SENATE BILL 104 9 "An Act relating to regulation and examination of insurers and insurance agents; relating to kinds of insurance; relating to payment of insurance taxes and to required insurance reserves; relating to insurance policies; relating to regulation of capital, surplus, and investments by insurers; relating to hospital and medical service corporations; and providing for an effective date." TIM BENINTENDI, STAFF, SENATOR TIM KELLY, stated that the bill was requested by the Division of Insurance and contains numerous provisions that will enhance the effectiveness, efficiency and quality of insurance regulations for the Alaskan consumer and industry. The majority of the provisions implement the minimum federal standards for individual and group health insurance plans as established under the federal Health Insurance Portability and Accountability Act of 1996 which will become effective in Alaska by July 1, 1997. If the provisions are not enacted in this legislative session, the federal Department of Health and Human Services will take over regulations of these standards in individual and group health insurance markets in Alaska. Mr. Benintendi provided a summary of the federal minimum standards in the bill: * In August 1996, the 1996 Act was signed into federal law. The Act received wide bipartisan support in Congress and by many organizations including the American Medical Association (AMA). * Federal law establishes minimum standards for all individual and group health care plans which must become effective July 1, 1997. These standards ensure that health coverage is portable, available and renewable for many individuals. * If Alaska fails to enact the federal reforms or otherwise, provides for enforcement of the federal reforms, the federal government will enforce compliance in Alaska beginning January 1, 1998. * Alaska has the option to implement an alternative to the minimum individual health insurance standards in federal law. This legislation would provide for the necessary amendments to the insurance code to implement 10 such an alternative as well as other amendments necessary to implement the minimum group reforms. * The bill would provide for a federally acceptable alternative by modifying the eligibility requirements for the Comprehensive Health Insurance Association (CHIA). This alternative would be the least disruptive to Alaska's small individual health insurance market. Mr. Benintendi commented that Amendment #1, 0-LS0407\KA.4, Ford, 5/5/97, was a refinement of an amendment provided on the Senate floor to improve the legislation's intention. [Copy on file]. He commented that Senator Kelly supports the amendment. Ms. Burke advised that the issue is currently before the Alaska Supreme Court and involves contradictory federal decisions. The federal court remanded it to the State Supreme Court. The amendment would remove the ambiguity which lead to the case and would clarify the intent. (Tape Change HFC 97-125, Side 1). MICHAEL LESSMEIER, STATE FARM INSURANCE, JUNEAU, agreed that there exists a controversy about when the underinsured motorist coverage is triggered. The policy decision made by Senator Donley is reflected in Amendment #1. He believed that the consideration is a complicated issue. Representative Martin MOVED to adopt Amendment #1. There being NO OBJECTION, it was adopted. Mr. Lessmeier spoke to a concern regarding that the maintenance of records provision being held for ten years, Page 5, Line 31. He pointed out that this is longer than any other state in the country. He requested it be changed to five years. Ms. Burke responded that all domestic insurers in the State of Alaska are required to keep their records ten years. She added that the Division would have no objection to changing it to five years. Mr. Benintendi noted that the sponsor would not object to that change. Representative Martin MOVED that language change on Page 5, Line 31, deleting "ten years" and inserting "five years". There being NO OBJECTION, it was adopted. Representative Martin MOVED to report HCS CS SB 104 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it 11 was so ordered. HCS CS SB 104 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Revenue and the Department of Commerce and Economic Development.