Legislature(2013 - 2014)BARNES 124

03/27/2013 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 175 ELECTRONIC POSTING OF INSURANCE POLICIES TELECONFERENCED
Moved CSHB 175(L&C) Out of Committee
*+ HB 125 TOPICAL EYE MEDS PRESCRIPTION REFILLS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= HB 74 AIDEA: LNG PROJECT; DIVIDENDS; FINANCING TELECONFERENCED
Moved CSHB 74(L&C) Out of Committee
        HB 175-ELECTRONIC POSTING OF INSURANCE POLICIES                                                                     
                                                                                                                                
3:25:11 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  first order of business  would be                                                              
HOUSE BILL  NO. 175, "An Act  allowing, under certain  conditions,                                                              
a  property   or  casualty   insurer  to   provide  policies   and                                                              
endorsements   to  an  insured   by  posting   the  policies   and                                                              
endorsements on the insurer's Internet website."                                                                                
                                                                                                                                
3:25:27 PM                                                                                                                    
                                                                                                                                
KONRAD  JACKSON, Staff,  Representative Kurt  Olson, Alaska  State                                                              
Legislature,  stated that  HB 175,  sponsored by  the House  Labor                                                              
and  Commerce   Standing  Committee,  would  permit   insurers  to                                                              
provide  standard property  and  casualty  insurance policies  and                                                              
endorsements  to  those  insured   by  posting  the  policies  and                                                              
endorsements  on  the insurer's  website.   Current  law  requires                                                              
companies  to mail  or deliver  policies in  all 50  states.   The                                                              
bill  would add  posting  as a  means of  access  to policies  and                                                              
endorsements.   Posting property  and casualty insurance  policies                                                              
on insurer's websites  will allow insurers to  dramatically reduce                                                              
the number  of bulky policy  contracts and endorsements  they mail                                                              
to  customers each  year  while  improving the  accessibility  and                                                              
usefulness  of the documents.   He  referred to  an example  of an                                                              
insurance policy  in members' packets from  Progressive Insurance.                                                              
Again,  the  documents  are  typically  lengthy  ones  so  posting                                                              
represents  a direct  savings  to the  consumer  and the  company.                                                              
The  intent of  the  bill  is to  post  policies that  contain  no                                                              
personally  identifiable information  and are  filed and  approved                                                              
before use.  Further,  public posting to the website  will pose no                                                              
privacy risk to  insureds or any competitive risk  to insurers and                                                              
are strictly  policy and endorsement  documents.   Market research                                                              
shows  consumers  often do  not  read  the entire  documents,  but                                                              
instead thumb  through the document  or read a  page or two.   The                                                              
website  access  to  lengthy  documents   such  as  these  is  not                                                              
uncommon,  since  consumers  often receive  software  licenses  or                                                              
other  agreements  on-line  when   purchasing  software  or  other                                                              
items.                                                                                                                          
                                                                                                                                
3:27:59 PM                                                                                                                    
                                                                                                                                
MR.  JACKSON said  some people,  including his  mother, would  not                                                              
use  website technology.    Thus,  a paper  copy  is available  to                                                              
those  who so  desire.   He  pointed out  the  documents would  be                                                              
searchable   and  paper   contracts  will   remain  available   to                                                              
consumers.   The U.S.  Postal Service  has increased postage  five                                                              
times  since 2006  and this  bill  is designed  to help  alleviate                                                              
some of the postage costs, as well.                                                                                             
                                                                                                                                
3:28:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  asked if those  opposed to this  bill would                                                              
likely be the U.S. Post Service and the paper supply companies.                                                                 
                                                                                                                                
MR. JACKSON  responded that  no one has  contacted the  sponsor in                                                              
opposition to the bill.                                                                                                         
                                                                                                                                
CHAIR OLSON recalled this is an opt-in program.                                                                                 
                                                                                                                                
MR.  JACKSON  agreed   that  this  bill  merely   would  authorize                                                              
companies  to  post  the  documents on  their  website  since  the                                                              
general  policies  do  not  contain  any  personally  identifiable                                                              
information  and thereby  anyone who  wished to  could access  the                                                              
policy via the website.                                                                                                         
                                                                                                                                
3:30:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  moved to  adopt  the proposed  committee                                                              
substitute  (CS)   for  HB   175,  labeled  28-LS0327\O,   Bailey,                                                              
3/22/13, as the working document.                                                                                               
                                                                                                                                
CHAIR OLSON objected for purpose of discussion.                                                                                 
                                                                                                                                
3:31:11 PM                                                                                                                    
                                                                                                                                
MR. JACKSON,  referring to page 1,  line  7, pointed out  that the                                                              
language  "provide  a  policy  or   endorsement"  is  inserted  to                                                              
indicate  specifically  what  will  be  posted is  the  policy  or                                                              
endorsement.  The  second change on page 1, line  11, would insert                                                              
the   language  "or   endorsement,"   for  consistency   purposes.                                                              
Similar  changes  are  made  on  page  2,  lines  1-2,  where  the                                                              
language "and  endorsements," is inserted  and on page 2,  line 5,                                                              
after policy, the language "and endorsements" is inserted.                                                                      
                                                                                                                                
CHAIR  OLSON  removed  his  objection.   There  being  no  further                                                              
objection, Version O was before the committee.                                                                                  
                                                                                                                                
3:32:44 PM                                                                                                                    
                                                                                                                                
JOSH ZIELASKIESWISC,  Attorney, Progressive Insurance,  stated his                                                              
primary  focus  is  e-commerce.    He  explained  that  his  chief                                                              
executive  officer  visited  the   Progressive  Insurance  mailing                                                              
center and  observed numerous boxes  of policy contracts  awaiting                                                              
mailing.    He related  the  Progressive  Insurance policy  is  35                                                              
pages in  length, which is  on the short  side for policies.   The                                                              
CEO subsequently  tasked him  to figure out  how to  limit mailing                                                              
out so many policies.   The company has conducted  product testing                                                              
and typically  the outcome is that  policies are thrown  out since                                                              
the   policyholders    are   typically    interested    in   their                                                              
identification  cards  and  their declarations  page  since  these                                                              
items  contain  the  information  on  deductibles,  vehicles,  and                                                              
drivers covered under the specific policy.                                                                                      
                                                                                                                                
MR. ZIELASKIESWISC  outlined the goal  of HB 175, which  is first,                                                              
to dramatically reduce  the number of paper property  and casualty                                                              
insurance  contracts  and  endorsements printed  and  mailed  each                                                              
year.   Next,  the  company would  like  to provide  property  and                                                              
casualty  insurance  contracts  and  endorsements  on  a  publicly                                                              
available website  for existing and potential insureds  to review,                                                              
save and  print whenever they  like.  Thus, Progressive  Insurance                                                              
would  like  to  post  their  policies  on  a  publicly  available                                                              
website so people  can read the policies and  perhaps compare them                                                              
to other  policies.  He  said one of  the added consumer  benefits                                                              
would  be to  allow comparison.    In fact,  consumer groups  have                                                              
asked  for  more  openness  and   transparency  between  carriers.                                                              
Additionally,  to assist  policyholders, each  form they  purchase                                                              
will be itemized  on their declarations page or  issued along with                                                              
it.   Finally,  the goal  of HB  175  would be  to provide  simple                                                              
mechanisms for insureds  to access their documents  and allow them                                                              
to request paper copies free of charge.                                                                                         
                                                                                                                                
MR.  ZIELASKIESWISC stated  that  even when  people buy  insurance                                                              
they  typically do  not  see the  printed  terms  of the  contract                                                              
until   the  insurance   company   mails   the  polices   to   the                                                              
policyholders.   This bill would  further benefit  consumers since                                                              
it  allows insurers  to fine-tune  their  efficiencies, which  can                                                              
lower  premium costs.    Further,  the policies  and  endorsements                                                              
will  be available  on  demand.   Typically,  people  are not  too                                                              
worried  about their  policies  until they  have  an accident  and                                                              
want  to check  specific  coverage and  exclusions.   Rather  than                                                              
necessitate calling  an insurance company  to ask for a  policy or                                                              
search  for it,  the policyholders  could check  on the  company's                                                              
website.                                                                                                                        
                                                                                                                                
3:38:12 PM                                                                                                                    
                                                                                                                                
MR. ZIELASKIESWISC  reiterated the benefits.   Additionally, there                                                              
are  green  considerations  and eliminating  these  saves  natural                                                              
resources  and   printing,  as  well   as  postage  costs.     The                                                              
electronic version  is searchable in  a PDF, consumers  can search                                                              
and find  specific sections within  the policy.  The  policies are                                                              
typically  printed  using a  10  or 12  point  font; however,  the                                                              
online  version   can  be  increased  in  size   for  readability.                                                              
Further,  this bill  is  good for  insurance  companies, too,  for                                                              
many of the same reasons that the bill is good for consumers.                                                                   
                                                                                                                                
3:40:17 PM                                                                                                                    
                                                                                                                                
MR.  ZIELASKIESWISC  related  that insurance  laws  typically  lag                                                              
behind  the  rest of  the  financial  services.   The  changes  in                                                              
HB 175 can  help modernize  insurance laws to  bring them  in line                                                              
with the rest of  the financial services.  He predicted  laws like                                                              
this  could  also  allow  more insurance  carriers  to  engage  in                                                              
commerce.   He reported that similar  changes have been  passed in                                                              
Virginia   and  Michigan.      Additionally,   other  states   are                                                              
considering   similar  bills  in   Arizona,  Illinois,   Missouri,                                                              
Kansas, Texas,  Florida, Idaho,  Ohio, Oregon, Alabama,  Colorado,                                                              
Minnesota, Oklahoma, and Pennsylvania.                                                                                          
                                                                                                                                
3:42:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether  the  amendment  labeled                                                              
"O.1" has been discussed.                                                                                                       
                                                                                                                                
MR. JACKSON responded it has not yet been offered.                                                                              
                                                                                                                                
3:42:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER asked whether people could inadvertently                                                                 
change their policy or if this relates to elections that the                                                                    
policyholders have previously elected.                                                                                          
                                                                                                                                
MR.   ZIELASKIESWISC  agreed   it   only  applies   to  what   the                                                              
policyholders  have   elected  to   purchase.    The   items  they                                                              
purchased  will  be  itemized  on   their  declaration  page,  but                                                              
policyholders cannot change their policies inadvertently.                                                                       
                                                                                                                                
3:44:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD moved to adopt Amendment 1, labeled 28-                                                                 
LS0327\O.1, Bailey, 3/27/13, to HB 175, which read:                                                                             
                                                                                                                                
     Page 1, line 2:                                                                                                            
          Delete "and" in both places                                                                                         
          Insert "or" in both places                                                                                          
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "personal"                                                                                                 
                                                                                                                                
     Page 2, line 1, following "policy":                                                                                        
          Delete "and"                                                                                                          
          Insert "or [AND]"                                                                                                 
                                                                                                                                
     Page 2, line 3:                                                                                                            
          Delete "and"                                                                                                          
          Insert "or [AND]"                                                                                                 
                                                                                                                                
     Page 2, line 10, following "policy":                                                                                       
          Insert "or endorsement"                                                                                           
                                                                                                                                
     Page 2, line 12, following "policy":                                                                                       
          Insert "or endorsement"                                                                                           
                                                                                                                                
     Page 2, line 13, following "policy":                                                                                       
          Insert "or endorsement"                                                                                           
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "endorsements"                                                                                                 
          Insert "endorsement without the insured paying a                                                                  
     fee [ENDORSEMENTS]"                                                                                                    
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "endorsements"                                                                                                 
          Insert "endorsement [ENDORSEMENTS]"                                                                               
                                                                                                                                
CHAIR OLSON objected for purpose of discussion.                                                                                 
                                                                                                                                
MR.  JACKSON  explained that  Amendment  1  contains a  number  of                                                              
technical  changes.   He  referred  to  the language  "policy  and                                                              
endorsement"  which   he  said  is  the  preferred   language  for                                                              
consistency.  He  then referred to one substantive  change on page                                                              
2,   line  18,   of  Amendment   1,  which   would  add   language                                                              
"endorsement without  the insured paying a fee" to  ensure that no                                                              
one would be  required to pay for  a paper copy of  his/her policy                                                              
or endorsement.                                                                                                                 
                                                                                                                                
3:46:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  asked whether  page 2, line  18, attaches                                                              
a fee if a person requests a copy of his/her policy.                                                                            
                                                                                                                                
MR.  JACKSON  answered no,  that  a  person  could obtain  a  copy                                                              
without paying an  additional fee to ensure policyholders  are not                                                              
charged a fee for a printed copy of their policy.                                                                               
                                                                                                                                
CHAIR OLSON  [withdrew is  objection] and  upon determining  there                                                              
were  no  further  objections,  announced  that  Amendment  1  was                                                              
adopted.                                                                                                                        
                                                                                                                                
3:47:34 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 175.                                                                                     
                                                                                                                                
3:47:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT asked  if anyone  has addressed  concerns                                                              
by the  Alaska State Troopers or  police associations in  terms of                                                              
drivers using electronic  insurance policies.  He  understood that                                                              
officers  do  not want  the  driver  to  accompany them  to  their                                                              
police cars  for safety  reasons; however,  some concern  has also                                                              
been expressed  that if an officer  were to take the phone  to the                                                              
police vehicle,   the driver might  suggest calls were  made using                                                              
the phone during the time it was in the officer's possession.                                                                   
                                                                                                                                
3:49:09 PM                                                                                                                    
                                                                                                                                
MR.   ZIELASKIESWISC  stated   that   it  seemed   more  like   an                                                              
identification issue  than a policy contract or  endorsement issue                                                              
since people  do not typically  bring their policy  contracts with                                                              
them  in  their  vehicles and  instead  will  have  identification                                                              
cards in  their glove box.   The policy  cards would be  mailed or                                                              
e-mailed  to  them,  in whichever  manner  they  have  elected  to                                                              
receive them, he said.                                                                                                          
                                                                                                                                
3:50:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT related a  scenario in which  advertising                                                              
shows  a  cartoon character  handing  a  phone  to an  officer  in                                                              
response to  a request for  proof of insurance.   He  surmised the                                                              
only reason for  an electronic version would be if  the person was                                                              
in  a position  in which  he/she  did not  have his/her  insurance                                                              
card  in his  vehicle.   He also  recalled  some discussion  about                                                              
police not wanting to take the phone device.                                                                                    
                                                                                                                                
3:51:04 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON answered  that in  Alaska, the  vehicle insurance  is                                                              
required to physically be in the vehicle as a paper document.                                                                   
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 175.                                                                                     
                                                                                                                                
REPRESENTATIVE  REINBOLD  moved  to  report HB  175,  labeled  28-                                                              
LS0327\O,  Bailey,  3/22/13, as  amended,  out of  committee  with                                                              
individual  recommendations  and  the accompanying  fiscal  notes.                                                              
There  being no  objection, CSHB  175(L&C) was  reported from  the                                                              
House Labor and Commerce Standing Committee.                                                                                    

Document Name Date/Time Subjects
HB175 ver C.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Sponsor Statement.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Fiscal Note-DCCED-DOI-03-22-13.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-AK PGR Policy Contract.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-Letter NAMIC 3-26-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-Sample Declaration Page.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-Written Testimony of Joshua M Zielaskiewicz.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Draft Proposed CS ver O.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB125 ver N.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Sponsor Statement.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Fiscal Note-DCCED-DOI-03-26-13.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Fiscal Note-DOA-DRB-3-22-13.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Supporting Documents-Letter Alaska Optometric Association 2-26-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Supporting Documents-Letter Amerian Academy of Opthalmology 2-25-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Opposing Documents-Letter Premera 3-12-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB74 Draft Proposed CS ver N.PDF HL&C 3/27/2013 3:15:00 PM
HB 74
HB74 Supporting Documents-Letter Heatherdale Resources 3-25-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 74
HB74 Supporting Documents-Letter Ucore 3-26-2013.PDF HL&C 3/27/2013 3:15:00 PM
HB 74
HB175 Draft Proposed Amendment O.1.PDF HL&C 3/27/2013 3:15:00 PM
HB 175