Legislature(2003 - 2004)
05/09/2004 11:13 AM House FIN
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CS FOR SENATE BILL NO. 357(FIN)
An Act relating to the regulation of insurance,
insurance licenses, qualifications of insurance
producers, surplus lines, fraud investigations,
electronic transactions, and compliance with federal
law and national standards; and providing for an
effective date.
LINDA HALL, DIVISION OF INSURANCE, DEPARTMENT OF COMMUNITY
AND ECONOMIC DEVELOPMENT, explained that the legislation
would ensure that Alaska statutes are consistent with
federal law (provisions mandated under the Gramm-Leach-
Bliley Act) and with model acts and standards of the
National Association of Insurance Commissioners (NAIC). The
NAIC accreditation team suggested some of the proposed
changes addressing financial oversight of insurance
companies when Alaska was reviewed for a renewal of
accredited status. Some of the proposed changes relate to
updating procedures in order to better reflect current
insurance environment and enabling electronic communications
between the Division of Insurance and the public, industry
and other regulators. Two key elements of the Division of
Insurance are:
· Protecting the consumer
· Enhancing the insurance business environment
Ms. Hall provided a sectional analysis of the bill.
TAPE HFC 04 - 111, Side B (faulty tape - changed)
TAPE HFC 04 - 112, Side A
Ms. Hall continued with the analysis.
Representative Fate inquired if automobile warranties would
be considered in the same manner.
Ms. Hall responded that it would depend on who wrote the
automobile coverage. If the federal government regulates
the company, the State cannot preempt that. There is little
local control on risk groups.
Representative Hawker inquired if there could be testimony
heard from the industry. Co-Chair Williams pointed out that
there were no representatives present from that group.
Representative Hawker asked if the industry supported the
bill. Ms. Hall replied that to date, there had been no
testimony either way on the proposed changes. The changes
will only "standardize" what is currently done by the
Division. Representative Hawker was "astounded" that there
had been no testimony received by the industry.
Co-Chair Williams MOVED to ADOPT Amendment #1, #23-
LS1684\Q.4, Bullock, 5/5/04. (Copy on File). Vice-Chair
Meyer OBJECTED.
JERRY RHINEWALD, LOBBYIST, BLUE CROSS AND BLUE SHIELD OF
ALASKA, JUNEAU, noted that Blue Cross was in the process of
moving from a non-profit company to a per profit company and
currently, is under scrutiny by Alaska's Division of
Insurance. There is concern that Section 18 could create
problems in the transition process that would change the
"rules of the game". He did not believe it would affect the
regulatory environment. Mr. Rhinewald requested the
Committee's consideration of the amendment. Ms. Hall noted
that the Division had no objection to the amendment.
Vice Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment #1 was adopted.
Co-Chair Williams pointed out a Letter of Intent. (Copy on
File). Mr. Rhinewald commented that the letter would make
the Alaska market more attractive to national insurance
companies. The Letter of Intent would continue dialogue on
ways to improve making the Alaska market more attractive
without compromising the integrity of the insurance program
or consumer protection.
Co-Chair Williams MOVED to ADOPT the Letter of Intent.
There being NO OBJECTION, it was adopted.
Representative Croft MOVED to ADOPT Amendment #2, #23-
LS1684\Q.7, Craver, 5/9/04. (Copy on File). Co-Chair
Williams OBJECTED.
Representative Croft spoke to the amendment and concerns
with HB 311, replacing Administration needs and placing them
into the worker's compensation. He suggested that could
provide "insurance" for the Commissioner of Insurance.
Co-Chair Harris stated support for Amendment #2, noting that
it is important to get the parts of HB 311 that are non
controversial in place.
Ms. Hall noted that she had authored that language in HB 311
and that she would be "hesitant to remove portions of that
bill", putting them into SB 357.
Co-Chair Williams acknowledged that he also did not accept
the amendment language. If the Committee wants to take-up
HB 311, it should address that bill separately.
Representative Croft understood that the intent to continue
was to provide for a debate. Co-Chair Williams disagreed,
stating that the Committee should work on HB 311 if that is
the concern. Co-Chair Harris reiterated support for the
"intent of the amendment", but indicated that he would vote
with Co-Chair Williams. He requested that policy remain
consistent with bills coming before the Committee.
A roll call vote was taken on the motion.
IN FAVOR: Croft
OPPOSED: Meyer, Stoltze, Chenault, Fate, Foster,
Hawker, Williams, Harris
Representative Joule and Representative Moses were not
present for the vote.
The MOTION FAILED (1-8).
Co-Chair Williams advised that Amendment #3, #23-LS1684\Q.6,
Bullock, 5/8/04 had been WITHDRAWN. (Copy on File).
Representative Foster MOVED to report HCS CS SB 357 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal note. There being NO OBJECTION, it
was so ordered.
HCS CS SB 357 (FIN) was reported out of Committee with a "no
recommendation", a Letter of Intent and zero note #1 by the
Department of Community & Economic Development.
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