HB 29-INSURANCE DISCRIMINATION  [SCS CSHB 29(L&C) was before the committee.] 2:25:28 PM CHAIR CLAMAN announced the consideration of CS FOR HOUSE BILL NO. 29(JUD) am "An Act prohibiting certain insurance decisions based solely on a person's status as an elected official." 2:26:05 PM REPRESENTATIVE KEVIN MCCABE, District 30, Alaska State Legislature, Juneau, Alaska, asserted that insurance companies discriminate based on risk-profile differences. This discrimination allows insurers to segregate the insured, thus enabling the insurer to vary premium charges by group (based on the group's associated risk) and to incentive risk reduction. He noted that there are limits to the types of discrimination that insurers can engage in; these limits are decided at both the federal and state level and vary greatly. He stated that insurance companies have denied Alaskans coverage based on political affiliation, expression, and/or elected status. HB 29 would end these types of discriminatory practices. He explained that an amendment in the [Senate Labor and Commerce Standing Committee] expanded the scope of protection to members of Alaska's congressional delegation. He paraphrased the following sponsor statement: HB 29 SPONSOR STATEMENT "An Act relating to insurance discrimination." HB29 seeks to prohibit insurers from discriminating against individuals on the basis of their political affiliation or expression. HB29 amends the Insurance Code to prohibit a person from taking any of the following actions because of an individual's political affiliation or expression: • refuse to insure or renew insurance coverage; • limit the scope of insurance coverage; • Cancel an existing policy of insurance; • Deny a covered claim; or • Increase the premium, policy fees or rates charged on an insurance policy. A person does not violate this prohibition if the refusal, limitation, or charge is based on sound underwriting or actuarial principles reasonably related to actual or anticipated loss experience or is required or authorized by law or a regulatory mandate. Given that insurance products are critical to protecting property and health, it is in the public interest to ensure that consumers are protected from discriminatory practices contrary to the foundational values of our democracy. REPRESENTATIVE MCCABE explained that HB 29 arose from personal experience. He shared his story and stated that he was denied an umbrella policy because he was an elected official. He explained that many companies do not offer umbrella policies to elected officials (from the school board level through to the congressional delegation level). 2:30:18 PM JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State Legislature, Juneau, Alaska, presented the sectional analysis for HB 29: [Original punctuation provided.] Section 1 amends Sec. 21.36 to add a new section that prohibits a person transacting insurance in this state from discriminating against a person based solely on a person's political affiliation or expression or a person's status as an elected state official as defined in AS 44.99.205. Section 2 amends uncodified law of the State of Alaska by adding a new section regarding applicability and effective dates to insurance policies and/or contracts. 2:30:33 PM SENATOR KIEHL joined the meeting. MS. MORRIS said the Senate Labor and Commerce Committee amended HB 29. 2:31:28 PM CHAIR CLAMAN sought clarification that those changes were made in the Senate Labor and Commerce Committee. MS. MORRIS replied yes. CHAIR CLAMAN asked if those changes were made in version U.A. MS. MORRIS replied yes. CHAIR CLAMAN said that if the changes made in Senate Labor and Commerce Standing Committee were in the version of HB 29 that is before the committee, then no further explanation is needed. 2:31:51 PM REPRESENTATIVE MCCABE corrected a misstatement in his previous testimony; he stated that the Senate Labor and Commerce (SL&C) was the first committee to hear CSHB 29(JUD) am, version U.A, in the Senate. He explained that SL&C adopted an amendment adding the congressional delegation verbiage. 2:32:07 PM CHAIR CLAMAN clarified that version U.A. does not have the congressional delegation update, so the updated, amended version must contain the change. 2:32:22 PM SENATOR KIEHL shared his understanding that SL&C heard (and amended) CSHB 29(JUD). The resulting Senate committee substitute (SCS) is version Y, which contains the congressional delegation language. He clarified that version Y is before the committee for consideration. SENATOR KIEHL asked whether HB 29 applies to all insurance or is limited to a particular category of insurance. 2:32:55 PM REPRESENTATIVE MCCABE replied that the change applies to all insurance. He explained that if a form of insurance is offered to the general public, then it must also be offered to elected officials. He said that there must be a sound actuarial reason to exclude or charge more and indicated that being an elected official is not a sound actuarial reason. 2:34:20 PM SENATOR KIEHL expressed his appreciation and agreement that denials should not be allowed. He noted that HB 29 also prohibits higher insurance premiums. He shared a hypothetical scenario in which Alaska's elected officials share a common ailment that results in increased health costs (which would normally result in an increased insurance premium). He asked if this would be forbidden by HB 29. REPRESENTATIVE MCCABE replied no. He explained that any decision regarding rate-making that is based on sound underwriting or actuarial principles would be allowed. He briefly explained the process of determining whether these decisions are sound. 2:36:48 PM SENATOR KIEHL commented that he is considering whether the Division of Insurance should also consider underwriting that relates to other areas. 2:37:05 PM CHAIR CLAMAN commented that, if an insurance company could show that elected officials submit more claims, the elected official could be charged a higher premium but could not be denied coverage. REPRESENTATIVE MCCABE said that is correct. 2:37:43 PM CHAIR CLAMAN opened public testimony on HB 29; finding none, he closed public testimony. 2:38:07 PM CHAIR CLAMAN held HB 29 in committee.