Legislature(2005 - 2006)CAPITOL 17
02/23/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB7 | |
| HB147 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 7 | TELECONFERENCED | |
| *+ | HB 147 | TELECONFERENCED | |
| *+ | HB 150 | TELECONFERENCED | |
HB 147-INSURANCE 4:17:37 PM CHAIR ANDERSON announced that last order of business would be HOUSE BILL NO. 147, "An Act relating to the regulation of insurance, insurance licensing, surplus lines, insurer deposits, motor vehicle service contracts, guaranteed automobile protection products, health discount plans, third-party administrators, self-funded multiple employer welfare arrangements, and self-funded governmental plans; and providing for an effective date." LINDA HALL, Director of Insurance, Department of Commerce, Community, & Economic Development (DCCED), stated that she was here to speak on HB 147. If passed, she said, this bill will provide more efficiency for the division, more uniformity for the insurance industry, and more protection for Alaskan consumers. MS. HALL quickly went over the bill and what it stipulates beginning with the industry. She stated that there is no longer a requirement of the insurance industry to keep their own lists of agents, and if the division decides to administer regulatory action, the insurance company can go ahead, pull the license, and notify their agent themselves. MS. HALL then went on to describe the types of insurance companies. The first type of company, she said, is the admitted companies that file their rates and forms and pay premium tax, and the second kind are called surplus lines, or unauthorized insurers. There were a few things that were overlooked and these, she said, were looked at. MS. HALL then indicated that there were minor changes to insured deposits in Section 3, 4, and 5. They are removing the clause that refers to safety deposit boxes and are now permitting the release of the deposit directly to the guarantee fund. MS. HALL continued to say that there are two sections, sections 30 and 33, that deal with automobile insurance and service contracts, and guaranteed auto protection. This has been the subject of discussion with dealerships and the Division is now seeking to put together standards that can be used across the board, that will allow them to have more uniform review of those products. MS. HALL announced that these sections really clarify the division's authority to promulgate regulations for licensing product standards and financial responsibility and adds a definition for automobile protection and auto contracts. She then indicated that this will be the subject of discussion and possible revision and rewording. She then adds that it is not her intention to create havoc in the automobile dealership industry, but she insists that she must have some oversight ability. 4:22:04 PM MS. HALL continued with a discussion on sections that deal with health discounts. These are plans, she said, that are sold using terminology found in the health insurance industry, and from 2000-2002, over 200,000 of these plans were sold nationally, leaving $250 million of unpaid claims. This fraudulent insurance, she said, is advertised on radio and television, and they purport to have a web of medical providers, which they do not. She indicates that her group is trying to add these groups under the unfair practices act in Alaska. [Chair Anderson passed the gavel to Representative Ledoux, who now presides over the meeting.] REPRESENTATIVE LEDOUX asked if there were questions. REPRESENTATIVE ROKEBERG asked if this were the kind of thing that requires a monthly payment and one where you are given a closed panel of doctors. 4:24:39 PM MS. HALL indicated that she has not heard of the closed panel terminology. She said that with this type of so-called insurance there is no waiting period, or questions about pre- existing conditions. Instead, she said, the consumer might get discount rates at the medical provider's office. The unsophisticated consumer who is looking for discount insurance will probably fall prey to this scheme. REPRESENTATIVE ROKEBERG asked if there were any legitimate plans that are associated with insurance companies. MS. HALL answered that there were some discount plans associated with insurance companies. REPRESENTATIVE GUTTENBERG asked how the division regulates a company that does not have a physical presence in the state of Alaska. MS. HALL answered that we have put some companies out of business by working with other states. She indicated that it is an investigative effort of several states that usually leads to tracking down the companies through either fax numbers or toll free numbers through a national database. 4:27:21 PM REPRESENTATIVE LEDOUX pointed out that these advertisements are broadcast on public and private airwaves and that being so, she asked if the Division could issue cease and desist orders to the broadcasters to shut the insurance companies out from the public eye. MS. HALL answered no, but that it was an interesting angle and she would look into the method. 4:28:40 PM MS. HALL answered that the next section are found in 28 and 29, the self funded governmental insurance plans. The division conducted a review of the state union health trust that resulted in greater clarification in the extent of state regulation. Section 28 provides standards for filing requirements for financial analysis and solvency regulation, and provides minimum standards for healthcare expenses and finally, the division is seeking to have oversight of the union health trust. 4:29:55 PM MS. HALL then stated that the last section that this bill dealt with third party administrators. She defined these as insurers that perform administrative functions for an insurer or a self- funded health insurance plan. She then mentioned that these third party administrators have to be registered. MS. HALL stated that there are 7 sections that deal with these entities. The first thing it does, she said, is to remove the requirement that the insurer be registered with the Division, since this is already established. It does add a requirement that entities that are exempt certify their eligibility for exemption and it also authorizes the director of the Division to immediately suspend the registration of third party administrators if they are financially impaired or engaged in practices that are injurious to the policyholders. In the last three last sections, the division has added in section 24, the same standards in rate making as found in other lines of insurance. She pointed out that this is the basic rate making philosophy that stipulates that rates are not excessive, inadequate, or discriminatory. She then went on to say that sections 26 and 27 deal with minor changes in title insurance that authorizes the director designee to accept financial statements, and it also requires them to provide quarterly financial statements within 45 days of issue, which creates uniformity within all insurance industries. REPRESENTATIVE GUTTENBERG asked how the regulations prescribing fairness in terms of excessive prices, inadequate coverage, or discriminatory practices deal with credit scoring and he asked it would disallowed. MS. HALL answered that would not be disallowed. She indicated that she allows credit scoring around particular parameters. REPRESENTATIVE GUTTENBERG asked if there are any persons that work within the division that have, as their sole responsibility, the safeguarding of Alaskan citizens through consumer protection. MS. HALL announced that her division has a consumer advocacy position whose only job is to investigate consumer complaints and review statute regulations, and enter into discussions with insurance companies and see that they are obeying these regulations. The efforts that these people have given consumers has generated over $100,000 to $300,000 in payments that would not have been received had it not been for these efforts. She ended by stating that in addition these goals and the previous ones, that achieving a healthy insurance environment and the needs of the consumers was their top priority. REPRESENTATIVE LEDOUX asked if there any further questions and then the committee took an at-ease from 4:36 p.m. to 4:37 p.m. [HB 147 was held over.]
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