OMNIBUS INSURANCE BILL

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CS FOR HOUSE BILL NO. 148(L&C)

IN THE LEGISLATURE OF THE STATE OF ALASKA

THIRTY-FOURTH LEGISLATURE - FIRST SESSION

BY THE HOUSE LABOR AND COMMERCE COMMITTEE

Offered: 5/16/25
Referred: Finance

Sponsor(s): HOUSE LABOR AND COMMERCE COMMITTEE
A BILL

FOR AN ACT ENTITLED

"An Act relating to insurance; and providing for an effective date." 1
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 2
* Section 1. AS 12.10.020 is amended by adding a new subsection to read: 3
(d) Even if the general time limitation has expired, a prosecu tion for any 4
offense related to life insurance may be commenced within one y ear after discovery of 5
the offense by an aggrieved party or by a person who has legal capacity to represent an 6
aggrieved party or a legal duty to report the offense and who i s not a party to the 7
offense, but in no case shall this provision extend the period of limitation otherwise 8
applicable by more than 20 years. 9
* Sec. 2. AS 21.07.030(a) is amended to read: 10
(a) If a health care insurer offers a health care insurance po licy that provides 11
for coverage of medical care services only if the services are furnished through a 12
network of health care providers t hat have entered into a contr act with the health care 13
insurer, the health care insurer shall also offer a non-network option to covered 14
persons at initial enrollment, as provided under (c) of this se ction. The non-network 15
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option may require that a covered person pay a higher deductibl e, copayment, or 1
premium for the plan if the higher deductible, copayment, or pr emium results from 2
increased costs caused by the use of a non-network provider. Th is subsection does not 3
apply to 4
(1) a covered person who is offered non-network coverage through 5
another health care insurance policy or through another health care insurer; or 6
(2) a health maintenance organization licensed under AS 21.86. 7
* Sec. 3. AS 21.07.030 is amended by adding a new subsection to read: 8
(i) A health care insurer that offers a health care insurance policy that provides 9
different levels of coverage for health care services based on network status and 10
performs utilization review shall include details on a prior au thorization request form 11
on how a health care provider or c overed person may request a b enefit-level 12
exception. If the health care insurer approves the prior author ization, the insurer shall 13
detail whether the claim will be processed as a network or non- network claim. If the 14
benefit will be paid based on a non-network reimbursement level and a benefit-level 15
exception requires an application process separate from the pri or authorization 16
process, the prior authorization must include instructions for requesting the benefit-17
level exception. In this subsection, a "benefit-level exception " means an exception to 18
medical care coverage where a health care insurer applies netwo rk health care benefit 19
levels to services received from an out-of-network health care provider or facility. 20
* Sec. 4. AS 21.09.200(g) is amended to read: 21
(g) An insurer shall file with the director or the director's designee an annual 22
audited financial re port for the previous year by June 1 of eac h year [UNLESS, 23
UNDER A REGULATION ADOPTED BY THE DIRECTOR, THE DIRECTOR 24
GRANTS AN EXEMPTION BASED ON A FINDING THAT FILING AN 25
ANNUAL AUDITED FINANCIAL REPORT WOULD CONSTITUTE A 26
FINANCIAL OR ORGANIZATIONAL HARDSHIP ON THE INSURER. THE 27
FILING DATE FOR THE ANNUAL AUDITED FINANCIAL REPORT MAY BE 28
EXTENDED BY THE DIRECTOR UPON SHOWING THAT THE STANDARDS 29
ESTABLISHED BY REGULATION HAVE BEEN MET]. If the director gives the 30
insurer 90 days' advance notice, and for good cause, the direct o r m a y r e q u i r e a n 31
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insurer to file an audited financial report earlier than June 1 of each year. The annual 1
audited financial report must be prepared by a qualified indepe ndent certified public 2
accountant. An insurer shall notify the director of the certifi ed public accountant 3
engaged to conduct the audit and issue the annual audited financial report. 4
* Sec. 5. AS 21.09.200 is amended by adding a new subsection to read: 5
(m) An insurer may apply to the director for an exemption from compliance 6
with a requirement of this secti on if compliance would cause th e insurer to suffer a 7
financial or organizational hard ship. The director may, in the director's discretion, 8
approve an exemption. If the director denies an insurer's application for exemption, the 9
insurer may, within 15 days after the date of the denial, submi t a request in writing to 10
the director for a hearing as provided under AS 21.06.180 - 21.06.240. 11
* Sec. 6. AS 21.09.210(b) is amended to read: 12
(b) Each insurer, and each formerly authorized insurer with re spect to 13
premiums written while an authorized insurer in this state, sha ll pay a tax on the total 14
direct premium written during the year ending on the preceding December 31 and paid 15
for the insurance of property or risks resident or located in t he state [, OTHER THAN 16
WET MARINE AND TRANSPORTATION INSURANCE,] after deducting from the 17
total direct premium income the applicable cancellations, retur ned premiums, the 18
unabsorbed portion of any depos it premium, all policy dividends , unabsorbed 19
premiums refunded to policyholders, refunds, savings, savings c oupons, and other 20
similar returns paid or credited to policyholders with respect to their policies. 21
Deductions may not be made of ca sh surrender value of policies. Considerations 22
received on annuity contracts are not included in the direct pr emium income and are 23
not subject to tax. The tax shall be paid to the director at le ast annually but not more 24
often than once each quarter on the dates specified by the dire ctor. The method of 25
payment must be by the electr onic or other payment method speci fied by the director. 26
Except as provided under (m) of this section, the tax is computed at the rate of 27
(1) for domestic and foreign insurers, except hospital and med ical 28
service corporations, 2.7 percent; 29
(2) for hospital and medical ser vice corporations, six percent of their 30
gross premiums less claims paid; 31
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(3) for wet marine and transportation insurance, three-quarters of 1
one percent. 2
* Sec. 7. AS 21.09.242(a) is amended to read: 3
(a) Each [AN] insurer and [, INCLUDING A] pharmacy benefits manager 4
shall, with respect to a medical assistance program [PROGRAMS] under AS 47.07, 5
[SHALL] cooperate with the Department of Health to 6
(1) provide, with respect to an individual who is eligible for o r i s 7
provided medical assistance under AS 47.07, at [ON] the request of the department, 8
information to determine during what period the individual or t he individual's spouse 9
or dependents may be or may have been covered by the insurer an d the nature of the 10
coverage that is or was provided by the insurer, including the name and address of the 11
insurer and the identifying number of the health care insurance plan; 12
(2) accept the department's right of recovery and the assignme nt to the 13
department of any right of an i ndividual or other entity to pay ment from the party for 14
an item or service for which payment has been made under AS 47.07; 15
(3) respond within 60 days to any inquiry by the department regarding 16
a claim for payment for any health care item or service that is submitted not later than 17
three years after the date of the provision of the health care item or service; and 18
(4) agree not to deny a claim submitted by the department solely on the 19
basis of the date of submission of the claim, the type or forma t of the claim form, a 20
failure to obtain prior authorization, or a failure to present proper documentation at 21
the point-of-sale that is the basis of the claim if 22
(A) the claim is submitted by the department within the three-23
year period beginning on the date on which the item or service was furnished; 24
and 25
(B) any action by the department to enforce its rights with 26
respect to the claim is commenced within six years after the de partment's 27
submission of the claim. 28
* Sec. 8. AS 21.12.020(h) is amended to read: 29
(h) The director shall consider the list of reciprocal jurisdi ctions published 30
through the National Association of Insurance Commissioners com mittee process in 31
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determining a reciprocal jurisdi ction and has the discretion to defer to the list. The 1
director may approve a jurisdiction not on the list in accordan ce with criteria 2
developed under regulations adopted by the director. The direct o r m a y r e m o v e a 3
jurisdiction from the list of reciprocal jurisdictions upon det ermination that the 4
jurisdiction no longer meets the requirements of a reciprocal jurisdiction in accordance 5
with a process set out in regulation by the director. Upon remo val of a reciprocal 6
jurisdiction from the list, credit for reinsurance ceded to an assuming insurer that has a 7
home office or is domiciled in that jurisdiction shall be allow ed if otherwise allowed 8
under this section. The director shall timely create and publis h a list of assuming 9
insurers that have satisfied the conditions set out in this sub section and to which 10
cessions shall be granted credit in accordance with (a) of this section. The director 11
may add an assuming insurer to a list if a National Association o f I n s u r a n c e 12
Commissioners accredited jurisdiction has added the assuming in surer to a list of 13
assuming insurers or, if upon in itial eligibility, the assuming insurer submits the 14
information to the director as required under (a)(6)(D) of this section and complies 15
with any additional requirements the director may impose by regulation. If the director 16
determines that an assuming insurer no longer meets one or more of the requirements 17
of (a)(6) of this section, the director may revoke or suspend t he eligibility of the 18
assuming insurer under (a)(6) of t his section in accordance wit h procedures set out in 19
regulation. While an assuming insurer's eligibility is suspende d, a reinsurance 20
agreement issued, amended, or renewed after the effective date of the suspension does 21
not qualify for credit except to the extent that the assuming i nsurer's obligations under 22
the contract are secured in accordance with (c) of this section . If an assuming insurer's 23
eligibility is revoked, a credit for reinsurance may not be gra n te d a f te r th e e f fe c tiv e 24
date of the revocation with respect to any reinsurance agreemen t entered into by the 25
assuming insurer, including a reinsurance agreement entered int o before the date of 26
revocation, except to the extent that the assuming insurer's ob ligations under the 27
contract are secured in a form a cceptable to the director and c onsistent with (c) of this 28
section. Upon entry of an orde r of rehabilitation, liquidation, or conservation against 29
the ceding insurer, the supervising court may [SHALL ] require an assuming insurer 30
under (a)(6) of this section to post 100 percent security for t he benefit of the ceding 31
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insurer or its estate. Nothing in this subsection shall limit o r in any way alter the 1
capacity of parties to a reinsurance agreement to agree on requ irements for security or 2
other terms in that reinsurance agreement consistent with this section. Credit under 3
(a)(6) of this section may be taken only for reinsurance agreem ents entered into, 4
renewed, or amended on or after the date the director has determined that the assuming 5
insurer is eligible for credit, and may not be taken for reinsu rance of losses incurred or 6
reserves reported before that date. Credit under (a)(6) of this section may not apply to 7
reinsurance agreements entered into, to losses incurred, or to reserves posted before 8
application under (a)(6) of this section. 9
* Sec. 9. AS 21.12.020(i)(2) is amended to read: 10
(2) "reciprocal jurisdiction" means a jurisdiction that 11
(A) is not a United States jurisdiction that is subject to an in- 12
force covered agreement with the United States, each within its legal authority, 13
or in the case of a covered agreement between the United States and the 14
European Union, is a member stat e of the European Union; in thi s 15
subparagraph, "covered agreement" is an agreement entered into under 31 16
U.S.C. 313 - 314 (Dodd-Frank Wall Street Reform and Consumer Pr otection 17
Act) that is currently in effect or in a period of provisional application and 18
addresses the elimination, under specified conditions, of colla teral 19
requirements as a condition for entering into any reinsurance a greement with a 20
ceding insurer domiciled in this state or for allowing the cedi ng insurer to 21
recognize credit for reinsurance; 22
(B) is a United States jurisdic tion that meets the requirement s 23
for accreditation under the National Association of Insurance C ommissioners 24
financial standards and accreditation program; or 25
(C) is a qualified jurisdiction, as determined by the director 26
under (a)(5)(C) of this section, that is not otherwise described in (A) and (B) of 27
this paragraph and that meets certain additional requirements, consistent with 28
the terms and conditions of in-force covered agreements, as spe cified by the 29
director in regulation; 30
* Sec. 10. AS 21.18.112(e) is amended to read: 31
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(e) An insurer shall establish reserves using a principle-base d valuation that 1
meets the following conditions for policies or contracts as spe cified in the valuation 2
manual: 3
(1) quantify the benefits, guarantees, and funding associated with the 4
contracts and their risks at a level of conservatism that refle cts conditions that include 5
unfavorable events that have a reasonable probability of occurr ing during the lifetime 6
of the contracts and, for policies or contracts with significan t tail risk, that reflect 7
conditions appropriately adverse to quantify the tail risk; 8
(2) incorporate assumptions, ri sk analysis methods, and financ ial 9
models and management techniques that are consistent with, but not necessarily 10
identical to, those used in the insurer's overall risk assessme nt process while 11
recognizing potential differences in financial reporting struct u r e s a n d p r e s c r i b e d 12
assumptions or methods; 13
(3) incorporate assumptions that are derived in one of the fol lowing 14
manners: 15
(A) the assumptions are prescribed in the valuation manual; 16
(B) for assumptions that are not prescribed, the assumptions 17
shall be established using the insurer's available experience, to the extent it is 18
relevant and statistically credibl e; to the extent that data is not available, 19
relevant, or statistically credi ble, the assumptions shall be e stablished using 20
other relevant or statistically credible experience; 21
(4) provide margins for uncertainty, including adverse deviati on and 22
estimation error, so that the greater the uncertainty the large r the margin and resulting 23
reserve; 24
(5) for an insurer using a prin ciple-based valuation for one o r more 25
policies or contracts subject to this subsection as specified in the valuation manual, 26
(A) establish procedures for corporate governance and 27
oversight of the actuarial valua tion function consistent with t hose described in 28
the valuation manual and a process for appropri ate waiver or modification 29
of the established procedures; 30
(B) provide to the director an annual certification of the 31
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effectiveness of the internal c ontrols with respect to the prin ciple-based 1
valuation; the controls shall be designed to ensure that all ma terial risks 2
inherent in the liabilities and associated assets subject to th e valuation are 3
included in the valuation and that valuations are made in accor dance with the 4
valuation manual; the certification shall be based on the contr ols in place as of 5
the end of the preceding calendar year; 6
(C) develop and file with the director upon request a principl e-7
based valuation report that complies with standards prescribed in the valuation 8
manual; 9
(6) a principle-based valuation may include a prescribed formu laic 10
reserve component. 11
* Sec. 11. AS 21.18.900(12) is amended to read: 12
(12) "policyholder behavior" means a lapse, withdrawal, transfer, 13
deposit, premium payment, loan, annuitization, or election of a policy benefit by 14
the terms of a policy or contract, or another [AN] action of a policyholder, contract 15
holder, or another person with the right to elect options ; "policyholder behavior" 16
does not include events of mortality or morbidity that result i n a benefit 17
prescribed by the terms of a policy or contract; 18
* Sec. 12. AS 21.27.020(c) is amended to read: 19
(c) To qualify for issuance or renewal of a license as a firm insurance 20
producer, a firm managing general agent, a firm reinsurance int ermediary broker, a 21
firm reinsurance intermediary manager, a firm surplus lines bro ker, or a firm 22
independent adjuster, an applicant or licensee shall 23
(1) comply with (b)(4) and (5) of this section; 24
(2) maintain a lawfully established place of business in this state, 25
except when licensed as a nonresident under AS 21.27.270; 26
(3) designate one or more compliance officers for the firm, ex cept that 27
not more than one compliance officer may be designated for each line [ CL A S S ] o f 28
authority under AS 21.27.115; 29
(4) provide to the director documents necessary to verify the 30
information contained in or made in connection with the application; and 31
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(5) notify the director, in writing, not later than 30 days af ter a change 1
in the firm's compliance officer. 2
* Sec. 13. AS 21.27.020(f) is amended to read: 3
(f) The director may adopt regul ations establishing additional education or 4
experience requirements for applicants, licensees, and continui ng education providers 5
under this chapter upon due consid eration of the availability a nd accessibility of 6
education and training opportun ities in rural areas of the stat e. Regulations adopted 7
under this subsection are subject to the following provisions: 8
(1) additional educational or experience requirements may not apply to 9
a licensee who has been licensed by the division of insurance before January 1, 1980; 10
(2) a licensee shall complete at least 24 credit hours of appr oved 11
continuing education courses during each two-year license period; 12
(3) if a licensee has accumulated more credit hours than required under 13
(2) of this subsection by the end of the license period, a maxi mum of eight hours may 14
be carried over to meet the requirements of (2) of this subsect ion in the next license 15
period; 16
( 4 ) a p r o g r a m o r s e m i n a r m a y n o t b e a p p r o v e d a s a n a c c e p t a b l e 17
continuing education program unl ess it is a formal program of l earning that 18
contributes to the professional competence of the licensee; ind ividual study programs 19
or correspondence courses may be used to fulfill continuing edu cation requirements if 20
approved by the director; 21
(5) a nonresident licensee is exempt from the requirements of this 22
subsection, except for a nonresident independent adjuster who designates this 23
state as the adjuster's home state. 24
* Sec. 14. AS 21.27.025(a) is amended to read: 25
(a) A licensee shall notify the director in writing not later than 30 days after a 26
change in residence, place of business, legal name, fictitious name or alias, mailing 27
address, electronic mailing addr ess, telephone number, or compl iance officer. A 28
licensee shall report to the director in writing any administra tive action taken against 29
the licensee by a governmental agency [OF ANOTHER STATE, BY A 30
GOVERNMENTAL AGENCY OF ANOTHER JURISDICTION,] or by a financial 31
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industry regulatory authority san ction or arbitration proceedin g not later than 30 days 1
after the final disposition of the action. A licensee shall submit to the director the final 2
order and other relevant legal documents in the action. A licen see shall report to the 3
director in writing any criminal prosecution of the licensee in this or another st ate or 4
jurisdiction not later than 30 days after the date of filing of the criminal complaint, 5
indictment, information, or citation in the prosecution. The licensee shall submit to the 6
director a copy of the criminal complaint, calendaring order, a nd other relevant legal 7
documents in the prosecution. 8
* Sec. 15. AS 21.27.115 is amended to read: 9
Sec. 21.27.115. Lines of authority. If a person has met the applicable 10
requirements of AS 21.27.020 and 21.27.270, the director shall issue a license for one 11
or more of the following lines of authority: 12
(1) life insurance coverage on natural persons; in this paragr aph, "life 13
insurance coverage" 14
(A) includes benefits of endowment and annuities; and 15
( B ) m a y i n c l u d e b e n e f i t s i n t h e e v e n t o f d e a t h o r 16
dismemberment by accident and benefits for disability income; 17
(2) accidental and health or sickness insurance coverage for sickness, 18
bodily injury, or accidental d eath; in this paragraph, " accidental and health or 19
sickness insurance coverage" includes health insurance, as defined in 20
AS 21.12.050(a), and may include benefits for disability income; 21
(3) property insurance coverage for the direct or consequentia l loss for 22
damage to property of every kind; 23
(4) casualty insurance coverage against legal liability, inclu ding that 24
for death, injury, or disability or damage to real or personal property; in this 25
paragraph, "casualty insurance" includes surety insurance as defined in AS 21.12.080; 26
(5) variable life and variable annuity products insurance coverage; 27
(6) personal lines property and casualty insurance coverage so ld to 28
individuals and families for primarily noncommercial purposes; 29
(7) limited lines credit insurance; 30
(8) [REPEALED 31
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(9) REPEALED 1
(10)] any insurance for which a limited lines license may be i ssued 2
under AS 21.27.150. 3
* Sec. 16. AS 21.27.270(b) is amended to read: 4
(b) Unless the director denies or refuses to renew a license u nder 5
AS 21.27.410, the director shall issue a nonresident producer, limited lines, surplus 6
lines broker, managing general agent, reinsurance intermediary broker, independent 7
adjuster, or reinsurance intermediary manager license to a person who is not a 8
resident of this state if 9
(1) the person is currently licensed and is in good standing i n the 10
person's home state; the director may verify the person's licen sing status through the 11
producer licensing database records maintained by the National Association of 12
Insurance Commissioners or its affiliates or subsidiaries; 13
(2) the person has paid the fees required under AS 21.06.250 a nd has 14
submitted to the director 15
(A) the license application the person submitted to the person 's 16
home state; or 17
(B) if the person is not a firm, a completed uniform application 18
or, if a firm, the uniform business entity application; and 19
(3) the person's home state awards nonresident producer, limit ed lines, 20
surplus lines broker, managing general agent, reinsurance intermediary broker, 21
independent adjuster, and reinsurance intermediary manager licenses to residents of 22
this state on the same basis as does this state. 23
* Sec. 17. AS 21.27.270(h) is amended to read: 24
(h) A nonresident applicant fo r an independent adjuster licens e who [ONLY 25
ADJUSTS CLAIMS RELATED TO PORTABLE ELECTRONICS INSURANCE 26
UNDER AS 21.36.515 AND WHO] is licensed as an independent adjus ter and in 27
good standing in the applicant's home state does not have to me et the requirements of 28
AS 21.27.060 or 21.27.830 to be licensed under this section. [A RESIDENT OF 29
CANADA MAY NOT BE LICENSED AS AN INDEPENDENT ADJUSTER 30
UNDER THIS SECTION UNLESS THE APPLICANT HAS OBTAINED A 31
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RESIDENT INDEPENDENT ADJUSTER LICENSE IN ANOTHER STATE OR 1
DECLARED ANOTHER STATE THE APPLICANT'S HOME STATE AND 2
OBTAINED AN INDEPENDENT ADJUSTER LICENSE IN THAT STATE.] 3
* Sec. 18. AS 21.27.270(i) is amended to read: 4
(i) If a nonresident independent [PORTABLE ELECTRONICS] adjust er 5
applicant's home state does not license independent adjusters, the independent 6
[PORTABLE ELECTRONICS] adjuster applicant may designate the app licant's home 7
state as any state in which the applicant is licensed in good standing. 8
* Sec. 19. AS 21.27.270 is amended by adding a new subsection to read: 9
(j) A nonresident applicant fo r issuance or renewal of an inde pendent adjuster 10
license or firm independent adjuster license who designates this state as the applicant's 11
home state must qualify for licensure under AS 21.27.020 and ap ply for the issuance 12
or renewal of the license in accordance with AS 21.27.040. 13
* Sec. 20. AS 21.27.380(d) is amended to read: 14
(d) The director shall send [MAIL] a notice of license expiration stating the 15
reason for the expiration to a licensee at the licensee's most current electronic mail 16
address or mailing [LAST] address on record with the director. [THE DIRECTOR 17
SHALL OBTAIN A CERTIFICATE OF MAILING FROM THE UNITED STATES 18
POSTAL SERVICE.] 19
* Sec. 21. AS 21.27.630(d) is amended to read: 20
(d) A third-party administrator may not use a fictitious name or alias unless 21
the third-party administrator's [LICENSEE'S] legal name and fictitious name or 22
alias are on the registration. 23
* Sec. 22. AS 21.27.640(b) is amended to read: 24
(b) To qualify for issuance or renewal of a registration, an a pplicant or 25
registrant shall comply with this title, regulations adopted under AS 21.06.090, and 26
(1) be a trustworthy person; 27
(2) have active working experience in administrative functions that, in 28
the director's opinion, exhibits the ability to competently per form the administrative 29
functions of a third-party administrator; 30
(3) not have committed an act that is a cause for denial, nonr enewal, 31
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suspension, or revocation of a registration or license in this state or another 1
jurisdiction; 2
(4) maintain a lawfully est ablished place of business [AS 3
DESCRIBED IN AS 21.27.330] in this state, unless licensed as a nonresident under 4
AS 21.27.270; 5
(5) disclose to the director all owners, officers, directors, or partners, if 6
any; 7
(6) designate a compliance officer for the firm; 8
(7) provide in or with its application 9
(A) all basic organizational documents of the third-party 10
administrator, including article s of incorporation, articles of association, 11
partnership agreement, trade name certificate, trust agreement, shareholder 12
agreement, and other applicable documents and all endorsements to the 13
required documents; 14
(B) the bylaws, rules, regulations, or similar documents 15
regulating the internal affairs of the administrator; 16
(C) the names, mailing addresses, physical addresses, official 17
positions, and professional qualif ications of persons who are r esponsible for 18
the conduct of affairs of the third-party administrator, includ ing the members 19
of the board of directors, board of trustees, executive committ ee, or other 20
governing board or committee; the principal officers in the cas e of a 21
corporation, or the partners or m embers in the case of a partne rship, limited 22
liability company, limited liability partnership, or associatio n; shareholders 23
holding directly or indirectly 10 percent or more of the voting securities of the 24
third-party administrator; and an y other person who exercises c ontrol or 25
influence over the affairs of the third-party administrator; 26
(D) certified financial statements for the preceding two years , 27
or for each year and partial year that the applicant has been i n business if less 28
than two years, prepared by an independent certified public acc ountant 29
establishing that the applicant is solvent, that the applicant' s system of 30
accounting, internal control, and procedure is operating effect ively to provide 31
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reasonable assurance that money is promptly accounted for and p aid to the 1
person entitled to the money, and any other information that th e director may 2
require to review the current financial condition of the applicant; and 3
(E) a statement describing the business plan, including 4
information on staffing levels and activities proposed in this state and in other 5
jurisdictions and providing details establishing the third-part y administrator's 6
capability for providing a sufficient number of experienced and qualified 7
personnel in the areas of claims handling, underwriting, and record keeping; 8
(8) provide to the director documents necessary to verify the 9
statements contained in or in connection with the application; and 10
(9) notify the director, in writing, not later than 30 days after 11
(A) a change in compliance officer, residence, place of 12
business, mailing address, or phone number; 13
(B) the final disposition of an administrative action taken 14
against the registrant by a gove rnmental agency [OF ANOTHER STA TE, BY 15
A GOVERNMENTAL AGENCY OF ANOTHER JURISDICTION,] or by a 16
financial industry regulatory a uthority sanction or arbitration p r o c e e d i n g ; i n 17
addition, a registrant shall submit to the director documents relating to the final 18
disposition on, including the final order and other relevant le gal documents in, 19
the action; or 20
(C) a conviction of a misdemeanor or felony of the third-party 21
administrator, its officers, directors, partners, owners, or employees. 22
* Sec. 23. AS 21.27.990(8) is amended to read: 23
(8) "compliance officer" means a licensee designated for a specific line 24
[AND CLASS] of authority under AS 21.27.115 [ T H I S C H A P T E R ] w h o i s 25
responsible for a firm's complia nce with the insurance statutes and regulations of this 26
state; 27
* Sec. 24. AS 21.27.990(12) is amended to read: 28
(12) "home state," with respect to 29
(A) an insurance producer, means the District of Columbia or a 30
state or territory of the United States in which an insurance p roducer maintains 31
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the producer's principal place of residence or principal place of business and is 1
licensed to act as an insurance producer; 2
(B) an independent [PORTABLE ELECTRONICS] adjuster, 3
means the District of Columbia or a state or territory of the U nited States in 4
which an independent [PORTABLE ELE CTRONICS] adjuster maintains the 5
independent [PORTABLE ELECTRONICS ] adjuster's principal place o f 6
residence or principal place of business and is licensed to act as an independent 7
adjuster or, if the state or territory of the United States of the independent 8
[PORTABLE ELECTRONICS] adjuster's principal place of residence or 9
principal place of business doe s not license independent adjust ers, the state or 10
territory of the United States d esignated by the independent [P ORTABLE 11
ELECTRONICS] adjuster where the independent [PORTABLE 12
ELECTRONICS] adjuster is licensed; 13
* Sec. 25. AS 21.27.990(13) is amended to read: 14
(13) "independent [PORTABLE ELECTRONICS] adjuster" means a 15
person [AN INDEPENDENT ADJUSTER] who investigates, negotiates, or settles 16
property, casualty, or workers' compensation claims for insurer s or self-insurers 17
[COLLECTS, FURNISHES, OR ENTERS CLAIM INFORMATION FOR 18
PORTABLE ELECTRONICS INSURANCE ISSUED UNDER AS 21.36.515]; 19
* Sec. 26. AS 21.27.990(20) is amended to read: 20
(20) "limited lines" means those lines of insurance defined in 21
AS 21.27.150 [OR ANY OTHER LINE OF INSURANCE THAT THE DIRECTOR 22
DESIGNATES BY ORDER AS A LIMITED LINE]; 23
* Sec. 27. AS 21.33.055(d) is amended to read: 24
(d) On default of a nonadmitted insurer in the payment of the tax, the insured 25
shall pay the tax within 30 days after written notice from the director of the default by 26
the nonadmitted insurer. For wet marine and transportation insurance, a surplus 27
lines broker may pay the tax on behalf of the nonadmitted insurer or the insured. 28
If the tax prescribed by this section is not paid [BY THE NONAD MITTED 29
INSURER] within the time stated [OR BY THE INSURED WITHIN THE T IME 30
STATED] after notice of default from the director [BY THE NONADMITTED 31
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INSURER], the tax may be increased by 1
(1) a late payment fee of $1,000 or 10 percent of the tax due, 2
whichever is greater; 3
(2) interest at the rate of one percent a month or part of a m onth from 4
the date the payment was originally due to the date paid; and 5
(3) a penalty not to exceed $100 a day or 25 percent of the ta x due, 6
whichever is greater, from the date the payment was due to the date paid. 7
* Sec. 28. AS 21.34.035 is amended to read: 8
Sec. 21.34.035. Health care insuran ce and disability insurance. (a) Except 9
for a multiple employer welfare arrangement, health care insura nce and disability 10
insurance may be placed in and written by a nonadmitted insurer if 11
(1) the director finds it is in the best interest of the publi c and issues an 12
order to that effect; and 13
(2) the insurance is in compliance with this chapter. 14
(b) The rates and rating methods for health care insurance and disability 15
insurance placed and written under this section are subject to AS 21.51. 405 and 16
AS 21.54.015. The surplus lines broker shall make the filings r equired under 17
AS 21.51.405 and AS 21.54.015 and maintain the records and acco unts as required 18
under AS 21.87.230. 19
(c) Health care insurance and disability insurance may not be procured under 20
this chapter 21
(1) for the purpose of obtaining a lower premium rate than acc eptable 22
by an authorized insurer; or 23
(2) for obtaining a competitive advantage. 24
(d) Health care insurance and disability insurance [INSURANCE] placed 25
in or written by a nonadmitted in surer and the activities of th e surplus lines broker 26
relating to that transaction are subject to this title. 27
(e) In this section, 28
(1) "disability insurance" means disability insurance as defin ed in 29
AS 21.12.052 that is excess insurance or for individuals unable to obtain disability 30
insurance with any admitted insurer; 31
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(2) "health care insurance" has the meaning given in AS 21.12.050(b). 1
* Sec. 29. AS 21.34.040(d) is amended to read: 2
(d) An insurer, including a nonadmitted insurer, not domiciled in a state 3
or territory of the United States and not listed on the Quarter ly Listing of Alien 4
Insurers maintained by the National Association of Insurance Co mmissioners 5
International Insurers Department [A NONADMITTED INSURER] may be 6
eligible to provide coverage in this state if it files with the director or the director's 7
designee a copy of its current a nnual financial statement that has been certified by the 8
insurer. The financial stateme nt must be filed with and approve d by the regulatory 9
authority in the domicile of the [NONADMITTED] insurer [,] or c ertified by an 10
accounting or auditing firm licensed in the jurisdiction of the insurer's domicile. The 11
[A FOREIGN] insurer shall file [PROVIDE] the approved or certified financial 12
statement with the director or director's designee not more than nine [SIX] months 13
after the close of the reporting period. [AN ALIEN INSURER SHAL L PROVIDE 14
THE APPROVED OR CERTIFIED FINANCIAL STATEMENT NOT MORE THAN 15
N I N E M O N T H S A F T E R T H E C L O S E O F T H E R E P O R T I N G P E R I O D . I N T H E 16
CASE OF AN INSURANCE EXCHANGE, THE STATEMENT MAY BE AN 17
AGGREGATE COMBINED STATEMENT OF ALL UNDERWRITING 18
SYNDICATES OPERATING DURING THE PERIOD REPORTED UPON.] 19
* Sec. 30. AS 21.34.170(a) is amended to read: 20
(a) A surplus lines broker shall file with the director, on fo rms prescribed by 21
the director, a report of all surplus lines insurance, by type of insurance as required to 22
be reported in the annual statement that must be filed with the director by admitted 23
insurers. The report must include all surplus lines insurance t ransactions during the 24
preceding period showing the aggregate gross premiums written, the aggregate return 25
premiums, and the amount of aggregate tax remitted to this state [, AND THE 26
AMOUNT OF AGGREGATE TAX REMITTED TO EACH OTHER STATE FOR 27
WHICH AN ALLOCATION IS MADE UNDER AS 21.34.180]. The surplus lines 28
broker [ F O R M S ] s h a l l file the report [BE FILED] quarterly on March 1, June 1, 29
September 1, and December 1 of each year. 30
* Sec. 31. AS 21.34.190 is amended to read: 31
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Sec. 21.34.190. Filing fee. (a) The fee for filing the statement under 1
AS 21.34.180(e) is an amount equal to one percent on gross premium charged less any 2
return premiums as reported on the statement. The surplus lines broker shall pay the 3
fee at the time of filing [OF] the statement and in a form and manner required by 4
the director. 5
(b) If the surplus lines broker does not pay the filing fee [IS NOT PAID] 6
when due, the surplus lines broker shall pay an additional late payment fee of $50 a 7
month [$250] plus two percent of the fee due per month, or part of a month, during 8
which the surplus lines broker fails to pay the full amount of the filing fee. The 9
late payment fee may not exceed $250 plus 10 percent of the fil ing fee due. If the 10
surplus lines broker does not pay the filing fee in the form or manner required by 11
the director, a penalty fee will be assessed equal to 25 percent of the filing fee due, 12
not to exceed $1,000, with a minimum penalty of $50. In additio n t o a n y o t h e r 13
penalty provided by law, the director may assess a penalty of n ot more than 14
$10,000 for a violation of this section. The director may suspe nd or revoke the 15
license of a surplus lines broker that fails to pay a fee under this section [SHALL 16
BECOME DUE AND PAYABLE BY THE SURPLUS LINES BROKER]. 17
* Sec. 32. AS 21.34.900(8) is amended to read: 18
(8) "home state," for purposes of determining the home state o f an 19
insured in a multistate or multinational placement of nonadmitted insurance, is 20
defined as follows: 21
(A) except as provided in (B) or (C) of this paragraph, "home 22
state" means, with respect to an insured, 23
(i) the state in which an ins ured maintains its principal 24
place of business or, in the case of an individual, the individ ual's 25
principal residence; or 26
(ii) if 100 percent of the insured risk is located out of 27
the state referred to in (i) of this subparagraph, the state to which the 28
greatest percentage of the insured's taxable premium for that i nsurance 29
contract is allocated; 30
(B) if two or more insureds from an affiliated group are named 31
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insureds on a single policy, "home state" under (A) of this par agraph is based 1
on the member of the affiliated group that has the largest perc entage of 2
premium attributed to it under the insurance contract; 3
(C) if two or more insureds are named insureds on a 4
nonaffiliated group policy, "home state" under (A) of this paragraph 5
(i) is based on the group policyholder if the group 6
policyholder pays 100 percent of the premium; or 7
(ii) is based on the named insured of the group 8
policy if the group policyholder does not pay 100 percent of th e 9
premium from the policyholder's own funds; 10
(D) for purposes of (A) of this paragraph, the principal place of 11
business of an insured is 12
(i) the state where the insured maintains its headquarters 13
and where the insured's high-level officers direct , control , and 14
coordinate the business activities of the insured; or 15
(ii) if an insured's high-level officers direct, control, 16
and coordinate the business activities of the insured in more t han 17
one state or if the insured maintains its headquarters in a 18
jurisdiction outside the United States, the state where the gre atest 19
percentage of the insured's taxable premium for the insurance 20
contract is allocated; 21
( E ) f o r p u r p o s e s o f ( A ) o f t h i s p a r a g r a p h , t h e p r i n c i p a l 22
residence of an insured is 23
(i) the state where the insured resides for the 24
greatest number of days in a calendar year; or 25
(ii) if the insured resides for the greatest number of 26
days in a calendar year in a jurisdiction outside the United St ates, 27
the state where the greatest percentage of the insured's taxabl e 28
premium for the insurance contract is allocated; 29
* Sec. 33. AS 21.34.900(15) is amended to read: 30
(15) "wet marine and transportation insurance" has the meaning given 31
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in AS 21.12.090(b) [MEANS ONE OR MORE OF THE FOLLOWING: 1
(A) INSURANCE UPON, OF INTEREST IN, OR RELATING 2
TO VESSELS, CRAFTS, HULLS, EXCEPT VESSELS OF 50 3
DISPLACEMENT TONS OR LESS; 4
(B) INSURANCE OF MARINE BUILDERS RISKS, 5
MARINE WAR RISKS, AND CONTRACTS OF MARINE PROTECTION 6
AND INDEMNITY INSURANCE; 7
(C) INSURANCE OF FREIGHT AND DISBURSEMENTS 8
PERTAINING TO A SUBJECT OF INSURANCE COMING WITHIN THIS 9
PARAGRAPH; OR 10
(D) INSURANCE OF PERSONAL PROPERTY AND 11
INTERESTS IN PERSONAL PR OPERTY, IN COURSE OF 12
EXPORTATION FROM OR IMPORTATION INTO A COUNTRY OR IN 13
THE COURSE OF COASTAL OR INLAND WATER TRANSPORTATION, 14
INCLUDING TRANSPORTATION BY LAND, WATER, OR AIR FROM 15
POINT OF ORIGIN TO FINAL DESTINATION IN CONNECTION WITH 16
ANY AND ALL RISKS OR PERILS OF NAVIGATION, TRANSIT, OR 17
TRANSPORTATION, AND WHILE BEING REPAIRED FOR AND WHILE 18
AWAITING SHIPMENT, AND DURING ANY DELAYS, 19
TRANSSHIPMENT, OR RESHIPMENT INCIDENT TO THEM]. 20
* Sec. 34. AS 21.36.125(a) is amended to read: 21
(a) A person may not commit any of the following acts or practices: 22
(1) misrepresent facts or po licy provisions relating to covera ge of an 23
insurance policy; 24
(2) fail to acknowledge and ac t promptly upon communications 25
regarding a claim arising under an insurance policy; 26
(3) fail to adopt and implement r easonable standards for promp t 27
investigation of claims; 28
(4) refuse to pay a claim without a reasonable investigation o f all of 29
the available information and an explanation of the basis for d enial of the claim or for 30
an offer of compromise settlement; 31
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(5) fail to affirm or deny coverage of claims within a reasona ble time 1
of the completion of proof-of-loss statements; 2
(6) fail to attempt in good faith to make prompt and equitable 3
settlement of claims in which liability is reasonably clear; 4
(7) engage in a pattern or practice of compelling insureds to litigate for 5
recovery of amounts due under insurance policies by offering su bstantially less than 6
the amounts ultimately recovered in actions brought by those insureds; 7
(8) compel an insured or third-party claimant in a case in whi ch 8
liability is clear to litigate for recovery of an amount due un der an insurance policy by 9
offering an amount that does not h ave an objectively reasonable basis in law and fact 10
and that has not been documented in the insurer's file; 11
(9) attempt to make an unreasonably low settlement by referenc e to 12
printed advertising matter accompanying or included in an application; 13
(10) attempt to settle a claim on the basis of an application that has 14
been altered without the consent of the insured; 15
(11) make a claims payment wit hout including a statement of th e 16
coverage under which the payment is made; 17
(12) make known to an insured or third-party claimant a policy o f 18
appealing from an arbitration award in favor of an insured or t hird-party claimant for 19
the purpose of compelling the insured or third-party claimant t o accept a settlement or 20
compromise less than the amount awarded in arbitration; 21
(13) delay investigation or pay ment of claims by requiring sub mission 22
of unnecessary or substantially repetitive claims reports and proof-of-loss forms; 23
(14) fail to promptly settle c laims under one portion of a pol icy for the 24
purpose of influencing settlements under other portions of the policy; 25
(15) fail to promptly provide a r easonable explanation of the basis in 26
the insurance policy in relation to the facts or applicable law for denial of a claim or 27
for the offer of a compromise settlement; [OR] 28
(16) offer a form of settlement or pay a judgment in any manne r 29
prohibited by AS 21.96.030; 30
(17) violate a provision contained in AS 21.07; or 31
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(18) offer a valuation that depreciates the expense of labor i n 1
violation of AS 21.60.030. 2
* Sec. 35. AS 21.36.225(a) is amended to read: 3
(a) An [EXCEPT FOR A HEALTH CARE INSURANCE POLICY 4
SUBJECT TO AS 21.51.400 OR AS 21.54.130, AN] insurer may not ca ncel a health 5
insurance policy unless the insurer provides written notice to a policyholder at least 45 6
days before the effective date of the cancellation. 7
* Sec. 36. AS 21.36.235(a) is amended to read: 8
(a) Except as provided in A S 21.36.305, if the renewal premium is increased 9
more than 10 percent for a reason other than an increase in cov erage or exposure base, 10
or if after renewal there will be a material restriction or red uction in coverage not 11
specifically requested by the insured, written notice shall be mailed to the insured and 12
to the agent or broker of record as required by AS 21.36.260 13
[(1) AT LEAST 20 DAYS BEFORE EXPIRATION OF A 14
PERSONAL INSURANCE POLICY; OR 15
(2)] at least 45 days before expiration of the [A BUSINESS OR 16
COMMERCIAL] policy. 17
* Sec. 37. AS 21.36.240(a) is amended to read: 18
(a) An insurer may only fail to renew a personal insurance pol icy on the 19
policy's annual anniversary. An insurer may not fail to renew a policy unless a written 20
notice of nonrenewal is mailed to the named insured under AS 21 .36.260 at least [20 21
DAYS FOR A PERSONAL INSURANCE POLICY, AND AT LEAST] 45 days 22
[FOR A BUSINESS OR COMMERCIAL INSURANCE POLICY,] before the dat e 23
the policy expires or the anniversary date of a policy written for a term longer than one 24
year or with no fixed expiration date. 25
* Sec. 38. AS 21.36.240 is amended by adding a new subsection to read: 26
(e) For purposes of this section, an offer of placement with a n affiliate insurer 27
does not constitute a failure by an insurer to renew coverage. 28
* Sec. 39. AS 21.36 is amended by adding a new section to Article 4 to read: 29
Sec. 21.36.245. Cancellation of and failure to renew property a nd casualty 30
insurance. An insurer may not cancel or fail to renew a property insurance policy, or a 31
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casualty insurance policy insuring a business or commercial pro perty, as a result of a 1
claim to an insurer made solely to meet a local, state, or fede ral aid requirement where 2
the insurer does not apply coverage and does not pay a benefit. 3
* Sec. 40. AS 21.36.475(a) is amended to read: 4
(a) An owner controlled insurance program or a contractor cont rolled 5
insurance program is subject to both AS 21.39 and AS 21.42, mus t be approved by the 6
director, and shall be allowed only for a major construction pr oject or a major multi-7
owner residential construction project . Owner controlled and contractor controlled 8
insurance programs are limited to property insurance as defined in AS 21.12.060 and 9
casualty insurance as defined in AS 21.12.070. 10
* Sec. 41. AS 21.36.475(b) is amended to read: 11
(b) In this section, an owner controlled or contractor control led insurance 12
[INSURED] program does not include 13
(1) builder's risk or course of construction insurance; 14
(2) insurance relating to the transportation of cargo or other property; 15
(3) insurance covering one or more affiliates, subsidiaries, p artners, or 16
joint venture partners of a person; or 17
(4) insurance policies endorsed to name one or more persons as 18
additional insureds if naming a person as an addition al insured is a term required 19
by a contract; this paragraph does not apply to an owner contro lled or 20
contractor controlled insurance program for a major construction project. 21
* Sec. 42. AS 21.36.475(c) is amended by adding a new paragraph to read: 22
(7) "major multi-owner residential construction project" means a 23
construction project for condomin iums, townhouses, cooperative housing 24
developments, or other residential housing involving at least 5 0 units and three or 25
more property owners with a total cost of $25,000,000 or more. 26
* Sec. 43. AS 21.36.505(a) is amended to read: 27
(a) A person may not sell, market, promote, advertise, or otherwise distribute a 28
health discount plan unless 29
(1) each advertisement, policy, document, information, stateme nt, or 30
other communication regarding th e health discount plan and the plan itself contain a 31
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statement, in bold and prominent type, that the health discount plan is not insurance; 1
(2) [THE DISCOUNTS OFFERED UNDER THE HEALTH 2
DISCOUNT PLAN ARE SPECIFICALLY AUTHORIZED BY A CONTRACT 3
WITH EACH PROVIDER OF THE SERVICES OR SUPPLIES LISTED IN 4
CONJUNCTION WITH THE PLAN; 5
(3)] the health discount plan st ates the name, address, and te lephone 6
number of the administrator of the plan; 7
(3) [(4)] the person makes readil y available to the consumer a 8
complete, accurate, and up-to-date list of providers participat ing in the plan that offer 9
discounted health care services or supplies in the consumer's l ocal area and the 10
discounts offered by the providers; 11
(4) [(5)] the person provides the consumer the right to cancel the health 12
discount plan within 30 days after purchase of the plan; 13
(5) [AND (6)] the person provides the consumer with a full refund o f 14
all payments made, except for a nominal processing fee, within 30 days after 15
notification of cancellation of the plan under (5) of this subsection; 16
(6) the person registers the health discount plan in accordanc e 17
with regulations adopted by the director; and 18
(7) the person renews the health discount plan when required 19
under regulations adopted by the director. 20
* Sec. 44. AS 21.36.910(d) is amended to read: 21
(d) In addition to an order issued under (c) of this section, the director may, 22
after a hearing, order restitution, assess a penalty of not mor e than $2,500 for each 23
violation or $25,000 for engaging in a general business practic e in violation of this 24
chapter. The director may include int erest calculated under AS 09.30.070 in an 25
order for restitution entered under this subsection. 26
* Sec. 45. AS 21.39.155(c) is amended to read: 27
(c) An insurer may impose a surcharge not to exceed 25 percent o f t h e 28
premium for assigned risk pool insurance, except that a surchar ge may not be applied 29
to the first $6,000 [$3,000] in premium in any policy year. 30
* Sec. 46. AS 21.42.250(a) is amended to read: 31
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(a) An insurer shall provide a policy or endorsement to the in sured or to the 1
person entitled to it by mail or electronic mail [DELIVERY] or by posting on the 2
insurer's Internet website under (c) of this section within a r easonable period of time 3
after its issuance. The insurer is not required to mail, delive r, or post the policy or 4
endorsement until all conditions required by the insurer have been met by the insured. 5
* Sec. 47. AS 21.42.375(e) is amended to read: 6
(e) Except as necessary to qualify a plan as a high deductible health plan 7
eligible for a health savings a ccount tax deduction under 26 U. S.C. 223 (Internal 8
Revenue Code), a health care insurer that offers, issues, deliv ers, or renews a health 9
care insurance plan in the indivi dual or group market in the st ate that provides 10
coverage for mammography screening, diagnostic breast examinati ons, and 11
supplemental breast examinations m ay not impose cost sharing, a deductible, 12
coinsurance, a copayment obligation, or another similar out-of- pocket expense on an 13
insured for coverage of a low-dose mammography screening, diagn ostic breast 14
examination, [OR] supplemental breast examination, biopsy, or consultation. 15
* Sec. 48. AS 21.42.375(f) is amended by adding new paragraphs to read: 16
(4) "biopsy" means a medical pro cedure involving the removal o f 17
tissue to determine the presence of cancer cells; 18
(5) "consultation" means a medical consultation with a health care 19
provider to discuss the results of a diagnostic breast examinat ion and whether further 20
biopsies or other diagnostic procedures are needed. 21
* Sec. 49. AS 21.42.377(a) is amended to read: 22
(a) Except for a fraternal benefit society, a health care insu rer that offers, 23
issues for delivery, delivers, or renews in this state a health care insurance plan shall 24
provide coverage for the costs of colorectal cancer screening e xaminations and 25
laboratory tests under the schedule described in (b) of this section. [THE COVERAGE 26
REQUIRED BY THIS SECTION IS SUBJECT TO STANDARD POLICY 27
PROVISIONS APPLICABLE TO OTHER BENEFITS, INCLUDING 28
DEDUCTIBLE OR COPAYMENT PROVISIONS.] 29
* Sec. 50. AS 21.42.377(b) is amended to read: 30
(b) The minimum coverage requi red under (a) of this section fo r colorectal 31
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cancer screening includes coverage for colorectal cancer examin ations and laboratory 1
tests as recommended by the most recent [SPECIFIED IN] American Cancer 2
Society guidelines for colorectal cancer screening of [ASYMPTOM ATIC] individuals 3
considered at average risk for colorectal cancer . Coverage shall be provided for all 4
colorectal screening examinations and tests, including a colonoscopy performed as a 5
result of a positive result on a non-colonoscopy preventive scr eening test, that are 6
administered at a frequency identified in the most recent American Cancer Society 7
guidelines for colorectal cancer. 8
* Sec. 51. AS 21.42.377(e) is amended to read: 9
(e) For individuals considered at 10
(1) average risk for colorectal cancer, coverage or benefits shall be 11
provided for the choice of screening, so long as it is conducte d in accordance with the 12
specified frequency ; coverage required by this par agraph is not subject to cost 13
sharing, including deductible, coinsurance, or copayment provisions; 14
(2) [. FOR INDIVIDUALS CONSIDERED AT] high risk for 15
colorectal cancer, screening shall be provided at a frequency d etermined necessary by 16
a health care provider. 17
* Sec. 52. AS 21.45.305(c)(2) is amended to read: 18
(2) The interest rate used in determining minimum nonforfeitur e 19
amounts shall be an annual rate of interest determined as the l esser of three percent a 20
year or the following, which shall be specified in the contract if the interest rate will be 21
reset: (A) the five-year constant maturity treasury rate report ed by the federal reserve 22
as of a date, or average over a period, rounded to the nearest 1/ 20 of one percent, 23
specified in the contract not mor e than 15 months before the co ntract issue date or 24
redetermination date under (D) of this paragraph; (B) reduced b y 125 basis points; (C) 25
where the resulting interest rate is not less than 0.15 [ONE] percent; and (D) the 26
interest rate must apply for an initial period and may be redet ermined for additional 27
periods; the redetermination da te, basis, and period, if any, m ust be stated in the 28
contract; the basis is the date or average over a specified per iod that produces the 29
value of the five-year constant maturity treasury rate to be us ed at each 30
redetermination date. 31
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* Sec. 53. AS 21.48.010(f) is amended to read: 1
(f) An insurer shall submit to the director information demonstrating 2
[SATISFACTORY TO THE DIRECTOR] that the group meets the require ments of 3
(a) or (e) of this section. If the director finds the information to be satisfactory, the 4
director shall [, AND THE DIRECTOR MUST AFFIRMATIVELY] approve [OF] 5
the [GROUP BEFORE AN] insurer to [MAY] issue a group life policy to a group 6
under (a) or (e) of this section. The director's approval is not required for a single 7
employer group, labor union group, or multiple employer welfare arrangement 8
authorized under AS 21.85. 9
* Sec. 54. AS 21.51.060(b) is amended to read: 10
( b ) A p o l i c y i n w h i c h t h e i n s u r e r r e s e r v e s t h e r i g h t t o r e f u s e renewal shall 11
have, at the beginning of the provision in (a) of this section, 12
"Unless not less than 45 [30] days before the premium due date the insurer has 13
delivered to the insured or has m ailed to the las t address of t he insured as shown by 14
the records of the insurer written notice of its intention not to renew this policy beyond 15
the period for which the premium has been accepted." 16
* Sec. 55. AS 21.57.160(1) is amended to read: 17
(1) " agricultural [AGRICULTURE] credit transaction commitment" 18
means a binding agreement to lo an money up to a fixed amount as needed for 19
agricultural purposes; 20
* Sec. 56. AS 21.59 is amended by adding a new section to read: 21
Sec. 21.59.125. Motor vehicle service contract approval. (a) A provider may 22
not deliver or issue for delivery a motor vehicle service contr act unless the provider 23
files the contract with the division and receives approval from the director for the 24
contract. 25
(b) If a change is made to a motor vehicle service contract af ter it has been 26
approved, the provider shall file and receive approval for the changed contract in 27
accordance with (a) of this section. 28
* Sec. 57. AS 21.59.140(c) is amended to read: 29
(c) A licensee shall report to the director in writing any adm inistrative action 30
taken against the licensee by a governmental agency [OF ANOTHER STATE OR BY 31
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A GOVERNMENTAL AGENCY OF ANOTHER JURISDICTION] within 30 days 1
after the final disposition of the action. A licensee shall submit to the director the final 2
order and other relevant legal documents in the action. A licen see shall report to the 3
director any criminal prosecution of the licensee within 30 day s after the date of filing 4
of the criminal complaint, indictment, or citation in the prose cution. The licensee shall 5
submit to the director a copy of the criminal complaint, calend aring order, and other 6
relevant legal documents in the prosecution. 7
* Sec. 58. AS 21.60 is amended by adding a new section to read: 8
Sec. 21.60.030. Depreciation of labor. In a residential property policy, the 9
valuation of the expense of labor may not be depreciated, excep t where offered as a 10
stand-alone endorsement that specifically identifies the nontan gible items subject to 11
depreciation. An endorsement offered under this section must be an optional coverage 12
and provide a proportionate reduction in premium. 13
* Sec. 59. AS 21.76.070 is amended to read: 14
Sec. 21.76.070. Excess insurance. A cooperative agreement may authorize the 15
board of directors to purchase excess or catastrophic insurance on behalf of the joint 16
insurance arrangement. The cos t of the insurance shall be appor tioned in the manner 17
specified in the joint insurance agreement. The board may purch ase insurance under 18
this section only from an insurer authorized to do business in the state, except that an 19
arrangement formed by municipalities or school districts may pu rchase insurance 20
under this section from a risk-sharing pool established by a na tional association of 21
similar entities if the risk-shar ing pool meets the qualificati ons for a nonadmitted 22
[AN UNAUTHORIZED] insurer under AS 21.34.040(d) [AS 21.34.040(b) AND (d) 23
AND 21.34.220] and has capital and policyholders surplus in an amount at least as 24
great as would be required if the association were a domestic m ultiple line insurer. An 25
arrangement may purchase insurance under this section for prope rty and liability risks 26
from unauthorized insurers allowed for use by licensed Alaska surplus lines brokers. 27
* Sec. 60. AS 21.79.020(c) is amended to read: 28
(c) This chapter does not apply to 29
(1) that part of a policy or contract that is not guaranteed b y the 30
member insurer; 31
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(2) that part of the risk borne by the policy or contract owner; 1
(3) a policy or contract of reinsurance, unless an assumption certificate 2
has been issued; 3
(4) that part of a policy or contract, except for part of a po licy or 4
contract, including a rider, that provides long-term care or ot her health insurance 5
benefits, to the extent that the rate of interest on which it i s based, or the interest rate, 6
crediting rate, or similar factor determined by use of an index or other external 7
reference stated in the policy or contract employed in calculat ing returns or changes in 8
value, 9
(A) averaged over the period of four years before the date on 10
which the member insurer becomes an impaired or insolvent insur er under this 11
chapter, whichever occurs first, exceeds the rate of interest d etermined by 12
subtracting two percentage points from the published monthly av erage for that 13
same four-year period or for a lesser period if the policy or contract was issued 14
less than four years before the member insurer becomes an impai red or 15
insolvent insurer under this chapter, whichever occurs first; and 16
(B) on and after the date on which the member insurer becomes 17
an impaired or insolvent insurer under this chapter, whichever occurs first, 18
exceeds the rate of interest determined by subtracting three pe rcentage points 19
from the most recent published monthly average; 20
(5) a portion of a policy or contract issued to a plan or prog ram of an 21
employer, association, or similar entity to provide life, healt h, or an annuity benefit to 22
an employee, member, or other person, to the extent that the pl an or program is self-23
funded or uninsured, including a benefit payable by the employe r, association, or 24
similar entity under 25
(A) a multiple employer welfare arrangement as defined in 29 26
U.S.C. 1002 (Employee Retirement Income Security Act of 1974); 27
(B) a minimum premium group insurance plan; 28
(C) a stop-loss group insurance plan; or 29
(D) an administrative services only contract; 30
(6) that part of a policy or contract that provides a dividend o r 31
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experience rating credit or voting rights, or provides that a f ee or allowance be paid to 1
a person, including the policy or contract owner, in connection with the service to or 2
administration of the policy or contract; 3
(7) a policy or contract issued in this state by a member insurer at a 4
time when it was not licensed or did not have a certificate of authority to issue the 5
policy or contract in this state; 6
(8) a person who is a payee or beneficiary of a contract owner who is a 7
resident of this state if the payee or beneficiary is provided coverage by the association 8
of another state; 9
(9) a person covered under (d) of this section if any coverage i s 10
provided by the association of another state to that person; 11
(10) an unallocated annuity contract issued to or in connectio n with a 12
benefit plan protected under the United States Pension Benefit Guaranty Corporation, 13
regardless of whether the United States Pension Benefit Guarant y Corporation has 14
become liable to make any payments with respect to the benefit plan; 15
(11) that part of an unallocated annuity contract that is not issued to or 16
in connection with a specific em ployee, union, or association o f natural persons 17
benefit plan or a government lottery; 18
(12) that part of a policy or contract to the extent that asse ssments 19
required by AS 21.79.070 with respect to the policy or contract are preempted by law; 20
(13) an obligation that does not arise under the express written terms of 21
the policy or contract issued by the member insurer to the enro llee, certificate holder, 22
contract owner, or policy owner, including, without limitation, 23
(A) a claim based on marketing materials; 24
(B) a claim based on a side lette r or other document that was 25
issued by the member insurer w ithout meeting applicable policy or contract 26
form filing or approval requirements; 27
(C) a misrepresentation of or regarding policy or contract 28
benefits; 29
(D) an extra contractual claim; or 30
(E) a claim for penalties or consequential or incidental 31
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damages; 1
(14) a contractual agreement that establishes the member insur er's 2
obligations to provide a book value accounting guaranty for def ined contribution 3
benefit plan participants by reference to a portfolio of assets t h a t i s o w n e d b y t h e 4
benefit plan or its trustee, which, in each case, is not an aff iliate of the member 5
insurer; 6
(15) that part of a policy or contract to the extent the part of the policy 7
or contract provides for interest or other changes in value to be determined by the use 8
of an index or other external reference stated in the policy or contract, but that have 9
not been credited to the policy or contract, or as to which the policy or contract 10
owner's rights are subject to forfeiture, as of the date the me mber insurer becomes an 11
impaired or insolvent insurer unde r this chapter, whichever is earlier; if a policy's or 12
contract's interest or changes in value are credited less frequ ently than annually, then, 13
for purposes of determining the values that have been credited and are not subject to 14
forfeiture under this paragraph, the interest or change in value determined by using the 15
procedures defined in the policy or contract shall be credited as if the contractual date 16
of crediting interest or changing values was the date of impair ment or insolvency, 17
whichever is earlier, and will not be subject to forfeiture; 18
(16) a policy or contract providing a hospital, medical, presc ription 19
drug, or other health care benefit in accordance with 42 U.S.C. 1395w-21 - 42 U.S.C. 20
1395w-28, 42 U.S.C. 1395w-101 - 42 U.S.C. 1395w-154, 42 U.S.C. 1396 - 42 U.S.C. 21
1396w-8, [42 U.S.C. 1395w-21 - 1395w-154] or federal regulations adopte d under 22
those sections; 23
(17) a person who acquires rights to receive payments through a 24
structured settlement factoring transaction as defined in 26 U. S.C. 5891(c)(3)(A), 25
regardless of whether the transaction occurred before, on, or a fter 26 U.S.C. 26
5891(c)(3)(A) became effective; or 27
(18) structured settlement annuity benefits to which a payee o r 28
beneficiary has transferred the payee's or beneficiary's rights in a structured settlement 29
factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), re gardless of whether the 30
transaction occurred before, on, or after 26 U.S.C. 5891(c)(3)(A) became effective. 31
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* Sec. 61. AS 21.86.040(a) is amended to read: 1
(a) The governing body of a health maintenance organization ma y include 2
providers, or other individuals, or both. At least one member [ONE-THIRD] of th e 3
governing body must be a consumer to represent [CONSIST OF CONSUMERS 4
WHO ARE SUBSTANTIALLY REPRESENTATIVE OF] enrollees. 5
* Sec. 62. AS 21.86.060(b) is amended to read: 6
(b) In addition to basic health care services, a health mainte nance organization 7
may provide, or arrange for, other health care services on a pr epayment, fixed fee, or 8
other financial basis. 9
* Sec. 63. AS 21.86.060 is amended by adding new subsections to read: 10
(d) A health maintenance organi zation shall provide coverage f or emergency 11
services, as that term is de fined in AS 21.07.250, that are nec essary to screen and 12
stabilize a covered person at the health maintenance organizati on provider employee 13
or contracted provider level of c ost sharing when the services are not provided by a 14
health maintenance organization provider. The health maintenanc e organization may 15
require the transfer of a hospitalized covered person upon stabilization. 16
(e) A health maintenance organization shall provide coverage a t the health 17
maintenance organization provider employee or contracted provid er level of cost 18
sharing upon referral from a hea lth maintenance organization pr ovider that states the 19
covered person requires medically necessary services from a pro vider that is not a 20
health maintenance organization provider. The health maintenanc e organization may 21
deny the referral when an in-network provider is available to p rovide the medically 22
necessary services. 23
* Sec. 64. AS 21.96.090 is amended by adding a new subsection to read: 24
(g) A risk retention group shall file a report in accordance w ith 25
AS 21.09.210(a) and pay the tax required for a domestic and for eign insurer under 26
AS 21.09.210(b). 27
* Sec. 65. AS 21.96.120 is amended to read: 28
Sec. 21.96.120. Waiver for state innovation. The director may apply to a 29
federal agency for a waiver of federal law that relates to a he alth insurance 30
requirement, including applying to the United States Secretary of Health and 31
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Human Services and the United States Department of the Treasury under 42 1
U.S.C. 18052 , as amended, for a waiver of applicable provisions of P.L. 111-148 2
(Patient Protection and Affordable Care Act) , as amended, w i t h r e s p e c t t o h e a l t h 3
insurance [COVERAGE] in the state for a plan year beginning on or after January 1, 4
2017. The director may implement a state plan meeting the waive r requirements in a 5
manner consistent with state and federal law and as approved by t h e U n i t e d S t a t e s 6
Secretary of Health and Human Services. 7
* Sec. 66. AS 21.97.900 is amended by adding a new paragraph to read: 8
(48) "motor vehicle" means a mo tor vehicle subject to registra tion 9
under AS 28.10.011. 10
* Sec. 67. AS 21.09.210(d); AS 21.27.020(g), 21.27.330(a); AS 21.34.030(d) ; 11
AS 21.39.020(b)(4); AS 21.42.377(c); AS 21.59.290(2); and AS 21.86.078 are repealed. 12
* Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to 13
read: 14
APPLICABILITY. AS 21.36.475(b), as amended by sec. 41 of this A ct, applies to 15
contracts entered into on or after the effective date of this Act. 16
* Sec. 69. This Act takes effect immediately under AS 01.10.070(c). 17