04/25/2006 08:30 AM Senate JUDICIARY

          HB 439-INSURANCE PRODUCT REGULATION COMPACT                                                                       
                                                                                                                                
9:12:03 AM                                                                                                                    
CHAIR  RALPH SEEKINS  announced CSHB  439(L&C)  am to  be up  for                                                               
consideration.                                                                                                                  
                                                                                                                                
RYNNIEVA MOSS, Staff for  Representative John Coghill, introduced                                                               
the bill.  The Interstate Insurance Product  Regulation Act would                                                               
culminate in  the regulation of insurance,  annuities, disability                                                               
income,  and long-term  care products.  Alaska would  join twenty                                                               
other states  in creating a  commission governed  collectively by                                                               
the  states  that would  establish  uniform  standards for  those                                                               
products.  Language  was added  on  the  House floor  that  would                                                               
direct the  director of the Division  of Insurance to opt  out of                                                               
the  commission  if  the  standards  adopted  are  less  consumer                                                               
protective than are currently in state law.                                                                                     
                                                                                                                                
9:14:58 AM                                                                                                                    
LINDA  HALL, Director,  Division  of Insurance,  (DOI) said  CSHB
(JUD) am  is a  model act  that was  proposed by  the National                                                               
Association of  Insurance Commissioners  in response to  a number                                                               
of perceived  needs, including a recognition  that the population                                                               
is becoming  increasingly mobile and that  insurance products are                                                               
not  state specific.  Life insurance  and annuities  are products                                                               
that people keep  for a long time and are  not like an automobile                                                               
policy, which is state specific.                                                                                                
                                                                                                                                
There is  a move  by certain portions  of the  insurance industry                                                               
toward  federal regulation  but Ms.  Hall  stated that  she is  a                                                               
strong  supporter   of  state   regulation.  She   said  consumer                                                               
protections are best  done on a state-by-state  basis where there                                                               
is better access to the regulator.                                                                                              
                                                                                                                                
The other particular  need is "speed to market  of products," she                                                               
said. The basic  structure of this particular compact  is that it                                                               
would delegate to  a commission the authority  to develop uniform                                                               
standards for products.                                                                                                         
                                                                                                                                
9:16:55 AM                                                                                                                    
Insurance companies could  choose to file either in  the state or                                                               
file with the  commission. Each state member would  have a single                                                               
vote and  it would take  a two-thirds majority of  the commission                                                               
to adopt the  product standard. There are two ways  to opt out of                                                               
individual  standards.  Either  the regulator  could  decide  the                                                               
standard is not  appropriate or the Legislature could  opt out of                                                               
any standard they feel does not  meet the needs of consumers. She                                                               
said she believes  the standards adopted by  the commission would                                                               
provide greater consumer protection.                                                                                            
                                                                                                                                
CHAIR SEEKINS  asked Mr. George  whether he  was in favor  of the                                                               
bill.                                                                                                                           
                                                                                                                                
JOHN  GEORGE,  American  Council   of  Life  Insurers,  expressed                                                               
support of the bill.                                                                                                            
                                                                                                                                
CHAIR SEEKINS closed public testimony.                                                                                          
                                                                                                                                
SENATOR  CHARLIE HUGGINS  moved CSHB  439(L&C) am  from committee                                                               
with  individual  recommendations   and  attached  fiscal  notes.                                                               
Hearing no objections, the motion carried.