HB 148-OMNIBUS INSURANCE BILL  4:07:49 PM CO-CHAIR HALL announced that the final order of business would be HOUSE BILL NO. 148, "An Act relating to insurance; and providing for an effective date." 4:08:25 PM REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, as prime sponsor, presented HB 148 to the committee. 4:08:48 PM HEATHER CARPENTER, Deputy Director, Division of Insurance, Department of Commerce, Community & Economic Development (DCCED), She reported that the last insurance bill was done around 10 years ago. Further, she stated that the Division of Insurance is always looking at modernization. Further, she referenced a document titled "Common Insurance Terms related to HB 148," which read as follows [original punctuation provided]: Adjuster - a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held. Admitted Company - an insurance company licensed to do business in a state(s), domiciled in an alternative state or country. Annuity - See AS 21.12.055 Sec. 21.12.055 Annuities and annuity contract defined. Annuities means all agreements to make periodical payments if the making or continuance of all or some of a series of payments or the amount of a payment is dependent upon the continuance of human life, except payments made under AS 21.12.040. The business of annuities is considered to include additional benefits operating to safeguard the contract from lapse, or to provide a special surrender value, or special benefit, or annuity, in the event of the total and permanent disability of the holder. Authorized insurer - See AS 21.97.900(6) (6) "authorized insurer" means an insurer authorized by a certificate of authority issued by the director to transact insurance in this state; Benefit-level exception - means an exception to medical care coverage where a health care insurer applies network health care benefit levels to services received from an out-of-network health care provider or facility. Casualty coverage - a form of insurance providing coverage for loss, damage, and liability, including but limited to workers compensation and employer's liability, legal liability, burglary and theft, errors and omissions, fidelity, crime, glass, boiler, various malpractice coverages. See also AS 21.12.070 Casualty insurance defined. Copay - a cost sharing mechanism in group insurance plans where the insured pays a specified dollar amount of incurred medical expenses and the insurer pays the remainder. Covered person - means a policyholder, subscriber, enrollee, or other individual participating in an insurance policy. Credit for reinsurance - refers to a statutory accounting procedure that allows a ceding company (insurer) to treat amounts due from reinsurers as assets or reductions from liabilities. Deductible - portion of the insured loss (in dollars) paid by the policy holder before the insurer starts covering costs. Depreciation of labor - the reduction in the value of labor costs, similar to how materials depreciate due to age, wear, and tear. Direct Written Premium - total premiums received by an insurance company without any adjustments for the ceding of any portion of these premiums to the reinsurer. Disability income - a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness. MS. CARPENTER began with Section 1, stating that the intent was to "take into account life insurance products as being vulnerable to prosecution avoidance under the general time limitation statute. The longevity of life products makes them unique from other insurance products since they're not subject to yearly renewal. Since life products can remain active for decades, crimes like theft, forgery, and misapplication of funds may remain undetected passed the statute of general time limitation. She further explained that, upon investigation, the Division of Insurance found that many individuals, often elderly, did not discover crimes committed against them with regards to life insurance products until 10 to 15 years after the incident. CO-CHAIR HALL, in response to a question from Representative Coulombe, confirmed that they would be reviewing all sections of the proposed legislation. 4:11:45 PM MS. CARPENTER moved to Section 2, explaining that it would amend the Health Maintenance Organizations (HMOs), aligning requirements for access to out-of-network coverage. She stated that Section 3 would add consumer protection to health insurance by requiring insurers to provide details on prior authorization, so as to ensure that consumers are paying in-network and not out-of-network. She further noted that the Division of Insurance had received complaints about a lack of clear guidance. She moved to Section 4, stating that it worked in conjunction with Section 5 to allow the director to grant filing delays and exemptions to insurers for any requirement. MS. CARPENTER moved to Section 6, which she explained would change the premium base for how wet marine and transportation are taxed. MS. CARPENTER, in response to a questions from Representative Saddler and Representative Coulombe, stated that Section 6 would create increases to a currently existing tax. 4:14:58 PM REPRESENTATIVE BURKE queried the reason wet marine and transportation were originally exempted from tax. MS. CARPENTER responded that a lot of laws & code were old and modernization and "treating everybody the same" were part the rationale. 4:15:29 PM REPRESENTATIVE COULOMBE shared concerns about raising taxes and requested more background information. MS. CARPENTER stated that she would provide more background information later on the tax provisions. 4:15:51 PM MS. CARPENTER stated that Section 7 concerned coordination with the Department of Health (DOH). She explained that, due to a change in federal law in 2022, insurers were required to respond to DOH regarding healthcare claims within 60 days and "not to deny claims solely because a consumer didn't receive a prior authorization." She further explained that changes in Section 7 were requested by DOH. 4:16:35 PM REPRESENTATIVE COULOMBE asked if the proposed legislation would remove prior authorization for only Medicaid plans or all health insurance services in the state. MS. CARPENTER answered that the proposed legislation would change how prior authorization it performed. 4:17:05 PM CO-CHAIR FIELDS said that the committee would soon hear a bill with regard to prior authorization. 4:17:20 PM MS. CARPENTER moved to Section 8, noting that it was a technical amendment changing the word "shall" to "may." REPRESENTATIVE COULOMBE asked about the difference in language between "shall" and "may." MS. CARPENTER confirmed that the change was from "shall" to "may" and stated that the change was made to align with model laws in order to be accredited. She further explained that DOI goes through financial accreditation every five years. 4:19:07 PM MS. CARPENTER quickly detailed sections 9, 10, and 11 of the sectional analysis to HB 148. 4:20:23 PM CO-CHAIR FIELDS asked how HB 148 would affect the ability of insurance companies to surveil Alaskans. MS. CARPENTER spoke to existing consumer protection laws and offered Ms. Wingheier to answer the question. 4:23:37 PM REPRESENTATIVE SADDLER asked Ms. Carpenter to detail section 17 of the Sectional analysis for HB 148. MS. CARPENTER explained that section 17 would adopt updates to the independent adjuster guidelines. 4:25:01 PM CO-CHAIR FIELDS said that the intent of the hearing before the committee was to get an initial idea of what it was trying to accomplish. 4:25:27 PM MS. CARPENTER continued reading the sectional analysis for HB 148 on Section 18. 4:26:18 PM CO-CHAIR FIELDS asked what factors might lead an adjuster to designate Alaska as a person's home state. 4:26:36 PM MS. CARPENTER said that insurance was currently regulated at the state level, which created a loophole for insurance companies that the proposed legislation was aiming to solve. 4:28:04 PM MS. CARPENTER continued reading the sectional analysis for HB 148 on sections 20-22 and detailed sections 25-34. 4:36:22 PM REPRESENTATIVE SADDLER asked what the definition of "depreciation of labor" was. 4:36:58 PM MS. CARPENTER noted that herself and Lori Wingheier would make themselves available to committee members following the committee meeting to answer questions. She continued reading the sectional analysis for HB 148 on section 35. 4:37:31 PM CO-CHAIR FIELDS asked for any context of national best practices with regard to notices. MS. CARPENTER explained that the coming sections of HB 148 would concern notice for property and casualty insurance claims. 4:39:18 PM MS. CARPENTER resumed her presentation of the sectional analysis to HB 148 on section 36. She read from sections 39-41 and read section 43 and 44 of the document. 4:44:34 PM CO-CHAIR FIELDS shared his understanding that section 44 would result in small businesses paying less money. 4:44:55 PM MS. CARPENTER confirmed Representative Fields understanding was correct and continued to read the sectional analysis for HB 148 on sections 45-46. 4:45:23 PM CO-CHAIR FIELDS asked if the DCBPL had reviewed best practices from around the country regarding cancer screening. MS. CARPENTER said that the DCBPL was constantly tracking the information that Representative Fields had requested and continued reading the sectional analysis on sections 47-51. She read through sections 56-58 of the document and noted that section 62 concerned consumer complaint filings regarding aircraft companies. 4:53:40 PM CO-CHAIR FIELDS shared his appreciation for the discussion surrounding controlled insurance programs in the state and asked about the variables to consider "now." MS. CARPENTER answered that there was discussion concerning the reduction of the current statutory spending limit and said that she was unsure of any uniform spending limit. 4:55:54 PM CO-CHAIR HALL thanked the invited testifier and delivered committee announcements. [HB 148 was held over.]