SB 197 - INS: DOMESTIC VIOL. VICTIMS & DISCLOSURES CHAIRMAN KOTT brought SB 197 before the committee and noted it had been heard before. He opened public testimony for Becky Achten, who had not testified previously. Number 1982 BECKY ACHTEN, Children's Counselor, Aiding Women from Abuse and Rape Emergency (AWARE), testified in support of SB 197. She stated, "I've read that half of the 16 major insurance companies use domestic violence as a criteria to deny coverage or increase rates for victims. This says to me that insurance companies recognize the economic cost of domestic violence in this country. But in order to resolve this economic problem, insurance companies re-victimize the victim. Failure to pass this bill in a form which ensures its intent to protect victims of domestic violence from discrimination, which would deny them medical coverage or raise their rates, is also a re-victimization. The problem is domestic violence. The question is: Are we going to recognize the gravity of this problem by allowing insurance companies to deny coverage to victims, or are we going to address the problem [of] domestic violence and support Senate Bill 197 and others before you aimed at protecting victims, perhaps protecting them before they are injured? Shame on the insurance companies for denying coverage or raising their rates to those who have suffered injuries. I invite them to join and unite and address the root cause of the problem, domestic violence." CHAIRMAN KOTT noted there was a committee substitute that had not yet been adopted as a work draft, which added "or as required by the division of insurance" at the bottom of page 1. REPRESENTATIVE PORTER pointed out there were additional changes. CHAIRMAN KOTT called an at-ease at 4:43; the meeting resumed shortly thereafter. Number 2181 REPRESENTATIVE KUBINA moved that the committee adopt the work draft for SB 196, version M, dated 3/26/96. REPRESENTATIVE ROKEBERG objected for purposes of discussion. REPRESENTATIVE PORTER noted that Chairman Kott had mentioned the addition on page 1. He said the major change was a suggestion he had worked out with the sponsor, which changed the disclosure requirement. Instead of an insurance company being required to automatically provide that information upon denial, the company would advise anyone they denied of their right to have that information and if they received written notification, provide it. Number 2332 REPRESENTATIVE ROKEBERG withdrew his objection. CHAIRMAN KOTT noted the committee substitute for CSSB 197, version M, dated 3/26/96, was before them. Number 2353 REPRESENTATIVE ROKEBERG offered an amendment, which read: Section AS 21.36 is amended by adding new sections to read: Sec. 21.36.430 INSURANCE FOR DOMESTIC VIOLENCE VICTIMS; (a) An insurer offering life, disability or health insurance in Alaska may not discriminate against a victim of domestic abuse based on an individual's status as a victim of domestic abuse. This prohibition shall not prevent an insurer from underwriting or rating for a medical condition in the same manner as they would for an insured or applicant who is not a victim of domestic abuse. (b) This section applies only to an insured or applicant for insurance. (c) An insurer is granted immunity for criminal or civil liability resulting from compliance with this statute. REPRESENTATIVE ROKEBERG stated he had provided letters from eight or nine insurance companies throughout the country. "This was an amendment that was in Mr. Lessmeier's letter, I believe, of March15," he said, commenting that was in the packet and duplicated a recommendation by State Farm. "We've heard testimony from the bill sponsor that he does not care for this language," he said. "But we also heard testimony in this committee that the insurance industry was duly informed, and so forth, and had no objections to this bill. And the letters you have in hand directly oppose what that testimony was. And I'd like to take exception to that." He listed the insurance companies that had provided letters. TAPE 96-31, SIDE A Number 0001 REPRESENTATIVE ROKEBERG said, "What we don't want to do, I think, particularly, and that's our charge in this committee, is to provide additional burdens on the insurance industry that are not called for by any other type of classification of citizenry in this country. This is an extraordinary demand and I don't think we need to do that to accomplish the purpose of this bill. And I particularly take exception to the fact that ... the insurance industry was duly represented at this table or in the Senate, because to my knowledge, they weren't. And these letters speak for that case. So, that's why I'm bringing the amendment. Also, the amendment includes a deletion of the committee substitute section (b), based on confidentiality. Mr. Lessmeier's letter of March20th in your package clearly sets forward the lack of necessity of having this in the bill." He specified he was referring to Section 1, subsection (b). REPRESENTATIVE ELTON objected and then asked if Representative Rokeberg had moved the amendment. REPRESENTATIVE ROKEBERG moved the amendment. REPRESENTATIVE KUBINA asked to hear from the sponsor. Number 0185 SENATOR DAVE DONLEY, sponsor of SB 197, said after consulting with the Division of Insurance, he believed he could speak for them, as well. "We oppose this amendment for at least three reasons," he stated. "Number 1, it excludes specific lines of insurance from coverage. I guess if I was State Farm, I wouldn't want to have to live under any new rules, either. But this would say property is no longer covered by the bill." SENATOR DONLEY pointed out the committee had heard "horrific examples of discrimination against victims of domestic violence in property lines of insurance". He referred to the victim of an arson attack, discussed in earlier testimony, whose insurance was subsequently cancelled. He referred to subsection (b) of the amendment, which said, "This section applies only to an insured or applicant for insurance." He said a third-party beneficiary could be discriminated against on the basis of domestic violence, which he believed was completely improper, as there may be other classes of people who need protection from discrimination. SENATOR DONLEY said third, the amendment granted blanket immunity that did not appear anywhere else in the insurance code for any other action required of insurance companies. Although insurance companies had prohibitions against discrimination for reasons of race and religion, for example, there was no blanket immunity for any criminal or civil liability. "No matter how they administer it, how grossly negligent or even intentional their action was to violate any other law that may conflict with this, they would be granted blanket immunity," he noted. "It just doesn't appear anywhere in the code like that. And they've got all kinds of mandates in the code that they have to follow." Number 0370 REPRESENTATIVE ELTON said he had a couple of problems with the amendment. First was the assumption that life, disability and health insurance were the only insurance lines that needed addressed. He noted there was information in his packet compiled by the Women's Law Project in Philadelphia, which indicated shelters in Vermont were having a tough time getting insurance due to rejections and high rates because of domestic violence. A homeowner's policy in Washington state had been cancelled by Safeco after receiving information about domestic violence-related claims. Also in Washington, a landlord's policy was cancelled because the insurer learned the landlord intended to rent to a women's shelter. "I think there are examples out there. And for us to say the only applicable lines of insurance are life, disability and health insurance is misleading and addresses only a portion of the problem," Representative Elton stated, adding that he had not even addressed sections (b) and (c) of the amendment. Number 0554 REPRESENTATIVE ELTON referred to comments by Representative Rokeberg, sponsor of the amendment, that indicated the amendment deleted subsection (b). "I don't see where that happens," he said. REPRESENTATIVE ROKEBERG replied, "Technically, this is supposed to delete Section 1 and replace it." He apologized for the confusion and said, "If it's the will of the committee, I wouldn't look at it as hostile to add property insurance into that. I don't think that's the intent here, to exclude that." Number 0512 REPRESENTATIVE ELTON asked if Representative Rokeberg would object to removing the delineation and just saying "offering insurance". REPRESENTATIVE ROKEBERG indicated he would not object to that, if it would be the proper wording to cover all insurance. "We don't want to have any discrimination," he said. "I don't disagree with that." REPRESENTATIVE PORTER asked if the committee had done that or just talked about it. CHAIRMAN KOTT clarified they had just talked about it. Number 0554 REPRESENTATIVE ELTON moved to delete "life, disability or health" from the amendment. REPRESENTATIVE ROKEBERG interjected, objecting for discussion. He asked Mr. Lessmeier, attorney for State Farm, if he wanted to comment. REPRESENTATIVE ELTON said he wanted to know the difference between domestic abuse and domestic violence, since the amendment talked about domestic abuse. Number 0600 MR. LESSMEIER claimed there was not, to his knowledge, a single example of a problem in property/casualty. "Our desire was to limit the protection to where discrimination occurs," he said, "which is in insurance over the person." He responded to instances cited by Representative Elton and said the first two dealt with life insurance and the third was cancelled because of multiple fires set in the home. He said problems in Vermont with women's shelters raised a concern of commercial insurance. And the Washington state policy was denied because of multiple claims. He asserted there were no "valid" situations in the property and casualty business of discrimination based on status as a victim of domestic violence. CHAIRMAN KOTT noted there was a call to attend a House floor session. He said SB 197 would be heard first at the next meeting.