ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 31, 2006
3:32 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Pete Kott
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
Representative Gabrielle LeDoux
COMMITTEE CALENDAR
SENATE BILL NO. 273
"An Act relating to a motor vehicle dealer's selling or offering
to sell motor vehicles as new or current models or as new or
current model motor vehicles having manufacturer's warranties."
- MOVED SB 273 OUT OF COMMITTEE
HOUSE BILL NO. 29
"An Act relating to health care insurance and to the
Comprehensive Health Insurance Association; and providing for an
effective date."
- MOVED CSHB 29(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 480
"An Act relating to voluntary self-evaluative audits by insurers
and providing for an insurance compliance self-evaluative
privilege; and indirectly amending Rules 104, 402, and 501,
Alaska Rules of Evidence, Rules 16, 26, 30, 31, 33, 34, 36, and
40, Alaska Rules of Civil Procedure, and Rules 15, 16, and 17,
Alaska Rules of Criminal Procedure."
- BILL HEARING POSTPONED
PREVIOUS COMMITTEE ACTION
BILL: SB 273
SHORT TITLE: MOTOR VEHICLE SALES
SPONSOR(s): SENATOR(s) COWDERY
02/08/06 (S) READ THE FIRST TIME - REFERRALS
02/08/06 (S) TRA, L&C
02/23/06 (H) TRA AT 1:30 PM CAPITOL 17
02/23/06 (H) -- Meeting Canceled --
03/02/06 (S) TRA AT 2:00 PM FAHRENKAMP 203
03/02/06 (S) Moved SB 273 Out of Committee
03/02/06 (S) MINUTE(TRA)
03/03/06 (S) TRA RPT 4DP
03/03/06 (S) DP: HUGGINS, THERRIAULT, COWDERY,
KOOKESH
03/16/06 (S) L&C AT 1:30 PM BELTZ 211
03/16/06 (S) Moved SB 273 Out of Committee
03/16/06 (S) MINUTE(L&C)
03/17/06 (S) L&C RPT 5DP
03/17/06 (S) DP: BUNDE, DAVIS, ELLIS, SEEKINS,
STEVENS B
03/20/06 (S) TRANSMITTED TO (H)
03/20/06 (S) VERSION: SB 273
03/22/06 (H) READ THE FIRST TIME - REFERRALS
03/22/06 (H) L&C, JUD
03/27/06 (H) L&C AT 3:15 PM CAPITOL 17
03/27/06 (H) Heard & Held
03/27/06 (H) MINUTE(L&C)
03/29/06 (H) L&C AT 3:15 PM CAPITOL 17
03/29/06 (H) Heard & Held
03/29/06 (H) MINUTE(L&C)
03/31/06 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 29
SHORT TITLE: HEALTH CARE INSUR./COMP HEALTH INS. ASSN
SPONSOR(s): REPRESENTATIVE(s) ROKEBERG
01/10/05 (H) PREFILE RELEASED 12/30/04
01/10/05 (H) READ THE FIRST TIME - REFERRALS
01/10/05 (H) L&C, HES
04/08/05 (H) L&C AT 3:15 PM CAPITOL 17
04/08/05 (H) Heard & Held
04/08/05 (H) MINUTE(L&C)
04/12/05 (H) HES AT 3:00 PM CAPITOL 106
04/12/05 (H) <Pending Referral>
03/31/06 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
RYAN MAKINSTER, Staff
to Senator John Cowdery
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during hearing on SB 273
on behalf of the sponsor.
KATIE CAMPBELL, Actuary-Life and Health
Juneau Office
Division of Insurance
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: During hearing on HB 29, explained changes
made by the committee substitute.
JOHN GEORGE, Lobbyist
American Family Life Assurance Company of Columbus (AFLAC)
Juneau, Alaska
POSITION STATEMENT: During hearing on HB 29, expressed support
and answered questions.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:32:24 PM. Representatives
Crawford, Rokeberg, Lynn, and Anderson were present at the call
to order. Representatives Kott and Guttenberg arrived as the
meeting was in progress.
3:32:55 PM
SB 273-MOTOR VEHICLE SALES
CHAIR ANDERSON announced that the first order of business would
be SENATE BILL NO. 273, "An Act relating to a motor vehicle
dealer's selling or offering to sell motor vehicles as new or
current models or as new or current model motor vehicles having
manufacturer's warranties."
3:33:21 PM
RYAN MAKINSTER, Staff to Senator John Cowdery, Alaska State
Legislature, sponsor, said that it is the sponsor's intent to
leave the bill as currently written. He stated that the
language that was previously discussed would drastically change
the bill, adding that the bill is merely intended to fix the
statutory language so that it is enforceable.
3:33:58 PM
CHAIR ANDERSON informed the committee of his intent to move the
bill at this time.
3:34:28 PM
REPRESENTATIVE ROKEBERG moved to report SB 273 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE KOTT objected, and asked if the sponsor would be
amenable to an immediate effective date.
3:34:55 PM
MR. MAKINSTER replied that the sponsor does not wish to amend
the bill at this time, and remarked that this may happen in the
next committee of referral.
3:35:41 PM
REPRESENTATIVE KOTT removed his objection.
3:35:55 PM
There being no further objection, SB 273 was reported from the
House Labor and Commerce Standing Committee.
HB 29-HEALTH CARE INSUR./COMP HEALTH INS. ASSN
3:36:11 PM
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 29, "An Act relating to health care insurance
and to the Comprehensive Health Insurance Association; and
providing for an effective date."
3:36:27 PM
REPRESENTATIVE ROKEBERG made a motion to adopt CSHB 29, Version
24-LS0191\R, Bailey, 3/22/06, for discussion purposes. There
being no objection, Version R was before the committee.
3:37:01 PM
REPRESENTATIVE ROKEBERG said that when the bill was previously
heard, objections were raised regarding the assessments. He
stated that Version R removes the sections of the bill which
were of concern in addition to changing the funding source.
Furthermore, Version R relies on the current assessments to the
health insurance industry for the additional monies needed to
keep the Alaska Comprehensive Health Insurance Association
(ACHIA) pool alive. He explained that it would entitle the
insurer to a premium tax credit equal to 50 percent of the
assessment. He added that currently, the assessments are about
$3.5 million. He noted a letter of support from ACHIA, which is
included in members' packets.
3:39:51 PM
KATIE CAMPBELL, Actuary-Life and Health, Juneau Office, Division
of Insurance, Department of Commerce, Community, & Economic
Development (DCCED), explained the changes made by Version R.
Section 4, she said, clarifies that the insurers' membership is
based on the major medical premium. She said that Section 5
amends the process with which ACHIA determines liability for
unpaid assessments. She stated that this section clarifies that
the insurer must cease to do business in the state before it is
no longer assessed. Section 6, she said, is the premium tax
off-set. She went on to say that Section 7 redefines "major
medical".
3:41:52 PM
JOHN GEORGE, Lobbyist, American Family Life Assurance Company of
Columbus (AFLAC), informed the committee that AFLAC is a member
of ACHIA, which is federally mandated. He stated that while the
state had the option of using general funds to cover the costs
of the program, it chose to assess the insurance industry. He
said that anytime the insurance industry is required to pay, the
cost "trickles down" to the policy holders. In this case, he
said, the policy holders are small businesses or individuals.
He said that the intent of HB 29 is to help small businesses and
individual policy holders who are "shouldering 100 percent of
the burden." He remarked that it is beneficial to have health
insurance because unless a [business or individual] is a member
of a major self-insured group, insurance is unaffordable, which
can be due to add-ons or paying to subsidize the aforementioned
program. He expressed strong support of HB 29.
3:44:05 PM
REPRESENTATIVE ROKEBERG asked if the definition of "major
medical" adopted in HB 29 would affect AFLAC. He also asked if
AFLAC would still be a participant [in ACHIA].
MR. GEORGE replied that AFLAC would still be a participant, as
it is a major writer of [the types of insurance which are not
considered "major medical" by the legislation]. He stated that
currently, AFLAC's assessment costs are in excess of its total
"major medical" premium.
3:44:51 PM
REPRESENTATIVE ROKEBERG pointed out that AFLAC has been very
forthcoming in it's participation in the ACHIA program. He
noted that Mr. George was previously the Director of the
Division of Insurance, and asked if he considers the potential
rising amount of the assessments as a "barrier to entry" for
health insurance underwriters in the state.
MR. GEORGE replied that Alaska has never had enough health
insurers, adding that any efforts made to remove a portion of
the burden will be of assistance. He opined that while these
efforts may not cause insurance companies to "rush to the
state," it would encourage any companies considering business in
Alaska. He said that this is "the right thing to do."
3:46:24 PM
REPRESENTATIVE ROKEBERG noted a drafting error and offered the
following conceptual amendment:
Page 3, line 29
Delete "January 1, 2007"
Insert "March 1, 2008"
REPRESENTATIVE ROKEBERG explained that the amendment would allow
zero fiscal impact in 2007. He said that this is a "backward
looking assessment." There being no objection, Conceptual
Amendment 1 was adopted.
3:47:41 PM
REPRESENTATIVE LYNN moved to report CSHB 29, Version 24-
LS0191\R, Bailey, 3/22/06, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 29(L&C) was reported from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:48:08 PM.