HOUSE BILL NO. 216 An Act relating to insurance ratemaking and form filing. JON BITTNER, STAFF, REPRESENTATIVE TOM ANDERSON, pointed out that under existing law property/casualty insurance rates and forms are subject to the insurance commissioner's prior approval before they may be put in place. While maintaining the insurance commissioner's authority to oversee rate changes, a key component of the bill is creation of a percentage "flex band." HB 216 allows an insurer to make rate increases and decreases within the flex band without having to obtain the insurance commissioner's prior approval. Rate changes outside of the flex band must be filed with the insurance commissioner for review before put into effect. Mr. Bittner highlighted the purpose of HB 216. · Create an environment where insurers compete more vigorously on rates and products offered to consumers. · Encourage insurers who are in the Alaska market to stay and would attract new insurers to Alaska, which would result in more competition. · The bill is in line with the national movement away from strict government price controls toward a more flexible and competitively oriented system for regulation of insurance rates and forms. Mr. Bittner commented that HB 216 had been the result of discussions among insurance companies, agents and the Director of Insurance and their staff. The participants in the effort used the flex-rating model law adopted by the National Conference of Insurance Legislators (NCOIL) as the starting point. Some elements of that model were adopted. HB 216 is consistent with NCOIL's goal of modernizing the state insurance regulation. 1:54:34 PM LINDA HALL, DIRECTOR, DIVISION OF INSURANCE, DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, acknowledged that the legislation was a combined effort. Last year, when the bill was up before the Legislature, the Division requested that it remain in Committee until more work could be done with the industry. The bill is a compromise of various positions while meeting the needs of the industry, the Division, and consumer protection. She urged support of the bill. Ms. Hall identified the changes in the bill. The legislation promotes flexibility for products coming into the market more quickly. It provides the Division the protection necessary to have rates meet standards. Ms. Hall requested support for the bill, as it will bring Alaska more in line with what is happening nationally. 1:57:29 PM Representative Croft asked the problem for using a complete number. Ms. Hall responded that 10% was chosen as it meets statutory provisions. Discussion followed between Ms. Hall and Representative Croft regarding filing proceedings. Ms. Hall pointed out that worker's compensation is exempt from the rate filing procedure. She felt it could be too broad of a band to put in place without other types of oversights. The change is a "big step". Representative Croft agreed. 1:59:32 PM JOHN GEORGE, PROPERTY CASUALTY INSURANCE ASSOCIATION OF AMERICA, advised that the industry has been working for many months to create something acceptable and supported by everyone. It provides public safety while allowing insurance companies to compete. He urged support of the legislation. 2:00:47 PM Vice-Chair Stoltze MOVED to REPORT CS HB 216 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 216 (L&C) was reported out of Committee with a "do pass" and with zero note #1 by the Department of Commerce, Community and Economic Development. 2:01:40 PM