Legislature(2023 - 2024)BARNES 124
02/10/2023 03:15 PM House LABOR & COMMERCE
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HB 29-INSURANCE DISCRIMINATION 3:16:10 PM CHAIR SUMNER announced that the first order of business would be HOUSE BILL NO. 29, HOUSE BILL NO. 29, "An Act relating to insurance discrimination." 3:16:43 PM REPRESENTATIVE KEVIN MCCABE, Alaska State Representative, as prime sponsor, presented HB 29. He stated insurance companies discriminate based on certain risk factors for the purposes of rate management and to incentivize certain risk reduction measures. He continued that there are some limitations on the types of discrimination that can be used by insurance companies. He stated that HB 29 would add political expression, affiliation, and status as an elected official to the list of classes protected against discrimination by insurance companies. 3:19:12 PM BUDDY WHITT, Staff, Representative Kevin McCabe, Alaska State Legislature, provided the sectional analysis and sponsor's statement on behalf of Representative McCabe, prime sponsor. He stated that Section 1 of HB 29 would amend AS 21.36 by adding a new section that would prohibit insurance brokers from discriminating against people on the basis of their political affiliation or expression or a person's status as an elected official as defined in AS 44.99.205. He said that Section 2 would amend uncodified law to provide effective dates to insurance companies. 3:20:12 PM REPRESENTATIVE PRAX asked if Representative McCabe had talked to insurance providers about the provisions of the bill. REPRESENTATIVE MCCABE answered that some insurance providers told him that they would not provide certain policies to elected officials, including umbrella policies. REPRESENTATIVE PRAX asked if there are any insurance companies that will provide that specific coverage. REPRESENTATIVE MCCABE answered that some providers said they would. 3:21:41 PM REPRESENTATIVE CARRICK asked if Representative McCabe had spoken to any elected officials or other individuals that had been denied coverage on the grounds covered by the bill. REPRESENTATIVE MCCABE answered that he had spoken to several elected officials on the state, municipal, and school board levels that had been denied umbrella policies due to their status as an elected official. 3:22:43 PM REPRESENTATIVE RUFFRIDGE asked if there is a definition of discrimination attached to the bill, and whether that would cause the price of insurance to increase. REPRESENTATIVE MCCABE answered that it is possible for the bill to cause prices to increase. He stated that he believes there is a significant difference between discriminating against someone because they won an election and discriminating against someone because they received multiple traffic citations. REPRESENTATIVE RUFFRIDGE asked if the reason for that change in discrimination was a result of an assumed increase in risk for the elected official. REPRESENTATIVE MCCABE answered that he had looked through multiple actuaries but was unable to find one pertaining to the risk of being a public official. 3:25:47 PM REPRESENTATIVE SADDLER asked if any insurance providers explicitly denied someone coverage because of their status as a public official. REPRESENTATIVE MCCABE answered that he had spoken to elected officials that told him that they had been denied umbrella coverage due to their status as an elected official. 3:26:58 PM REPRESENTATIVE PRAX asked if Greg Smith had anything to add to the previous answers. GREG SMITH, Legislative Liaison, Department of Commerce, Community, and Economic Development, answered that insurance companies have the ability to discriminate but not to discriminate unfairly. He stated that he was unable to find the protected classes in statute but understood that certain classes such as race could not be used to discriminate. He added that insurance companies sometimes discriminate against "people of notoriety" due to an assumed level of increased risk. REPRESENTATIVE PRAX stated that umbrella coverage is excess liability coverage, and while homeowner's insurance covers slander and libel, the limit for it is lower. He asked if any insurance providers would exclude someone from buying liability coverage on a homeowner's policy because of their status as an elected official. MR. SMITH answered that he was unsure. 3:29:52 PM REPRESENTATIVE RUFFRIDGE asked about the potential of liability coverage from the special Department of Risk under the Department of Administration. MR. SMITH answered that he is unsure how the department works, but that elected officials would be indemnified in certain cases. 3:31:38 PM REPRESENTATIVE CARRICK asked what definition of political affiliation the bill would use and whether Representative McCabe knew of anyone that had been denied coverage explicitly for their political affiliation. REPRESENTATIVE MCCABE answered that he is unaware of any person in Alaska that has been denied coverage on the grounds of their political affiliation; he stated that the bill is modeled after a similar bill in the state of Texas where there had been incidents in which a person was denied coverage on those grounds. He said that he would define political affiliation as a party registration or stated political belief. 3:33:21 PM REPRESENTATIVE PRAX asked if it was Representative McCabe's intention to keep the political affiliation language in the bill. REPRESENTATIVE MCCABE answered that he had looked at bills from other states as models, stating that he believed the one from Texas made the most sense. He said that he understands why an insurance company would be able to discriminate based on circumstances such as driving record; he continued that he does not believe that should apply to political affiliation. He stated that the possibility of losing umbrella coverage as a result of being elected to an office is a barrier to people wanting to run for office. REPRESENTATIVE PRAX asked if there were any documents available pertaining to the Texas bill that HB 29 is modeled after. MR. WHITT answered that he would be able to retrieve those documents, including a paper written by a PhD student at the University of Texas detailing risk pools and discrimination within those risk pools. He referenced a previous question asked by Representative Ruffridge and stated that within certain risk pools, there are certain classes that are still protected against discrimination. He added that the bill would add a section to Title 21 preventing discrimination based on political affiliation and status as an elected official for insurance coverage. 3:37:31 PM REPRESENTATIVE SADDLER stated that the definition of "elected official" given in A.S. 44.99.205 includes only the Governor, Lieutenant Governor, and members of the legislature, and asked whether the bill could be improved by expanding the definition to include local and school board officials. REPRESENTATIVE MCCABE answered that he believes the bill can be improved but was concerned about the scope going too far. He stated his willingness to broaden the definition of elected officials used by the bill in the future. [HB 29 was held over.]