CS FOR SENATE BILL NO. 357(L&C) "An Act relating to the regulation of insurance, insurance licenses, qualifications of insurance producers, surplus lines, fraud investigations, electronic transactions, and compliance with federal law and national standards; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this legislation which is referred to as "the insurance omnibus bill," would make numerous changes to current language in order to ensure that State statutes remain in compliance with federal law and Model Act standards and guidelines. Amendment #2: This amendment inserts the word "genetic" after the word "Medical" in Section 2 subsection (a) on page two, line 13. In addition, on line 16 of that same section, the word "public" is deleted and, following the word "disclosure", the words "without the expressed consent of the enrollee or applicant" are inserted. Senator Olson moved for the adoption of Amendment #2. Co-Chair Green objected. Senator Olson voiced that this amendment would address concerns relating to medical confidentiality as identified in Section 2, subsection (a) beginning on page two, line 13. SFC 04 # 65, Side B 09:54 AM Senator Olson stated that, in addition, there is concern regarding the bill's repealing of AS 21.34.280 as specified in Section 52, on page 29, beginning on line 13. [NOTE: Senator Olson inadvertently referenced line nine in his testimony.] He noted that Members' packets contain a copy of the language pertaining to Sec. 21.86.280. Confidentiality of medical information. [copy on file] as currently mandated in State statute. He noted that as a result of technological advances, the confidentiality of such things as genetic information should be addressed. Therefore, inserting the word "genetic" into Section 2, subsection (a) would address this concern. Inserting the language "without the expressed consent of the enrollee or applicant" would further address public disclosure concerns in the absence of AS 21.86.280. LINDA HALL, Director, Division of Insurance, Department of Community and Economic Development, stated that the Division is not opposed to the amendment. The intent of the bill's language in Section 2 and the repealing of AS 21.86.280 were "to bring consistency to privacy regulations" pertaining to medical records. The repealing of AS 21.86.280 is included because other sections in the bill provide the same coverage, specifically in addressing regulation pertaining to Health Management Organizations [HMOs]. In addition, the Division recently underwent "a regulatory project and adopted regulations dealing with privacy with input from all consumers." These regulations are currently under review by the Department of Law. She stressed that the State has adopted privacy regulations that would require that the consumer "opt in" to approve the sharing of their medical information. She stressed that while the Division supports the ability of insurance companies being able to collect medical information, it also upholds the position that insurance companies should be prohibited from sharing the information, "generally." The understanding is that this is the concern being addressed by Amendment #2. Co-Chair Green asked whether the definition of "genetic" is included in State Statute. Furthermore, she asked whether the confidentially of medical genetic information and financial information is recognized "at the same level of seriousness." In addition, she asked whether there is "a technical method" whereby information would be considered "routine" as opposed to being considered "invasive or intrusive" personal information. Ms. Hall responded that the definition of the term "genetic" has not been addressed in the Insurance chapter of State regulations. It is unknown as to whether the term might already be included under medical information. Ms. Hall informed that the privacy of financial information is treated differently than medical information in that individuals are provided "an opt-out standard" for financial information rather than "an opt-in standard" for medical information. The Opt-In Standard would prohibit the sharing of medical information unless an individual actively agreed. The Opt-Out standard would allow a person's financial information to be shared with affiliates rather than the public, unless the person actively elected to prohibit it. Co-Chair Green voiced concern regarding the lack of a "genetic" definition in State Statute, as the words "medical", "genetic," and "financial" have very different levels of meanings, "intensity and seriousness." She voiced being unsure that addressing these issues in this manner is appropriate. She also acknowledged that the procedures required to distribute and acquire consent forms in this regard is "cumbersome" for both the provider and the individual. She voiced concern that action relating to this bill might further create inefficiencies in this regard. Ms. Hall agreed that the requirement of any consent form would create an additional step on the part of providers and insurers, both of whom have requested that the State refrain from implementing any steps that would make the consent form process for Alaska different from the national standard, as this would require an additional expense and burden and would prevent business efficiency. Co-Chair Green declared, "that this is a bigger issue than it might appear at first glance." Therefore, she would oppose the amendment. Senator Olson moved to withdraw Amendment #2. There being no objection, Amendment #2 was WITHDRAWN from consideration. Co-Chair Wilken noted that Amendment #2 is being withdrawn with the understanding that Senator Olson, Co-Chair Green, and the Division of Insurance would work together to address Committee concerns in its regard. Co-Chair Wilken ordered the bill HELD in Committee.