Legislature(1997 - 1998)
03/05/1997 01:48 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 14 INS:DOMESTIC VIOL. VICTIMS & DISCLOSURES SENATOR DAVE DONLEY , sponsor of the measure, gave the following overview. SB 14 is similar to legislation that passed both houses last year. It prohibits discrimination by insurers against victims of domestic violence based solely on that fact. The bill still allows appropriate underwriting based on objective criteria. In the lower 48 there has been a problem with insurance companies redlining victims of domestic violence. The Division of Insurance has proposed one technical amendment (Amendment #1). Number 044 SENATOR PARNELL moved to adopt Amendment #1 (0-LS0160\A.2) which reads as follows. Page 2, line 14: Delete "a writing carrier, as defined in AS 21.55.500" Insert "the Comprehensive Health Insurance Association, established in AS 21.55.010" CHAIRMAN TAYLOR objected for the purpose of taking further testimony. MARIANNE BURKE , Director of the Division of Insurance, explained SB 14, as drafted, contains a reference to a "writing carrier." No such entity exists within insurance terminology. The entity being referred to is defined in AS 21.55.010, and is known as "the Comprehensive Health Insurance Association." Amendment #1 uses that term. CHAIRMAN TAYLOR asked if anyone in attendance opposed Amendment #1 or wanted to testify on it. There being no response, CHAIRMAN TAYLOR removed his objection to Amendment #1, and it was adopted. SENATOR DONLEY explained a second amendment (Amendment #2) clarifies the intent of the legislation that a rate adjustment or denial of coverage based on a known frequency of loss, as would occur if the client was not a victim of domestic violence, is permissible. The intent of the bill is to prevent discrimination against clients simply because he/she has been a victim of domestic violence, not to prevent ratings by insurers based on objective facts. Number 124 CHAIRMAN TAYLOR asked if a person was a victim of domestic violence eight times over a ten-year period, the insurance company could take into account frequency when determining rates, because each time the person got medical attention. SENATOR DONLEY replied that is correct and noted if an insurer's underwriting criteria can base rates on eight claims over a ten-year period for non-domestic violence medical claims, that criteria can be used for a domestic violence victim. The rating policy must be consistent. SENATOR PARNELL asked whether SB 14 will allow the insurance industry to objectively look at a person's injury, regardless of the cause, and adjust rates and premiums based on that injury, or would that criteria be prohibited if the person is a victim of domestic violence. SENATOR DONLEY answered the purpose of Amendment #2 is to make crystal clear that it can not be argued at a later time, that if the results of the objective criteria were domestic violence, the insurer could not use the objective criteria in rating someone. Number 164 MS. BURKE commented there are a lot of legitimate underwriting criteria. If a person had seven car accidents in two years, the insurance company would have a legitimate reason to cancel the policy. If a person submits seven claims because the damage to the car was caused by the person's partner during domestic violence disputes, frequency is the issue, not the person's status as a domestic violence victim. CHAIRMAN TAYLOR felt it will be difficult to establish, in the future, that the insurance raters used objective facts rather than a bias toward this category of victim. MS. BURKE said the Division conducts market examinations and reviews insurance company files. If a person's coverage was denied or cancelled, the cited reason is reviewed and compared with the company's written policies and procedures to verify compliance with criteria. Number 215 CHAIRMAN TAYLOR expressed concern that an insurance company can write altruistic policies but carry out something different. SENATOR PARNELL moved to adopt Amendment #2 (0-LS0160\A.3). LAUREE HUGONIN , Director of the Alaska Network on Domestic Violence and Sexual Assault, echoed Chairman Taylor's concern that policies and procedures could be drawn by insurance companies to appear to apply evenly but would, in fact, apply to victims of domestic violence more often or strenuously than other customers, particularly in the property and casualty lines. Underwriting is not consistent among companies. She stated she supports SB 14 but prefers the language "only a victim of domestic violence" because then a victim could determine the reasons he/she was denied coverage. JAYNE ANDREEN , Executive Director of the Council on Domestic Violence and Sexual Assault, agreed with Ms. Hugonin's testimony. CHAIRMAN TAYLOR removed his objection to Amendment #2, therefore it was adopted. There being no further testimony or opposition to SB 14, SENATOR PARNELL moved SB 14 as amended from committee with individual recommendations and its accompanying zero fiscal note. There being no objection, the motion carried.
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