SB 357-INSURANCE  CHAIR CON BUNDE announced SB 357 to be up for consideration. SENATOR GARY STEVENS moved to adopt CSSB 357(L&C), version H. There were no objections and it was so ordered. MS. LINDA HALL, Director, Division of Insurance, Department of Community & Economic Development (DCED), said the CS has two changes. We have had two areas of concern expressed to us.... One of those is represented in sections 47 and 48, which are the changes in the bill. The original bill requires reinsurance agreements to be filed and approved by the director of the Division of Insurance. The feedback we got from, not only industry, but the Reinsurance Association, was that this was overly burdensome and could sometimes be impossible due to negotiations between insurers for their treating reinsurance agreements. The new language in the CS requires only that the signed agreements be filed within 30 days and it's my understanding that these changes meet the concerns of industry and they also meet our needs. Our needs were that we need to be sure that we are able to get copies of the signed reinsurance agreements and that had been a problem in the past. So, the only changes in the CS are to, instead of the division having to approve the reinsurance agreements, they would merely have to file a signed copy of the reinsurance agreements. The other area of concern that I would like to address...is in section 12 of the bill and I believe this was also part of a letter that was received by members of the committee. CHAIR BUNDE asked her if she was referencing the Timber Insurance Exchange letter. MS. HALL replied yes. She explained: The second half of that letter is addressed in 47 and 48 addressed in the CS. Section 12 has received some concern. The language in section 12 is taken directly from the NAIC [National Association of Insurance Commissioners] model regulations on reinsurance. What we've tried to do here is to provide assurances that the state of domicile is aware that the insurer writing the reinsurance is a life insurance company who is writing what is typically a property casualty line of workers' compensation. The financial statements that are filed by the two types of companies are very different and the NAIC has recognized a need for more extensive financial information and has provided a supplement to the annual financial statements that a life insurer would file if they choose to write workers' compensation. We want to be sure that the state of domicile, the primary regulator, has that information, has the ability to look at and approve that company writing those lines of business. We're not asking that they have a certificate of authority, but merely that they be given approval, which can be done as simply as a letter acknowledging that they have approval to write that line of business. That's really a financial oversight area. CHAIR BUNDE added that the letter expressed concern that section 12 would prevent Alaskan property and casualty insurers from using life insurance as a reinsurance. MS. HALL clarified that it wouldn't prevent them from using life insurers for reinsurance as long as the state where the reinsurer is primarily regulated, their state of domicile, knows they're doing it and has approved them doing it. They don't have to be licensed, so section 12 would not prevent them from being able to do it. CHAIR BUNDE asked her why it could be perceived as preventing them from doing it. MS. HALL replied that she didn't know. CHAIR BUNDE asked if she had any further comments on the bill. MS. HALL replied that she had spent quite a bit of time going through the bill at its first hearing and would answer questions. CHAIR BUNDE indicated there were no further questions. SENATOR RALPH SEEKINS moved to pass CSSB 357(L&C) from committee with individual recommendations and attached zero fiscal note. CHAIR BUNDE asked for a roll call vote. Senators Ralph Seekins, Hollis French, Bettye Davis, Gary Stevens and Chair Con Bunde voted yea; and CSSB 357(L&C) moved from committee.