SB 214-INSURANCE ADJUSTER LICENSING  3:34:12 PM CHAIR DUNLEAVY announced the consideration of SB 214. "An Act relating to insurance adjuster licensing." This was the first hearing. 3:34:28 PM STEVE RICCI, Aide, Senate Labor & Commerce Committee, introduced SB 214 on behalf of the committee. He spoke to the following sponsor statement: The product that is at the heart of this bill is an insurance program that protects a consumer's investment in their wireless communications device by insuring it against loss, theft, damage, and internal malfunction of the device. The bill provides for a claims adjusting structure that efficiently meets the needs of consumers of this product and maintains the Division of Insurance's proper regulatory authority. As wireless devices have become an integral part of our everyday lives their functionalities have expanded exponentially and with these developments the cost of these devices has also risen. Portable electronics insurance not only ensures that a consumer's investment in such a device is protected, but also ensures that a consumer receives quick service by getting a pre-programmed phone or other portable electronic device in the consumer's hands often times the very next day after a claim has been made. The bill creates a regulatory framework tailored to portable electronics insurance adjusting in Alaska. The approach set forth in this important piece of legislation ensures a balanced regulatory structure that would avoid the need to license every individual who takes claims calls from Alaska consumers while insisting on a supervisory structure of insurance producers or adjusters to ensure proper oversight. Because a consumer's device is critical to their everyday life, it is critical that portable electronics insurance claims be handled efficiently and swiftly. Recognizing this, the portable electronics insurance industry utilizes automated claims adjudication systems to ensure expedient resolution to claims to ensure a replacement phone reaches the consumer as quickly as possible. This legislation authorizes the use of such a system while also ensuring that it is developed to comply with Alaska law governing claims handling. The bill also amends state law to further clarify how a nonresident adjuster is licensed in Alaska by utilizing a designated home state, a concept embraced by the National Association of Insurance Commissioners. This model proposed in this legislation is consistent with the national trend to the regulation of this product as it creates an efficient and fair licensing framework, and gives regulators the authority they need to effectively oversee these activities. Legislation similar to this has been enacted into law in twenty-eight states including Texas, Florida, Hawaii, Washington, Oregon, and Michigan. In summary, this is a good bill not only for insurers offering portable electronics insurance but also for the consumers of Alaska. The bill creates a regulatory structure suitable for this product which allows the Division of Insurance regulatory oversight to ensure that claims made by Alaska consumers are handled in the right way. MR. RICCI advised that a committee substitute was forthcoming and noted the individuals who were available to answer questions. 3:36:34 PM PAUL FASSBENDER, Director, Public Policy and Economic Development, Asurion, Nashville, Tennessee, stated that his company provides insurance for portable electronics, primarily phones. He explained that SB 214 adds to legislation passed last year that established standards for adjusting portable electronic insurance claims. It will remove the gray areas in these claim adjustments and provide stability for operating in a regulated environment. 3:38:00 PM STEPHEN MCDANIEL, Outside Regulatory Counsel, Asurion, offered to answer questions. CHAIR DUNLEAVY opened public testimony. 3:38:46 PM SENATOR ELLIS asked the subject of the new language in the forthcoming CS that Mr. Ricci mentioned. MR. RICCI explained that the Division of Insurance noticed the need to make technical changes related to the home state where adjusters are registered and whether or not the company has a physical presence in that state. He deferred further explanation to the Division of Insurance. SENATOR ELLIS asked if the industry or the Division of Insurance brought this up. MR. RICCI replied the industry brought it up and Senator Dunleavy's office has been working with the Division of Insurance on the language. MR. FASSBENDER added that the issue is a consequence of a virtual marketplace. Insurance adjusters supervise clerical staffs that take claims nationwide and they apply for nonresident adjuster licenses in various states. The technical issue relates to whether the adjuster needs to have a brick and mortar facility or be a resident of a state in order to claim it as a home state. When states drafted their insurance laws they didn't necessarily take into account Asurion's business model. CHAIR DUNLEAVY asked Mr. Hester to supplement the record regarding the reason for the technical language change in the anticipated committee substitute. 3:41:14 PM MARTY HESTER, Deputy Director, Division of Insurance, Department of Commerce, Community and Economic Development (DCCED), Juneau, Alaska, explained that Alaska is one of the states that requires a license for this particular type of insurance and a physical storefront. The language in the forthcoming committee substitute would allow a company doing virtual claims to operate from the state that they're currently licensed out of. 3:43:05 PM CHAIR DUNLEAVY announced he would keep public testimony open and hold SB 214 in committee for further consideration.