02/17/2023 03:15 PM House LABOR & COMMERCE

                HB  29-INSURANCE DISCRIMINATION                                                                             
                                                                                                                                
3:51:25 PM                                                                                                                    
                                                                                                                                
CHAIR SUMNER announced that the  final order of business would be                                                               
HB 29, "Insurance Discrimination."                                                                                              
                                                                                                                                
3:52:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS asked what  the number of umbrella policies                                                               
available is.                                                                                                                   
                                                                                                                                
3:52:27 PM                                                                                                                    
                                                                                                                                
LORI  WING-HEIER, Director,  Juneau  Office,  Alaska Division  of                                                               
Insurance,  Department  of   Commerce,  Community,  and  Economic                                                               
Development answered that she was  unsure of the exact number but                                                               
noted that there are "not a lot."                                                                                               
                                                                                                                                
3:52:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS asked  whether the  legislature should  be                                                               
concerned  about the  potential  of increased  prices or  reduced                                                               
insurance availability  if it passed  a bill  requiring insurance                                                               
companies to  make umbrella insurance  policies available  to its                                                               
members.                                                                                                                        
                                                                                                                                
MS. WING-HEIER  answered that because  Alaska is a  small market,                                                               
anything  that   affects  insurance  companies  could   become  a                                                               
concern.   In  response to  a follow-up  question, she  said that                                                               
there is not an effective way  to gauge the potential impact that                                                               
the bill would have on  prices or insurance companies leaving for                                                               
certain.                                                                                                                        
                                                                                                                                
3:55:37 PM                                                                                                                    
                                                                                                                                
CHAIR  SUMNER  asked  whether  HB  29  could  potentially  affect                                                               
insurance policies other than just umbrella coverage.                                                                           
                                                                                                                                
MS. WING-HEIR  answered that  her department  was unable  to find                                                               
any record of a complaint in  the State of Alaska for any elected                                                               
official  being unable  to find  primary homeowner's,  automobile                                                               
liability, or  watercraft insurance.   The  issue seems  to arise                                                               
only  when it  comes to  excess liability  insurance.   She added                                                               
that  the   Department  of   Administration,  Division   of  Risk                                                               
Management  self-insures   for  the  executive  branch   and  the                                                               
legislature.     In  response  to   a  follow-up   question,  she                                                               
reiterated that  no elected officials submitted  a complaint that                                                               
they were unable to obtain primary insurance.                                                                                   
                                                                                                                                
3:57:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PRAX  asked the  bill sponsor  if he  believed the                                                               
bill could cause some insurance providers to leave the state.                                                                   
                                                                                                                                
3:58:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KEVIN  MCCABE,  Alaska State  Representative,  as                                                               
prime  sponsor of  HB 29,  answered that  such a  possibility had                                                               
been  considered.   He  said  that  he  was  unable to  find  any                                                               
insurance  providers  that  either  could  or  would  answer  the                                                               
question.  He gave his opinion  that if the bill passes, the most                                                               
likely scenario  is that  legislators will have  to pay  more for                                                               
umbrella policies than  those who are deemed to  be "lower risk,"                                                               
in a  manner similar to how  a person that has  received multiple                                                               
traffic  citations has  higher insurance  premiums than  a person                                                               
who is a "safe" driver.                                                                                                         
                                                                                                                                
3:59:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   FIELDS  asked   if  Representative   McCabe  had                                                               
personally  experienced denial  of an  umbrella insurance  policy                                                               
due to his status as an elected official.                                                                                       
                                                                                                                                
REPRESENTATIVE MCCABE  answered that  he has.   In response  to a                                                               
follow-up question,  he said that  the insurance company  did not                                                               
articulate  any specifics  as to  why  his status  as an  elected                                                               
official caused it to deny him an umbrella policy.                                                                              
                                                                                                                                
4:00:55 PM                                                                                                                    
                                                                                                                                
CHAIR  SUMNER  asked  whether there  is  anything  preventing  an                                                               
Alaskan  from  buying an  umbrella  insurance  policy in  another                                                               
state.                                                                                                                          
                                                                                                                                
MS.  WING-HEIR answered  that  the first  step  in purchasing  an                                                               
umbrella insurance  policy is to  fill out an  application, which                                                               
includes  listing a  place of  residence.   The insurance  broker                                                               
selling  the  policy  would  need  to  have  a  license  to  sell                                                               
insurance  in the  State  of Alaska,  and  Alaska statutes  would                                                               
apply.  In response to a  follow-up question, she said a physical                                                               
address is required  and a U.S. Post Office box  (P.O. box) would                                                               
not be accepted.                                                                                                                
                                                                                                                                
4:02:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WRIGHT asked  what the  consequences would  be if                                                               
someone were to use a P.O.  box rather than their actual physical                                                               
address for the purpose of obtaining an umbrella policy.                                                                        
                                                                                                                                
MS.  WING-HEIR answered  that such  a scenario  would potentially                                                               
constitute as insurance fraud.                                                                                                  
                                                                                                                                
4:03:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PRAX  commented that insurance companies  are very                                                               
skeptical of  fraud and will refuse  to pay out a  claim if fraud                                                               
is likely to have occurred.                                                                                                     
                                                                                                                                
CHAIR SUMNER replied  that the issue is  particularly relevant to                                                               
Alaska,  as many  Alaskans spend  significant time  out of  state                                                               
during the winter months.                                                                                                       
                                                                                                                                
MS. WING-HEIER  added that  a physical  address can  be different                                                               
from  a mailing  address;  if  someone were  to  own property  in                                                               
another state, that  person could purchase an  umbrella policy in                                                               
that state  for that property but  have the mail sent  to his/her                                                               
Alaska residence without any issues.                                                                                            
                                                                                                                                
[HB 29 was held over.]