SENATOR KELLY asked Mr. Fink to contact the State Appraiser's Association to testify Thursday and announced SB 362 (OMNIBUS INSURANCE REFORM) to be up for consideration. He announced a recess from 2:20 through 2:25 p.m. DAVE WALSH, Director, Division of Insurance, said there was one change in the bill that affected Lloyds of London and Mr. Gussi would answer questions regarding that issue. He said this bill has a $0 fiscal note and gives them the authority to respond to catastrophic situations. TAPE 94-21, SIDE B Number 580 MR. WALSH said it provides them with the authority to suspend a certificate of an insurance company if they don't renew it and provides for the voluntary surrender of a certificate of authority without going through a full liquidation process. Another provision allows them to grant a refund or tax credits for overpayment of premium tax. Industry does not object to this. SB 362 restores their ability to promulgate regulations for continuing education for agents and brokers. The Agents and Brokers Association is in support of this. The bill also clarifies fiduciary accounts, saying they must be in Alaska if it's an Alaska broker, but that a single bond can cover multiple offices. The bill also allows incorporated insurers into the definition of a group of unincorporated insurers to reflect a recent change at Lloyds of London. As they have reorganized, they have gone from allowing only individual members to allowing corporate members. This provision is key to continued participation of Lloyds in our market. SB 362 strengthens the consumer protection and enforcement laws with regards to false statements made when filing an insurance claim. A couple of other miner provisions allows the Director to specify the format and content of rate and policy form filings. It clarifies health insurance coverage for newborn and adopted kids. It allows electronic transfer of funds, makes "housekeeping" corrections and conforming amendments. Number 500 SENATOR KELLY asked if there were any objections to adopting the CS to SB 362. There were none and it was so ordered. SENATOR RIEGER asked in reference to page 8, line 24 if somewhere in statute you can have filings, but not be subject to subpoena. MR. WALSH explained that the depth of a filing a company must make really reveals everything. In the past, frivolous lawsuits have been filed just to obtain this information. If any of the information is ruled to be material to a lawsuit, it is discoverable, but not from the Department of Commerce. SENATOR RIEGER asked at the top of page 37 what it meant that an insurer may not increase the premium on auto insurance, unless it applies to all insurance in the same class. MR. WALSH said that means that if you as a company set up your classes by age, type of vehicle, etc., you may not have a discriminatory rate. SENATOR RIEGER said there were several references to credit insurance which, he thought, were bad deals, anyhow. MR. WALSH agreed and said their loss ratios are so low, you can't hold them to a 20% standard. This bill gives them the power to correlate the premium to the losses. SENATOR SALO asked him to explain on page 3, closing an examination hearing to the public. MR. WALSH responded that when they examine a company, they hold a hearing on the examination report. At times the reports can be highly critical and sometimes there are mistakes. This is an opportunity where those things can get straightened out. If the hearing officer disagrees, it becomes public, but it gives an individual or company the right to come in and be heard in a fashion that would do them the least harm, if a mistake had been made. Number 430 SENATOR LINCOLN asked what section 12 does. MR. WALSH explained that insurers pay a premium tax to the state based upon the type of line they write. SB 362 would allow them to give tax credit, if the figures were found to be wrong, so that the Department would not have to come up with cash it didn't have, if it was a large sum. Although it has not come up, yet, he said they would have no way of dealing with a big figure. SENATOR LINCOLN asked what right we had to keep someone's money, so they have to wait over a period to get it back. MR. WALSH said if it took longer than 1 year to pay back, he would come to the legislature for an appropriation. This measure would give them more flexibility to deal with an accidental overpayment to the state. SENATOR LINCOLN said she would feel better if it said "to be used in the next calendar year to the fullest extent possible and then have a monetary refund" rather than saying "in each succeeding year until no credit remains." MR. WALSH said that would be fine with him. SENATOR KELLY told Mr. Fink to put that language in the bill and asked if there were any objections to adopting CSSB 362(L&C). There were none and it was so ordered. Number 508 SENATOR KELLY adjourned the meeting at 2:50 p.m.