ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 8, 2002                                                                                          
                           1:15 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
DIVISION OF  INSURANCE UPDATE: AVAILABILITY  & COST  OF INSURANCE                                                               
IN ALASKA                                                                                                                       
                                                                                                                                
TAPES                                                                                                                         
                                                                                                                                
02-44, SIDE A                                                                                                                   
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
REPRESENTATIVE   NORMAN  ROKEBERG,   Chair,   called  the   House                                                               
Judiciary Standing Committee meeting to  order at 1:15 p.m.  [For                                                               
minutes regarding HB  317, HB 295, and HB 316,  see the 1:45 p.m.                                                               
minutes for this date.]                                                                                                         
                                                                                                                                
PRESENT                                                                                                                       
                                                                                                                                
Committee members  present were Representatives  Rokeberg, James,                                                               
Coghill, Meyer, Berkowitz, and Kookesh.                                                                                         
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                        
                                                                                                                                
BOB  LOHR,   Director,  Division  of  Insurance,   Department  of                                                               
Community &  Economic Development, discussed the  report prepared                                                               
by the division regarding the  impact of tort reform on insurance                                                               
rates in Alaska.   He pointed out that it  was next to impossible                                                               
to accurately determine the impact of tort reform specifically.                                                                 
                                                                                                                                
REPRESENTATIVE JAMES  asked about  homeowner's insurance  and the                                                               
effects of tort reform.                                                                                                         
                                                                                                                                
MR. LOHR  responded that the  information in Alaska is  often not                                                               
credible due to the limited population and loss experience.                                                                     
                                                                                                                                
SARAH  McNAIR-GROVE, Actuary  P/C,  Central  Office, Division  of                                                               
Insurance,  Department  of   Community  &  Economic  Development,                                                               
talked further about the difficulty  of determining the impact of                                                               
tort reform  on insurance costs.   She also explained  the charts                                                               
that were provided in the report.                                                                                               
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked about  the number of  claims paid                                                               
as a result of verdict versus settlement.                                                                                       
                                                                                                                                
MR. LOHR  responded that  most claims are  settled out  of court.                                                               
Further he  mentioned that  defense attorneys  seem to  be bolder                                                               
since tort reform in terms of their willingness to go to trial.                                                                 
                                                                                                                                
CHAIR ROKEBERG  asked a question  regarding the  establishment of                                                               
rates and ISO recommended rate changes.                                                                                         
                                                                                                                                
MS.  McNAIR-GROVE  briefly  mentioned insurance  rate  trends  as                                                               
discussed in the report.                                                                                                        
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  asked  if   there  was  a  correlation                                                               
between the number  of insurance companies operating  in a market                                                               
and the costs in that market.                                                                                                   
                                                                                                                                
MR.  LOHR said  that  market  concentration may  be  a factor  in                                                               
pricing.   If  one company  controls  a large  percentage of  the                                                               
market, that company  has the capacity to make  prices instead of                                                               
take prices.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JAMES  commented  that  we have  no  interest  in                                                               
increasing large settlements.  She  also commented on her concern                                                               
that  assisted  living  centers have  great  difficulty  securing                                                               
insurance.                                                                                                                      
                                                                                                                                
MS. McNAIR-GROVE  added that her  concern had been felt  all over                                                               
the lower  48 as well  as in Alaska,  and that  it was in  fact a                                                               
significant problem.                                                                                                            
                                                                                                                                
ANNOUNCEMENTS                                                                                                                 
                                                                                                                                
No announcements were made.                                                                                                     
                                                                                                                                
COMMITTEE ACTION                                                                                                              
                                                                                                                                
The committee took no action.                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
CHAIR ROKEBERG called an at-ease at  1:43 p.m. for the purpose of                                                               
hearing legislation.  [For minutes  regarding HB 317, HB 295, and                                                               
HB 316, see the 1:45 p.m. minutes for this date.]                                                                               
                                                                                                                                
                                                                                                                                
NOTE:   The meeting was  recorded and handwritten log  notes were                                                               
taken.  A  copy of the tape(s)  and log notes may  be obtained by                                                               
contacting the  House Records  Office at  State Capitol,  Room 3,                                                               
Juneau,  Alaska   99801 (mailing  address),  (907) 465-2214,  and                                                               
after  adjournment of  the second  session  of the  Twenty-Second                                                               
Alaska  State Legislature  this  information may  be obtained  by                                                               
contacting the Legislative Reference Library at (907) 465-3808.