HB 303 - MISC. INSURANCE PROVISIONS Number 799 CHAIRMAN DYSON announced the next order of business as House Bill No. 303, "An Act relating to the method of payment of fees and adoption of regulations under AS 21; relating to orders under AS 21 regarding risk based capital instructions; relating to accounting standards for insurance companies; amending the definitions of 'creditable coverage' and 'late enrollees' in AS 21.54; relating to requirements for small employer insurers; relating to requirements for issuance of new voting securities by an insurance company; requiring health care insurance coverage for reconstructive surgery following mastectomy; requiring guaranteed renewability of and certification of coverage regarding certain individual health insurance policies; and providing for an effective date." Number 0815 BOB LOHR, Director, Division of Insurance, Department of Community & Economic Development, testified via teleconference from Anchorage. He told the committee that Representative Rokeberg, Chairman, House Labor and Commerce Committee did a search of representatives of each insurance related organization in the state that might have concerns about the bill and responded to questions, and there was no adverse testimony in House Labor and Commerce Committee concerning this bill. MR. LOHR explained what HB 303 does. It allows the Director of the Division of Insurance to require electronic payment of fees. That is not controversial at this stage and would put deposits into the general fund. It updates and moves obsolete language from the statutes related to the accounting procedures. When insurance companies file their annual financial statements with the division, there specific procedures that they follow. This bill would conform the statutes to national model regulations developed by the National Association of Insurance Commission. These are regulations that most multi-national companies are comfortable with and aware of and expect to go into force January 1, 2001. The division has already adopted regulations for that. However, there are a few accounting provisions in state law that are not consistent with those rules, and this bill will conform them to the national model rules. MR. LOHR explained the third major area involves HIPAA [Health Insurance Portability and Accountability Act of 1996]. Most state law changes that were required for conforming to HIPAA were made in 1997 by the legislature. However, several provisions have been identified that were not caught at the time. One has led to the federal Health Care Financing Administration writing to the Governor and asking what the intention of the state was with respect to that provision, because if it were not enforced by the state, then there would be the risk of preemption by this federal agency. At this point, the division is enforcing those provisions in policy language under current state authority. However, there is a specific change there that would be required. There are additional specific requirements there, but there are no mandates beyond those required by federal law contained in these changes. Number 0998 REPRESENTATIVE COGHILL referred to page 8, line 24, and asked Mr. Lohr explain "or other state high-risk pool." MR. LOHR answered that there are two state high-risk pools. One is the Comprehensive Health Insurance Association (CHIA), and the other is the Small Employer Health Insurance Association. REPRESENTATIVE BRICE made a motion to move HB 303 out of committee with individual recommendations and zero fiscal note. There being no objection, HB 303 moved from the House Health, Education and Social Services Standing Committee.