Legislature(1993 - 1994)
04/12/1994 01:40 PM Senate L&C
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SENATE LABOR AND COMMERCE
April 12, 1994
1:40 P.M.
MEMBERS PRESENT
Senator Tim Kelly, Chairman
Senator Steve Rieger, Vice Chairman
Senator Bert Sharp
Senator Georgianna Lincoln
Senator Judith Salo
MEMBERS ABSENT
None
COMMITTEE CALENDAR
SENATE BILL NO. 347
"An Act relating to limited liability companies; amending Alaska
Rules of Civil Procedure 20 and 24; and providing for an effective
date."
CS FOR HOUSE BILL NO. 358(STA)
"An Act allowing a mobile home owner to obtain a certificate of
title from the Department of Public Safety."
SENATE BILL NO. 313
"An Act relating to the Comprehensive Health Insurance Association
and to health insurance provided to residents of the state who are
high risks; and providing for an effective date."
CS FOR HOUSE BILL NO. 54(L&C)
"An Act relating to telephone caller identification; and providing
for an effective date."
HOUSE BILL NO. 403
"An Act requiring that automobile liability insurance include
coverage for uninsured or underinsured motor vehicles and an offer
of policy limits for that coverage equal to coverage voluntarily
purchased for bodily injury or death; and providing for an
effective date."
HOUSE BILL NO. 439
"An Act enacting the Uniform Fraudulent Transfer Act."
PREVIOUS ACTION
SB 347 - See Labor & Commerce minutes dated 3/24/94
3/31/94, and 4/7/94.
HB 358 - No previous action to record.
SB 313 - See Health, Education & Social Services minutes dated
3/21/94.
HB 54 - No previous action to record.
HB 403 - No previous action to record.
HB 439 - No previous action to record.
WITNESS REGISTER
Patrick Lounsbury, Legislative Aide
c/o Representative Brian Porter
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Supported HB 358.
Carol Carrol, Legislative Aid
c/o Senator Jay Kerttula
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Supported SB 313.
Robert Niebrugge
P.O. Box 365
Glennallen, Ak. 99588
POSITION STATEMENT: Supported SB 313.
Brenda Evans
300 Howland Rd. #41
Fairbanks, Ak. 99712
POSITION STATEMENT: Supported SB 313.
Rudy Vetter
P.O. box 70342
Fairbanks, Ak. 99707
POSITION STATEMENT: Supported SB 313.
Vicki Lahti
5190 Amherst, #51
Fairbanks, Ak. 99709
POSITION STATEMENT: Supported SB 313.
Sybil Skelton
15 Eleanor
Fairbanks, Ak. 99709
POSITION STATEMENT: Supported SB 313.
Bonnie Nelson
20615 White Birch Rd.
Chugiak, Ak. 99567
POSITION STATEMENT: Supported SB 313.
Thelma Walker
800 E Dimond, Ste 300
Anchorage, Ak. 99515
POSITION STATEMENT: Supported SB 313.
Nina Magnuson
P.O. Box 771885
Eagle River, ak. 99577
POSITION STATEMENT: Supported SB 313.
Stella Walker
Division of Insurance
Department of Commerce and Economic Development
P.O. Box 110805
Juneau, Ak. 99811-0805
POSITION STATEMENT: Supported SB 313.
Dan Austin, Legislative Aide
c/o Representative Kay Brown
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Supported HB 54.
Royce Weller, Legislative Aide
c/o Representative Bill Hudson
State Capitol
Juneau, Ak. 99811-1182
POSITION STATEMENT: Supported HB 403.
Josh Fink, Legislative Aide
c/o Senator Tim Kelly
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Commented on HB 54.
Senator Donley
State Capitol
Juneau, Ak. 99811-1182
POSITION STATEMENT: Supported SB 313.
John George
National Association of Independent Insurers
9515 Moraine Way
Juneau, Alaska 99801
POSITION STATEMENT: Supported SB 313.
Howard Jaegar
Alaska Independent Agents and Brokers
301 Seward St.
Juneau, Ak. 99801
POSITION STATEMENT: Supported SB 313.
Michael Lessmeier
State Farm Insurance
One Sealaska Plaza, Suite 303
Juneau, Ak. 99801
POSITION STATEMENT: Supported SB 313.
David Walsh, Director
Division of Insurance
Department of Commerce and Economic Development
P.O. Box 110805
Juneau, Ak. 99811-0805
POSITION STATEMENT: Neutral position on SB 313.
Daniella Loper, Legislative Aide
c/o Representative Brian Porter
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Supported HB 439.
Mary Ellen Beardsley, Assistant Attorney General
Department of Law
1031 W. 7th, Suite 200
Anchorage, Ak. 99501-1994
POSITION STATEMENT: Commented on HB 439.
Charles McGee
Anchorage, Ak.
POSITION STATEMENT: Commented on his driver's license.
ACTION NARRATIVE
TAPE 94-27, SIDE A
Number 001
CHAIRMAN KELLY called the Labor and Commerce meeting to order at
1:40 p.m. and announced SB 347 (LIMITED LIABILITY COMPANIES) to be e
up for consideration. He said they had a CS incorporating the
changes made on the House side and adding an effective date of July
1, 1995. It puts off the tax question until next year when it will
become clear what is going to happen in Alaska.
SENATOR SHARP moved to adopt the CS to SB 347. There were no
objections and it was so ordered.
SENATOR SHARP moved to pass CSSB 347 (L&C) with individual
recommendations. There were no objections and it was so ordered.
Number 35
SENATOR KELLY announced HB 358 (MOBILE HOME CERTIFICATES OF TITLE) )
to be up for consideration.
PATRICK LOUNSBURY, Staff to Representative Porter, said HB 358 is
necessary because last year the DMV's authority to issue mobile
home titles was repealed. Without a title, there is no way of
knowing for certain that the person selling the mobile home is a
legal owner or whether there is a lien that needs to be paid off.
SENATOR SHARP moved to pass CSHB 358 (STA Aff) from committee with
individual recommendations and with fiscal note #1. There were no
objections and it was so ordered.
SENATOR KELLY announced SB 313 (HEALTH INS. FOR HIGH RISK
RESIDENTS) to be up for consideration.
CAROL CARROL, Staff for Senator Kerttula, said SB 313 amends his
high risk health insurance bill that was passed in 1992. The
amendments were requested by the High Risk Health Insurance
Association that was set up at that time. One of the requirements
of the insurance bill is that each member of the industry be a
member of the Association in order to do business in the state by
participating in the high risk health insurance pool.
Sections 3 and 4 provide additional forms of deductibles, co-
payments, and maximums. This responds to requests by residents
seeking only catastrophic insurance with high deductibles.
Section 5 broadens the ability of the association to offer policies
to groups that maintain healthy lifestyles without changing the
basic requirements that premium rates be based on age and
geographic location.
Section 6 further defines eligibility for the state plan. This
would disqualify those residents who are eligible to be covered by
a plan subject to the Small Employer Health Reinsurance
Association.
Sections 7 and 8 require payment of the premium with the request or
the application.
Section 9 gives the Director of Insurance the ability to formulate
policy and adopt regulations.
Section 10 provides a member of the Board of the Association with
immunity from civil or criminal liability for an act or omission in
good faith in the scope of the director's duties.
Section 11 allows the director to accept an application for
coverage in cases where 2 denials of coverage seem to be
superfluous. This would allow the director to list those
disabilities that are recognized as being high risk before they
have to be rejected by an insurance company.
SENATOR SALO asked how many people had taken advantage of the high
risk insurance since the bill was passed. MS. CARROL said there
were 70 people in the pool at the time. She said that number would
expand, especially the catastrophic insurance.
BOB NIEGRUGGE, Glennallen, supported SB 313 and said they could
offer a reduced rate if there was a higher deductible which would
make it more accessible to Alaska residents.
BRENDA EVANS, Fairbanks, said she is a diabetic and has renal
failure and she has no medical insurance and is not on any
government sponsored program or medicaid.
SENATOR KELLY asked Rudy Vetter, Vicki, Lahti, and Sybil Skelton,
teleconferencing from Fairbanks, if they supported this
legislation. They said yes they did.
SENATOR KELLY asked Bonnie Nelson, Thelma Walker, and Nina
Magnuson, teleconferencing from Anchorage, it they supported SB
313. They said they did.
STELLA WALKER, Division of Insurance, said as of February 1, they
had 71 people insured under this program. Since then, they have
issued 24 new policies.
SENATOR KELLY asked how this program is being financed. MS. WALKER
replied that it is being financed through insurance premiums and
that state money is not going into this program.
SENATOR SALO moved to pass SB 313 with individual recommendations
and the fiscal note. There were no objections and it was so
ordered.
SENATOR KELLY announced HB 54 (TELEPHONE CONSUMER PROTECTION) to
be up for consideration.
DAN AUSTIN, Legislative Aide to Representative Kay Brown, said HB
54 provides if a telephone utility offers the feature known as
caller I.D. to its Alaska customers, it shall also offer the
customers the choice of not having their number or other
identification revealed by that feature. This is known as
"blocking." The issue involved is that of privacy and its impact
on facilities such as domestic violence shelters.
MR. FINK explained the change in the proposed CS was a simple
prohibition against the telephone company for charging a fee for
caller blocking for the first time, but not for subsequent
services.
SENATOR RIEGER moved to adopt the Senate CS to CSHB 54. There were
no objections and it was so ordered.
SENATOR RIEGER moved to pass SCSCSHB 54 with individual
recommendations. There were no objections and it was so ordered.
Number 277
SENATOR KELLY announced HB 403 (AUTOMOTIVE LIABILITY INSURANCE
COVERAGE) to be up for consideration.
ROYCE WELLER, Legislative Aide to Representative Hudson, said the
best way to insure Alaska consumers competitive auto insurance
premiums is to have a market place which encourages competition.
HB 403 does this by not mandating unreasonable insurance coverages.
Current law requires all insurance companies offering auto
liability coverage to have coverage up to 1 million dollars per
person for bodily injury or death and 2 million dollars per
accident for more than one person.
No other state mandates a company to offer such an uninsured or
underinsured motorist higher than the driver selects for himself.
No other state mandates even the minimum levels of coverage we have
here in Alaska.
HB 403 has the support of the Division of Insurance and the Alaska
Independent Insurance Agents and Brokers and has a $0 fiscal note,
Mr. Weller said.
SENATOR DONLEY said the position of the Division was neutral, but
they had formerly supported it. He said this is the kind of
insurance coverage that protects us from underinsured or uninsured
motorists if they hit us.
He explained that the insurance industry strongly opposes mandatory
auto insurance, but 80 - 85% of Alaskans support mandatory auto
insurance. About 11% of Alaskan drivers are uninsured presently.
This is a good figure compared to other states. People should have
the choice to protect themselves from that small percentage. The
problem is that some less preferred companies that do a smaller
amount of the market, who specifically deal with high risk drivers,
have difficulty in getting reinsurance for this type of coverage.
The provisions of this bill would apply just to the people who are
in the assigned risk pools now and would allow them more insurance
companies to do business in the Alaska market just like they do in
other places.
SENATOR DONLEY said he thought the average motorist is probably
underinsured against uninsured and underinsured drivers.
Number 425
SENATOR RIEGER asked why the insurance industry was against
mandatory liability insurance. SENATOR DONELY explained that when
you have mandatory auto insurance, a lot of people who are lousy
risks are forced to get insurance and that tends to make it more
difficult for everybody.
JOHN GEORGE, National Association of Independent Insurers, agreed
with Senator Donley. He said as in other states there is an
assigned risk market where someone who can't buy insurance in the
voluntary market can be assured of finding insurance coverage. The
problem that insurance companies face in Alaska is that they were
either unable or unwilling to buy reinsurance specifically for
Alaska, because of the limit. Also, it just seems like if you buy
a certain amount to cover another driver if you hit him, you should
be able to get the same amount of coverage for yourself if he hits
you.
Number 511
HOWARD JAEGER, Alaska Independent Agents and Brokers, said they are
not the companies, but are the retailers of the products the
insurance companies make available to them. They are in support of
this bill which does not preclude insurers from buying the higher
limits. The problem is that Alaska has the highest mandatory auto
liability limits in the nation which has an impact on cost to the
consumer. This bill would encourage more competition, Mr. Jaeger,
stated.
TAPE 94-27, SIDE B
Number 580
MICHAEL LESSMEIER, State Farm Insurance, said 11% for uninsureds is
a very good number nation wide. One of the difficulties with
mandatary insurance is that no matter what form you adopt, there
are certain categories of people you cannot force to buy insurance
no matter what you do.
Philosophically, they would prefer that the mandated offer be equal
to the amount of liability coverage a person chooses to purchase,
he said.
SENATOR KELLY asked if the Division would support a revision that
would remove the mandatory higher limits to a neutral position.
DAVID WALSH, Director, Division of Insurance, said the
Administration has not taken a formal position on the bill.
SENATOR DONLEY said he would support other consumer options and
deletion of the requirement in the present law that at each renewal
they would have to make this offer. Even if we do make this
change, there is no guarantee that new companies will come to
Alaska. There have been no words to that effect.
Number 502
CHARLES MCGEE, Anchorage, said his I.D. number is 0334797 and he
would like to have his drivers license back. SENATOR KELLY thanked
him for his comments.
MR. JAEGER said it's important to remember we are not talking about
every accident, only the one where the other driver is at fault.
SENATOR LINCOLN noted that the references to underinsured and
uninsured drivers was inconsistent.
SENATOR KELLY said they would hold the bill to work on the
questions and bring it up at another time.
SENATOR KELLY announced HB 439 (UNIFORM FRAUDULENT TRANSFER ACT) to to
be up for consideration.
DANIELLA LOPER, Legislative Aide to Representative Brian Porter,
said that HB 439 is the Uniform Fraudulent Transfer Act (UFTA).
Current law says if a transfer is fraudulent the plaintiff bears
the burden of proof which is difficult. UFTA would eliminate the
present Alaska necessity of finding actual intent of a property
transfer to hinder, delay, or defraud a creditor in many situations
where transfers are obviously transferring assets solely to keep
them out of reach of the transferrer's creditors. It establishes
three basic criteria that need to be met to prove fraudulent
transfer.
MARY ELLEN BEARDSLY, Assistant Attorney General, said this bill is
beneficial because it makes it easier for creditors and harder for
debtors to do what they have been doing.
SENATOR RIEGER asked her to explain on page 2, lines 28 and 29 the
words: "assets of a debtor are unreasonably small in relation to a
business or transaction."
MS. BEARDSLY explained that means a situation where the debtor
sells his assets to avoid paying his current debts.
SENATOR LINCOLN asked how this bill protected individuals (the
innocent party) who are in a partnership. MS. BEARDSLEY answered
that she didn't know how to answer that question, but she said
there are defenses in this act in situations where the transferee
is a relative of the debtor. The creditor does not have a straight
shot at this, but it would be a little easier.
Number 334
SENATOR SHARP moved to pass HB 439 with individual recommendations.
There were no objections and it was so ordered.
SENATOR KELLY adjourned the meeting at 2:55 p.m.
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