  stockholders  or  members.  This  allows  insurance                                                               
companies  to  have  a   diverse  membership  and  subject-matter                                                               
experts serve on their boards.                                                                                                  
                                                                                                                                
MS. WING HEIER reiterated that to  the best of her knowledge, the                                                               
existing statute had not been enforced in over 35 years.                                                                        
                                                                                                                                
2:35:21 PM                                                                                                                    
CHAIR BISHOP  polled the members  and found  they did not  need a                                                               
sectional   analysis.   He   commented  that   the   bill   seems                                                               
straightforward. He noted that she  indicated that 44 states have                                                               
done this.                                                                                                                      
                                                                                                                                
MS. WING HEIER agreed.                                                                                                          
                                                                                                                                
2:35:36 PM                                                                                                                    
CHAIR BISHOP found no questions and stated he would hold SB 195                                                                 
in committee.                                                                                                                   
                                                                                                                                
MS. WING HEIER offered to talk to and answer committee members'                                                                 
questions before the next meeting.