HB 246-OMNIBUS INSURANCE BILL  CHAIRMAN STEVENS announced HB 246 to be up for consideration. REPRESENTATIVE LISA MURKOWSKI, sponsor, said this bill was requested by the Division of Insurance. She said that it was much more comprehensive last year and that they had dealt with the Gramm-Leach-Blighly provisions. She said the changes in terms of policy matters are limited to two areas. The first is as they related to multiple employer welfare arrangements. Essentially, past employee welfare benefit plans have been regulated as an insurer. HB 246 sets up a less burdensome regulatory structure for them. The other area is issues that relate to the confidentiality of records. HB 246 provides for confidential information sharing arrangements. Confidentiality provisions are required for Alaska to remain accredited by the National Association of Insurance Commissioners. She said that the other provisions correct existing insurance laws. Essentially, the director went through the insurance provisions and did a lot of the cleanup, addressing things like fees for late payment of premium taxes, establishing minimum benefit levels for stop loss insurance contracts and for the first time, it provides for an annual fee to operate as a joint insurance arrangement. It also revises the assessment formula for the guarantee fund and has more corrections and clarifications. SENATOR TORGERSON asked if the joint insurance arrangements affect the AML-JAI's. He also had questions on the confidentiality on page 36 where, "the director may withhold the rating form from public inspection for as long as the director determines that it is necessary to protect the service corporation" is deleted and replaced with "confidential". He wanted to know why they did that. REPRESENTATIVE MURKOWSKI replied that Director Lohr was on line to answer the last question and pointed out that the joint insurance arrangements are discussed under section 48. MR. LOHR, Director, Division of Insurance, answered Senator Torgerson's last question saying that basically there are certain types of documents that are invariably declared confidential by the division including work papers from an examination by the division. The degree of confidentiality associated with a case by case determination is not enough to satisfy other states or the National Association. Basically, a state that shares the contents of an exam with other states is information that will not get out to the public or to third parties. This language is designed to do exactly that. SENATOR TORGERSON noted his concern was with section 58 on page 36. MS. KATIE CAMPBELL, Life and Health Actuary, said this particular provision, section 3, they put in a definition of what it actually means to be confidential. This provision was tightened up a little bit, because Blue Cross/Blue Shield is the only entity that has to file rates with the division and they're very concerned that they're the only ones who have to file, so all the details of the rating information are kept confidential for proprietary reasons. SENATOR TORGERSON asked what impacts this has on joint insurance arrangements. MS. CAMPBELL explained that although the division doesn't have regulatory authority over JAI's, they are often asked to be brought into that to do some work on it and there are costs associated with it. MR. LOHR added that basically JAI's are not in the business of insurance. The chapter that sets them up states that specifically. However, each of the JAI's from time to time accuses the other ones of intruding into what is the business of insurance, which would then become regulated by the division to the extent that they are going outside the boundaries of the joint insurance arrangement. The expenses are born by the fee payers to the division, since they are entirely a fee-supported agency. So the fees are passed on to the JAI's. SENATOR TORGERSON asked what other JAI's the state has besides AML. MR. LOHR replied that there is Alaska Public Entities Insurance. SENATOR TORGERSON said this would only affect them if they step outside of their statutory authority. MR. LOHR replied, "That's correct. It's only if they stray into the area of regulating activity outside of the bounds of the JAI organizing statute." SENATOR TORGERSON moved to pass SCSHB 246(L&C) from committee with individual recommendations and the $0 fiscal note. There were no objections and it was so ordered.