SENATE BILL 197 "An Act prohibiting increases in health insurance premiums if the insured is a victim of domestic violence." AMBER ALA, STAFF, SENATOR DAVE DONLEY, testified in support of SB 197. She noted that the bill would protect victims of domestic violence from insurance company discrimination such as refusing to provide coverage, concealing a policy, or increasing premiums on the basis of domestic violence. SB 197 would require the insurer to disclose the reason insurance coverage was denied or cancelled. Ms. Ala reported that SB 197 was drafted with the advise and support of the Division of Insurance. She continued, the statutory provisions contained in SB 197 were necessary to protect victims of domestic violence. Eight states have passed legislation similar to SB 197. Alaska's pro-active measures follow the nation-wide trend by adopting legislation that protects innocent victims of domestic violence from insurance discrimination. Ms. Ala continued, currently, there is no protection in Alaska for victims of domestic violence against insurance premium increases, cancellation, or denial. SB 197 would protect innocent victims of domestic violence from being unfairly discriminated against by insurance companies. Insurers discriminating against domestic violence victims has been a serious problem in the "lower 48"; SB 197 would prevent similar occurrences in Alaska. In response to Representative Martin, Ms. Ala stated that an insurance company could identify a person as a victim of domestic violence through medical records which specifically indicate that person was abused. Records can be released through court orders which an insurance company has access to. Representative Martin pointed out that most medical records are confidential. Ms. Ala advised that insurance companies do check out medical records. Representative Brown pointed out that medical records are maintained by large credit reporting firms; they have risk factors checked. People who apply for medical insurance often have to reveal or give permission to get their medical records as a condition of obtaining insurance. JOHN GEORGE, AMERICAN COUNCIL OF LIFE INSURANCE, NATIONAL ASSOCIATION OF INDEPENDENT INSURERS, JUNEAU, stated that 8 insurance companies support passage of a bill which protects victims of domestic violence from discrimination by insurance companies. He elaborated, there are no known cases of discrimination in the State of Alaska, adding that the legislation is trying to "fix" something which is not "broken". Mr. George stated that insurance companies support the current version of the bill, although would request that property and casualty insurance be removed. Representative Brown asked if it was possible that someone was denied insurance because a portion of that decision took into account the domestic violence risk factor. She suggested that the bill had become "inoperative" by changes made in the House Labor and Commerce Committee, which deleted "only". Mr. George interjected that change had been proposed by Senator Donley. SENATOR DAVE DONLEY replied that language had been recommended by the Division of Insurance in order to guarantee that the legislation would not unfairly impact them. Mr. George clarified that a person is underwritten depending on their condition, not how their condition originated. Representative Brown asked if everyone living in a violent household had the same rate. Mr. George stated that the bill as currently written would not allow that consideration. A person is underwritten depending on their condition, from information provided from their medical records. Representative Parnell asked the problem with including property casualties. Mr. George responded, allegations are based on the frequency of claims. He reiterated that the insurance industry would like to support the bill. He recommended removing "property casualty"; to date there have no cases in Alaska. Representative Martin voiced concern with the insurance companies becoming the "goat" of domestic violence situations. Mr. George reiterated that it would be difficult for an individual to receive information from an insurance company. Insurance companies do not ask if the party has been a victim of abuse, although, there could be an inadvertent disclosure. He reiterated that the actual condition could not be used against a client. Representative Martin maintained that the legislation would place the insurance company in a vulnerable position. Senator Donley stressed that the legislation only specifies that if there is discrimination against someone because they 9 are a victim of domestic violence, that act is against the law. It would be essential that a reason other than domestic violence be shown indicating why the insurance had been cancelled or raised. Mr. George reiterated that the bill as proposed is supported by insurance companies. Discussion followed between Representative Martin and Senator Donley regarding potential suits to insurance companies. Senator Donley reminded Representative Martin that the bill allows to rate for actual injuries and not the circumstances leading to the injury. The bill had been drafted to address inappropriate underwriting in the insurance industry. (Tape Change, HFC 96-139, Side 2). Senator Donley responded to Representative Therriault, noting that it was inappropriate to use domestic violence as a classification of people. Insurance companies should be allowed factual reasons for their rating determinations. Representative Brown asked how the language in Subsection (b) would be applied. She understood that language would allow discrimination against the abused party based on medical conditions. There could be assigned a risk factor. Senator Donley agreed that it would if those people were treated differently than anyone else. He stressed that domestic violence is not an appropriate reason to be discriminated against. Representative Parnell suggested that Subsection (b) would modify Subsection (a), stating that the provision of (a) may not prevent an insurer from underwriting a rating for medical conditions. It would not be the domestic violence relationship that would be underwritten but rather the medical condition. TERI FRONSEN, (TESTIFIED VIA TELECONFERENCE), ATTORNEY, WOMEN'S LAW PROJECT, PHILADELPHIA, PENNSYLVANIA, testified as a consumer representative for the legal and economic status of women. She pointed out that she had represented a woman in Pennsylvania who was denied insurance from two different insurance companies because of a "so-called" history of domestic violence. She was denied life insurance, health insurance and mortgage disability insurance. In a 1994 survey, the Commonwealth Fund reported four million battered women. Calls to sixteen major insurance companies in the United States revealed that eight considered domestic violence an underwriting standard in both issuance and reading of policies. Some of those 10 insurance companies have modified their policy following Congressman Shumer's efforts, although, they still consider domestic violence a factor to be considered. Companies are behaving on misperceptions about what domestic violence is. Ms. Fronsen pointed out that women are confined to these circumstances for all sorts of reasons, including economics, housing, children, and fear of retaliation. Violence does not leave when you leave the household. Domestic violence advocates have worked hard to educate people to the fact that domestic violence is a crime. Law enforcement personnel have treated it as a private matter. She stressed that it is a crime; and, under the law, it should be treated that way. With respect to insurance companies, they also need to know that it is a crime. It is not a medical condition. She reiterated that it is a crime and should not be used as a basis for denying or treating victims differently. Ms. Fronsen urged the Committee to move forward with the proposed model legislation and support the bill. [Testimony on file]. In response to Representative Martin's comment, Ms. Fronsen noted her concern regarding confidentiality, and that information not be disseminated by the insurance company in a way to cause harm to a victim. In some situations, information has been provided to the batterer. Insurers also provide information to data bases that collect risk information. Ms. Fronsen noted that it was not in the clients best interest to not record the violence. She pointed out that the abused person may need to seek legal help. The purpose of the legislation is to clarify that insurance companies can not use information on domestic violence to take adverse insurance action. Discussion followed between Representative Therriault and Ms. Fronsen regarding the application of when violence occurs within the home. The law stipulates when there is abuse. LAUREE HUGONIN, EXECUTIVE DIRECTOR, ALASKA NETWORK ON DOMESTIC VIOLENCE AND SEXUAL ASSAULT, JUNEAU, explained that advocates working to end violence against women, encourage battered women to document their injuries by seeking medical care and by requesting that violent incidents be noted in their medical records. Identification of abused women through routine screening and 11 accurate diagnosis can break the cycle of violence. Early intervention can prevent or ameliorate many of the long-term health and social consequences associated with victimization. Ms. Hugonin continued, national health initiatives require medical institutions to develop domestic violence protocols, plans for training and improving their facilities response to domestic violence. Surveys indicate that insurance discrimination against victims of domestic violence is widespread. An informal survey by the staff of the Subcommittee on Crime and Criminal Justice of the U.S. House Judiciary Committee in 1994, found that eight out of sixteen of the largest insurers in the country were using domestic violence as a factor when deciding whether to issue a policy and how much to charge for that policy. She concluded, it seems that the industry as a whole is not interested or willing to look at medical conditions without regard to cause. The reality is that every woman is at risk of becoming a victim of domestic violence. Just as their is no excuse for domestic violence, there is no excuse, legal or otherwise, for the insurance industry to justify and continue the discriminatory practice. MARCIA MCKENZIE, PROGRAM COORDINATOR, COUNCIL ON DOMESTIC VIOLENCE AND SEXUAL ASSAULT, JUNEAU, spoke to the concerns that the Council on Domestic Violence and Sexual Assault has regarding the current version of the legislation. She advised that the confidentiality protection for domestic violence victims had been removed. A provision should be added for coverage and rating based on a medical condition as long as there is no discrimination. Ms. McKenzie stressed that violent behavior was criminal and deliberate and that abuse received was not the result of a medical condition. (Tape Change, HFC 96-140, Side 1). She added, the Council was concerned that insurance companies would not be responsible to inform the applicant why they had been denied coverage. Ms. McKenzie urged Committee members to amend the bill to reinstate the provisions of confidentiality, prohibiting the "so-called" non-discriminatory consideration of medical conditions and requiring the insurers to inform applicants of the reason coverage would be denied. CS SB 197 (L&C) was HELD in Committee for further consideration.