(a) All persons transacting a business of insurance in this state, or relative to a subject resident, located or to be performed in this state, shall comply with the applicable provisions of this title. (b) Foreign and alien insurers doing business as authorized insurers under this title are not subject to AS 10.06 (Alaska Corporations Code). (c) A person who transacts insurance in this state, or relative to a subject resident, located, or to be performed in this state as or on behalf of a risk retention group or purchasing group formed under and in compliance with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act), shall comply with the provisions of this title not preempted by federal law.
(a) In addition to the exclusion contained in AS 21.03.070, this title does not apply to a life insurance or annuity company organized and operated without profit to any private shareholder or individual exclusively for the purpose of aiding and strengthening educational institutions by issuing insurance and annuity contracts only to or for the benefit of the institutions and individuals engaged in the service of these institutions; however, all policies and contracts issued by such an organization must provide for acceptance of service of process within this state. (b) Except as otherwise provided in this title, a person that provides coverage for the cost of medical care in this state is subject to this title unless the person shows that, while providing coverage for medical care, the person is subject to the jurisdiction of another agency of this state or of the federal government by providing the director with the appropriate certificate, license, or other document issued by the other governmental agency that permits or qualifies the person to provide coverage for medical care. (c) A person described under (b) of this section who is unable to show that the person is subject to the jurisdiction of another governmental agency under (b) of this section and who has not received a certificate of authority under AS 21.85 (1) is subject to all appropriate provisions of this title regarding the conduct of the person's business; and (2) shall submit to an examination by the director to determine the organization and solvency of the person and to determine whether the person complies with this title. (d) A person that advertises, administers, sells, or transacts the coverage of medical care under (b) of this section and is required to submit to an examination by the director under (c)(2) of this section shall advise every purchaser, prospective purchaser, or covered person that the person's coverage may not be regulated under Alaska insurance law and may not be covered by the Alaska Life and Health Insurance Guaranty Association under AS 21.79. (e) This title does not apply to a service contract offered, issued for delivery, delivered, or renewed in this state. In this subsection, service contract (1) means a service contract or agreement for a separate or additional consideration, for a specific duration, to (A) maintain, service, repair, or replace tangible personal property, or to indemnify for repair, replacement, or maintenance, for an operational or structural failure due to a defect in materials or workmanship or normal wear and tear, with or without additional provision for incidental indemnity payments when service, repair, or replacement is not reasonably or commercially feasible; (B) repair, replace, or maintain tangible personal property damaged as a result of power surges or as a result of accidental damage from the handling of property; or (C) repair, replace, or maintain household consumer goods, household appliances, and household systems, including damage resulting from operational or structural failure due to a defect in materials or workmanship or normal wear and tear; (2) does not include (A) mechanical breakdown insurance; (B) a contract that requires an indemnity payment for each incident, and the payment exceeds the purchase price of the property serviced; (C) a home warranty; in this subparagraph, home warranty means a warranty that covers the entire home and does not include a warranty limited to a household system or appliance; or (D) portable electronics insurance as defined in AS 21.36.515. (f) If an insurer is not required to obtain a certificate of authority in this state under AS 21.09.020(5), the provisions of this title do not apply to policies or contracts issued by the insurer. (g) This title does not apply to a portable electronics manufacturer's warranty or extended warranty. (h) A motor vehicle service contract shall be governed by AS 21.59.110 - 21.59.290 except as expressly provided in this title. (i) A motor vehicle warranty, motor vehicle maintenance agreement, and motor vehicle service contract offered for sale or sold to a person other than a consumer are not insurance and do not have to comply with any provision of this title. In this subsection, motor vehicle maintenance agreement means a contract of limited duration that provides for regular maintenance only. (j) This title does not apply to the solicitation of an agreement or an agreement between a prospective recipient of ambulance, emergency, or fire protection services and a municipality or community-based nonprofit that provides ambulance, emergency, or fire protection services. (k) This title does not apply to a health care sharing ministry. In this subsection, health care sharing ministry means an organization that (1) is described in 26 U.S.C. 501(c)(3) and exempt from taxation under 26 U.S.C. 501(a); (2) is faith-based and whose participants share (A) a common set of ethical or religious beliefs; and (B) medical expenses among participants in accordance with the common set of ethical or religious beliefs; (3) coordinates financial sharing of medical expenses among willing participants in the organization according to criteria established by the organization; (4) provides assistance for the financial or medical needs of a participant through contributions from one participant to another; (5) provides the amounts of assistance that participants may contribute without an assumption of risk or promise to pay by the participants or the organization; (6) provides to all participants written monthly statements that list the total dollar amount of qualified needs submitted to the organization by participants for contribution; (7) provides for an annual audit by an independent certified public accountant in accordance with generally accepted accounting principles and makes the annual audit available to the public upon request; and (8) provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads in substance: Notice: The organization coordinating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary because no other participant will be compelled by law to contribute toward your medical bills. Participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive a payment for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills.
The state hereby preempts the field of regulating insurers and their managing general agents, insurance producers, and representatives. All political subdivisions of the state, including home rule boroughs or cities, are prohibited from requiring of an insurer, managing general agent, insurance producer, or representative regulated under this title an authorization, permit, or registration of any kind for conducting transactions lawful under the authority granted by the state under this title.
(a) Notwithstanding any other provision of this title, the issuance of a qualified charitable gift annuity does not constitute engaging in the business of insurance in this state, and, except as provided by this section, is exempt from regulation by the division under this title. (b) When entering into an agreement for a qualified charitable gift annuity, the charitable organization shall set out in writing in the agreement that (1) a qualified charitable gift annuity is not an insurance policy in this state, is not subject to regulation by the division, and is not protected by the Alaska Life and Health Insurance Guaranty Association established under AS 21.79.040 or any other association that guarantees payment under a policy of insurance; and (2) the state does not in any way approve or endorse the annuity. (c) The notice required by (b) of this section must be in bold type and be contained in a separate paragraph, and the print size of the notice must be larger than the print size generally used in the annuity agreement. (d) A charitable organization that issues its first qualified charitable gift annuity on or after October 1, 2001 shall notify the division in writing within 90 days after the issuance. The notice (1) shall be signed by an officer or director of the charitable organization; (2) must provide the name and address of the charitable organization; and (3) must certify that (A) the charitable organization is a charitable organization; and (B) the charitable gift annuities issued by the charitable organization are qualified charitable gift annuities. (e) Except for the information required by (d) of this section, a charitable organization is not required to submit information to the division unless the division determines additional information is necessary to determine an appropriate fine under (g) of this section. (f) If a charitable organization fails to comply with the notice requirements under (b), (c), or (d) of this section, the qualified charitable gift annuity issued by the charitable organization still receives the exemption for a qualified charitable gift annuity provided by (a) of this section. (g) The division may enforce performance with the notice requirements under (b), (c), or (d) of this section by sending a letter by certified mail, return receipt requested, demanding that the charitable organization comply with the requirements. The division may impose a civil penalty on the charitable organization in an amount not to exceed $1,000 for each qualified charitable gift annuity issued by the charitable organization until the charitable organization complies with the requirements. (h) In this section, (1) charitable gift annuity means a transfer of money or other property by a person to a charitable organization in return for the charitable organization's providing an annuity to the person that is payable over one or two lives and under which the (A) actuarial value of the annuity is less than the value of the money or other property transferred; and (B) difference in value constitutes a charitable deduction for federal income tax purposes; (2) charitable organization means a person identified (A) in the definition of charitable contribution in 26 U.S.C. 170(c) as a person to whom or for whose use a contribution or gift is made; or (B) as an exempt organization under 26 U.S.C. 501(c)(3); (3) qualified charitable gift annuity means an annuity described in 26 U.S.C. 501(m)(5) and 26 U.S.C. 514(c)(5), if the annuity is issued by a charitable organization that on the date of the issuance has (A) a minimum of (i) $300,000 in unrestricted cash, in cash equivalents, or in publicly traded securities, exclusive of the assets funding the annuity; and (ii) three years of continuous operation or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three years; or (B) a guarantee that the obligations of the annuity contract will be met by a charitable organization that meets the requirements of (A) of this paragraph.
The commissioner of commerce, community, and economic development shall appoint the director, division of insurance, Department of Commerce, Community, and Economic Development. The director serves at the pleasure of the commissioner.
(a) There is created within the Department of Commerce, Community, and Economic Development a division of insurance, which shall be located in or convenient to the office occupied by the commissioner of commerce, community, and economic development. (b) The division of insurance shall be under the administrative control of the commissioner of commerce, community, and economic development and the supervision of the director of the division of insurance.
(a) The director may appoint a chief deputy, who shall be in charge of the division of insurance under the direction and control of the director. (b) The director may appoint additional deputies for purposes designated by the director. (c) The director may employ a competent insurance actuary to perform actuarial duties, if any, of the division, to take charge of or assist in the examination of insurers, and to perform other assigned duties. (d) The director may appoint or employ examiners to conduct or assist in examinations provided for under this title as may be competent because of experience or special education or training to fulfill the responsibilities of an insurance examiner. (e) The director may appoint and employ a field investigator whose primary duty is to make investigations in this state of violations or claimed violations of this title. (f) The director may appoint a chief clerk for the division, and employ other assistants and clerks necessary to discharge the duties of the director under this title. (g) The director may contract for and procure, on a fee or part-time basis, or both, actuarial, technical, or other professional services required for the discharge of the director's duties. (h) A volunteer member of an advisory committee who has been appointed by the director under a provision of this title to assist and advise the director on issues or matters concerning a specific area of insurance is not entitled to payment of per diem or travel expenses authorized under AS 39.20.180.
(a) The director may delegate to a deputy, assistant, examiner, or employee of the division the exercise or discharge in the director's name of a power, duty, or function, whether ministerial or discretionary, vested by this title in the director. (b) The director is responsible for the official acts of a deputy, assistant, examiner, or employee of the director acting in the name of and by the authority of the director.
(a) The director shall enter in permanent form records of official transactions, examinations, investigations, and proceedings and keep those records in the office of the director. The records and insurance filings in the office of the director are open to public inspection, except as otherwise provided in (b) - (g) of this section or other provisions of this title with respect to particular records or filings. (b) Information and records, including written documents and electronic data, designated as confidential or not available for public inspection under this section or other provisions of this title (1) are not subject to inspection and copying under AS 40.25.110 - 40.25.220; (2) may not be obtained from the director by subpoena, except for a subpoena issued by a state or federal law enforcement agency or grand jury; (3) may be used by the director in a regulatory or legal proceeding; and (4) may be released for public inspection if the person who provided the information or records to the director consents or releases incomplete or misleading information on the same topic to the public. (c) The director or a person acting under the authority of the director who receives information or records designated in this title as confidential or not available for public inspection may not be permitted or required to testify about the information or records in a civil action not involving the state or a state agency, officer, or employee. (d) A person required or requested to provide information or records to the director under this title does not waive a claim of privilege that the person may have by providing the information or records to the director. (e) In the performance of duties under this title, the director may (1) disclose confidential information or records to the legislature, state, federal, and international regulatory or law enforcement agencies, or the National Association of Insurance Commissioners if the recipient will maintain the confidentiality of the information or records; (2) receive information or records from state, federal, and international regulatory or law enforcement authorities or the National Association of Insurance Commissioners and maintain the confidentiality of the information or records if requested to do so or given notice that the information or records are confidential under the law of the jurisdiction supplying them; and (3) enter into agreements consistent with this section governing the sharing of information or records that are confidential under this title with other state, federal, and international regulatory or law enforcement agencies or the National Association of Insurance Commissioners for the purpose of furthering any regulatory or legal action that may be taken as part of the recipient's official duties. (f) The following information or records submitted to or obtained by the director are confidential: (1) personally identifiable consumer information; however, the director may disclose the information or records for the purpose of attempting to resolve a consumer complaint; (2) information or records established by a showing satisfactory to the director to be a trade secret or proprietary business information, including (A) detailed health insurance claim cost data; and (B) justification for usual, customary, and reasonable charge determinations; (3) information or records provided by a person not subject to this title at the request of the director if the information or records are identified as confidential by the director; and (4) analysis ratios and examination synopses concerning insurance companies that are submitted to the director by the National Association of Insurance Commissioners. (g) The director may withhold information or records from public inspection for as long as the director finds the withholding is (1) necessary to protect a person against unwarranted injury; or (2) in the public interest.
(a) A copy of a record or document in the office of the director that is certified as a true copy by the director shall be received in evidence in any court as if it were the original. (b) The director shall furnish upon request a certificate as to the authority of a person to transact insurance. The certificate is evidence of the facts set out in the certificate.
(a) The director shall enforce the provisions of this title, and shall execute the duties imposed by this title. (b) The director has the power and authority expressly conferred by or reasonably implied from the provisions of this title. (c) The director may conduct examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized, considered proper to determine whether any person has violated a provision of this title or to secure information useful in the lawful administration of its provisions. (d) If the director determines that a catastrophe has occurred in this state and in good faith believes that the governor or the President of the United States has issued or is about to issue a declaration of disaster, the director may take the action that the director considers necessary to assure that a contract of insurance already issued will be honored under the terms of the contract. Actions that the director may take include emergency orders permitting the immediate licensing of adjusters to facilitate handling of claims, permitting a licensee to open or close an office, permitting a licensee to move or remove a record as required by the existence of the catastrophe, or permitting the issuance by an insurer of checks or drafts drawn on an out-of-state bank in payment of a claim. Until a declaration of the disaster has been lifted, the director may take action to respond to a disaster without a hearing. An action taken under this subsection may not remain in effect more than six months from the date that the director determines that a catastrophe has occurred unless, after a hearing, the director determines that the action is still necessary to respond to the disaster. (e) The director has such additional powers and duties as may be provided by other laws of this state.
(a) The director shall adopt by regulation uniform claims forms, uniform standards, and uniform procedures for the processing of data relating to billing for and payment of health care services provided to state residents. A health care insurer shall use the uniform claims forms and comply with the uniform standards and procedures established under this section. (b) In this section, (1) health care insurer has the meaning given in AS 21.54.500; (2) health care services has the meaning given in AS 21.86.900.
(a) The director may adopt reasonable regulations to effectuate this title. A regulation may not extend, modify, or conflict with any law of this state or the reasonable implications thereof. Except for regulations adopted under AS 21.06.250, a regulation affecting a person or matter other than the personnel or the internal affairs of the director's office shall be adopted or amended only after a hearing, of which notice was given as required by AS 21.06.200. If reasonably possible the director shall set out the proposed regulation or amendment in or with the notice of hearing. A regulation or amendment as to which a hearing is required is not effective until it has been on file as a public record in the director's office for at least 10 days. (b) In addition to any other penalty provided, wilful violation of a regulation subjects the violator to the administrative penalty prescribed for that violation.
(a) Orders and notices of the director are not effective unless in writing signed by or under the authority of the director. (b) Every order must state its effective date and must concisely state (1) its intent or purpose; (2) the grounds on which it is based; (3) the provisions of this title under which the action is taken or proposed to be taken; the failure of an order to designate a particular provision of this title does not deprive the director of the right to rely on the particular provision. (c) Except as may be provided in this title respecting particular procedures, an order or notice may be given by delivery to the person to be ordered or notified or by mailing it, postage prepaid, addressed to the person at the principal place of business as last of record in the director's office. A mailed order or notice is considered given when mailed.
As early in each calendar year as is reasonably possible, the director shall prepare and deliver an annual report to the commissioner, who shall notify the legislature that the report is available, showing, with respect to the preceding calendar year, (1) a list of the authorized insurers transacting insurance in this state, with a summary of their financial statement as the director considers appropriate; (2) the name of each insurer whose certificate of authority was surrendered, suspended, or revoked during the year and the cause of surrender, suspension, or revocation; (3) the name of each insurer authorized to do business in this state against which delinquency or similar proceedings were instituted and, if against an insurer domiciled in this state, a concise statement of the facts with respect to each proceeding and its present status; (4) a statement in regard to examination of rating organizations, advisory organizations, joint underwriters, and joint reinsurers as required by AS 21.39.120;  (5) the receipt and expenses of the division for the year; (6) recommendations of the director as to amendments or supplementation of laws affecting insurance or the office of director; (7) statistical information regarding health insurance, including the number of individual and group policies sold or terminated in the state; this paragraph does not authorize the director to require an insurer to release proprietary information; (8) the annual percentage of health claims paid in the state that meets the requirements of AS 21.36.495(a) and (d);  (9) the total amount of contributions reported and the total amount of credit claimed under AS 21.96.070;  (10) the total number of public comments received and the director's efforts, to the extent allowable by law, to improve or maintain public access to information on individual health insurance rate filings before they become effective; and (11) other pertinent information and matters the director considers proper.
The director shall regularly inform the public of matters concerning the purchase, price, coverage, benefits, and rights of insurance marketed in this state and make available information on availability of the services of the division of insurance. The director shall prepare, publish, and revise as it becomes useful or necessary to do so, an information pamphlet on insurance and the rights of a consumer of insurance and on how to take advantage of the services of the division of insurance.
(a) The director may examine the affairs, transactions, accounts, records, and assets of each authorized and formerly authorized insurer and each licensed and formerly licensed managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, and surplus lines association as often as the director considers advisable. In scheduling and determining the nature, scope, and frequency of examinations, the director may consider any factor or material that the director determines is appropriate, including the results of financial statement analysis and ratios, competency of management or change of ownership, actuarial opinions, reports of independent certified public accountants, number and nature of consumer complaints, results of prior examinations, frequency of prior violations of statute and regulation, and criteria set out in the most recent edition of the Financial Condition Examiners Handbook and the Market Regulation Handbook approved by the National Association of Insurance Commissioners and in effect when the director conducts an examination. Examination of an alien insurer may be limited to its insurance transactions and affairs in the United States. Examination of a reciprocal insurer may also include examination of its attorney-in-fact to the extent that the transactions of the attorney-in-fact relate to the insurer. (b) The director shall in like manner examine each insurer applying for an initial certificate of authority to do business in this state. (c) In place of an examination by the director, the director may accept a full report of the last recent examination of a foreign or alien insurer, issued by the insurance supervisory official of another state, territory, commonwealth, or district of the United States. The director may require that the (1) insurance regulatory agency conducting the examination be, at the time of the examination, accredited by the National Association of Insurance Commissioners; (2) examination be performed under the supervision of an insurance regulatory agency accredited by the National Association of Insurance Commissioners; and the supervising examiner, after a review of the examination work papers and report, state under oath that the examination and report comply with the standards and procedures required by their accredited state insurance regulatory agency; or (3) examiner conducting the examination be employed by an insurance regulatory agency accredited at the time of the examination by the National Association of Insurance Commissioners and that the examiner, after review of the examination work papers and report, state under oath that the examination and report comply with the standards and procedures required by the accredited insurance regulatory agency. (d) The director may examine insurers in participation with the National Association of Insurance Commissioners. (e) The director may use a contract examiner to carry out the functions of this section. The selection of a contract examiner and the award of a contract is subject to AS 36.30 (State Procurement Code), except when the director makes a written determination that an emergency selection and contract award is necessary. (f) For the purpose of completing an examination of a person under this title, the director may examine or investigate any person, or the business of any person, if the director determines that the examination or investigation is necessary or material to the examination of the person. (g) The director shall examine a domestic insurer at least once every three years. The director may examine a domestic insurer at any time when the director determines that an examination or investigation is necessary. Unless the director determines an insurer is in danger of becoming impaired, when the director intends to conduct an interim examination of a domestic insurer covering the same subjects that were included in the scope of the last examination report, the director shall give at least 10 days prior written notice stating the scope and purpose of the examination. In this subsection, interim examination means an examination of a domestic insurer that occurs within three years after the start of the domestic insurer's last examination.
(a) To determine compliance with this title, the director may, as often as the director has reasonable cause, examine or require a written report from a person of the accounts, records, documents, and transactions pertaining to or affecting the insurance affairs or proposed insurance affairs of (1) an insurance producer or independent adjuster; or (2) a person engaged in or proposing to be engaged in or assisting in the promotion or formation of a domestic insurer or insurance holding corporation, or corporation to finance a domestic insurer or the production of its business. (b) [Repealed,  223 ch 67 SLA 1992.] 
(a) The director shall conduct the examination at the home office of a domestic, foreign, or Canadian insurer, or the United States branch office of an alien insurer, or in any of its branch or agency offices; or with respect to persons other than insurers, at the office or other place or places where the records are kept. (b) Every person being examined, or from whom information is sought, and its officers, employees, agents, and representatives shall provide to the director timely, convenient, and free access, at all reasonable hours at its office, the books, accounts, records, documents, files, information, assets, and matters in their possession or control relating to the subject of the examination, including all computer or other recordings relating to the property, assets, business, and affairs of the person being examined, and shall facilitate and aid the examination as far as it is in their power to do so, including providing to the director, at the expense of the person being examined, a copy of any document requested during the examination. The director may suspend, revoke, or refuse to issue or renew a license or authority of a person engaging in the business of insurance or other business under the jurisdiction of the director if the person or an officer, director, employee, or agent of the person refuses to submit to examination or to comply with a reasonable written request of an examiner. (c) If the director finds financial or other records to be inadequate or inadequately kept or posted or if an insurer's financial records are not kept as required by the Accounting Practices and Procedures Manual currently approved by the National Association of Insurance Commissioners after the director has issued an order citing the inadequacy of the accounts and given a reasonable opportunity to complete or correct the accounting, the director may employ experts to rewrite, post, or balance them at the expense of the person being examined. (d) When conducting an examination under this section, the director may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the reasonable cost of which shall be paid by the person being examined under AS 21.06.160(a). (e) As far as practical the director shall conduct the examination of a foreign or alien insurer in cooperation with the insurance supervisory officials of other states in which the insurer transacts business, and for this purpose the director may participate in joint examinations of insurers or be represented at an examination by an examiner of another state. (f) In conducting an examination under this section, the examiner shall observe at a minimum those guidelines and procedures set out in the most recent edition of the Financial Condition Examiners Handbook and the Market Regulation Handbook approved by the National Association of Insurance Commissioners that are consistent with this title. (g) An examiner may not be appointed by the director if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in a person subject to examination under this title. This section may not be construed to automatically preclude an examiner from being, in the ordinary course of business, (1) a policyholder or claimant under an insurance policy; (2) a grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if obtained under customary terms; (3) an investment owner in shares of regulated mutual fund companies; or (4) a settlor or beneficiary of a blind trust into which otherwise impermissible holdings have been placed. (h) The director may terminate or suspend an examination in order to pursue other legal or regulatory action under this title. (i) In a judicial or administrative proceeding a factual determination made in an examination report approved under AS 21.06.150(b)(1) is prima facie evidence of the fact.
(a) An examination report may only consist of facts appearing upon the books, records, or other documents of the examined person, the person's agents, or other persons examined, or facts determined from the testimony of officers, agents, or other persons examined concerning the person's affairs, and the conclusions and recommendations that the examiners find reasonably warranted from the facts. (b) The examiner shall file with the division a written report of an examination, signed by the examiner under oath, not later than 60 days following the last day of examination field work. The period for filing the report may be extended for 60 additional days upon approval of the director. Upon receipt of the report, the division shall transmit the report to the person being examined, together with a notice that gives the person being examined a period of 30 days to make a written submission or rebuttal with respect to matters contained in the examination report. Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the director shall fully consider and review the report, together with any written submissions or rebuttals, and any relevant portions of the examiner's work papers and enter an order (1) approving the examination report as filed or approving the examination report with modification or corrections; (2) rejecting the examination report with directions to the examiners to reopen the examination for the purpose of obtaining additional data, documentation, or information and refiling the report under this section; or (3) setting an investigatory hearing under the procedures of AS 21.06.200 and 21.06.210(a) - (d) for purposes of obtaining additional information and testimony. (c) In the event the director determines that regulatory action is appropriate as a result of an examination, the director may enter orders and initiate proceedings as provided by law. The director may use an examination report, work papers or other documents, the testimony of the examiners, or other information discovered or developed during the course of an examination in a judicial or administrative proceeding, whether or not a written report of the examination at the time has been made, transmitted, or approved by the director. (d) The director may disclose the content of an examination report, preliminary examination report or results, or a matter relating to it to the insurance division of this or another state or country and to law enforcement officers of this or another jurisdiction. Except as allowed by this section or other provision of law, the director may not disclose the contents of a preliminary examination report before the report is filed in the office of the director under AS 21.06.060. (e) An order entered under (b)(1) of this section must be accompanied by findings of fact and conclusions of law resulting from the director's consideration and review of the examination report, relevant examiner work papers, and written submissions or rebuttals. (f) Within 30 days of the receipt of the approved report, the person examined shall file affidavits executed by each director and the chief executive officer or equivalent officer stating under oath that they have received and reviewed a copy of the approved report and related orders. (g) Information or records obtained by the director under AS 21.06.120 or 21.06.140 and any related work papers of an examination are confidential. The director may publish an examination report or a summary of it in a newspaper or electronic media in the state if the director determines that the publication is in the public interest.
(a) Each person examined, other than examinations under AS 21.06.130 and examinations of managing general agents, third-party administrators, reinsurance intermediary managers, motor vehicle service contract providers, or surplus lines brokers, shall pay a reasonable rate calculated on salary, benefit costs, and estimated division overhead for time spent directly or indirectly related to the examination. Each person examined, other than examinations under AS 21.06.130, shall pay actual out-of-pocket business expenses, including travel expenses, incurred by division staff examiners and shall pay the compensation of a contract examiner, to be set at a reasonable customary rate, for conducting the examination upon presentation of a detailed account of the charges and expenses by the director or under an order of the director. The director may waive payment of all or part of the actual out-of-pocket business expenses incurred by division staff examiners, or the compensation of a contract examiner, if the director determines that payment of the expenses or compensation creates a financial hardship for a managing general agent, third-party administrator, reinsurance intermediary manager, motor vehicle service contract provider, or surplus lines broker. The accounting may either be presented periodically during the course of the examination or at the termination of the examination. A person may not pay and an examiner may not accept additional compensation for an examination. A person shall pay examination expenses to the division under this subsection using an electronic payment method specified by the director.  (b) The director shall pay into the general fund of the state all money received under (a) of this section. Instead of charging and collecting the costs and expenses of the examination under (a) of this section, the director may give written authorization for the person examined to make direct payment to the contract examiner for all or part of the contract examiner's compensation or expenses. The contract between the state and a contract examiner who will receive direct payment under this subsection must require that the examiner provide the director with a copy of each billing for the examination. (c) In addition to other penalties provided by this title, if the person fails to pay the charges and expenses prescribed in (a) of this section, the amount may be recovered by suit by the attorney general on behalf of the state and restored to the general fund. The amount due shall be a first lien upon all of the assets and property of the person in this state.
(a) The director, employees or agents of the division, and the National Association of Insurance Commissioners and its employees, are not liable for civil damages for an act or omission in the execution of their authorized activities or duties under this title, or for the publication or dissemination of a report or bulletin related to their authorized activities or duties. (b) A person may not bring a civil action if the civil action arises out of the act of communicating or delivering information to the director, a representative of the director, or an examiner who is performing an examination under this title. (c) This section does not abrogate or modify the common law or other statutory privilege or immunity. (d) This section does not preclude liability for civil damages as a result of reckless, wilful, or intentional misconduct.
(a) With respect to the subject of an examination, investigation, or hearing being conducted by the director or an examiner, if general written authority has been given the examiner by the director, the director or the examiner may subpoena witnesses and administer oaths or affirmations and examine any person under oath, and may compel the production of records, books, papers, contracts, and other documents by attachments, if necessary. If, in connection with an examination of an insurer, the director desires to examine an officer, director, or manager who is then outside this state, the director is authorized to conduct and to enforce by appropriate and available means an examination under oath in another state or a territory of the United States in which the officer, director, or manager may then presently be, to the full extent permitted by the laws of the other state or territory, this special authorization considered. An administrative law judge from the office of administrative hearings (AS 44.64.010) conducting a hearing under this title may, in the course of the hearing, exercise the powers granted to the director under this subsection. (b) Witness fees and mileage, if claimed, shall be allowed the same as for testimony in a court. Witness fees, mileage, and the actual expenses necessarily incurred in securing attendance of witnesses and their testimony shall be itemized, and shall be paid by the person being examined if the person is found to have violated the law regarding the matter for which the witness was subpoenaed, or shall be paid by the person, if other than the director, at whose request the hearing is held. (c) Subpoenas of witnesses shall be served in the same manner as if issued from a court. (d) If a person disobeys or resists a lawful order of the administrative law judge or director, refuses to respond to a subpoena, refuses to take oath or affirmation as a witness, refuses to be examined, or is guilty of misconduct at a hearing or so near the hearing as to obstruct the proceeding, the administrative law judge or director shall certify the facts to the superior court where the hearing is held, and, upon certification, the court shall issue an order directing the person to appear before the court and show cause why the person should not be punished for contempt. (e) [Repealed,  22 ch 149 SLA 1984.] 
(a) The director may hold hearings for any purpose within the scope of this title considered to be necessary. (b) The office of administrative hearings (AS 44.64.010) shall conduct a hearing on behalf of the director if required under AS 44.64.030. Otherwise, the director shall conduct a hearing if required by a provision of this title, or upon written demand to the director by a person aggrieved by an act, threatened act, or failure of the director to act, or by a report, regulation, or order of the director (other than an order for the holding of a hearing, or an order on hearing or under it). A demand must specify the grounds to be relied upon at the hearing as a basis for the relief. Except as provided under AS 21.27.420(d), unless postponed by mutual consent or for good cause shown, the hearing shall be held within 30 days after receipt by the director of the written demand. (c) Except as provided under AS 21.27.420(d), if, within the 30-day period, the director does not either (1) grant the hearing, or (2) issue an order refusing the hearing, as to the previous report, regulation, or order as to which the person so claims to be aggrieved, the hearing shall be considered to have been refused.
(a) Except as provided in AS 21.27.420(d), a demand for a hearing received by the director before the effective date of an order issued or within 10 days after an order is delivered stays the effectiveness of the order pending the hearing and an order made thereon, except as to action taken or proposed under an order (1) on hearing; (2) under and supplemental to an order on hearing; or (3) based upon impairment of assets or unsound financial condition of an insurer. (b) If an automatic stay is not provided for and the director after receipt of a written request for a stay fails to grant it, the person aggrieved may apply to the superior court for a stay of the director's proposed action.
Not less than 20 days in advance, the administrative law judge or director shall give notice of the time and place of the hearing, stating the matters to be considered at the hearing. If the persons to be given notice are not specified in the provision under which the hearing is held, the administrative law judge or director shall give notice to all persons whose pecuniary interests are to be directly and immediately affected by the hearing.
(a) The administrative law judge or director shall allow a party to the hearing to appear in person and by counsel, to be present during the giving of all evidence, to have a reasonable opportunity to inspect all documentary evidence and to examine witnesses, to present evidence in support of the party's interest, and to have subpoenas issued by the administrative law judge or director to compel attendance of witnesses and production of evidence in the party's behalf. (b) The administrative law judge or director shall permit to become a party to the hearing by intervention, if timely, any person who was not an original party to the proceeding and whose pecuniary interests are to be directly and immediately affected by the director's order made upon the hearing. (c) Formal rules of pleading or evidence need not be observed at a hearing. (d) Upon written request seasonably made by a party to the hearing and at that person's expense, the administrative law judge or director shall cause a full stenographic record of the proceedings to be made by a competent reporter. If transcribed, a copy of the stenographic record shall be furnished to the director, without cost to the director or the state, and shall be a part of the director's record of the hearing. If transcribed, a copy of the stenographic record shall be furnished to any other party to the hearing at the request and expense of the other party. If no stenographic record is made or transcribed, the administrative law judge or director shall prepare an adequate record of the evidence and of the proceedings. (e) Upon written request of a party to a hearing filed with the director within 30 days after an order made pursuant to a hearing has been mailed or delivered to the persons entitled to receive it, the director may grant a rehearing or reargument of the matters involved in the hearing. Notice of the rehearing or reargument must conform to the requirements of AS 21.06.200. (f) If the parties agree, the administrative law judge or director may conduct a hearing under this section by teleconference. (g) A witness at a hearing under this section may testify telephonically. (h) The administrative law judge or director may close a hearing to the public when the administrative law judge or director finds the closure is necessary to protect a person against unwarranted injury or is in the public interest.
(a) In conducting the hearing, the administrative law judge or director shall sit in a quasi-judicial capacity. Within 45 days after termination of the hearing, rehearing, or reargument, the director shall make an order on hearing, covering matters involved in the hearing, rehearing, or reargument, and shall give a copy of the order to the same persons given notice of the hearing. (b) The order must contain a concise statement of the facts found by the director, the conclusions of the director, and the matters required by AS 21.06.100. (c) The order may affirm, modify, or nullify a previous action or may constitute the taking of new action within the scope of the notice of hearing.
A person aggrieved by an order of the director may appeal the order to the superior court using procedures provided by court rule.
The hearing and appeal procedures provided for in AS 21.06.180 - 21.06.230 do not apply to matters covered by AS 21.39 (Rates and Rating Organizations).
The director shall collect in advance a fee for each license and for services performed by the division of insurance. Fees may be collected for but are not limited to applications, licenses and license renewals, certificates of authority, service of process, printed or photocopied material, and postage. The director shall adopt regulations setting the fees in an amount the director determines to be sufficient to reimburse the state for the actual expense incurred in providing a service. The director may require by regulation that an insurer or other licensee pay a fee by electronic means.
Notwithstanding any other provision of this title, a natural person who applies for a license or requests renewal of a license issued by the director under this title shall provide the director with the person's social security number. Upon request, the director shall provide a social security number provided under this section to the child support services agency created in AS 25.27.010, or the child support enforcement agency of another state, for child support purposes authorized under law.
(a) The director shall adopt regulations to provide standards and criteria for (1) the structure and operation of utilization review and benefit determination processes; (2) the establishment and maintenance of procedures by health care insurers to ensure that a covered individual has the opportunity for appropriate resolution of grievances; and (3) an independent review of an adverse determination or final adverse determination. (b) The regulations under (a) of this section must be at least as restrictive as the Utilization Review and Benefit Determination Model Act adopted by the National Association of Insurance Commissioners on June 22, 2003, the Health Carrier Grievance Procedure Model Act adopted by the National Association of Insurance Commissioners on June 22, 2003, and the Uniform Health Carrier External Review Model Act adopted by the National Association of Insurance Commissioners on June 2, 2008. (c) The director may adopt regulations for the registration and regulation of independent review organizations, including the establishment of fees in an amount the director determines to be sufficient to reimburse the state for actual expenses incurred in providing a service.
(a) A contract between a participating health care provider and a health care insurer must contain a provision that (1) provides for a reasonable mechanism to identify all medical care services to be provided by the health care insurer; (2) clearly states or references an attachment that states the health care provider's rate of compensation; (3) clearly states all ways in which the contract between the health care provider and health care insurer may be terminated; a provision that provides for discretionary termination by either party must apply equitably to both parties; (4) provides that, in the event of a dispute between the parties to the contract, a fair, prompt, and mutual dispute resolution process must be used; at a minimum, the process must provide (A) for an initial meeting at which all parties are present or represented by individuals with authority regarding the matters in dispute; the meeting shall be held within 10 working days after the health care insurer receives written notice of the dispute or gives written notice to the provider, unless the parties otherwise agree in writing to a different schedule; (B) that if, within 30 days following the initial meeting, the parties have not resolved the dispute, the dispute shall be submitted to mediation directed by a mediator who is mutually agreeable to the parties and who is not regularly under contract to or employed by either of the parties; each party shall bear its proportionate share of the cost of mediation, including the mediator fees; (C) that if, after a period of 60 days following commencement of mediation, the parties are unable to resolve the dispute, either party may seek other relief allowed by law; (D) that the parties shall agree to negotiate in good faith in the initial meeting and in mediation; (5) states that a health care provider may not be penalized or the health care provider's contract terminated by the health care insurer because the health care provider acts as an advocate for a covered person in seeking appropriate, medically necessary medical care services; (6) protects the ability of a health care provider to communicate openly with a covered person about all appropriate diagnostic testing and treatment options; and (7) defines words in a clear and concise manner. (b) A contract between a participating health care provider and a health care insurer that offers a health care insurance policy may not contain a provision that (1) has as its predominant purpose the creation of direct financial incentives to the health care provider for withholding covered medical care services that are medically necessary; nothing in this paragraph shall be construed to prohibit a contract between a participating health care provider and a health care insurer from containing incentives for efficient management of the utilization and cost of covered medical care services; (2) requires the provider to contract for all products that are currently offered or that may be offered in the future by the health care insurer; or (3) requires the health care provider to be compensated for medical care services performed at the same rate as the health care provider has contracted with another health care insurer. (c) A health care insurer may not enter into a contract with a health care provider that requires the provider to indemnify or hold harmless the health care insurer for the acts or conduct of the health care insurer. An indemnification or hold harmless clause entered into in violation of this subsection is void.
A health care insurance policy must contain a provision (1) that preauthorization for a covered medical procedure on the basis of medical necessity may not be retroactively denied unless the preauthorization is based on materially incomplete or inaccurate information provided by or on behalf of the provider; (2) for emergency services that meet the requirements under 42 U.S.C. 300gg-19a(b) if any coverage is provided for treatment of an emergency medical condition; (3) that covered medical care services be reasonably available in the community in which a covered person resides or that, if referrals are required by the policy, adequate referrals outside the community be available if the medical care service is not available in the community; (4) that discloses covered benefits, optional supplemental benefits, and benefits relating to and restrictions on nonparticipating provider services; (5) describing a mechanism for assignment of benefits for health care providers and payment of benefits; (6) describing the availability of prescription medications or a formulary guide, and whether medications not listed are excluded; if a formulary guide is made available, the guide must be updated annually; and (7) describing available translation or interpreter services, including audiotape or braille information.
(a) If a health care insurer offers a health care insurance policy that provides for coverage of medical care services only if the services are furnished through a network of health care providers that have entered into a contract with the health care insurer, the health care insurer shall also offer a non-network option to covered persons at initial enrollment, as provided under (c) of this section. The non-network option may require that a covered person pay a higher deductible, copayment, or premium for the plan if the higher deductible, copayment, or premium results from increased costs caused by the use of a non-network provider. This subsection does not apply to a covered person who is offered non-network coverage through another health care insurance policy or through another health care insurer. (b) The amount of any additional premium charged by the health care insurer for the additional cost of the creation and maintenance of the option described in (a) of this section and the amount of any additional cost sharing imposed under this option shall be paid by the covered person unless it is paid by an employer or other person through agreement with the health care insurer. (c) A covered person may make a change to the medical care coverage option provided under this section only during a time period determined by the health care insurer. The time period described in this subsection must occur at least annually and last for at least 15 working days. (d) If a health care insurer that offers a health care insurance policy requires or provides for a designation by a covered person of a participating primary care provider, the health care insurer shall permit the covered person to designate any participating primary care provider, including a pediatrician, that is available to accept the covered person. (e) Except as provided in this subsection and (h) of this section, a health care insurer that offers a health care insurance policy shall permit a covered person to receive medically necessary or appropriate specialty care, subject to appropriate referral procedures, from any qualified participating health care provider that is available to accept the individual for medical care. This subsection does not apply to specialty care if the health care insurer clearly informs covered persons of the limitations on choice of participating health care providers with respect to medical care. In this subsection, (1) appropriate referral procedures means procedures for referring patients to other health care providers as set out in the applicable member policy and as described under (a) of this section; (2) specialty care means care provided by a health care provider with training and experience in treating a particular injury, illness, or condition. (f) If a contract between a health care provider and a health care insurer is terminated, a covered person may continue to be treated by that health care provider as provided in this subsection. If a covered person is pregnant or being actively treated by a provider on the date of the termination of the contract between that provider and the health care insurer, the covered person may continue to receive medical care services from that provider as provided in this subsection, and the contract between the health care insurer and the provider shall remain in force with respect to the continuing treatment. The covered person shall be treated for the purposes of benefit determination or claim payment as if the provider were still under contract with the health care insurer. However, treatment is required to continue only while the health care insurance policy remains in effect and (1) for the period that is the longest of the following: (A) the end of the current policy or plan year; (B) up to 90 days after the termination date, if the event triggering the right to continuing treatment is part of an ongoing course of treatment; (C) through completion of postpartum care, if the covered person is pregnant on the date of termination; or (2) until the end of the medically necessary treatment for the condition, disease, illness, or injury if the person has a terminal condition, disease, illness, or injury; in this paragraph, terminal means a life expectancy of less than one year. (g) The requirements of this section do not apply to medical care services covered by Medicaid. (h) A health care insurer that offers a health care insurance policy that provides coverage for obstetrical and gynecological care and that requires designation by a covered person of a participating primary care provider may not require authorization or referral by any person, including a primary care provider, for a female patient to receive obstetrical and gynecological care from a participating health care professional who specializes in obstetrics or gynecology. A participating health care professional who specializes in obstetrics or gynecology shall agree to adhere to the health care insurer's policies and procedures, including procedures regarding referrals, obtaining prior authorization, and providing services under a treatment plan, if any, approved by the health care insurer. A health care insurer shall treat authorizations by a health care professional who specializes in obstetrical or gynecological care as the authorization of the primary care provider. This subsection may not be construed to (1) waive any exclusions of coverage under the terms and conditions of the health care insurance policy with respect to coverage of obstetrical and gynecological care; or (2) preclude a health care insurer from requiring that the health care provider who specializes in obstetrical or gynecological care to notify the primary care provider or the health care insurer of treatment decisions.
This chapter may not be construed to (1) restrict or limit the right of a health care insurer to include services provided by a religious nonmedical provider as medical care services covered by the health care insurance policy; (2) require a health care insurer, when determining coverage for services provided by a religious nonmedical provider, to (A) apply medically based eligibility standards; (B) use health care providers to determine access by a covered person; (C) use health care providers in making a decision on an internal or external appeal; or (D) require a covered person to be examined by a health care provider as a condition of coverage; or (3) require a health care insurance policy to exclude coverage for services provided by a religious nonmedical provider because the religious nonmedical provider is not providing medical or other data required from a health care provider if the medical or other data is inconsistent with the religious nonmedical treatment or nursing care being provided.
This chapter may not be construed to supersede or change the provisions of 29 U.S.C. 1001 - 1191 (Employee Retirement Income Security Act of 1974) as those provisions apply to self-insured employers.
In this chapter, (1) [Repealed,  65 ch 41 SLA 2016.] (2) [Repealed,  65 ch 41 SLA 2016.] (3) emergency medical condition means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, that a prudent person who possesses an average knowledge of health and medicine could reasonably expect that the absence of immediate medical attention would result in serious impairment of bodily functions, serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy. (4) emergency services means medical care services or items furnished or required to evaluate and treat an emergency medical condition; (5) health care insurer has the meaning given in AS 21.54.500; (6) health care provider means a person licensed in this state or another state of the United States to provide medical care services; (7) health insurance has the meaning given in AS 21.12.050(a); (8) [Repealed,  65 ch 41 SLA 2016.] (9) medical care has the meaning given in AS 21.97.900; (10) participating health care provider means a health care provider who has entered into an agreement with a health care insurer to provide services or supplies to a patient covered by a health care insurance policy; (11) primary care provider means a health care provider who provides general medical care services and does not specialize in treating a single injury, illness, or condition or who provides obstetrical, gynecological, or pediatric medical care services; (12) provider means a health care provider; (13) religious nonmedical provider means a person who provides only religious nonmedical treatment or nursing care for an illness or injury; (14) "utilization review" means a set of techniques designed to monitor the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of, health care services, procedures, or settings; techniques may include ambulatory review, prospective review, second opinion certification, concurrent review, case management, discharge planning, or retrospective review.
(a) A person may not act as an insurer and an insurer may not transact insurance in this state except as authorized by a subsisting certificate of authority issued to it by the director, except as to transactions that are expressly otherwise provided for in this title. (b) An insurer may not have or maintain in this state an office, representative, or other facility for the solicitation or servicing of any kind of insurance in another state unless the insurer is authorized to transact the same kind of insurance in this state.
A certificate of authority is not required of an insurer, not otherwise authorized in this state, with regard to (1) transactions relative to its policies lawfully written in the state, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, resulting from its former authorized operations in the state; (2) related transactions subsequent to issuance of a policy covering only subjects of insurance not resident, located, or expressly to be performed in the state at time of issuance, and which coverage was lawfully solicited, written, and delivered outside the state; (3) transactions under surplus lines coverages lawfully written under AS 21.34; (4) reinsurance, except as to domestic reinsurers; or (5) transactions relative to policies issued in another state, but only if (A) the insurer does not market insurance in this state; (B) the laws of the state of issue apply to this state's residents covered under the policies; and (C) the insurer complies with other requirements the director adopts by regulation to qualify for an exception under this paragraph.
A foreign insurer may transact business in this state without a certificate of authority, for the purpose and to the extent only of investing its funds in real estate in this state or in securities secured thereby by complying with the applicable laws of this state other than this title. Such an insurer is not subject to any other provision of this title.
To qualify for and hold authority to transact insurance in this state an insurer shall comply with this title and with its charter powers and shall be an incorporated stock insurer, an incorporated mutual insurer, or a reciprocal insurer, all of the same general type as may be formed as a domestic insurer under this title, except that (1) a foreign insurer may not be authorized to transact insurance in this state that does not maintain reserves as required by AS 21.18 applicable to the kind or kinds of insurance transacted by the insurer, wherever transacted in the United States; or that transacts business anywhere in the United States on the assessment plan, or stipulated premium plan, or any similar plan; (2) a foreign insurer that is directly or indirectly owned or controlled in whole or in substantial part by a government or governmental agency may not be authorized to transact insurance in this state; membership or subscribership in a mutual or reciprocal insurer by virtue of being a policyholder thereof, or ownership of stock or other security that does not have voting rights with respect to the management of the insurer, or supervision of an insurer by public authority, is not considered to be an ownership or control of the insurer for the purposes of this provision.
(a) An insurer may not be authorized to transact insurance in this state that has or uses a name so similar to that of another authorized insurer that the name is likely to mislead the public. (b) A life insurer may not be authorized that has or uses a name deceptively similar to that of another insurer authorized to transact insurance in this state within the preceding 10 years if life insurance policies originally issued by the other insurer are still outstanding in this state. (c) An insurer may not be authorized that has or uses a name that tends to deceive or mislead the public as to the type of organization of the insurer. (d) In case of a conflict of names between two insurers, or a conflict otherwise prohibited under (a) - (c) of this section, the director may permit or require the more recently authorized insurer to use in this state a supplementation or modification of its name or a business name that may reasonably be necessary to avoid the conflict.
An insurer that otherwise qualifies may be authorized to transact any one kind or combination of kinds of insurance as defined in AS 21.12, except that (1) a life insurer may also grant annuities, but is not authorized to transact any other kind of insurance than health; except that if the insurer is otherwise qualified, the director shall continue to authorize a life insurer that, immediately before July 1, 1966, was lawfully authorized to transact in this state a kind or kinds of insurance in addition to life and health; (2) a reciprocal insurer may not transact life insurance; (3) a title insurer must be a stock insurer; (4) a property or casualty insurer may not transact life insurance and may not grant annuities.
(a) To qualify for authority to transact any one kind of insurance as defined in AS 21.12, or combination of kinds of insurance as shown below, a foreign insurer, or a domestic insurer applying for its original certificate of authority in this state, after having withdrawn from this state for any cause, shall possess and after that maintain unimpaired basic paid-in capital stock if a stock insurer, or unimpaired basic surplus if a foreign mutual insurer or foreign reciprocal insurer, that is unavailable for dividends of any kind, and shall possess when first so authorized, and maintain after that, additional money in surplus, as follows: Kind or Kindsof InsuranceBasic Capital or Basic GuaranteeSurplusAdditional Surplus When First AuthorizedAdditional Maintained SurplusLife$1,000,000$1,000,000$750,000Health1,000,0001,000,000750,000Life and Health1,250,0001,250,0001,000,000Property1,000,0001,000,000750,000Casualty excludingvehicle1,000,0001,000,000750,000Vehicle1,000,0001,000,000750,000Marine &transportation1,000,0001,000,000750,000Surety1,000,0001,000,000750,000Title500,000500,000250,000Any three or more ofthe following kinds ofinsurance: property, marine and transportation,vehicle, casualtyexcluding vehicle,surety, and health3,000,0003,000,0002,250,000Legal expenses1,000,0001,000,000750,000Mortgage Guarantee1,000,0001,000,000750,000 (b) Capital and surplus requirements are based upon all the kinds of insurance transacted by the insurer in all areas in which it operates or proposes to operate, whether or not only a portion of the kinds of insurance are to be transacted in this state. After a hearing, the director may for the protection of the public require an insurer to maintain funds in excess of the amounts required under (a) of this section, due to the amount, kind, or combination of kinds of insurance transacted by the insurer. Failure of an insurer to maintain funds as ordered by the director is grounds for suspension or revocation of the insurer's certificate of authority. (c) After January 1, 1992, an insurer may not renew and continue its certificate of authority unless the insurer possesses at least the basic capital or basic surplus, and additional surplus required under this section. (d) As to surplus required for qualification to transact one or more kinds of insurance and thereafter to be maintained, domestic mutual insurers formed after July 1, 1966, are governed by AS 21.69 and domestic reciprocal insurers formed after July 1, 1966, are governed by AS 21.75. (e) A life insurer may also grant annuities without additional capital or additional surplus. (f) On or after January 1, 1991, a domestic property or casualty insurer may assume reinsurance, either new or renewal, (1) only of the kinds of risks, and to retain risks, within the limits it is otherwise authorized to insure; and (2) only if, in the absence of prior written approval from the director, it maintains, notwithstanding (a) of this section, in policyholder surplus at least $10,000,000 as of December 31, 1990, $15,000,000 as of December 31, 1991, and $20,000,000 as of December 31, 1992. This subsection does not apply to reinsurance that is required to be assumed by applicable law or regulation or is assumed under an intracompany pooling arrangement between affiliated insurers. (g) Notwithstanding (a) of this section and AS 21.09.080(a), a domestic insurer admitted in this state before May 16, 1990, and that has not had an ownership change after May 15, 1990, shall maintain capital and surplus of at least $4,000,000 as of January 1, 1992; $4,250,000 as of January 1, 1993; $4,500,000 as of January 1, 1994; $4,750,000 as of January 1, 1995; $5,000,000 as of January 1, 1996; and $5,250,000 as of January 1, 1997, if the domestic insurer (1) is not affiliated with any other insurer or group of insurers; (2) has capital and surplus of less than $5,250,000 on December 31, 1991; (3) transacts any three or more of the following kinds of insurance: property, marine and transportation, vehicle; casualty, excluding vehicle; surety; and health; and (4) has obtained the prior written approval of the director.
(a) In order for a domestic insurer to renew and continue the insurer's certificate of authority after January 1, 1992, the insurer must possess at least the basic capital, basic guarantee surplus, and additional maintained surplus required under AS 21.09.070(a). (b) [Repealed,  85 ch 50 SLA 1990.]  (c) [Repealed,  85 ch 50 SLA 1990.]  (d) Notwithstanding the provisions of this section, a domestic life insurer duly licensed and capitalized on December 31, 1984, shall have and maintain the capital and surplus required under the laws of this state on December 31, 1984, as if the laws had continued in force. This subsection does not apply to a domestic life insurer if the ownership of the insurer is changed, or the class, line, and volume of the business written is materially changed from that written on December 31, 1984.
(a) This section applies to all insurers. (b) The director may not authorize an insurer to transact insurance in this state unless it makes and thereafter maintains in trust in this state through the director for the protection of all its policyholders or of all its policyholders and creditors, a deposit of cash or securities eligible for deposit under AS 21.24.030 in the amount of no less than $300,000, except that (1) from foreign insurers, in lieu of the deposit or part thereof in this state, the director may accept the certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by the insurer is being maintained in public custody or control under the law in that state in trust for the protection generally of the insurer's policyholders or its policyholders and creditors, in the United States; (2) from alien insurers, in lieu of the deposit or part thereof in this state, the director may accept evidence satisfactory to the director that the insurer maintains within the United States by way of trust deposits with public depositaries, or in trust institutions acceptable to the director, assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with a surplus equal to the larger of the following sums: (A) the largest deposit required by this title to be made by a foreign insurer transacting like kinds of insurance; or (B) $300,000; which surplus shall for all purposes under this title be considered to be the capital or surplus of the insurer. (c) Deposits of foreign insurers, or deposits of alien insurers under (b)(2)(A) or (B) of this section in another state shall be in cash or securities of substantially as high quality as those eligible for deposit in this state under AS 21.24.030. (d) All such deposits in this state are subject to the applicable provisions of AS 21.24.
The director may not grant or continue authority to transact insurance in this state to an insurer whose principal management personnel is found by the director for good cause shown to be untrustworthy or not of good character, or so lacking in insurance company managerial experience as to make the proposed operation hazardous to the insurance-buying public or to its stockholders; or that the director has good reason to believe is affiliated directly or indirectly through ownership, control, management, reinsurance transactions, or other insurance or business relations with a person or persons whose business operations, to the detriment of insurers, stockholders, or creditors, are or have been marked by manipulation of assets, of accounts, or of reinsurance, or by bad faith.
(a) To apply for an original certificate of authority, an insurer shall file with the director its application, accompanied by the applicable fees set under AS 21.06.250, showing its name, location of its home office, or principal office in the United States if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, and additional information that the director may reasonably require, together with the following documents, as applicable: (1) if a foreign insurer, a copy of its corporate charter or articles of incorporation, with all amendments certified by the public officer with whom the originals are on file in the state or country of domicile; (2) if a reciprocal insurer, copies of the power of attorney of its attorney-in-fact and of its subscribers' agreement, if any, certified by its attorney-in-fact; (3) a copy of its financial statement as of the preceding December 31 and all subsequent quarterly financial statements, sworn to by at least two executive officers of the insurer or certified by the public insurance supervisory official of the insurer's state of domicile or of entry into the United States; (4) a copy of the report of last examination, if any, made of the insurer, issued by the insurance supervisory official of its state of domicile or of entry into the United States; (5) appointment of the director under AS 21.09.180 as its attorney to receive service of legal process; (6) if a foreign or alien insurer, a certificate of the public official having supervision of insurance in its state or country of domicile, or state of entry into the United States, showing that it is authorized to transact the kinds of insurance proposed to be transacted in this state; (7) if an alien insurer, a copy of the appointment and authority of its United States manager, certified by its officer having custody of its records; and (8) if a foreign insurer, a certificate as to deposit if it is to be tendered under AS 21.09.090. (b) Policy forms and rates that require filing under AS 21.39 or AS 21.42 shall be submitted under AS 21.39.041, 21.39.220, or AS 21.42.120(b) and may not be submitted with the application for a certificate of authority.
(a) If, upon completion of its application, the director finds that the insurer has met the requirements for and is entitled to a certificate under this title, the director shall issue to the insurer a proper certificate of authority; if the director does not so find, the director shall issue an order refusing the certificate. The director shall act upon an application for a certificate of authority within 60 days after its completion. (b) The certificate, if issued, shall specify the kind or kinds of insurance the insurer is authorized to transact in this state. At the insurer's request, the director may issue a certificate of authority limited to particular types of insurance or insurance coverages within the scope of a kind of insurance defined in AS 21.12. (c) Although issued to the insurer, the certificate of authority is at all times the property of the state. Upon the expiration, suspension, or termination of the certificate of authority the insurer shall promptly deliver it to the director.
(a) A certificate of authority issued or renewed under this title continues in force as long as the insurer is entitled to it under this title and until suspended or revoked, or otherwise terminated, subject, however, to continuance of the certificate by the insurer each year by payment before June 30 of the continuation fee set under AS 21.06.250. The method of payment must be by electronic or other payment method specified by the director by regulation under AS 21.06.250. (b) If not continued by the insurer, its certificate of authority shall be suspended at midnight on June 30 following the failure of the insurer to continue it in force. The certificate of authority shall expire on June 30 one year following its suspension due to failure to continue the certificate of authority. The director shall promptly notify the insurer of the occurrence of a failure that may result in suspension of its certificate of authority. (c) The director may reinstate a certificate of authority that the insurer has inadvertently permitted to expire, after the insurer has fully cured all its failures that resulted in the expiration and upon payment by the insurer of the fee for reinstatement in addition to the current continuation fee, set under AS 21.06.250. Otherwise, the insurer shall be granted another certificate of authority only after filing an application and meeting all other requirements as for an original certificate of authority in this state. (d) The director may amend a certificate of authority at any time to accord with changes in the insurer's charter of insuring powers.
(a) A foreign admitted insurer may apply for voluntary surrender of its certificate of authority and the director may accept the application, if the foreign admitted insurer (1) is in compliance with the applicable sections of this title, or the director waives in writing each condition of noncompliance; (2) provides written confirmation that obligations incurred before the voluntary surrender of the certificate of authority shall be paid to guarantee funds or insurance pools established by law; and (3) is domiciled in a state that is (A) accredited by the National Association of Insurance Commissioners at the time of the request for voluntary surrender; or (B) not accredited by the National Association of Insurance Commissioners at the time of the request and agrees in writing to be subject to (i) AS 21.09.200 and 21.09.205 for a period of two years, including payment of any fee related to filing information with the director; and (ii) any other provision of this title that may be required in writing by the director and for the period of time the director may specify. (b) If a foreign admitted insurer who surrenders a certificate of authority ceases to exist, all business written and in force relative to a risk resident, located, or to be performed in this state shall be lawfully cancelled or reinsured. A reinsurance agreement covering all or a part of a risk described in this subsection shall be approved by the director before accepting the certificate of authority for surrender if the agreement meets the following criteria: (1) insurance coverage has not deteriorated from the policies existing at the time of the transfer; (2) the assuming insurer is of equal or better financial standing; and (3) the assuming insurer is admitted to do business in this state unless this requirement is waived by the director.
(a) The director shall suspend or revoke an insurer's certificate of authority (1) if the action is required by a provision of this title; (2) if the insurer no longer meets the requirements for the authority granted, on account of the insurer becoming impaired or insolvent or otherwise; or (3) if the insurer's authority to transact insurance is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer. (b) Except in cases of insolvency or impairment of required capital or surplus, or suspension or revocation by another state as referred to in (a)(3) of this section, the director shall give the insurer at least 15 days' notice in advance of a suspension or revocation under this section.
(a) The director may suspend or revoke an insurer's certificate of authority if, after a hearing, the director finds that the insurer has violated a lawful order of the director or a provision of this title other than those for which suspension or revocation is mandatory or has not paid any annual service fees assessed under AS 23.05.067. (b) The director shall, after a hearing, suspend or revoke an insurer's certificate of authority if the director finds that the insurer (1) is in unsound condition, or in a condition, or using methods or practices in the conduct of its business, that render its further transaction of insurance in this state injurious or hazardous to its policyholders or to the public; (2) has refused to be examined or to produce its accounts, records, and files for examination or that any of its officers have refused to give information with respect to its affairs, when required by the director; (3) has failed to pay a final judgment rendered against it in this state within 30 days after the judgment became final; a judgment appealed from is not final until determined by the appellate court; (4) with a frequency that indicates its general business practice in this state, has without just cause refused to pay proper claims arising under its policies, whether the claim is in favor of an insured or is in favor of a third person, or without just cause delays adjustment of claims, or compels the insured or claimant to accept less than the amount due them or to employ attorneys or to bring suit against the insurer or an insured to secure full payment or settlement of claims; (5) is affiliated with and under the same general management or interlocking directorate or ownership as another insurer that transacts direct insurance in this state without having a certificate of authority, except as permitted for surplus line insurance under AS 21.34; (6) has failed, after written request by the director, to remove or discharge an officer or director who has been convicted of a felony involving fraud, dishonesty, or moral turpitude. (c) The director may, without advance notice or a hearing, immediately suspend the certificate of authority of an insurer against which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings, have been commenced in any state.
(a) Upon suspending or revoking an insurer's certificate of authority, the director shall immediately give notice to the insurer and shall also publish notice of the revocation in one or more newspapers of general circulation in this state. (b) The suspension or revocation shall automatically suspend or revoke, as the case may be, the authority of all its agents and managing general agents to act as agents or managing general agents of the insurer in this state, and the insurer shall so state in the notice to agents and managing general agents provided for in (c) of this section. (c) Upon notification of suspension or revocation of an insurer's certificate of authority, the insurer shall immediately give notice of the suspension or revocation to its agents and managing general agents operating in this state.
(a) Suspension of an insurer's certificate of authority shall be for a fixed period of time determined by the director, or until the occurrence of a specific event necessary for remedying the reasons for suspension. The director may modify, rescind, or reverse a suspension under this section. (b) During the period of suspension, the insurer (1) may not solicit or write any new business in this state; (2) shall file its annual statement and pay fees, licenses, and taxes required under this title; and (3) may service its outstanding business in force in this state as if the certificate had continued in full force. (c) If the suspension of the certificate of authority is for a fixed period of time and the certificate of authority has not been otherwise terminated, upon expiration of the suspension period, the insurer's certificate of authority shall be reinstated unless the director finds that the insurer is not in compliance with the requirements of this title. The director shall promptly notify the insurer of any reinstatement, and the insurer may not consider its certificate of authority reinstated until notified by the director. If not reinstated, the certificate of authority expires at the end of the suspension period or at the time the insurer fails to continue the certificate during the suspension period under (b) of this section, whichever event occurs first. (d) If the suspension of the certificate of authority continues until the occurrence of a specific event and the certificate of authority has not been otherwise terminated, upon the presentation of evidence satisfactory to the director that the specific event has occurred, the insurer's certificate of authority shall be reinstated unless the director finds that the insurer is not in compliance with the requirements of this title. The director shall promptly notify the insurer of any reinstatement, and the insurer may not consider its certificate of authority reinstated until notified by the director. If satisfactory evidence as to the occurrence of the specific event has not been presented to the director within five years after the date of suspension, the certificate of authority expires five years from the date of suspension or upon failure of the insurer to continue the certificate during the suspension period under (b) of this section, whichever occurs first. (e) The authority of the agents in this state to represent the insurer is reinstated upon reinstatement of the insurer's certificate of authority. (f) The director shall promptly notify an insurer's agents in this state, as shown by records of the director, of any reinstatement.
If the director determines that an insurer transacting business in this state is impaired or in imminent danger of becoming impaired, the director may order an insurer to limit or change the insurer's business practices, increase the insurer's capital and surplus, or file additional reports with the director. If an insurer is aggrieved by an order under this section, the insurer may request a hearing under AS 21.06.170 - 21.06.230.
(a) Each insurer applying for authority to transact insurance in this state shall appoint the director as its attorney to receive service of legal process issued against it in this state. The appointment shall be made on a form designated and furnished by the director. The appointment shall be irrevocable, shall bind the insurer and any successor in interest to the assets or liabilities of the insurer, and shall remain in effect as long as there is in force in this state a contract made by the insurer or obligations arising from it. (b) Service of process against a foreign or alien insurer shall be made only by service of process upon the director or upon a deputy or other person in charge of the office during the absence of the director. Service of process against a domestic insurer may be made either upon the director or upon the insurer corporation in the manner provided by laws applying to corporations generally, or upon the insurer's attorney-in-fact if a domestic reciprocal insurer. (c) Each insurer at the time of application for a certificate of authority shall file with the director the name and address of the person to whom process against it served upon the director is to be forwarded. The insurer may change the designation by a new filing.
(a) Duplicate copies of legal process against an insurer for whom the director is attorney under AS 21.09.180 shall be served upon the director, or upon a deputy of the director or other person in charge of the office during the absence of the director. At the time of service the plaintiff shall pay to the director a fee set under AS 21.06.250, taxable as costs in the action. Upon receiving service the director shall promptly forward a copy by certified mail with return receipt requested to the person last designated by the insurer to receive it. (b) Process served upon the director and the copy forwarded as provided in this section constitutes service upon the insurer.
(a) Each authorized insurer shall annually, before March 2, file with the director or the director's designee a full and true statement of its financial condition, transactions, and affairs as of the preceding December 31. The reporting format for a given year is the most recently approved National Association of Insurance Commissioners' annual financial statement blank form and instructions, supplemented for additional information as required by the director. The director may require the statement to be filed on electronic media. The statement shall be verified by the oath of the insurer's president or vice-president, and secretary, or, if a reciprocal insurer, by oath of the attorney-in-fact or its like officers if a corporation unless verification is waived by the director of insurance. The filing locations must be published by the director at least annually. (b) The statement of an alien insurer shall relate only to its transactions and affairs in the United States unless the director requires otherwise. If the director requires a statement concerning an alien insurer's affairs throughout the world, the insurer shall file the statement with the director as soon as is reasonably possible. The statement shall be verified by the insurer's United States manager or other authorized officer. (c) The director may refuse to accept a fee for continuance of the insurer's certificate of authority, as provided in AS 21.09.130, or may suspend or revoke the certificate of authority of an insurer failing to file its annual statement when due. (d) At the time of filing, the insurer shall pay to the director a fee for filing its statement, set under AS 21.06.250. The method of payment must be by electronic or other payment method specified by the director by regulation under AS 21.06.250. (e) An insurer shall pay to the division $100 for each day the insurer fails to file a statement or report in the form and location required and within the time established in this section. The authority of the insurer to enter into new obligations or issue new or renewal policies of insurance in this state may be suspended by the director if a statement or report required by this section has not been filed by the due date. (f) In addition to the requirements of (a) of this section, an authorized insurer shall file its annual statement with the National Association of Insurance Commissioners on electronic media acceptable to the association by the due date established by the association and shall pay the applicable filing fee. The director may waive the filing requirement if the insurer only transacts business in this state and only accepts risks relative to a subject resident, located, or to be performed in this state. An insurer that fails to comply with this subsection is subject to the penalties specified in (e) of this section, calculated from the filing and fee due date established by the National Association of Insurance Commissioners. (g) An insurer shall file with the director or the director's designee an annual audited financial report for the previous year by June 1 of each year unless, under a regulation adopted by the director, the director grants an exemption based on a finding that filing an annual audited financial report would constitute a financial or organizational hardship on the insurer. The filing date for the annual audited financial report may be extended by the director upon showing that the standards established by regulation have been met. If the director gives the insurer 90 days' advance notice, and for good cause, the director may require an insurer to file an audited financial report earlier than June 1 of each year. The annual audited financial report must be prepared by a qualified independent certified public accountant. An insurer shall notify the director of the certified public accountant engaged to conduct the audit and issue the annual audited financial report. (h) Within 60 days after filing the annual audited financial report under (g) of this section, the insurer shall file a written report on any unremediated material weakness in internal control over financial reporting noted during the audit. (i) The director may adopt regulations that require the insurer to file a report from management describing internal control over financial reporting. An insurer shall file the report on internal control by the date specified by the director. (j) If the director requires the submission of additional information, the insurer shall supplement the reports required by (h) and (i) of this section by the date specified by the director. The reports on internal control filed with the director under (h) and (i) of this section are confidential and subject to the provisions of AS 21.06.060. (k) In accordance with regulations adopted by the director, an insurer shall designate an audit committee to engage a qualified independent certified public accountant to conduct the annual audit. The audit committee shall oversee services performed by the certified public accountant. If an insurer does not designate an audit committee, the entire governing board of the insurer is considered to be the audit committee for purposes of this subsection. (l) The certified public accountant conducting the annual audit required by (g) of this section shall notify the governing board of the insurer or the audit committee in writing of a determination by the certified public accountant that the insurer has materially misstated its financial condition as reported to the director or that the insurer does not meet the minimum capital requirements and surplus requirements of this title as of the date of the balance sheet currently under audit. An insurer that has received a report under this subsection shall forward a copy to the director. The certified public accountant shall also forward the report to the director unless the insurer provides evidence satisfactory to the certified public accountant that the report has been forwarded to the director.
(a) The director may require an insurer to file quarterly financial statements. If required, the statements must follow for a given quarter the reporting format specified in the quarterly financial statement blank form and instructions most recently approved by the National Association of Insurance Commissioners. (b) A quarterly financial statement, if required, is due 45 days after the end of the quarter to which it applies. (c) An insurer shall pay to the division $100 for each day the insurer fails to file the quarterly statement in the form required or within the time established in (b) of this section. (d) In addition to the requirements of (a) of this section, an authorized insurer shall file its quarterly statement with the National Association of Insurance Commissioners on electronic media acceptable to the association by the due date established by the association, and shall pay the applicable filing fee. The director may waive the filing requirement if the insurer only transacts business in this state and only accepts risks relative to a subject resident, located, or to be performed in this state. An insurer that fails to comply with this subsection is subject to the penalties specified in (c) of this section, calculated from the filing and fee due date established by the National Association of Insurance Commissioners.
(a) An insurer authorized to write property, casualty, surety, marine, wet marine, transportation, or mortgage guaranty insurance shall file annually with the director a statement of actuarial opinion, unless the insurer is exempt or otherwise not required to file an opinion in the insurer's state of domicile. The statement of actuarial opinion must (1) be issued by an actuary appointed by the insurer; (2) follow, for a given year, the reporting format and requirements specified in the annual financial statement instructions most recently approved by the National Association of Insurance Commissioners; and (3) be supplemented with additional information as may be required by the director. (b) A domestic insurer that is required to file a statement under (a) of this section shall file annually with the director an actuarial opinion summary written by the insurer's appointed actuary. A foreign insurer that is required to file a statement under (a) of this section shall, on written request of the director, file an actuarial opinion summary with the director. The actuarial opinion summary must follow, for a given year, the reporting format and requirements specified in the annual financial statement instructions most recently approved by the National Association of Insurance Commissioners and must be supplemented with additional information as required by the director. (c) An insurer that is required to file a statement under (a) of this section shall prepare an actuarial report and work papers to support each statement of actuarial opinion as required by the annual financial statement instructions most recently approved by the National Association of Insurance Commissioners. If an insurer fails to provide a supporting actuarial report or work papers at the request of the director, or the director determines that the supporting actuarial report or work papers provided by the insurer are incomplete or otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the insurer to review the statement of actuarial opinion and the basis for the statement and to prepare the supporting actuarial report or work papers. (d) An actuarial report, actuarial opinion summary, or work paper provided in support of a statement of actuarial opinion and any other information provided by an insurer to the director in connection with the statement of actuarial opinion, the actuarial opinion summary, or the actuarial report issued under this section is confidential; however, nothing in this section limits the director's authority to release the documents to a national professional organization that disciplines actuaries that is recognized by the director, as long as the material is required for the purpose of professional disciplinary proceedings and the national professional organization establishes procedures satisfactory to the director for preserving the confidentiality of the documents. (e) In this section, (1) appointed actuary means a qualified actuary who is appointed or retained by a company to provide a statement of actuarial opinion and the related actuarial opinion summary, actuarial report, and work papers; (2) qualified actuary means a member in good standing of the (A) Casualty Actuarial Society; or (B) American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries.
(a) Each authorized insurer, and each formerly authorized insurer with respect to premiums written while an authorized insurer in this state, shall file with the director, on or before March 1 in each year, a report of all insurance business written or contracted in the state, with proper proportionate allocation of premium for the property, subjects, or risks in the state insured under policies or contracts covering property, subjects, or risks located or resident in more than one state, during the preceding year ending December 31. The report must show (1) the amounts paid policyholders on losses; (2) the total direct premium income including policy membership and other fees, premiums paid by application of dividends, refunds, savings coupon, and similar returns or credits to payment of premiums for new or additional or extended or renewed insurance, charges for payment of premium in installments, and all other consideration for insurance from all kinds and classes of insurance whether designated a premium or otherwise; (3) the amounts paid policyholders as returned premiums; (4) the amounts paid policyholders as dividends. (b) Each insurer, and each formerly authorized insurer with respect to premiums written while an authorized insurer in this state, shall pay a tax on the total direct premium written during the year ending on the preceding December 31 and paid for the insurance of property or risks resident or located in the state, other than wet marine and transportation insurance, after deducting from the total direct premium income the applicable cancellations, returned premiums, the unabsorbed portion of any deposit premium, all policy dividends, unabsorbed premiums refunded to policyholders, refunds, savings, savings coupons, and other similar returns paid or credited to policyholders with respect to their policies. Deductions may not be made of cash surrender value of policies. Considerations received on annuity contracts are not included in the direct premium income and are not subject to tax. The tax shall be paid to the director at least annually but not more often than once each quarter on the dates specified by the director. The method of payment must be by the electronic or other payment method specified by the director. Except as provided under (m) of this section, the tax is computed at the rate of (1) for domestic and foreign insurers, except hospital and medical service corporations, 2.7 percent; (2) for hospital and medical service corporations, six percent of their gross premiums less claims paid. (c) [Repealed,  48 ch 29 SLA 1987.]  (d) An authorized insurer shall, with respect to all wet marine and transportation contracts written in this state during the preceding calendar year, pay to the director a tax of three-quarters of one percent on its gross underwriting profit. The director shall specify the dates that payment is due and the electronic or other method by which payment is to be made. The gross underwriting profit is computed by deducting, from the net premiums on wet marine and transportation insurance contracts, the net losses paid during the calendar year under the contracts. In the case of an insurer issuing participating contracts, the gross underwriting profit may not include, for computation of the tax prescribed by this section, the amounts refunded or paid as participation dividends by the insurers to the holders of the contracts. In this subsection, (1) net losses means gross losses less salvage and recoveries on reinsurance ceded; (2) net premiums means gross premiums less all return premiums and premiums for reinsurance. (e) Payment to the director by an insurer of the tax upon its premiums required by this section shall be in lieu of all other taxes imposed by the state upon premiums, franchise, privilege, or other taxes measured by income of the insurer. (f) The state hereby pre-empts the field of imposing excise, privilege, franchise, income, license, permit, registration, and similar taxes, licenses, and fees upon insurers and their general agents, agents, and representatives as such; and on the intangible property of insurers or agents; and all political subdivisions of agencies in the state, including home rule boroughs or cities, are prohibited from imposing or levying upon insurers, or upon their general agents, agents, and representatives as such, any tax, license, or fee. However, this subsection shall not be construed as prohibiting the imposition by political subdivisions of taxes upon real and tangible personal property of insurers and their general agents, agents, and representatives. (g) An insurer shall pay to the division a late payment fee of $50 a month plus five percent of the tax due each calendar month or part of a month during which the insurer fails to pay the full amount of the tax, or a portion of the tax, and interest at the rate of one percent of the tax due each calendar month or part of a month for the period the insurer fails to pay the premium tax in this section or in AS 21.09.270. The late payment fee, not including interest, may not exceed $250 plus 25 percent of the tax due. The tax payment shall be made in the form required by the director, or a penalty shall be added to the tax of 25 percent of the tax due, not to exceed $2,000, with a minimum penalty of $100. In addition to any other penalty provided by law, a civil penalty may be assessed of not more than $10,000 if an insurer wilfully violates this section. The director may suspend or revoke the certificate of authority of an insurer that fails to pay taxes, a penalty, or a late payment fee as required under this section. (h) The provisions of this section do not apply to title insurance companies. A premium tax on title insurance companies shall be levied in accordance with the provisions of AS 21.66.110. (i) Premiums paid by the state for insurance policies and contracts purchased under the provisions of AS 39.30 are exempt from taxation under this section. An insurer may not include the tax imposed under this section in a premium charged on an insurance policy or contract purchased by the state under the provisions of AS 39.30. An insurer may claim the exemption on forms provided by the division of insurance. (j) The provisions of AS 21.96.070 apply to a taxpayer who is required to pay a tax due under this section. (k) If, within three years after the date the tax under this section was due, an insurer discovers a mistake or misinterpretation that resulted in an overpayment of the tax in an amount exceeding $250 in any one calendar year, the insurer may make a written request to the director for a refund. If the director determines a valid mistake or misinterpretation has occurred, the director shall refund to the insurer the amount of the excess tax by granting, at the director's discretion, a monetary refund or premium tax credit. A premium tax credit shall be used in the next calendar year to the extent possible and any unused credit shall be paid as a monetary refund. A premium tax credit may not reduce the payable tax, calculated without use of the credit, to less than zero. (l) A premium tax credit granted under (k) of this section may not carry over as an attribute in a transaction under AS 21.69.610, 21.69.620, AS 21.78, or a similar transaction entered into by a foreign insurer. (m) The tax imposed under this section for an individual life insurance policy shall be computed at the rate of (1) 2.7 percent of policy year premium up to $100,000; and (2) 0.08 percent of policy year premium exceeding $100,000. (n) Premiums on which taxes are paid under (m)(2) of this section are not subject to AS 21.09.270. (o) A qualified insurer is entitled to a premium tax credit under AS 21.55.220. (p) In this section, premium tax credit means an amount that an insurer may use as an offset against a premium tax payment.
(a) An insurer, including a pharmacy benefits manager, with respect to medical assistance programs under AS 47.07, shall cooperate with the Department of Health to (1) provide, with respect to an individual who is eligible for or is provided medical assistance under AS 47.07, on the request of the department, information to determine during what period the individual or the individual's spouse or dependents may be or may have been covered by the insurer and the nature of the coverage that is or was provided by the insurer, including the name and address of the insurer and the identifying number of the health care insurance plan; (2) accept the department's right of recovery and the assignment to the department of any right of an individual or other entity to payment from the party for an item or service for which payment has been made under AS 47.07; (3) respond to any inquiry by the department regarding a claim for payment for any health care item or service that is submitted not later than three years after the date of the provision of the health care item or service; and (4) agree not to deny a claim submitted by the department solely on the basis of the date of submission of the claim, the type or format of the claim form, or a failure to present proper documentation at the point-of-sale that is the basis of the claim if (A) the claim is submitted by the department within the three-year period beginning on the date on which the item or service was furnished; and (B) any action by the department to enforce its rights with respect to the claim is commenced within six years after the department's submission of the claim. (b) An assessable entity, as defined in AS 18.09.990, shall provide information and assessments to the Department of Health and the State Vaccine Assessment Council established under AS 18.09.210 as necessary for the statewide immunization program established under AS 18.09.200.
(a) If an insurer intends to change the insurer's name, domicile, or other information provided on the certificate of authority, the insurer shall file a notice of the change with the director within 30 days before or after the intended change takes effect. (b) If an insurer changes the insurer's articles of incorporation, bylaws, business address, phone number, electronic mailing address, or other information maintained by the director, the insurer shall file a notice of the change with the director not later than 90 days after the effective date of the change. (c) Failure by an insurer to provide notification required by this section may result in a civil penalty of up to $1,000 and, additionally, a civil penalty of up to $50 for each day that the information is withheld from the director.
A domestic insurer shall file with the director a complete affidavit of biographical information not later than 30 days after the appointment of an officer or director of the insurer. If requested by the director, a foreign insurer shall file with the director an affidavit of biographical information for the appointment of an officer or director of the insurer. A filing under this section must be on a form approved by the director. A filing is not required if a biographical affidavit of the officer or director has been submitted to the director within one year before the date of appointment. A biographical affidavit filed under this section is confidential and not subject to public inspection.
An insurer doing business in this state may not make, write, place, or cause to be made, written, or placed in this state a policy, duplicate policy, or contract of insurance of any kind or character, or general or floating policy upon persons or property resident, situated, or located in this state, from or through a person required to be licensed who has not secured a license in this state. An insurer may not pay a commission or any form of remuneration to a person, firm, or organization for the writing or placing of insurance coverage in this state unless that person, firm, or organization holds a license issued by the director.
An insurer that the director determines, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, has violated the provisions of AS 21.09.250 is subject to a civil penalty of not more than $2,500 for each violation. The director may suspend or revoke the license of the insurer for a violation of AS 21.09.250, but violation does not invalidate the insurance contract.
(a) If, under the laws of another state or foreign country, taxes, licenses, and other fees, in the aggregate, and fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Alaska insurers, or upon their agents or representatives, that are in excess of the taxes, licenses, and other fees, in the aggregate, or that are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon their agents or representatives, of another state or country under the statutes of this state, as long as the laws of the other state or country continue in force or are applied, the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, or deposit requirements or other material obligations, prohibitions, or restrictions of whatever kinds shall be imposed by the director upon the insurers, or upon their agents or representatives, of the other state or country doing business or seeking to do business in this state. A tax, license or other fee or other obligation imposed by a city, county, or other political subdivision or agency of another state or country on Alaska insurers or their agents or representatives shall be considered to be imposed by the state or country within the meaning of this section. (b) This section does not apply to personal income taxes, to ad valorem taxes on real or personal property, or to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance other than property insurance; except that deductions from premium taxes or other taxes otherwise payable allowed on accounts of real estate or personal property taxes paid shall be taken into consideration by the director in determining the propriety and extent of retaliatory action under this section. (c) For the purposes of this section the domicile of an alien insurer, other than insurers formed under the laws of Canada or a province of Canada, shall be that state designated by the insurer in writing filed with the director at the time of admission to this state or within six months after July 1, 1966, whichever date is the later, and may be any one of the following states: (1) that in which the insurer was first authorized to transact insurance; (2) that in which is located the insurer's principal place of business in the United States; (3) that in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States. (d) If the insurer makes no designation, its domicile shall be considered to be that state in which its principal place of business in the United States is located. (e) If an insurer is formed under the laws of Canada or a province of Canada, its domicile is the province in which its head office is located. (f) For purposes of the application of (a) of this section, a health care insurer, as defined in AS 21.54.500, may not include taxes, assessments, or other similar obligations on health care insurance premiums received from the state, a municipality, a city or borough school district, a regional educational attendance area, the University of Alaska, or a community college operated by the University of Alaska.
(a) A risk retention group formed in this state shall (1) comply with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act); and (2) qualify for and hold in good standing a certificate of authority under AS 21.09.010 - 21.09.320, limited to liability insurance only. (b) A risk retention group shall submit with its application for a certificate of authority (1) the identity of (A) the initial members of the risk retention group; (B) all persons who organized the risk retention group; (C) all persons who will provide administrative services to the risk retention group; (D) all persons who will influence or control the activities of the risk retention group; (2) the amount and nature of initial capitalization; (3) a plan of operation or a feasibility study that includes the coverage, deductible, coverage limit, rate, and rating classification system for the type or class of liability insurance the group intends to offer; and (4) the states in which the risk retention group intends to operate. (c) At least 30 days before a domestic risk retention group implements a material change or revision to an approved plan of operation or feasibility study, the material change or revision shall be filed with the director. A material change or revision may not be implemented unless the domestic risk retention group receives the director's written approval. In this subsection, material change or revision includes an offering of an additional type or class of liability insurance. (d) In this section, (1) liability means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses, because of injury to another person, damage to property, or other damage or loss to a person resulting from or arising out of a business, whether profit or nonprofit, trade, product, service, including a professional service, or an activity of a state or local government, or an agency or political subdivision of a state or local government; liability does not include personal risk liability or employer's liability with respect to its employees other than legal liability under 45 U.S.C. 51 (Federal Employers' Liability Act); (2) personal risk liability means liability for damages because of injury to a person, damage to property, or other loss or damage resulting from a personal, familial, or household responsibility or activity and that is not a responsibility or activity described under (1) of this subsection.
(a) A domestic insurer shall file a report with the director disclosing a material acquisition and disposition of assets or a material nonrenewal, cancellation, or revision of ceded reinsurance agreements unless the acquisition and disposition of assets or material nonrenewal, cancellation, or revision of ceded reinsurance agreements have been submitted to the director for review, approval, or information purposes as required by this title. (b) The report required under (a) of this section is due 15 days after the end of the calendar month in which a reportable transaction occurs. (c) Except as provided in this section, a report obtained by or disclosed to the director under this section is confidential, is not subject to subpoena, and may not be made public by the director, or another person, without the prior written consent of the insurer submitting the report. A report under this section may be disclosed to an insurance regulatory agency of another state or to the National Association of Insurance Commissioners, with notice of the disclosure sent to the insurer. If the director, after giving an insurer notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by publication of the report, the director may publish all or any part of the report in a manner the director determines appropriate. (d) A domestic insurer's report of an acquisition or disposition of an asset (1) shall be made under (a) of this section if the acquisition or disposition is material; for purposes of this subsection, an acquisition or disposition, or the aggregate of a series of related acquisitions or related dispositions during any 30-day period is material if it is nonrecurring, not in the ordinary course of business, and involves more than five percent of the reporting insurer's total admitted assets as reported in its most recent financial statement required by law that is filed with the division; (2) shall be made on asset acquisition, including a purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the (A) construction or development of real property by or for the reporting insurer; or (B) acquisition of material for construction or development of real property; (3) shall be made on asset disposition including a sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment for the benefit of creditors, or abandonment; (4) must include information on the (A) date of transaction; (B) manner of acquisition or disposition; (C) description of the assets involved; (D) nature and amount of the consideration given or received; (E) purpose of, or reason for, the transaction; (F) manner by which the amount of consideration was determined; (G) gain or loss recognized or realized as a result of the transaction; and (H) names of persons from whom the assets were acquired or to whom the assets were disposed. (e) A domestic insurer's report of nonrenewal, cancellation, or revision of a ceded reinsurance agreement (1) shall be made under (a) of this section if the nonrenewal, cancellation, or revision is material; for purposes of this subsection, a material nonrenewal, cancellation, or revision is one that affects (A) for property and casualty business, including accident and health business when written as property and casualty business, more than 50 percent of an insurer's ceded written premium; or (B) for life, annuity, and accident and health business, more than 50 percent of the total reserve credit taken for business ceded, on an annualized basis as indicated in the insurer's most recently filed statutory statement; however, a filing is not required if the insurer's ceded written premium or the total reserve credit taken for business ceded represents, on an annual basis, less than 10 percent of direct written premiums and assumed written premiums or 10 percent of the statutory reserve requirement before a cession; (2) shall be filed without regard to which party has initiated the nonrenewal, cancellation, or revision of ceded reinsurance whenever any of the following conditions exist: (A) the entire cession has been cancelled, nonrenewed, or revised and ceded indemnity and loss adjustment expense reserves after a nonrenewal, cancellation, or revision represent less than 50 percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation, or revision not occurred; (B) an admitted or accredited reinsurer has been replaced on an existing cession by an unauthorized reinsurer; however, a report shall be filed only if the result of the revision affects more than 10 percent of the cession; or (C) collateral requirements previously established for unauthorized reinsurers have been reduced; however, a report shall be filed only if the result of the revision affects more than 10 percent of the cession; and (3) must include (A) the effective date of the nonrenewal, cancellation, or revision; (B) a description of the transaction with an identification of the initiator of the transaction; (C) the purpose of, or reason for, the transaction; and (D) if applicable, the identity of the replacement reinsurers. (f) An insurer is required to report under (a) of this section on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is presumed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct written premiums and assumed written premiums during a calendar year that is not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer's capital and surplus.
(a) This section applies to all United States branches of alien insurers using this state as a state of entry to transact the business of insurance in the United States. Except as provided elsewhere in this title, a United States branch is subject to all state laws applicable to an insurer domiciled in this state. (b) An alien insurer may apply for a certificate of authority to use this state as a state of entry to transact the business of insurance in the United States by (1) qualifying as an insurer licensed to do business in this state; (2) establishing a trust under a trust agreement approved in writing by the director with a United States bank acceptable to the director in an amount not less than the greater of (A) the minimum basic capital or basic guarantee surplus and additional maintained surplus required under AS 21.09.070; or (B) the authorized control level risk based capital under AS 21.14; (3) submitting a copy of its charter and bylaws, if any, currently in force, and other documents necessary to show the kind of business it is authorized to transact in its domiciliary jurisdiction; documents submitted under this paragraph must be attested to as accurate and complete by the insurance supervisory official in the domiciliary jurisdiction, and must include an English translation, if in a language other than English; (4) submitting a full statement, subscribed and affirmed as true by two officers or equivalent responsible representatives in a manner that the director prescribes, of its financial condition as of the close of its latest fiscal year, showing its assets, liabilities, income disbursements, business transacted, and other facts required to be shown in its annual statement, as reported to the insurance supervisory official in its domiciliary jurisdiction; all documents submitted under this paragraph must include an English translation if in a language other than English; (5) submitting to an examination under AS 21.06.120(b) at its principal office within the United States, and elsewhere if necessary, unless the director accepts a report of the insurer's recent examination and the report has been issued by the insurance supervisory official of the insurer's domiciliary jurisdiction; and (6) payment of fees established under AS 21.06.250. (c) Before issuing or renewing a certificate of authority for a United States branch, the director may require satisfactory proof that the insurer does not intend to transact insurance business in violation of the provisions of this title or that is not authorized by its charter. Proof required under this subsection may include the alien insurer's charter, an agreement evidenced by a duly certified resolution of its board of directors, or other proof that the director may require. (d) The director may renew a certificate of authority for a United States branch if satisfied, by proof the director may require, that the insurer is not delinquent with respect to a requirement or qualification imposed by this title and that its continuance to transact the business of insurance in this state will not be hazardous or prejudicial to the best interest of the people of this state. (e) A United States branch may not receive or renew a certificate of authority in this state (1) to transact a kind of insurance or a combination of kinds of insurance that are not permitted to be transacted by domestic insurers in this state; (2) if it transacts business other than the business of insurance anywhere else within the United States unless the business, in the opinion of the director, is necessarily or properly incidental to the kind of insurance that it is authorized to transact in this state; (3) if it fails to keep full and correct entries of its transactions; records of entries shall at all times be maintained in its principal office within this state; or (4) if it fails to comply with a requirement or limitation of this title that it is not exempted from by another provision of this title and that is applicable to similar domestic insurers and if, in the judgment of the director, the requirement or limitation is necessary to protect the interest of the policyholders. (f) A United States branch that transacts a kind or combination of kinds of insurance outside this state that is not permitted to be done in this state by similar domestic insurers may not have a certificate of authority issued or renewed in this state unless, in the judgment of the director, the transaction of that kind of insurance is not prejudicial to the best interest of the people of this state. (g) A United States branch shall maintain assets in a trust account in an amount not less than the United States branch's reserves and other liabilities, plus the greater of (1) the minimum basic capital or basic guaranteed surplus and additional maintained surplus required under AS 21.09.070; or (2) the authorized control level risk based capital under AS 21.14. (h) A written trust agreement must contain provisions that (1) vest legal title to trusteed assets in the trustees, and their lawfully appointed successors; (2) require that all assets deposited in the trust be continuously kept within the United States; (3) provide for substitution of a new trustee in case of a vacancy by death, resignation, or other reason, subject to the prior written approval of the director; (4) require that the trustee continuously maintain a record sufficient to identify the assets of the trust fund; (5) require that trusteed assets consist only of cash, investments eligible for investment of the funds of domestic insurers, and accrued interest on the assets, if collectible by the trustee, subject to the limits on investment of funds by domestic insurers under this title; (6) require that the trust be for the exclusive benefit, security, and protection of the policyholders, or policyholders and creditors, of the United States branch in the United States and that the trust be maintained as long as there is an outstanding liability of the alien insurer arising out of its transaction of insurance in the United States; and (7) provide that withdrawal of an asset may not be made or permitted by a trustee without the prior written approval of the director except (A) to make deposits required by law in a state for the security or benefit of all policyholders, or policyholders and creditors, of the United States branch in the United States; (B) to withdraw funds deposited in another state under (A) of this paragraph if (i) the written trust agreement requires prior written approval of the insurance supervising official of that other state; (ii) written notice of the nature and extent of the withdrawal is provided to the director within 30 days of the withdrawal; and (iii) the total trusteed assets remaining are in excess of the total assets required to be maintained in trust under (g) of this section; (C) upon the specific written direction of the United States manager, who is duly authorized and is acting under either general or specific written authority previously given or delegated by the board of directors, to substitute other assets as permitted by this title if the substituted assets are of at least equal value and quality to those withdrawn; (D) to transfer assets to an official liquidator or rehabilitator under an order of a court of competent jurisdiction; or (E) if provided under the terms of the written trust agreement, to pay over to the United States manager of the United States branch, upon request, income, dividends, or interest accumulations of the assets of the trust fund that are in excess of the total assets required to be maintained in trust under (g) of this section. (i) A written trust agreement and all amendments to it shall be authenticated in a form and manner that the director may prescribe and may not take effect until approved by the director. The director may not approve a trust agreement unless the director makes a written finding that (1) the written trust agreement or its amendments are sufficient in form and in conformity with law; (2) a person designated as a trustee is eligible to act in that capacity; and (3) the written trust agreement is adequate to protect the interests of the beneficiaries of the trust. (j) The director may approve written modifications of, or variations in, a written trust agreement upon a finding that the proposed changes are not prejudicial to the interests of the people of this state or the United States policyholders and creditors of the United States branch. (k) The director may conduct examinations of the trusteed assets of an authorized United States branch at the insurer's expense and may require the trustee or trustees to file a statement, in a form as prescribed by the director, certifying the assets and amounts of the trust fund. (l) The director, upon finding that the requisites for the approval of the trust agreement no longer exist, may issue an order that withdraws approval of a written trust agreement and amendments to it. An order issued under this subsection takes effect 10 days after being issued. (m) In addition to all other actions permitted under this title, refusal or neglect of a trustee to comply with the requirements of this title is a cause for suspension or revocation of the United States branch's certificate of authority or the liquidation of the alien insurer's United States branch. (n) Annual statements under AS 21.09.200 and quarterly statements under AS 21.09.205 (1) may only relate to and must include all insurance transactions and affairs within the United States, assets held by or for the United States branch for the protection of policyholders and creditors within the United States, and liabilities incurred against those assets; and (2) may not contain a statement in regard to assets and business transacted in a place not described in this subsection. The annual and quarterly statements shall be signed and verified by the United States manager, attorney-in-fact, or a duly empowered assistant United States manager of the United States branch. (o) In a form prescribed by the director, an authorized United States branch shall file with its annual and quarterly statements a statement of trusteed surplus covering the same time period. The trusteed surplus shall consist of the aggregate value of the United States branch's general state deposits and assets deposited with a trustee under this section, plus accrued interest income if the interest were collected by the states for the trustees, less the aggregate net amount of all its reserves and other liabilities in the United States as determined under this subsection. The items of securities and other property held under trust deeds shall be certified by the United States trustee. To determine the net amount of the United States branch's liabilities in the United States to be reported in the statement of trusteed surplus, the United States branch shall adjust its total liabilities reported on its accompanying annual or quarterly statement as follows: (1) by adding back liabilities used to offset admitted assets reported in the accompanying annual or quarterly statement; and (2) by deducting (A) unearned premiums on agent's balances or uncollected premiums not more than 90 days past due; (B) reinsurance on losses with authorized insurers, less unpaid reinsurance premiums; (C) reinsurance recoverables on paid losses from unauthorized insurers that are included as an asset in the annual statement, but only to the extent a liability for unauthorized recoverables as described in this paragraph are included in the liabilities report in the trusteed surplus statement; (D) special state deposits held for the exclusive benefit of policyholders, or policyholders and creditors, of a particular state not exceeding net liabilities reported for that state; (E) secured accrued retrospective premiums; (F) if a life insurer, (i) the amount of its policy loans to policyholders within the United States, not exceeding the amount of legal reserve required on an affected policy; and (ii) the net amount of uncollected and deferred premiums; and (G) other nontrusteed assets, upon a written finding by the director that the other nontrusteed assets secure liabilities in a substantially similar manner to those permitted under this subsection. (p) In addition to the annual and quarterly statements and the statements of trusteed surplus, the director may require additional information relating to total business or assets, or any portion of them, of the alien insurer or its United States branch. (q) In addition to the general statement of the financial condition of the United States branch, a report of examination must include a trusteed surplus statement as of the date of the examination. (r) In this section, (1) trusteed assets are the assets maintained in a trust account under (g) of this section; (2) United States branch means the business unit through which business is transacted within the United States by an alien insurer and the assets and liabilities of the insurer within the United States applicable to that business.
(a) A foreign insurer shall keep at its principal place of business a complete record of its assets, transactions, and affairs in accordance with the methods and systems that are customary or suitable to the kind of business transacted. (b) To meet the requirements of (a) of this section, the insurer shall keep the records as required by the record maintenance requirements of the insurer's domicile jurisdiction. (c) The director may make a request in writing to review records under (a) of this section. An insurer shall, not later than 10 business days after the date of the request, provide the requested records to the director or make the records available for inspection and copying. All records inspected or examined under this subsection are confidential, but may be used by the director in a proceeding against the insurer. (d) Failure by an insurer to provide information required in this section may result in a civil penalty of up to $1,000 for each violation and an additional civil penalty of up to $50 for each day the information requested is not provided.
(a) AS 21.09.400 - 21.09.460 do not prescribe or impose a corporate governance standard or internal procedure beyond that required under AS 10. Nothing in AS 21.09.400 - 21.09.460 limits the director's authority or the rights or obligations of a third party. (b) AS 21.09.400 - 21.09.460 apply to an insurer domiciled in this state.
(a) An insurer, or an insurance group of which the insurer is a member, shall submit to the director not later than June 1 of each calendar year a corporate governance annual disclosure that contains the information described in AS 21.09.430(b). In the event the director requests an insurer to submit a disclosure under (c) of this section and the insurer is a member of an insurance group, the insurer shall submit the disclosure to the lead state insurance regulator of the insurance group, under the laws of the lead state, in accordance with the procedures set out in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners. (b) A corporate governance annual disclosure must include a signature of the insurer's or insurance group's chief executive officer or corporate secretary attesting that, to the best of that individual's belief and knowledge, (1) the insurer has implemented the corporate governance practices required under AS 21.09.400 - 21.09.460; and (2) a copy of the corporate governance annual disclosure has been provided to the insurer's board of directors or the appropriate committee of the board. (c) An insurer not required to submit a corporate governance annual disclosure under (a) of this section shall submit a disclosure upon request of the director. (d) For purposes of completing a corporate governance annual disclosure, an insurer or insurance group, depending on the insurer's or insurance group's corporate governance structure, may provide information regarding corporate governance at (1) the ultimate controlling parent level; (2) an intermediate holding company level; (3) the individual legal entity level; or (4) the ultimate controlling parent level, an intermediate holding company level, and the individual legal entity level. (e) An insurer or insurance group (1) is encouraged to make the corporate governance annual disclosure at the level at which (A) the insurer's or insurance group's risk appetite is determined; (B) the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised; or (C) legal liability for failure of general corporate governance duties would be placed; (2) shall, if determining the level of reporting based on the criteria under this section, (A) indicate which of the three criteria under (1) of this subsection was used to determine the level of reporting; and (B) explain any subsequent change in the level of reporting. (f) A review of the corporate governance annual disclosure and any additional requests for information shall be made through the lead state in accordance with the procedures set out in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners. (g) An insurer or insurance group providing information substantially similar to the information required under AS 21.09.400 - 21.09.460 in other documents provided to the director, including proxy statements filed in conjunction with Form B requirements under regulations of the division, or other state or federal filings provided to the division, is not required to duplicate that information in the corporate governance annual disclosure; however, the insurer or insurance group shall include in the disclosure a cross reference of the document in which the information is included.
To carry out the provisions of AS 21.09.400 - 21.09.460, the director may (1) adopt regulations, including regulations substantially similar to the regulations under the National Association of Insurance Commissioners' Corporate Governance Annual Disclosure Model Regulation; and (2) issue orders necessary to implement the provisions.
(a) An insurer or insurance group may have discretion in responding to a corporate governance annual disclosure inquiry if the insurer's or insurance group's disclosure contains the material necessary for the director to gain an understanding of the insurer's or insurance group's corporate governance structure, policies, and practices. The director may request additional information the director determines necessary for the director to have a clear understanding of the insurer's or insurance group's corporate governance policies, reporting or information system, or controls implementing those policies. (b) An insurer or insurance group shall prepare a corporate governance annual disclosure consistent with regulations adopted by the director under AS 21.09.420. An insurer or insurance group shall maintain documents and supporting information used in preparing the insurer's or insurance group's disclosure and shall make the documents and supporting information available upon examination or request of the director.
Documents, materials, or other information, including a corporate governance annual disclosure, in the possession or control of the division that are obtained by, created by, or disclosed to the director or any person under AS 21.09.400 - 21.09.460 are confidential and subject to the provisions of AS 21.06.060.
(a) The director may retain, at the insurer's or insurance group's expense and as consistent with this section, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff, as may be reasonably necessary to assist the director in reviewing the insurer's or insurance group's corporate governance annual disclosure and related information or the insurer's or insurance group's compliance with AS 21.09.400 - 21.09.460. (b) A person retained under (a) of this section is under the direction and control of the director and acts in a purely advisory capacity. (c) As part of the retention process, a third-party consultant must verify to the director in writing, with notice to the insurer or insurance group, that the consultant is free of a conflict of interest, has internal procedures in place to monitor compliance with a conflict, and will comply with the confidentiality standards and requirements under AS 21.09.400 - 21.09.460. (d) A written agreement with the National Association of Insurance Commissioners, a third-party consultant, or both, governing sharing and use of information provided under AS 21.09.400 - 21.09.460 must contain the following provisions and expressly require the written consent of the insurer or insurance group before making information under AS 21.09.400 - 21.09.460 public: (1) a provision stating that the National Association of Insurance Commissioners and third-party consultants are subject to the same confidentiality standards and requirements as the director under AS 21.22.120 and any other relevant law; (2) specific procedures and protocols for maintaining the confidentiality and security of information related to corporate governance annual disclosures that is shared with the National Association of Insurance Commissioners or the third-party consultant under AS 21.09.400 - 21.09.460; (3) procedures and protocols that ensure the National Association of Insurance Commissioners shares only with other state regulators from states in which the insurer or insurance group has domiciled insurers; the agreement must provide that the recipient agrees in writing to maintain the confidentiality of the documents, materials, or other information related to corporate governance annual disclosures and has verified in writing the legal authority to maintain confidentiality; (4) a provision specifying that ownership of information related to corporate governance annual disclosures that is shared with the National Association of Insurance Commissioners or a third-party consultant remains with the division, and the use of the information by the National Association of Insurance Commissioners or the third-party consultant is subject to the direction of the director; (5) a provision that prohibits the National Association of Insurance Commissioners or the third-party consultant from storing the information shared under AS 21.09.400 - 21.09.460 in a permanent database after the underlying analysis is completed; (6) a provision requiring the National Association of Insurance Commissioners or the third-party consultant to provide prompt notice to the director and the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of information related to the insurer's or insurance group's corporate governance annual disclosure; (7) a requirement that the National Association of Insurance Commissioners or the third-party consultant consent to intervention by an insurer or insurance group in any judicial or administrative action in which the National Association of Insurance Commissioners or the third-party consultant may be required to disclose confidential information about the insurer or insurance group shared with the National Association of Insurance Commissioners or the third-party consultant under AS 21.09.400 - 21.09.460.
Each day an insurer or insurance group fails, without just cause, to file the corporate governance annual disclosure in the time required under AS 21.09.410(a), the insurer or insurance group shall pay $1,000, not to exceed $365,000. The director may reduce the penalty under this section if the insurer or insurance group demonstrates to the director that the imposition of the penalty is a financial hardship to the insurer or insurance group.
(a) An insurer may not retain a risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding 10 percent of its surplus to policyholders. (b) In this section a subject of insurance as to insurance against fire and hazards other than windstorm, earthquake, and other catastrophe hazards, includes all properties insured by the same insurer that are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of the hazard insured against. (c) Reinsurance ceded as authorized by AS 21.12.020 shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by an established incorporated cosurety and the value of a security deposited, pledged or held subject to the surety's consent and for the surety's protection. (d) As to alien insurers, this section relates only to risks and surplus to policyholders of the insurer's United States branch. (e) In this section surplus to policyholders in addition to the insurer's capital and surplus includes any voluntary reserves that are not required under law, and are determined from the last sworn statement of the insurer on file with the director, or by the last report of examination of the insurer, whichever is more recent at time of assumption of risk. (f) This section does not apply to life or health insurance, annuities, title insurance, insurance of wet marine and transportation risks, workers' compensation insurance, employer's liability coverages, sprinklered risks, or to a policy or type of coverage in which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.
(a) Credit for reinsurance transactions is allowed a domestic ceding insurer as either an asset or a deduction from liability because of reinsurance ceded only when the reinsurer meets the requirements of (1) - (7) of this subsection. The director may, by regulation adopted under (g)(2) of this section, specify additional requirements relating to, or setting out, the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in (g)(2) of this section, and the circumstances under which credit will be reduced or eliminated. Credit is allowed under (1) - (3) of this subsection with respect to cessions of a kind or class of business that the assuming insurer is licensed or permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit is allowed under (3) or (4) of this subsection only if the applicable requirements in (b) of this section have been satisfied. Credit is allowed when the reinsurance is ceded to an assuming insurer that (1) is licensed to transact insurance or reinsurance in this state; (2) is accredited by the director as a reinsurer in this state; an accredited reinsurer is one that (A) files with the director evidence of submission to this state's jurisdiction, submits to this state's authority to examine its books and records, is licensed to transact insurance or reinsurance in at least one state that is accredited by the National Association of Insurance Commissioners, or, in the case of a United States branch of an alien admitted insurer, is entered through and licensed to transact insurance or reinsurance in at least one state that is accredited by the National Association of Insurance Commissioners; (B) demonstrates to the satisfaction of the director that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers; an assuming insurer is considered to meet the requirement at the time of application if the assuming insurer maintains at least $20,000,000 in policyholder surplus and the assuming insurer's accreditation has not been denied by the director within 90 days after application to the director; and (C) files annually with the director a copy of the reinsurer's annual statement filed with the insurance supervisory official of the reinsurer's state of domicile and a copy of the reinsurer's most recent audited financial statement; (3) is domiciled in a state or, in the case of a United States branch of an alien assuming insurer, is entered through a state accredited by the National Association of Insurance Commissioners that employs standards regarding credit for reinsurance ceded substantially similar to those applicable under (1) and (2) of this subsection, maintains a policyholder surplus of at least $20,000,000, and submits to the authority of this state to examine its books and records; the surplus requirements in this paragraph do not apply to reinsurance ceded and assumed under a pooling arrangement among insurers in the same holding company system; (4) maintains a trust fund in a qualified United States financial institution for the payment of the valid claims of the assuming insurer's United States domiciled ceding insurers, and their assigns and successors; credit for reinsurance under this paragraph shall be granted only if the following requirements are met: (A) the trust and each amendment to the trust is established in a form approved by the insurance supervisory official of the state where the trust is domiciled or the insurance supervisory official of another state who, under the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust; the form of the trust and each trust amendment is filed with the insurance supervisory official of every state in which the beneficiaries of the trust are domiciled; the trust instrument provides that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States; the trust vests legal title to its assets in the trustees of the trust for its United States domiciled ceding insurers, their assigns, and successors in interest; the trust and the assuming insurer are subject to examination as determined by the director; the trust remains in effect for so long as the assuming insurer has outstanding liabilities due under the reinsurance agreements subject to the trust; (B) on or before March 1 of each year, the trustees report in writing to the director on the balance of the trust, list the trust's investments at the end of the preceding year, and certify the date of termination of the trust, if so planned, or certify that the trust does not expire before the following December 31; (C) in the case of a single assuming insurer, the trust consists of trust assets not less than the assuming insurer's liabilities attributable to reinsurance ceded by the United States domiciled ceding insurers and, in addition, except as provided in (D) of this paragraph, the assuming insurer maintains a trust surplus of not less than $20,000,000 for the benefit of the United States domiciled ceding insurers as additional security for the liabilities covered by the trust; the single assuming insurer shall make available to the director an annual certification of the insurer's solvency by an independent certified public accountant or an accountant holding a substantially equivalent designation as determined by the director; at any time after the assuming insurer permanently discontinues underwriting new business secured by a trust for not less than three years, the insurance supervisory official with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus if, based on an assessment of the risk, the insurance supervisory official finds that the new required surplus level is adequate for the protection of United States domiciled ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development; the risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and must consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer's liquidity or solvency; the minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States domiciled ceding insurers covered by the trust; (D) in the case of a group, including incorporated and individual unincorporated insurers, (i) the trust consists of, for reinsurance ceded under the reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, a trusteed account in an amount not less than the respective insurers' several liabilities attributable to business ceded by United States domiciled ceding insurers to any insurer of the group, for reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this section, a trusteed account not less than the respective insurers' several insurance and reinsurance liabilities attributable to business written in the United States, and, in addition to an applicable trust described in this sub-subparagraph, trust assets representing the group's liabilities attributable to business ceded by United States domiciled ceding insurers include a trust surplus not less than $100,000,000 held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account as additional security for the group's liabilities covered by the trust; and (ii) the incorporated members of the group are not engaged in any business other than underwriting as a member of the group and are subject to the same level of solvency regulation and control by the group's domiciliary regulator as the unincorporated members; within 90 days after the group's financial statements are due to be filed with the group's domiciliary regulator, the group shall make available to the director an annual certification of the solvency of each insurer by the group's domiciliary regulator or, if the certification is unavailable, financial statements, prepared by an independent certified public accountant, or an accountant holding a substantially equivalent designation as determined by the director, for each underwriter member of the group; (E) in the case of a group of incorporated insurers under common administration that has continuously transacted an insurance business outside the United States for at least three years immediately before making application for accreditation and that has aggregate policyholders' surplus of $10,000,000,000 or more, the trust consists of trust assets in an amount not less than the group's several liabilities attributable to business ceded by United States domiciled ceding insurers to a member of the group under reinsurance contracts issued in the name of the group, and the group (i) maintains a joint trustee surplus, of which $100,000,000 is held jointly for the benefit of United States domiciled ceding insurers of a member of the group as additional security for the group's liabilities covered by the trust; (ii) not later than 90 days after the group's financial statements are due to be filed with the group's domiciliary regulator, ensures each member of the group makes available to the director an annual certification of the underwriter member's solvency by the member's domiciliary regulator and financial statement of each underwriter member prepared by the member's independent certified public accountant or an accountant holding a substantially equivalent designation as determined by the director; and (iii) submits to examination of its books and records by the director and bears the expense of the examination; (F) the assuming insurer reports annually to the director information substantially the same as that required to be reported on the National Association of Insurance Commissioners' annual statement form by licensed insurers; (5) is eligible for certification by the director as a reinsurer in this state if the assuming insurer secures its obligations under the following requirements: (A) the assuming insurer must (i) be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction; (ii) maintain minimum capital and surplus, or its equivalent, in an amount set out in regulations adopted by the director; (iii) maintain financial strength ratings from two or more rating agencies as required under regulations adopted by the director; (iv) agree to submit to the jurisdiction of this state and agree to provide security for 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States domiciled ceding insurers if the assuming insurer resists enforcement of a final United States judgment; (v) agree to meet applicable information filing requirements as determined by the director, both with respect to an initial application for certification and on an ongoing basis; and (vi) satisfy other requirements for certification asrequired by the director; (B) in addition to satisfying the requirements under (A) of this paragraph, an association, including an incorporated underwriter and an individual unincorporated underwriter, (i) shall satisfy the association's minimum capital and surplus requirements through the capital and surplus equivalents, net of liabilities, of the association and the association's members, which must include a joint central fund that may be applied to any unsatisfied obligation of the association or a member of the association, in an amount determined by the director to provide adequate protection; (ii) may not engage in any business other than underwriting as a member of the association and be subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members; and (iii) shall, not later than 90 days after the association's financial statements are filed with the association's domiciliary regulator, provide to the director an annual certification by the association's domiciliary regulator of the solvency of each underwriter member, or, if a certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the association; (C) the director shall create and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in a qualifying jurisdiction is eligible to be considered for certification by the director as a certified reinsurer, subject to the following provisions: (i) to determine whether the domiciliary jurisdiction of an alien assuming insurer is eligible to be recognized as a qualified jurisdiction, the director shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the jurisdiction to reinsurers licensed and domiciled in the United States; a qualified jurisdiction shall agree to share information and cooperate with the director with respect to all certified reinsurers domiciled within that jurisdiction; the director may not recognize a jurisdiction as a qualified jurisdiction if the director determines that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards; the director may consider additional factors when making an eligibility determination under this subparagraph; (ii) the director shall consider the list of qualified jurisdictions published through the committee process of the National Association of Insurance Commissioners; if the director approves as qualified a jurisdiction that does not appear on the list of qualified jurisdictions, the director shall provide thoroughly documented justification for the approval under criteria set out in regulations adopted by the director; (iii) the director shall recognize a United States jurisdiction that meets the requirement for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program as a qualified jurisdiction; (iv) the director, in lieu of revocation, may suspend a reinsurer's certification indefinitely if the certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction; (D) the director shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies considered acceptable under regulations adopted by the director; (E) a certified reinsurer shall secure obligations assumed from United States domiciled ceding insurers under this subsection at a level consistent with the reinsurer's rating, as specified under regulations adopted by the director and subject to the following requirements: (i) for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the director and consistent with (c) of this section or in a multibeneficiary trust under (4) of this subsection, except as otherwise provided in this paragraph; (ii) if a certified reinsurer maintains a trust to secure fully the reinsurer's obligations subject to (4) of this subsection and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted under this subsection or comparable laws of other United States jurisdictions and for its obligations subject to (4) of this subsection; a certified reinsurer shall, as a condition of the grant of certification under this paragraph, bind itself, by the language of the trust and agreement with the insurance supervisory official with principal regulatory oversight of the trust account, to use the remaining surplus of a terminated trust account for a deficiency in any other trust account of the certified reinsurer; (iii) the minimum trusteed surplus requirements under (4) of this subsection are not applicable to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subsection, except that the multibeneficiary trust shall maintain a minimum trusteed surplus of $10,000,000; (iv) if the obligations incurred by a certified reinsurer under this subsection are insufficiently secured, the director shall reduce the allowable credit by an amount proportionate to the deficiency and may impose further reductions in allowable credit if the director finds that there is a material risk that the certified reinsurer's obligations will not be paid in full when due; (v) for purposes of this subparagraph, a certified reinsurer whose certification is terminated for any reason is considered to be a certified reinsurer that is required to secure 100 percent of the reinsurer's obligations; however, if the director continues to assign a higher rating as permitted under other provisions of this section, the requirement to secure 100 percent of the reinsurer's obligations does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended; in this sub-subparagraph, terminated means revoked, suspended, voluntarily surrendered, or in inactive status; (F) if an applicant for certification is certified as a reinsurer in a jurisdiction accredited by the National Association of Insurance Commissioners, the director may defer to that jurisdiction's certification and to the rating assigned to the applicant by the jurisdiction; the assuming insurer shall be considered to be a certified reinsurer in this state; (G) a certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business; an inactive certified reinsurer shall continue to comply with all applicable requirements of this subsection, and the director shall assign a rating that takes into account, if relevant, the reasons the reinsurer is not assuming new business; (6) meets the following conditions: (A) the assuming insurer shall have its head office or be domiciled in a reciprocal jurisdiction; (B) the assuming insurer shall have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction, in an amount set out in regulation; if the assuming insurer is an association, including incorporated and individual unincorporated underwriters, the assuming insurer shall have and maintain on an ongoing basis minimum capital and surplus, net of liabilities, calculated according to the methodology of its domiciliary jurisdiction, and a central fund containing a balance in an amount set out in regulation; (C) the assuming insurer shall have and maintain on an ongoing basis a minimum solvency or capital ratio in an amount set out in regulation; if the assuming insurer is an association, including incorporated and individual unincorporated underwriters, the assuming insurer shall have and maintain on an ongoing basis a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled and licensed; (D) the assuming insurer shall agree to and provide adequate assurance to the director in a form specified by the director in regulation as follows: (i) the assuming insurer shall provide prompt written notice and explanation to the director if it falls below the minimum requirements described in (B) or (C) of this paragraph, or if any regulatory action is taken against it for serious noncompliance with applicable law; (ii) the assuming insurer shall consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process; the director may require that consent for service of process be provided to the director and included in each reinsurance agreement; nothing in this sub-subparagraph shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent the agreements are unenforceable under applicable insolvency or delinquency laws; (iii) the assuming insurer shall consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained; (iv) each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded under that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate; and (v) the assuming insurer shall confirm that it is not presently participating in any solvent scheme of arrangement that involves this state's ceding insurers and agree to notify the ceding insurer and the director and to provide security in an amount equal to 100 percent of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into a solvent scheme of arrangement; a security must be in a form consistent with the provisions of (5) of this subsection and (c) of this section and as specified by the director in regulation; (E) the assuming insurer or its legal successor shall provide, if requested by the director, on behalf of itself and any legal predecessors, certain documentation to the director as specified by the director in regulation; (F) the assuming insurer shall maintain a practice of prompt payment of claims under reinsurance agreements under criteria set out in regulation; (G) the assuming insurer's supervisory authority shall confirm to the director on an annual basis as of December 31 of the preceding year or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements in (B) and (C) of this paragraph; (H) nothing in this paragraph precludes an assuming insurer from providing the director with information on a voluntary basis; (7) does not meet the requirements of (1) - (6) of this subsection, but only with respect to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction. (b) If the assuming insurer is not licensed, accredited, or certified to transact insurance or reinsurance in this state, the credit permitted under (a)(4) and (5) of this section is not allowed unless the assuming insurer agrees in the reinsurance agreements (1) that, in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of a court of competent jurisdiction in a state of the United States, will comply with all requirements necessary to give the court jurisdiction and will abide by the final decision of the court or of an appellate court in the event of an appeal; and (2) to designate the director or an attorney resident in the United States as its true and lawful attorney upon whom may be served lawful process in an action, suit, or proceeding instituted by or on behalf of the ceding insurer; nothing in this subsection is intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes if such an obligation is created in the reinsurance agreement. (c) An asset or a reduction from liability, for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of (a), (b), and (d) - (f) of this section, shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. In addition, the director may adopt by regulation under (g)(2) of this section specific additional requirements relating to the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in (g)(2) of this section, and the circumstances under which credit will be reduced or eliminated. The reduction shall be equal to the amount of money held by or on behalf of the ceding insurer, including money held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations under it, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer, or, in the case of a trust, held in a qualified United States financial institution. The security must be in the form of (1) cash; (2) securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those exempted from filing as defined by the purposes and procedures manual of the Securities Valuation Office, and those that qualify as admitted assets under AS 21.21; (3) clean, irrevocable, unconditional letters of credit that contain an evergreen clause issued or confirmed by a qualified United States financial institution not later than December 31 in the year for which filing is made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of the ceding insurer's annual statement; letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever occurs first; in this paragraph, qualified United States financial institution means an institution that  (A) is organized or, in the case of a United States office of a foreign banking organization, is licensed under the laws of the United States or a state of the United States;  (B) is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and  (C) has been determined by either the director or the Securities Valuation Office of the National Association of Insurance Commissioners to meet the standards of financial condition and standing considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit are acceptable to the director; or (4) other security acceptable to and approved in advance by the director. (d) If an assuming insurer does not meet the requirements under this section, the credit permitted under (a)(1), (2), or (3) of this section is not allowed unless the assuming insurer agrees, in the trust agreements, to the following conditions: (1) notwithstanding any other provision in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required under (a)(4) or (5) of this section, or if the grantor of the trust is declared insolvent or is placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of the state or country of domicile, the trustee shall comply with an order of the insurance supervisory official with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance supervisory official with regulatory oversight over the trust all of the assets of the trust fund; (2) the assets shall be distributed by, and all claims shall be filed with and valued by, the insurance supervisory official with regulatory oversight over the trust under the laws of the state in which the trust is domiciled that are applicable to the liquidation of a domestic insurer; (3) if the insurance supervisory official with regulatory oversight over the trust determines that the assets or report of the assets of the trust fund are not necessary to satisfy the claims of the United States domestic ceding insurers of the grantor of the trust, the insurance supervisory official with regulatory oversight over the trust shall return the assets or part of the assets to the trustee for distribution under the trust agreement; (4) the grantor of the trust shall waive any right otherwise available to it under United States law that is inconsistent with this subsection. (e) The director may suspend or revoke a reinsurer's accreditation or certification under the following procedures if the accredited or certified reinsurer ceases to meet the requirements for accreditation or certification: (1) the director shall give the reinsurer notice and opportunity for a hearing under AS 21.06.170 - 21.06.230; the suspension or revocation may not take effect before the director issues an order on the hearing, unless the (A) reinsurer waives the right to a hearing; (B) director's order is based on a regulatory action by the reinsurer's domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under (a)(5)(F) of this section; or (C) director finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the director's action; (2) while a reinsurer's accreditation or certification is suspended, a reinsurance contract issued or renewed by the reinsurer on or after the effective date of the suspension does not qualify for credit, except to the extent that the reinsurer's obligations under the contract are secured under (c) of this section; if a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer's obligations under the contract are secured under (a)(5)(E) or (c) of this section. (f) A ceding insurer shall take steps to (1) manage its reinsurance recoverables proportionate to its own book of business; a domestic ceding insurer shall notify the director not later than 30 days after the reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers exceeds 50 percent of the domestic ceding insurer's last reported surplus to policyholders or the domestic ceding insurer determines that reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers is likely to exceed that limit; the notification must demonstrate that the exposure is safely managed by the domestic ceding insurer; and (2) diversify its reinsurance program; a domestic ceding insurer shall notify the director not later than 30 days after ceding to any single assuming insurer or group of affiliated assuming insurers more than 20 percent of the ceding insurer's gross written premium in the preceding calendar year or the domestic ceding insurer determines that the reinsurance ceded to any single assuming insurer or group of affiliated assuming insurers is likely to exceed that limit; the notification must demonstrate that the exposure is safely managed by the domestic ceding insurer. (g) The director may adopt regulations (1) to implement this section; and (2) relating to reinsurance arrangements, subject to the following provisions: (A) a regulation adopted under this paragraph may apply only to reinsurance relating to (i) a life insurance policy with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits; (ii) a universal life insurance policy with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guaranteed period; (iii) a variable annuity with guaranteed death or living benefits; (iv) a long-term care insurance policy; or (v) other life insurance, health insurance, and annuity products for which the National Association of Insurance Commissioners adopts model regulatory requirements with respect to credit for reinsurance; (B) a regulation adopted under (A)(i) or (ii) of this paragraph applies to a treaty containing a policy issued (i) on or after January 1, 2015, and (ii) before January 1, 2015, if the risk pertaining to the policy is ceded, in whole or in part, in connection with the treaty on or after January 1, 2015; in this subparagraph, treaty means a contract in which a reinsurance company agrees to accept and an insurance company agrees to cede all of a particular type of risk within a specific class of insurance policies; (C) the director may adopt a regulation under this paragraph to require a ceding insurer, in calculating the amounts or forms of security required to be held under regulations adopted under the authority of this paragraph, to use the edition of the valuation manual adopted by the National Association of Insurance Commissioners in effect on the date on which the calculation is made, to the extent applicable; (D) a regulation adopted under this paragraph does not apply to cessions to an assuming insurer that is certified in this state, meets the conditions set out in (a)(6) of this section, or meets the following criteria: (i) maintains at least $250,000,000 in capital and surplus as determined under the most recent edition of the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, including the effect of any permitted or prescribed practices; and (ii) is licensed in not fewer than 26 states, or licensed in not fewer than 10 states and licensed or accredited in a total of not fewer than 35 states; (E) nothing in this paragraph limits the director's authority to adopt regulations under (1) of this subsection. (h) The director shall consider the list of reciprocal jurisdictions published through the National Association of Insurance Commissioners committee process in determining a reciprocal jurisdiction and has the discretion to defer to the list. The director may approve a jurisdiction not on the list in accordance with criteria developed under regulations adopted by the director. The director may remove a jurisdiction from the list of reciprocal jurisdictions upon determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction in accordance with a process set out in regulation by the director. Upon removal of a reciprocal jurisdiction from the list, credit for reinsurance ceded to an assuming insurer that has a home office or is domiciled in that jurisdiction shall be allowed if otherwise allowed under this section. The director shall timely create and publish a list of assuming insurers that have satisfied the conditions set out in this subsection and to which cessions shall be granted credit in accordance with (a) of this section. The director may add an assuming insurer to a list if a National Association of Insurance Commissioners accredited jurisdiction has added the assuming insurer to a list of assuming insurers or, if upon initial eligibility, the assuming insurer submits the information to the director as required under (a)(6)(D) of this section and complies with any additional requirements the director may impose by regulation. If the director determines that an assuming insurer no longer meets one or more of the requirements of (a)(6) of this section, the director may revoke or suspend the eligibility of the assuming insurer under (a)(6) of this section in accordance with procedures set out in regulation. While an assuming insurer's eligibility is suspended, a reinsurance agreement issued, amended, or renewed after the effective date of the suspension does not qualify for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with (c) of this section. If an assuming insurer's eligibility is revoked, a credit for reinsurance may not be granted after the effective date of the revocation with respect to any reinsurance agreement entered into by the assuming insurer, including a reinsurance agreement entered into before the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the director and consistent with (c) of this section. Upon entry of an order of rehabilitation, liquidation, or conservation against the ceding insurer, the supervising court shall require an assuming insurer under (a)(6) of this section to post 100 percent security for the benefit of the ceding insurer or its estate. Nothing in this subsection shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in that reinsurance agreement consistent with this section. Credit under (a)(6) of this section may be taken only for reinsurance agreements entered into, renewed, or amended on or after the date the director has determined that the assuming insurer is eligible for credit, and may not be taken for reinsurance of losses incurred or reserves reported before that date. Credit under (a)(6) of this section may not apply to reinsurance agreements entered into, to losses incurred, or to reserves posted before application under (a)(6) of this section. (i) In this section, unless otherwise indicated, (1) qualified United States financial institution means an institution that is  (A) organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or a state of the United States, and has been granted authority to operate with fiduciary powers; and  (B) regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies;  (2) reciprocal jurisdiction means a jurisdiction that (A) is not a United States jurisdiction that is subject to an in- force covered agreement with the United States, each within its legal authority, or in the case of a covered agreement between the United States and the European Union, is a member state of the European Union; in this subparagraph, covered agreement is an agreement entered into under 31 U.S.C. 313 - 314 (Dodd-Frank Wall Street Reform and Consumer Protection Act) that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize; (B) is a United States jurisdiction that meets the requirements for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program; or (C) is a qualified jurisdiction, as determined by the director under (a)(5)(C) of this section, that is not otherwise described in (A) and (B) of this paragraph and that meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as specified by the director in regulation; (3) reinsurance transaction means a transaction stemming from a contract by which the assuming insurer agrees to indemnify the ceding insurer in whole or in part against liability or losses that the ceding insurer might incur under a separate contract of insurance with its insured.
(a) A nondomestic admitted insurer may not carry out an agreement of assumption reinsurance with a nonadmitted insurer that would transfer Alaska policyholders unless (1) the nonadmitted insurer applies for and obtains a certificate of authority from the director; or (2) the admitted insurer files the assumption agreement with the director and obtains approval to apply the assumption agreement to Alaska policies or certificates. (b) The director shall approve an assumption agreement involving the assumption of Alaska insurance business by a nonadmitted insurer if (1) the ceding insurer is in supervision, conservation, or liquidation and the assuming insurer is in good standing in its state of domicile; or (2) approval would be in the public interest of the Alaska policyholders.
It is intended that certain insurance coverages may come within the definitions of two or more kinds of insurance as defined in this chapter, and the inclusion of coverage within one definition does not exclude it from the definition of another kind of insurance coverage if the coverage may be reasonably included.
Life insurance is insurance on human lives. The transaction of life insurance includes also the granting of endowment benefits, additional benefits for death or dismemberment by accident or accidental means, additional benefits for the insured's disability, and optional modes of settlement of proceeds of life insurance. Transaction of life insurance does not include workers' compensation insurance.
(a) Health insurance is insurance of human beings (1) against bodily injury, disablement, or death by accident or accidental means; (2) against the resulting expenses of the injury, disablement, or death; (3) against disablement or expense resulting from sickness or childbirth; (4) against expense incurred in prevention of sickness; (5) for dental care; and (6) including every insurance that applies to injury, disablement, or death. Transaction of health insurance includes disability insurance and stop-loss insurance but does not include workers' compensation insurance. Health care insurance described in (b) of this section is a type of health insurance under this subsection. (b) Health care insurance means that part of health insurance that provides, delivers, arranges for, pays for, or reimburses any of the costs of medical care. (c) In this section, stop-loss insurance means insurance purchased by a self-insured employer to cover benefits the employer incurs in excess of a preset limit.
Disability insurance is insurance that provides periodic income payments when income is interrupted or terminated because of disability resulting from sickness, injury, or dismemberment, or a combination of sickness, injury, or dismemberment.
(a) Annuities means all agreements to make periodical payments if the making or continuance of all or some of a series of payments or the amount of a payment is dependent upon the continuance of human life, except payments made under AS 21.12.040. The business of annuities is considered to include additional benefits operating to safeguard the contract from lapse, or to provide a special surrender value, or special benefit, or annuity, in the event of the total and permanent disability of the holder. (b) Annuity contract means a contract providing for an annuity as defined in (a) of this section.
Property insurance is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon the loss or damage, other than noncontractual legal liability for loss or damage. Property insurance does not include title insurance as defined in AS 21.66.480.
(a) Casualty insurance includes (1) vehicle insurance: insurance against loss of or damage to a land vehicle or aircraft or a draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability, or expense resulting from or incidental to ownership, maintenance, or use of the vehicle, aircraft, or animal; and provision for medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability to the insured, if issued as an incidental coverage with or supplemental to insurance on the vehicle, aircraft, or animal; (2) liability insurance: insurance against legal liability for the death, injury or disability of a human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, if issued as an incidental coverage with or supplemental to liability insurance; (3) workers' compensation and employer's liability: insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees; (4) burglary and theft: insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal, or concealment, or from an attempt at any of the foregoing; including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to money, coins, bullion, securities, notes, drafts, acceptances, or other valuable papers and documents, resulting from any cause; (5) personal property floater: insurance upon personal effects against loss or damage from any cause under a personal property floater; (6) glass: insurance against loss or damage to glass, including its lettering, ornamentation, and fittings; (7) boiler and machinery: insurance against any liability and loss or damage to property or interest resulting from accident to or explosions of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured; (8) leakage and fire extinguishing equipment: insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes or containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to the sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus; (9) credit: insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured; (10) malpractice: insurance against legal liability of the insured, and against loss, damage, or expense incidental to a claim of liability, and including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury or disablement of a person, or arising out of damage to the economic interest of a person, as the result of negligence in rendering expert, fiduciary, or professional service; (11) elevator: insurance against loss of or damage to any property of the insured, resulting from the ownership, maintenance, or use of elevators, except loss or damage by fire, and to make inspection of and issue certificates of inspection on elevators; (12) livestock: insurance against loss or damage to livestock, and services of a veterinary for the animals; (13) entertainments: insurance indemnifying the producer of a motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation due to death, accidental injury, or sickness of performers, participants, directors, or other principals; (14) miscellaneous: insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within another kind of insurance as defined in this chapter, if the insurance is not disapproved by the director as being contrary to law or public policy. (b) The provision of medical, hospital, surgical, and funeral benefits, and of coverage against accidental death or injury, as incidental to and part of other insurance defined in (a)(1), (2), (4), and (10) of this section, shall for all purposes be considered to be the same kind of insurance to which it is incidental, and is not subject to provisions of this title applicable to life or health insurance.
Surety insurance includes (1) fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust; (2) insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship; (3) insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including loss while being transported in armored motor vehicles or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to an insured's premises or to the furnishings, fixtures, equipment, safes, and vaults on an insured's premises caused by burglary, robbery, theft, vandalism, or malicious mischief, or attempted burglary, robbery, theft, vandalism, or malicious mischief.
(a) Marine insurance includes (1) insurance against any and all kinds of loss or damage to (A) vessels, craft, aircraft, cars, automobiles, and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to, or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment or while awaiting shipment or during delays, storage, transshipment, or reshipment incident thereto, including marine builder's risks and all personal property floater risks; (B) a person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance, or use of the subject matter of the insurance (but not including life insurance or surety bonds or insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance, or use of automobiles); (C) precious stones, jewels, jewelry, gold, silver, and other precious metals, whether used in business or trade or otherwise and whether in the course of transportation or otherwise; (D) bridges, tunnels, and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion are the only hazards to be covered; piers, wharves, docks and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion; other aids to navigation and transportation, including dry docks and marine railways, against all risks; (2) marine protection and indemnity insurance, meaning insurance against, or against legal liability of the insured for loss, damage, or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of a vessel, craft, or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness, or death or for loss of or damage to the property of another person. (b) For the purposes of this title, wet marine and transportation insurance is that part of marine insurance that includes only (1) insurance on vessels, crafts, and hulls, and insurance of interests in or with relation to vessels, crafts, and hulls; (2) insurance of marine builder's risks, marine war risks, and contracts of marine protection and indemnity insurance; (3) insurance of freights and disbursements pertaining to a subject of insurance coming within this section; or (4) insurance of personal property and interests in personal property, in the course of exportation from or importation into any country, and in the course of transportation coastwise or on inland waters, including transportation by land, water, or air from point of origin to final destination, in respect to, appertaining to, or in connection with, any and all risks or perils of navigation, transit, or transportation, and while being prepared for and while awaiting shipment, and during delays, storage, transshipment, or reshipment incident thereto.
Mortgage guaranty insurance includes insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument consisting of a lien or charge on real estate.
Commercial insurance is any line of property insurance, as defined in AS 21.12.060, or casualty insurance, as defined in AS 21.12.070, that is for business and professional interests, whether for profit, nonprofit, or public in nature. For purposes of filing rates under AS 21.39.040 and forms under AS 21.42.120, commercial insurance does not include workers' compensation insurance.
(a) A domestic insurer shall, on or before March 1, submit to the director a report of its risk based capital covering the previous calendar year. The report must be in a form and contain the information required by risk based capital instructions. A domestic insurer required to submit a report under this subsection shall file the report with (1) the National Association of Insurance Commissioners; and (2) the insurance regulatory agency in each state in which the insurer is authorized to transact business if the insurance regulatory agency has requested the report in writing from the insurer; a report requested under this paragraph must be delivered (A) not later than 15 days after the receipt of a request if the report has already been filed with the director; or (B) at the time the report is filed with the director, if the report has not yet been filed with the director. (b) An insurer's risk based capital shall be determined under the formula contained in the risk based capital instructions. (c) If a domestic insurer files a report that the director determines to be inaccurate, the director may adjust the report to correct the inaccuracy. The director shall notify the insurer of an adjustment and the reason for it. (d) [Repealed,  34 ch 52 SLA 2015.]  (e) [Repealed,  34 ch 52 SLA 2015.] 
The requirements of this chapter supplement other provisions of this title and do not preclude or limit other powers or duties of the director.
If a company action level event occurs, the affected insurer shall submit to the director a plan under AS 21.14.060.
(a) If a regulatory action level event occurs, the director shall (1) require the affected insurer to submit a plan or a revised plan under AS 21.14.060; if the level event is caused by the insurer's failure to adhere to a previously filed plan or revised plan that has been accepted by the director, the director may exempt the insurer from this requirement; (2) perform whatever examination, analysis, or review of the assets, liabilities, and operations of the insurer that the director determines necessary; and (3) issue a corrective order specifying the action that the insurer is required to take to eliminate the level event. (b) The director may retain an actuary, investment expert, or other consultant as may be necessary to review the insurer's risk based capital plan or revised risk based capital plan, to examine or analyze the assets, liabilities, and operations of the insurer, or to formulate a corrective order with respect to the insurer. The affected insurer or affiliated person shall pay the fees, reasonable costs, and expenses of a person retained by the director under this subsection as ordered by the director.
If an authorized control level event occurs, the director shall take the action necessary (1) under AS 21.14.030(a) against the insurer; or (2) to place the insurer under regulatory control under AS 21.78.
(a) If a mandatory control level event occurs for a domestic insurer, the director shall take the action necessary to place the insurer under regulatory control under AS 21.78 or, if a fraternal benefit society, under AS 21.84. (b) Notwithstanding (a) of this section, the director may delay taking action under AS 21.78 or, if a fraternal benefit society, under AS 21.84 for up to 90 days after the mandatory control level event occurs, if the director finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period. (c) Notwithstanding (a) of this section, the director may allow a property and casualty insurer that is running off its business by writing no new business and by only renewing ongoing business to the extent required by law or by contract, but continuing to collect premiums and pay claims as they come due on existing business to continue the runoff under the director's supervision without placing the insurer under regulatory control under AS 21.78.
(a) If a plan is required under this chapter or by order of the director in response to an event described under AS 21.14.020 - 21.14.050, the plan must be a financial plan that includes (1) identification of the conditions that contribute to the level event; (2) a proposal for corrective action that the insurer intends to take that would be expected to eliminate the level event; (3) projections of the insurer's financial results for the current year and for at least the next four years or, if a health organization, for at least the next two years, with and without the proposed corrective action, including projections of statutory operating income, net income, and capital and surplus; the projections for new and renewal business must include separate projections for each major line of business and separately identify each significant income, expense, and benefit component; (4) identification of the key assumptions affecting the insurer's projections and the sensitivity of the projections to the assumptions; (5) identification of the quality of, and problems associated with, the insurer's business, including the insurer's assets, anticipated business growth, associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance in each case; and (6) other information required by the director. (b) An insurer shall submit a plan within 45 days (1) of an event described in AS 21.14.020 - 21.14.050; or (2) after the insurer receives notification from the director that the director has rejected the insurer's challenge, if the insurer has challenged an adjusted report under AS 21.14.080. (c) Not later than 60 days after an insurer has submitted a plan to the director, the director shall notify the insurer if the plan is satisfactory or unsatisfactory. If the director determines the plan to be satisfactory, the insurer shall implement the plan upon receiving notice from the director. If the director determines the plan is unsatisfactory, notification to the insurer must state the reasons for the determination and may propose revisions that, in the judgment of the director, will render the plan satisfactory. Upon receiving notice from the director that a plan is unsatisfactory, the insurer shall prepare a revised plan that may incorporate revisions proposed by the director and submit the revised plan to the director. A revised plan shall be submitted to the director within 45 days after the insurer receives notice that (1) the original plan is unsatisfactory; or (2) the director has rejected the insurer's challenge, if the insurer challenges an unsatisfactory determination of the director under AS 21.14.080. (d) A domestic insurer that files a plan or revised plan with the director shall file a copy of the plan or revised plan with the insurance regulatory agency in each state in which the insurer transacts business, if (1) the state has a risk based capital provision substantially similar to AS 21.14.090, as determined by the director; and (2) the insurance regulatory agency of that state has made a request in writing to the insurer. (e) An insurer shall file the copy of the plan or revised plan required under (d) of this section (1) within 15 days of the insurer's receipt of a request for the filing from a state; or (2) by the date on which the plan or revised plan is filed in this state under this section, whichever is later. (f) The director may specify in a notification under (c) of this section of an unsatisfactory plan or revised plan that the notification constitutes a regulatory action level event, subject to an insurer's right to challenge the unsatisfactory determination under AS 21.14.080.
(a) A foreign insurer shall, upon the written request of the director, submit to the director a report described under AS 21.14.010 not later than (1) 15 days from the receipt by the foreign insurer of a request, if the report has already been filed with the domiciliary state; (2) 60 days from the receipt by the foreign insurer of a request, if the report is not required to be filed with the domiciliary state; or (3) the date on which the report is filed with the domiciliary state or 60 days from receipt by the foreign insurer of the request, whichever is earlier, if the report is required to be filed but has not already been filed with the domiciliary state. (b) Within 15 days after receiving a written request from the director, a foreign insurer shall submit to the director a copy of a plan that is filed with an insurance regulatory agency of another state. (c) The director may require a foreign insurer to file a plan under AS 21.14.060, if (1) a company action level event, regulatory action level event, or authorized control level event occurs with respect to a foreign insurer as determined under (A) the risk based capital statute applicable in the domiciliary state of the insurer; or (B) this chapter, if a risk based capital statute is not in force in the domiciliary state that is substantially similar to this chapter; or (2) the insurance regulatory agency of the domiciliary state of the foreign insurer fails to require the foreign insurer to file a plan in the manner specified under that state's risk based capital statute. (d) If a foreign insurer fails to file a plan with the director as required under this section, the director may order the insurer to stop writing new insurance business in this state. (e) If a mandatory control level event occurs that involves a foreign insurer, the director may apply to a court under AS 21.78 for the liquidation of property of the foreign insurer that is located in this state, unless a domiciliary receiver has been appointed for the foreign insurer under the rehabilitation and liquidation statute applicable in the foreign insurer's domiciliary state.
(a) An insurer may request a hearing to challenge an action of the director or request a stay of the director's action as provided under AS 21.06.180 - 21.06.240. (b) An insurer shall request a hearing under (a) of this section within 15 days after the director's notice of (1) an adjusted risk based capital report under AS 21.14.010; (2) an unsatisfactory risk based capital plan or revised risk based capital plan; (3) a regulatory action level event based on an unsatisfactory risk based capital plan or revised risk based capital plan; (4) the insurer's failure to adhere to its risk based capital plan or revised risk based capital plan and the failure has a substantial adverse effect on the insurer's ability to eliminate the company action level event in accordance with its plan or revised plan; or (5) a corrective order applicable to the insurer.
(a) Except as provided in AS 21.06.060 and this subsection, a report required under AS 21.14.010, a plan required under AS 21.14.060, the results or report of an examination or analysis of an insurer performed under this chapter, and a corrective order issued by the director are confidential and may not be made public by the director or another person. Information in a risk based capital report that is also set out in a publicly available annual statement schedule is not confidential. (b) The calculation of risk based capital for an insurer constitutes a regulatory tool that may indicate a need for corrective action, and the calculation may not be used as a means to rank insurers. Except as otherwise required in this chapter, a person may not directly or indirectly use information regarding the risk based capital of an insurer. If a materially false statement regarding an insurer's risk based capital or an inappropriate comparison of any other amount to the insurer's risk based capital is published and the insurer is able to demonstrate with substantial proof, as determined by the director, the falsity or inappropriateness of the statement, the insurer may publish an announcement exclusively to rebut the materially false statement or inappropriate comparison. (c) The director may use the risk based capital instructions, report, adjusted report, plan, and revised plan only for monitoring the solvency of an insurer or for determining the need for corrective action by an insurer. Notwithstanding AS 21.39, documents described in this subsection may not be considered or introduced as evidence in a rate proceeding or used by the director to calculate or derive any elements of an appropriate premium level or rate of return for a line of insurance that an insurer or an affiliate is authorized to write.
(a) An insurer shall pay to the division $100 for each day the insurer fails to file a report, and $1,000 for each day the insurer fails to file a plan or revised plan in conformance with the requirements of this chapter. (b) If a report, plan, or revised plan has not been filed in conformance with the requirements of this chapter, the director may, as provided (1) under AS 21.09.150, AS 21.84.535, AS 21.86.190, or AS 21.87.110, as applicable to a particular insurer, suspend the authority of an insurer to enter into new obligations or issue a new or renewal policy of insurance in this state; or (2) under AS 21.34.070, declare a surplus lines insurer ineligible to transact business in this state.
(a) The director may exempt from the application of this chapter a domestic property and casualty insurer that (1) writes direct business only in this state; (2) writes direct annual premiums of $2,000,000 or less; and (3) does not assume reinsurance in excess of five percent of direct premiums written. (b) The director may exempt from the application of this chapter a domestic health organization that (1) writes direct business only in this state; (2) does not assume reinsurance in excess of five percent of direct premiums written and (A) writes direct annual premiums for comprehensive medical care of $2,000,000 or less; or (B) is a limited health service organization that covers less than 2,000 lives.
All notices by the director to an insurer that may result in regulatory action under this chapter are effective upon mailing if mailed by registered or certified mail or, in the case of any other transmission, upon the director's transmission of the notice.
The director may adopt regulations to implement this chapter.
In this chapter, (1) adjusted report means a risk based capital report that has been adjusted by the director under AS 21.14.010; (2) authorized control level event means (A) a report, an adjusted report that has not been challenged, or an adjusted report for which a challenge has been rejected, that is filed under AS 21.14.010 and that indicates that an insurer's total adjusted capital is greater than or equal to its mandatory control level risk based capital but is less than its authorized control level risk based capital; or (B) an insurer fails to respond to a corrective order issued under AS 21.14.030 in a manner satisfactory to the director, if (i) the insurer does not challenge the corrective order as permitted under AS 21.14.080; or (ii) after a hearing under AS 21.06.180 - 21.06.240, a challenge to the corrective order by the insurer under AS 21.14.080 is rejected by the director; (3) authorized control level risk based capital means the number determined under the risk based capital formula in the risk based capital instructions; (4) company action level event means a report, an adjusted report that has not been challenged, or an adjusted report for which a challenge has been rejected that is filed under AS 21.14.010 and that indicates that (A) an insurer's total adjusted capital is greater than or equal to its regulatory action level risk based capital but is less than its company action level risk based capital; (B) if a life and health insurer or a fraternal benefit society, the insurer or the fraternal benefit society has total adjusted capital that is greater than or equal to its company action level risk based capital but is less than the product obtained by multiplying the insurer's authorized control level risk based capital by 3.0 and that has a negative trend; or (C) if a property and casualty insurer or health organization, the insurer or organization has total adjusted capital that is greater than or equal to the company action level risk based capital but is less than the product obtained by multiplying its authorized control level risk based capital by 3.0 and that triggers the trend test calculation in the risk based capital instructions applicable to the insurer or health organization; (5) company action level risk based capital means the product obtained by multiplying an insurer's authorized control level risk based capital by 2.0; (6) corrective order means an order issued by the director specifying action that the director has determined is required under this chapter; (7) foreign insurer means a foreign insurer as defined in AS 21.97.900 but excludes an alien insurer; (8) fraternal benefit society has the meaning given in AS 21.84.900; (9) health organization means a health maintenance organization, limited health service organization, dental or vision plan, hospital, medical and dental indemnity or service corporation, or other managed care organization holding a certificate of authority under AS 21.86 or AS 21.87, or a company that writes primarily health insurance as defined in AS 21.12.050 and filed with the director the National Association of Insurance Commissioners Health Risk-Based Capital Report; (10) insurer means a property and casualty insurer, a life and health insurer, a health organization, and a fraternal benefit society; (11) level event means a company action level event, regulatory action level event, authorized control level action event, or mandatory control level event; (12) life and health insurer (A) means an insurer who transacts life insurance as defined in AS 21.12.040 or health insurance as defined in AS 21.12.050 and who filed with the director the National Association of Insurance Commissioners Life Risk-Based Capital Report; (B) does not include a benevolent association under AS 21.72, a fraternal benefit society under AS 21.84, a health maintenance organization under AS 21.86, or a hospital or medical service corporation under AS 21.87; (13) limited health service organization means a corporation, partnership, or other entity that undertakes to provide or arrange for the provision of one or more limited health services to enrollees; (14) limited health services means dental care services, vision care services, mental health services, substance abuse services, pharmaceutical services, podiatric care services, and other services as determined by order or regulation of the director; limited health services does not include hospital, medical, surgical, or emergency services except as provided incident to the limited health services as defined in this paragraph. (15) mandatory control level event means a report, an adjusted report that has not been challenged, or an adjusted report for which a challenge has been rejected, that is filed under AS 21.14.010, and that indicates that an insurer's total adjusted capital is less than the insurer's mandatory control level risk based capital; (16) mandatory control level risk based capital means the product obtained by multiplying an insurer's authorized control level risk based capital by 0.70; (17) negative trend for a life and health insurer or a fraternal benefit society means a negative trend over a period of time, as determined by the trend test calculation in the risk based capital instructions applicable to the life and health insurer or fraternal benefit society; (18) property and casualty insurer means an insurer who transacts health insurance as defined in AS 21.12.050, property insurance as defined in AS 21.12.060, casualty insurance as defined in AS 21.12.070, surety insurance as defined in AS 21.12.080, marine or wet marine and transportation insurance as defined in AS 21.12.090, or mortgage guaranty insurance as defined in AS 21.12.110 and who filed with the director the National Association of Insurance Commissioners Property and Casualty Risk-Based Capital Report; (19) regulatory action level event means (A) a report, an adjusted report that has not been challenged, or an adjusted report for which a challenge has been rejected, that is filed under AS 21.14.010, and that indicates that an insurer's total adjusted capital is greater than or equal to its authorized control level risk based capital but is less than the insurer's regulatory action level risk based capital; (B) an insurer fails to file a report required under AS 21.14.010 by its due date, unless the insurer has provided a written explanation for the failure by the due date that is satisfactory to the director and the insurer has cured the failure not later than 10 days after the report is due; (C) an insurer fails to submit a plan to the director within the time period described in AS 21.14.060; (D) a notification by the director to an insurer that a plan or revised plan submitted by the insurer is determined by the director to be unsatisfactory, if (i) the insurer does not challenge the determination of the director; or (ii) after a hearing under AS 21.06.180 - 21.06.240, a challenge of the director's determination by the insurer under AS 21.14.080 is rejected by the director; or (E) a notification by the director to an insurer that the insurer has failed to adhere to the insurer's plan or revised plan, if the director determines that the failure has a substantially adverse effect on the ability of the insurer to accomplish the objectives of the plan or revised plan, if (i) the insurer does not challenge the determination of the director; or (ii) after a hearing under AS 21.06.180 - 21.06.240, a challenge of the director's determination by the insurer under AS 21.14.080 is rejected by the director; (20) regulatory action level risk based capital means the product obtained by multiplying an insurer's authorized control level risk based capital by 1.5; (21) report means the report of an insurer's risk based capital for a calendar year as required under AS 21.14.010; (22) revised plan means a risk based capital plan revised by an insurer, after the director has found the original risk based capital plan unsatisfactory under AS 21.14.060; (23) risk based capital means the amount of risk based capital and surplus produced by the application of the risk based capital instructions, or other amount the director determines after examination to be sufficient to support the insurer's asset risk, underwriting risk, and credit risk, including the minimum capital and surplus required under AS 21.09; (24) risk based capital instructions means risk based capital instructions most recently adopted by the National Association of Insurance Commissioners; (25) total adjusted capital means the total of (A) an insurer's statutory capital and surplus as reported under AS 21.09.200 or 21.09.205; and (B) any other item required under the risk based capital instructions.
In a determination of the financial condition of an insurer, the following assets are allowed: (1) assets that are wholly and exclusively owned by the insurer and that are registered, recorded, or held under the insurer's name; (2) premiums, not more than three months past due, excluding commissions payable on them, due from a controlling or controlled person, to the extent that (A) the premiums collected by the controlling or controlled person and not remitted to the insurer are held in a trust account with a bank or other depository approved by the division and may not be commingled with other money of the controlling or controlled person; a disbursement from the trust account may be made only to the insurer, the insured, or, for the purpose of returning a premium, an entity that is entitled to returned premiums on behalf of the insured; however, the investment income derived from the trust may be allocated as the parties consider proper; a controlling or controlled person shall deposit premiums collected into the trust account within five working days after collection; the director shall disapprove a trust agreement that, in the director's judgment, does not assure the safety of the premiums collected; (B) the controlling or controlled person has provided to the insurer, and the insurer has maintained in its possession, an unexpired, clean, irrevocable, and unconditional letter of credit, payable to the insurer, for a term of not less than one year with automatic extension for one year, unless the beneficiary has received in writing notification of intention not to renew 30 days before the original expiration date; the letter of credit must be issued in conformity with the requirements set out in this subparagraph, and the amount of the letter of credit must equal or exceed the liability of the controlling or controlled person to the insurer, at all times during the period that the letter of credit is in effect, for premiums collected by the controlling or controlled person; a letter of credit must be issued under arrangements satisfactory to the division and the letter must be issued by a banking institution that is a member of the Federal Reserve System and that has a financial standing satisfactory to the department; the director shall disapprove a letter of credit that, in the director's judgment, does not assure the safety of the premiums; (C) the controlling or controlled person has provided to the insurer, and the insurer has maintained in its possession, evidence that the controlling or controlled person has purchased and has currently in effect a financial guaranty bond, payable to the insurer, issued for a continuous term, cancelable only on 30-day written notice to the beneficiary of intention to terminate with the bond continuing in effect for acts committed before the date of termination, and that is in conformity with the requirements set out in (B) of this paragraph; the amount of the bond must equal or exceed the liability of the controlling or controlled person to the insurer, at all times during which the financial guaranty bond is in effect, for the premium collected by the controlling or controlled person; a financial guaranty bond must be issued under an arrangement satisfactory to the division, by an insurer that is authorized to transact business in the state, that has financial standing satisfactory to the division, and that is neither controlled nor controlling in relation to either the insurer or the person for whom the bond is purchased; and (D) a financial examination indicates that the controlling or controlled person is solvent and has the ability to pay the premiums as they become due; the financial examination, as scheduled by the director, shall be based on a review of the books and records of the controlling or controlled person; (3) other assets considered by the director to be available for the payment of losses and claims, at values to be determined by the director, with any excess valuation reported as nonadmitted; and (4) other assets that do not exceed limitations as given in AS 21.21; any excess shall be reported as nonadmitted assets.
Assets may be allowed as deductions from corresponding liabilities, and liabilities may be charged as deductions from assets, and deductions from assets may be charged as liabilities, in accordance with the form of annual statement applicable to the insurer as prescribed by the director, or otherwise in the discretion of the director.
In addition to assets excluded by the application of AS 21.18.010, all nonadmitted assets and all other assets of doubtful value or character included as ledger or nonledger assets in a statement by an insurer to the director, or in an examiner's report to the director, shall also be reported, to the extent of the value disallowed, as deductions from the gross assets of the insurer, unless the director permits a reserve to be carried among the liabilities of the insurer in place of a deduction.
(a) The director shall disallow as an asset or as a credit against liabilities any reinsurance found by the director, after a hearing, to have been arranged for the purpose principally of deception as to the ceding insurer's financial condition as of the date of any financial statement of the insurer. Without limiting the general purport of this subsection, reinsurance of a substantial part of the insurer's outstanding risks contracted for in fact within four months before the date of any financial statement and cancelled in fact within four months after the date of the statement, or reinsurance under which the reinsurer bears no substantial insurance risk or substantial risk of net loss to itself, shall prima facie be considered to have been arranged for the purpose principally of deception within the intent of this subsection. (b) The director shall disallow as an asset a deposit, fund, or other asset of the insurer determined after a hearing to be (1) not in good faith the property of the insurer; (2) not freely subject to withdrawal or liquidation by the insurer at any time for the payment or discharge of claims or other obligations arising under its policies; (3) the result of arrangements made principally for the purpose of deception as to the insurer's financial condition as of the date of any financial statement of the insurer. (c) A disallowance of assets or credits is not valid unless made by the director after a hearing of which notice was given the insurer within six months after the date the financial statement of the insurer in which the deception is claimed was filed with the director. (d) The director may suspend or revoke the certificate of authority of an insurer that has knowingly been a party to a deception or an attempted deception.
In a determination of the financial condition of an insurer, liabilities to be charged against its assets shall include (1) the amount, estimated consistent with the provisions of this title, necessary to pay all of its unpaid losses and claims incurred on or before the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement; (2) with reference to life and health insurance and annuity contracts, (A) the amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted under this title that are applicable; (B) reserves for disability benefits, for both active and disabled lives; (C) reserves for accidental death benefits; (D) additional reserves that may be required by the director, consistent with practice formulated or approved by the National Association of Insurance Commissioners, on account of the insurance; (3) with reference to health insurance, the amount of reserves required under AS 21.18.080 - 21.18.086; (4) with reference to insurance other than specified in (2) and (3) of this section, and other than title insurance, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this chapter; (5) expenses and other obligations due or accrued at the date of the statement.
(a) Except as otherwise provided in AS 21.18.070, an insurer shall maintain an unearned premium reserve on all policies in force against loss or damage to property, including loss or damage under general casualty or surety insurance. (b) The director may require that the reserves be equal to the unearned portions of the gross premiums in force after deducting applicable reinsurance in solvent insurers as computed on each respective risk from the policy's date of issue. (c) An insurer shall compute all of the reserves on a monthly or more frequent pro rata basis. (d) After adopting a method for computing the reserve, an insurer may not change methods without approval of the supervisory official of the insurer's state of domicile. (e) This section does not apply to title insurance.
As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be considered unearned and the director may require the insurer to carry a reserve equal to 100 percent of premiums on trip risks written during the month ended as of the date of statement.
In addition to an adequate reserve as to outstanding losses as required under AS 21.18.050, a title insurer shall establish, segregate, and maintain an unearned premium reserve as required by the director.
In place of the unearned premium reserve required on surety bonds under AS 21.18.060, the department may require a surety insurer or limited surety insurer to set up and maintain a reserve on all bail bonds or other single premium bonds without a definite expiration date, furnished in judicial proceedings, equal to 25 percent of the total consideration charged for the bonds that are outstanding as of the date of a current financial statement of the insurer.
(a) The adequacy of health insurance reserves must be determined based on the sum of policy reserves determined under AS 21.18.082, claim reserves determined under AS 21.18.084, and premium reserves determined under AS 21.18.086. (b) Reserve adequacy must be determined by a prospective gross premium valuation. For policies in force, in a claims status, or in a continuation of benefits status on the valuation date, the gross premium valuation must take into account the present value of all expected benefits unpaid, all expected expenses unpaid, and all unearned or expected premiums, including expected future premium increases. (c) A gross premium valuation must be performed whenever there is an indication that reserves and future premiums may be insufficient to cover future claims for a particular block of policies or for the entire health insurance block. If a reserve inadequacy is determined to exist, the loss must be immediately recognized and reserves increased to account for the inadequacy. The increased reserves will be considered minimum reserves.
(a) Except as provided in (b) of this section, policy reserves are required for all individual and group health insurance policies or groups of policies (1) with level premiums or with a gross premium pricing structure at time of issue that results in future benefits exceeding the corresponding future valuation net premiums at any time; or (2) for which gross premiums are restricted by contract, regulation, or another reason that results in future gross premiums, reduced by expenses for administration, commissions, and taxes, being insufficient to cover future claims. (b) Policy reserves are not required for health insurance policies that cannot be continued after one year from the date of issue. (c) The structure of valuation net premiums used under a health insurance policy must be consistent with the structure of gross premiums on the date the policy is issued. (d) For return of premium benefits, deferred cash benefits, policies with premium rates that are not guaranteed, and where the effects of insurer underwriting by policy duration are specifically used in the valuation morbidity standard, termination rates that exceed the mortality rates in the tables required in (g)(2) of this section may be used but may not exceed the lesser of (1) 80 percent of the total termination rate used in the calculation of gross premiums; or (2) eight percent. (e) The methods and procedures used to determine health insurance policy reserves must be consistent with the methods and procedures used to determine claim reserves for a health insurance policy. (f) Negative reserves on a benefit may be offset against positive reserves for other benefits in the same policy, but the total policy reserve with respect to all benefits combined may not be less than zero. (g) Except as provided in (d) and (h) - (k) of this section, policy reserves for policies issued after July 1, 1997, must be determined based on (1) a maximum interest rate equal to the maximum interest rate allowed under AS 21.18.110 for the valuation of whole life insurance issued on the same date as the health insurance policy; (2) a termination assumption equal to the mortality table allowed under AS 21.18.110 for the valuation of whole life insurance issued on the same date as the health insurance policy or equal to a mortality table approved by the director for use in determining the policy reserves; (3) for long-term care policies issued after July 1, 1997, (A) a mortality assumption equal to the 1983 Group Annuity Mortality Table without projection; (B) a lapse assumption for policy durations one through four equal to the lesser of 80 percent of the voluntary lapse rate used in the calculation of gross premiums or eight percent; and (C) a lapse assumption for policy durations five and later of 100 percent of the voluntary lapse rate used in the calculation of the gross premiums or four percent; (4) a two-year full preliminary term method under which the terminal reserve is zero on the first and second policy anniversary dates; (5) a morbidity assumption for (A) individual disability income insurance issued (i) after December 31, 1997, equal to Tables A or B of the 1985 Commissioners' Individual Disability Tables for policies; and (ii) before January 1, 1998, equal to the 1964 or 1985 Commissioners' Individual Disability Tables; the insurer shall indicate which morbidity table the insurer will use for all individual disability income policies issued in a calendar year; (B) group disability income insurance issued (i) after December 31, 1997, equal to the 1987 Commissioners' Group Disability Table; and (ii) before January 1, 1998, equal to the morbidity assumption in use by the insurer before January 1, 1998; (C) scheduled or fixed time period hospital, surgical, or maternity benefit policies issued (i) after December 31, 1997, equal to the 1974 Medical Expense Table A from the Transactions of the Society of Actuaries, Volume XXX; and (ii) before January 1, 1998, equal to the morbidity assumption in use by the insurer before January 1, 1998; (D) cancer expense benefits for policies issued (i) after December 31, 1997, equal to the 1985 National Association of Insurance Commissioners Cancer Claim Cost Tables; and (ii) before January 1, 1998, equal to the morbidity assumption in use by the insurer before January 1, 1998; (E) accidental death benefits for policies issued (i) after December 31, 1997, equal to the 1959 accidental death benefit table; and (ii) before January 1, 1998, equal to the morbidity assumption in use by the insurer before January 1, 1998; or (F) all other individual or group policy benefits equal to a morbidity table established for reserve determination by an actuary qualified to determine the morbidity table and approved by the director; the morbidity table must contain a pattern of incurred claims cost that reflects the underlying morbidity and may not be constructed for the primary purpose of minimizing reserves. (h) The reserve method for return of premium or other deferred cash benefits must be a preliminary term method that is applied only in relation to the issue date of the policy and is a (1) one-year preliminary term method if benefits are provided before the 20th policy anniversary; or (2) two-year preliminary term method if the benefits are provided only on or after the 20th policy anniversary. (i) The reserve method for long-term care insurance must be calculated on a (1) two-year full preliminary term method for a policy or certificate issued on or before July 1, 1997; and (2) one-year full preliminary term method for a policy or certificate issued after July 1, 1997. (j) Reserve adjustments due to rate changes, revised assumptions, or other reasons for return of premium or other deferred cash benefits must be applied on the effective date of the adoption of the reserve adjustment. (k) An alternative method or basis of determining policy reserves may be used if the aggregate policy reserve is not less than the aggregate policy reserves determined under (c) - (j) of this section. (l) An insurer shall annually review prospective policy liabilities on policies valued by tabular reserves to determine the continuing adequacy and reasonableness of the tabular reserves given future gross premiums. The insurer shall make adjustments to the tabular reserves if the tests indicate that the basis of the reserves is no longer adequate. (m) Policy reserves that are valued based on the 1964 or 1985 Commissioners Individual Disability Tables must include a provision for a waiver of premium benefit with the minimum reserve for the benefit equal to the valuation net premium to be waived. (n) Policy reserves for long-term care insurance may not be less than the net single premium for any nonforfeiture benefits provided by the policy or certificate.
(a) Claim reserves are required for all incurred and unpaid claims on all health insurance policies. (b) Claim expense reserves are required for the estimated expense of settlement of all incurred and unpaid claims. (c) Claim reserves for prior valuation years must be tested for adequacy and reasonableness using claim runoff schedules in accordance with the statutory annual statement, including consideration of any residual unpaid liability. Claim reserve adequacy must be determined in the aggregate. (d) Claim reserves must be determined as follows: (1) for policies that require policy reserves under AS 21.18.082(a), based on a maximum interest rate equal to the maximum interest rate allowed under AS 21.18.110 for the valuation of whole life insurance issued on the same date as the date the claim was incurred; (2) for policies that do not require policy reserves under AS 21.18.082(b), based on a maximum interest rate equal to the maximum interest rate allowed under AS 21.18.110 for the valuation of single premium immediate annuities issued on the same date as the date the claim was incurred less 100 basis points; (3) except as provided in (4) and (5) of this subsection, a morbidity assumption for (A) individual disability income insurance must be equal to the morbidity assumption used in determining policy reserves under AS 21.18.082(g)(5); (B) group disability income insurance for policies issued (i) after December 31, 1997, must be equal to the 1987 Commissioners Group Disability Table; and (ii) before January 1, 1998, must be equal to the morbidity assumption in use by the insurer before January 1, 1998; (C) accidental death benefits must be equal to the actual amount of claims incurred; and (D) all other individual or group policy benefits must be equal to a morbidity table approved by the director and established for reserve determination by an actuary qualified to determine the morbidity table; (4) for individual or group disability claims with a duration from disablement of less than two years, morbidity assumptions may be based on the insurer's experience if determined credible by the insurer or upon another basis designed to place a sound value on the liabilities as determined by the insurer; (5) if approved by the director, reserves for group disability income claims with a duration from disablement of more than two years but less than five years may be based on the insurer's experience for which the insurer maintains control of underwriting and claim administration; request for approval to use this modified reserve basis must include (A) an analysis of the credibility of the experience; (B) a description of how all the insurer's experience is proposed to be used in setting the reserves; (C) a description and quantification of the margins to be included; (D) a summary of the financial impact that the proposed plan of modification would have on the insurer's last filed annual statement; (E) a copy of the approval from the state of domicile; and (F) all other information requested by the director; (6) any generally accepted actuarial reserving method or other reasonable method approved by the director may be used; the method used to estimate liabilities may be an aggregate method; approximations based on groupings and averages may also be used. (e) Claim reserves that are valued based on the 1964 or 1985 Commissioners' Individual Disability Tables must include a provision for a waiver of premium benefit with the minimum reserve for the benefit equal to the valuation net premium to be waived.
(a) Unearned premium reserves must be established for the period of coverage for which premiums, other than premiums paid in advance, have been paid beyond the date of valuation. (b) Due and unpaid premiums that are carried as an asset in the annual statement must be treated as premiums in force and are subject to the unearned premium reserve requirements of this section. Unpaid commissions, premium taxes, and costs of collection associated with due and unpaid premiums must be carried in the annual statement as an offsetting liability. (c) Gross premiums paid in advance for a period of coverage starting after the next premium due date following the valuation date may be discounted to the valuation date and must be held as a separate liability in the annual statement or as an addition to the unearned premium reserve established in this section. (d) The minimum unearned premium reserve for a policy is the pro rata unearned modal premium that applies to the valuation period beyond the date of valuation. If a policy reserve is required for a policy, the unearned modal premium is the valuation net modal premium on the policy reserve. If no policy reserve is required for a policy, the unearned modal premium is the gross modal premium for the policy. (e) The sum of the unearned premium and policy reserves for all policies may not be less than the gross modal unearned premium reserve on all policies as of the date of valuation. The total unearned premium and policy reserves may not be less than the expected claims for the period after the valuation date represented by the unearned premium reserve. (f) An insurer may use approximations and estimates in determining premium reserves, including groupings, averages, and aggregate estimates. The approximations or estimates must be tested periodically and not less frequently than triennially to determine adequacy. (g) Premium reserves based on the 1964 or 1985 Commissioners' Individual Disability Tables must include policies on premium waiver as in-force contracts and establish a minimum reserve for a waiver of premium benefit equal to the unearned modal valuation net premium being waived.
If loss experience shows that an insurer's loss reserves or reserves for incurred but not reported losses, however computed or estimated, are inadequate, the director shall require the insurer to maintain loss reserves or reserves for incurred but not reported losses in the increased amount needed to make them adequate.
(a) The director shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies, annuity and pure endowment contracts, and deposit-type contracts of every life insurer doing business in this state issued before the operative date of the valuation manual described in AS 21.18.112. In calculating the reserves for policies and contracts issued before the operative date of the valuation manual described in AS 21.18.112, the director may use group methods and approximate averages for fractions of a year or otherwise. For an alien insurer, the valuation shall be limited to the alien insurer's insurance transactions in the United States. For the purpose of making the valuation, the director may employ a qualified actuary who shall be paid by the insurer for which the service is rendered. For a foreign or alien insurer, the director may accept, in lieu of the valuation of the reserves required of a foreign or alien insurer, a valuation made, or caused to be made, by the insurance supervisory official of a state or other jurisdiction if the valuation complies with the minimum standard provided in this section. This subsection provides for the minimum standard for the valuation of reserves for policies and contracts subject to this subsection and applies to a policy and contract issued before the operative date of the valuation manual described in AS 21.18.112. An insurer that has adopted a standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided in this section may, with the approval of the director, adopt a lower standard of valuation, but not lower than the minimum provided in this section. (b) This subsection applies to only those policies and contracts issued on or after the operative date of AS 21.45.300 except as provided in (c) - (k) of this section, (5) and (6) of this subsection for group annuity and pure endowment contracts issued before that operative date, and AS 21.18.112(b): (1) Except as provided in (c) - (k) of this section, (5) and (6) of this subsection, and AS 21.18.112(b), the minimum standard for the valuation of all these policies and contracts shall be the commissioners reserve evaluation methods defined in (2)(A) and (B), (4), and (7) of this subsection, and AS 21.18.112(b), three and one-half percent interest, or in the case of policies and contracts, other than annuity and pure endowment contracts, issued on or after July 1, 1978, five and one-half percent interest for single premium life insurance policies and four and one-half percent interest for all other policies, and the following tables: (A) for all ordinary policies of life insurance issued on the standard basis, excluding disability and accidental death benefits in the policies - the Commissioners 1958 Standard Ordinary Mortality Table, for policies issued before the operative date of AS 21.45.300(w), of the Standard Nonforfeiture Law for Life Insurance as amended, except that, for a category of policies issued on female risks, all modified net premiums and present values, referred to in (2) of this subsection, may be calculated according to an age not more than six years younger than the actual age of the insured; and for policies issued on or after the operative date of AS 21.45.300(w) of the Standard Nonforfeiture Law for Life Insurance as amended (i) the Commissioners 1980 Standard Ordinary Mortality Table; (ii) at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with 10-year Select Mortality Factors; or (iii) any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum standard of valuation for the policies; (B) for all industrial life insurance policies issued on the standard basis, excluding disability and accidental death benefits in the policies - the 1941 Standard Industrial Mortality Table for the policies issued before the operative date of AS 21.45.300(l), of the Standard Nonforfeiture Law for Life Insurance as amended, and for the policies issued on or after April 7, 1984, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners that is approved by regulation adopted by the director for use in determining the minimum standard of valuation for those policies; (C) for individual annuity and pure endowment contracts, excluding disability and accidental death benefits in the policies - the 1937 Standard Annuity Mortality Table, or, at the option of the insurer, the Annuity Mortality Table for 1949, ultimate, or any modification of either of these tables approved by the director; (D) for group annuity and pure endowment contracts, excluding disability and accidental death benefits in the policies - the Group Annuity Mortality Table for 1951, any modification of the table approved by the director, or, at the option of the insurer, any of the tables or modification of tables specified for individual annuity and pure endowment contracts; (E) for total and permanent disability benefits in or supplementary to ordinary policies or contracts - the tables of period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the society of actuaries, with due regard to the type of benefit or any table of disablement and termination rates adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulation adopted by the director for use in determining the minimum standard of valuation for the policies; the table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies; (F) for accidental death benefits in or supplementary to policies - the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted after 1980 by the National Association of Insurance Commissioners that is approved by regulation adopted by the director for use in determining the minimum standard of valuation for the policies combined with a mortality table permitted for calculating the reserves for life insurance policies; (G) for group life insurance, life insurance issued on the substandard basis and other special benefits - tables approved by the director. (2) Except as otherwise provided in (4) and (7) of this subsection, reserves according to the commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, shall be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by the policies, over the then present value of any future modified net premiums; the modified net premiums for the policy shall be the uniform percentage of the respective contract premiums for the benefits that the present value, at the date of issue of the policy, of all the modified net premiums shall be equal to the sum of the then present value of the benefits provided for by the policy and the excess of (A) over (B), as follows: (A) a net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue of an annuity of one a year payable on the first and each subsequent anniversary of the policy on which a premium falls due; however, the net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of the policy; (B) a net one-year term premium for the benefits provided for in the first policy year; notwithstanding this paragraph, for a life insurance policy issued on or after January 1, 1987, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess premium and that provides an endowment benefit or a cash surrender value or a combination of these in an amount greater than the excess premium, the reserve according to the commissioners reserve valuation method as of a policy anniversary occurring on or before the assumed ending date, except as otherwise provided in (4) of this subsection, shall be the greater of the reserve as of the policy anniversary calculated as described in (A) of this paragraph and the reserve as of the policy anniversary; the reserve shall be calculated as described in (A) of this paragraph, except that (i) the present value shall be reduced by 15 percent of the amount of the excess first year premium; (ii) all present values of benefits and premiums shall be determined without reference to premiums or benefits provided for by the policy after the assumed ending date; (iii) the policy shall be assumed to mature on the assumed ending date as an endowment; and (iv) the cash surrender value provided on the assumed date shall be considered as an endowment benefit; in making the comparison in this subparagraph, the mortality and interest bases stated in (4) and (6) of this subsection and (c) of this section shall be used; in this subparagraph, the assumed ending date is the first policy anniversary on which the sum of the endowment benefit and cash surrender value then available is greater than the excess premium; (C) reserves according to the commissioners reserve valuation method for (i) life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums; (ii) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under 26 U.S.C. 408 (Internal Revenue Code), as amended; (iii) disability and accidental death benefits in all policies and contracts; (iv) all other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts, shall be calculated by a method consistent with the principles of this paragraph, except that any extra premiums charged because of impairments or special hazards shall be disregarded in the determination of modified net premiums. (3) Reserves for any category of policies, contracts, or benefits as established by the director, may be calculated at the option of the insurer according to standards that produce greater aggregate reserves for the category than those calculated according to the minimum standard provided in this section, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, may not be higher than the corresponding rate or rates of interest used in calculating nonforfeiture benefits provided for in the policy or contract. (4) If, in any contract year, the gross premium charged by a life insurer on a policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve on the policy or contract but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for that policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or contract, or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. In this paragraph, the minimum valuation standards of mortality and rate of interest are those standards referred to in (b) and (c) of this section. Notwithstanding this paragraph, for a life insurance policy issued on or after January 1, 1987, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess premium and that provides an endowment benefit or a cash surrender value or a combination of these in an amount greater than the excess premium, the provisions of this paragraph shall be applied as if the method used in calculating the reserve for such a policy were based on a net one-year term premium for the benefits provided for in the first policy year. The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated under (2)(B) of this subsection, and the minimum reserve calculated under this paragraph. (5) Except as provided in (c) - (k) of this section, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this paragraph as set out in (6) of this subsection and for all annuities and pure endowments purchased on or after that date under group annuity and pure endowment contracts, shall be the commissioners reserve valuation methods defined in (2) and (7) of this subsection and the following tables and interest rates: (A) for individual single premium immediate annuity contracts, excluding any disability and accidental death benefits in those contracts - the 1971 individual annuity mortality table or an individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum standard of valuation for the contracts, or any modification of these tables approved by the director and seven and one-half percent interest; (B) for individual annuity and pure endowment contracts, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in those contracts - the 1971 individual annuity mortality table or an individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum standard of valuation for the contracts, or any modification of these tables approved by the director and five and one-half percent interest for single premium deferred annuity and pure endowment contracts and four and one- half percent interest for all other comparable individual annuity and pure endowment contracts; (C) for all annuities and pure endowments purchased under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts - 1971 group annuity mortality table or a group annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum standard of valuation for the annuities and pure endowments, or any modification of these tables approved by the director, and seven and one-half percent interest. (6) After July 1, 1978, an insurer may file with the director a written notice of its election to comply with the provisions of (5) of this subsection after a specified date before January 1, 1979, which shall be the operative date of that requirement for the insurer; however, an insurer may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If an insurer makes no election, the operative date of (5) of this subsection for the insurer is January 1, 1979. (7) This paragraph applies to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement annuities under 26 U.S.C. 408 (Internal Revenue Code), as amended. Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in those contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by those contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of that contract, that become payable before the end of that respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in those contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of those contracts to determine nonforfeiture values. (c) The calendar year statutory valuation interest rates defined in (d) of this section shall be the interest rates used in determining the minimum standard for the valuation of (1) a life insurance policy issued in a particular calendar year, on or after the operative date of AS 21.45.300(w); (2) an individual annuity and pure endowment contract issued in a particular calendar year on or after January 1, 1984; (3) an annuity and pure endowment purchased in a particular calendar year on or after January 1, 1984 under a group annuity and pure endowment contract; and (4) the net increase, if any, in a particular calendar year after January 1, 1984, in an amount held under a guaranteed interest contract. (d) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of one percent (1) for life insurance,I = .03 + W(R1 - .03) + W/2(R2 - .09); (2) for a single premium immediate annuity and for an annuity benefit involving a life contingency arising from another annuity with a cash settlement option and from a guaranteed interest contract with a cash settlement option,I = .03 + W(R - .03)where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in (j) of this section, and W is the weighting factor defined in (f) of this section; (3) for other annuities with cash settlement options and other guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in (2) above, the formula for life insurance in (1) of this subsection shall apply to an annuity or guaranteed interest contract with a guarantee duration in excess of 10 years and the formula for a single premium immediate annuity in (2) of this subsection shall apply to an annuity or guaranteed interest contract with a guarantee duration of 10 years or less; (4) for other annuities with no cash settlement options and for other guaranteed interest contracts with no cash settlement options, the formula for a single premium immediate annuity in (2) of this subsection shall apply; (5) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for a single premium immediate annuity in (2) of this subsection shall apply. (e) Notwithstanding (d) of this section, if the calendar year statutory valuation interest rate for a life insurance policy differs from the corresponding actual rate for a similar policy issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate for the life insurance policy shall be equal to the corresponding actual rate for the immediately preceding calendar year. For the purpose of this subsection, the calendar year statutory valuation interest rate shall be determined for 1980 using the reference interest rate defined for 1979 and shall be determined for each following calendar year regardless of the operative date under AS 21.45.300(w). (f) The weighting factors referred to in (c) of this section are as follows: (1) weighting factors for life insurance:Guarantee Duration:WeightingYearsFactors10 or less.50more than 10, but not more than 20;.45more than 20;.35for life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guarantee in the policy or under an option to convert to a plan of life insurance with a premium rate or nonforfeiture value or both that are guaranteed in the original policy; (2) notwithstanding (3) of this subsection, the weighting factor for a single premium immediate annuity and for an annuity benefit involving a life contingency arising from another annuity with a cash settlement option and a guaranteed interest contract with a cash settlement option -.80; (3) for annuities and guaranteed interest contracts valued on an issue year basis:GuaranteeWeighting FactorDuration:for Plan TypeYearsABC5 or less;.80.60.50more than 5, but notmore than 10;.75.60.50more than 10, but notmore than 20;.65.50.45more than 20;.45.35.35 (4) for annuities and guaranteed interest contracts valued on a change in fund basis, the weighting factors shown in (3) of this subsection are increased by .15 for plan type A, .25 for plan type B, and .05 for plan type C; (5) for annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, that do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the weighting factors shown in (3) of this subsection or derived in (4) of this subsection are increased by .05. (g) The guarantee duration for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence. (h) In this section, plan type is defined as follows: (1) plan type A: at any time policyholder may withdraw funds only (A) with an adjustment to reflect a change in interest rates or asset values since receipt of the funds by the insurer; (B) without such adjustment but in installments over five years or more; (C) as an immediate life annuity; or (D) no withdrawal permitted; (2) plan type B: before expiration of the interest rate guarantee, policyholder may withdraw funds only (A) with adjustment to reflect a change in interest rates or asset values since receipt of the funds by the insurer; (B) without adjustment but in installments over five years or more; or (C) no withdrawal permitted; at the end of interest rate guarantee, funds may be withdrawn without adjustment in a single sum or installments over less than five years; (3) plan type C: policyholder may withdraw funds before expiration of an interest rate guarantee in a single sum or installments over less than five years either (A) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (B) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (i) An insurer may elect to value a guaranteed interest contract with a cash settlement option and an annuity with a cash settlement option on either an issue year basis or on a change in fund basis. A guaranteed interest contract with no cash settlement option and an annuity with no cash settlement option must be valued on an issue year basis. In this subsection an issue year basis of valuation means a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund. (j) The reference interest rates referred to in (d) and (e) of this section are as follows: (1) for life insurance, the lesser of the average interest rate for a period of 36 months and the average interest rate for a period of 12 months, ending on June 30 of the calendar year next preceding the year of issue, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc.; (2) for a single premium immediate annuity and for an annuity benefit involving a life contingency arising from another annuity with a cash settlement option and a guaranteed interest contract with a cash settlement option, the average interest rate for a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc.; (3) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as provided in (2) of this subsection, with a guarantee duration in excess of 10 years, the lesser of the average interest rate for a period of 36 months and the average interest rate for a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc.; (4) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as provided in (2) of this subsection, with a guarantee duration of 10 years or less, the average interest rate for a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc.; (5) for other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average interest rate for a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc.; (6) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as provided in (2) of this subsection, the average interest rate for a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc. (k) In the event that Moody's Corporate Bond Yield Average - Monthly Average Corporates is no longer published by Moody's Investors Service, Inc., or in the event that the National Association of Insurance Commissioners determines that Moody's Corporate Bond Yield Average - Monthly Average Corporates as published by Moody's Investors Service, Inc. is no longer appropriate for the determination of the reference interest rate, an alternative method for determination of the reference interest rate, which is adopted by the National Association of Insurance Commissioners and approved by regulation adopted by the director, may be substituted. (l) If a plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or if a plan of life insurance or annuity is of a nature that the minimum reserves cannot be determined by the methods described in (b)(2), (4), and (7) of this section, the reserves that are held shall be appropriate in relation to the benefits and the pattern of premiums for that plan, and be computed by a method that is consistent with the principles of this Standard Valuation Law, as determined by regulations adopted by the director. (m) A life insurer doing business in the state shall annually submit to the director an opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of a policy or contract are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with the applicable laws of this state. (n) The actuarial opinion must (1) be submitted with the annual statement reflecting the valuation of the reserve liabilities; (2) apply to all business in force, including individual and group health insurance plans; (3) be based on standards adopted by the Actuarial Standards Board; and (4) unless exempted by regulation, include an assessment as to whether the reserves and related actuarial items held in support of the policies and contracts, when considered in light of the assets held by an insurer with respect to the reserves and related actuarial items, including investment earnings on the assets and considerations anticipated to be received and retained under policies and contracts, make adequate provision for an insurer's obligations under a policy or contract including the benefits under and expenses associated with a policy or contract. (o) In the case of an actuarial opinion submitted by a foreign or alien insurer, the director may accept an opinion filed by the insurer with the insurance supervisory official of another state that is accredited by the National Association of Insurance Commissioners if the director determines that the opinion meets the requirements applicable to an insurer domiciled in this state. (p) The director may adopt regulations to provide a transition period for establishing higher reserves that a qualified actuary may consider necessary in order to render the opinion required under (n) of this section. (q) A qualified actuary who submits an opinion under (m) of this section (1) is not liable for damages to a person, other than the insurer and the director, for an act, error, omission, decision, or conduct with respect to the actuary's opinion except in a case of fraud or wilful misconduct; (2) is subject to disciplinary action by the director; and (3) shall prepare a memorandum, in form and substance acceptable to the director, to support the actuarial opinion. (r) If the insurer fails to provide a supporting memorandum as requested by the director within a period specified by regulation or the director determines that the supporting memorandum fails to meet the standards adopted by regulation or is otherwise unacceptable to the director, the director may engage a qualified actuary, at the expense of the insurer, to review the opinion and the basis for the opinion and to prepare a supporting memorandum as required under (q) of this section. (s) A memorandum in support of an actuarial opinion and other supporting material provided by an insurer to the director is confidential and may not be made public by the director or another person and is not subject to a civil subpoena, except for the purpose of defending an action seeking damages from a person because of an action required by this section. The memorandum or other material may be released by the director with the written consent of the insurer or to the American Academy of Actuaries upon a request stating that the memorandum or other material is required for the purpose of a disciplinary proceeding and setting out procedures satisfactory to the director for preserving the confidentiality of the memorandum or other material. Once a portion of the memorandum or other material is cited by the insurer in its marketing, is cited before a governmental agency other than a state insurance department, or is released by the insurer to the news media, the remainder of the confidential memorandum or other material is no longer confidential. (t) An insurer's aggregate reserves for (1) all life insurance policies, excluding disability and accidental death benefits, issued on or after July 1, 1992, may not be less than the aggregate reserves calculated under (b)(2), (4), (7), and (l) of this section, and the mortality table and rates of interest used in calculating nonforfeiture benefits for the policies; and (2) all policies, contracts, and benefits may not be less than the aggregate reserves determined by an appointed actuary to be necessary to render the opinion required under (m) of this section. (u) An insurer who submits an actuarial opinion that the insurer knew or should have known was not in compliance with this section is subject to suspension or revocation of the insurer's certificate of authority under AS 21.09.150(a). (v) In this section, unless the context requires otherwise, insurer means an entity that (1) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one of those policies in force or claim; or (2) has written, issued, or reinsured life insurance contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state.
(a) The director shall annually value, or cause to be valued, the reserve liabilities, hereinafter called reserves, for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every insurer issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien insurer, the director may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this section. (b) For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard described in the valuation manual is the minimum standard of valuation required under (a) of this section. For accident and health insurance contracts issued before the operative date of the valuation manual, the minimum standard of valuation is the standard required under AS 21.18.080 - 21.18.086. (c) Every insurer with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in the state and subject to regulation by the director shall annually submit to the director an opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of a policy or contract are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with the applicable laws of the state. The valuation manual must prescribe the specifics of this opinion, including any items considered to be necessary to its scope, as follows: (1) the actuarial opinion must (A) be in form and substance as specified in the valuation manual and acceptable to the director; (B) be submitted with the annual statement reflecting the valuation of the reserve liabilities on or after the operative date of the valuation manual; (C) apply to policies and contracts subject to this section, plus other actuarial liabilities specified in the valuation manual; (D) be based on standards adopted by the Actuarial Standards Board or its successor and on additional standards prescribed in the valuation manual; and (E) include, unless exempted in the valuation manual, an assessment of whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by an insurer with respect to the reserves and related actuarial items, including investment earnings on the assets and considerations anticipated to be received and retained under policies and contracts, adequately provide for an insurer's obligations under policies or contracts, including the benefits under and expenses associated with the policies or contracts; (2) in the case of an actuarial opinion submitted by a foreign or alien insurer, the director may accept an opinion filed by the insurer with the insurance supervisory official of another state that is accredited by the National Association of Insurance Commissioners if the director determines that the opinion meets the requirements applicable to an insurer domiciled in the state; (3) an appointed actuary who submits an opinion under this subsection (A) is not liable for damages to a person, other than the insurer and the director, for an act, an error, an omission, a decision, or conduct with respect to the appointed actuary's opinion, except in the case of fraud or wilful misconduct; (B) is subject to disciplinary action by the director against the appointed actuary or the insurer; and (C) shall prepare a memorandum, in form and substance acceptable to the director, to support the actuarial opinion; (4) if an insurer fails to provide a supporting memorandum as requested by the director within a period specified in the valuation manual or the director determines that the supporting memorandum fails to meet the standards adopted by the valuation manual or is otherwise unacceptable to the director, the director may engage a qualified actuary, at the expense of the insurer, to review the opinion and the basis for the opinion and to prepare a supporting memorandum as required under (3)(C) of this subsection. (d) Except as provided under (4) or (6) of this subsection, for policies and contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under (a) of this section, as follows: (1) the operative date of the valuation manual is January 1 following the effective date of this section; (2) unless a change in the valuation manual specifies a later effective date, changes to the valuation manual are effective on January 1 following the date when the change to the valuation manual has been adopted by the National Association of Insurance Commissioners by an affirmative vote representing (A) at least three-fourths of the members of the National Association of Insurance Commissioners voting, but not less than a majority of the total membership; and (B) members of the National Association of Insurance Commissioners representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available before the vote in this paragraph: life, accident and health annual statements, health annual statements, or fraternal annual statements; (3) the valuation manual must specify all of the following: (A) minimum valuation standards for and definitions of the policies or contracts subject to (a) of this section; the minimum valuation standards are (i) the commissioners reserve valuation method for life insurance policies and contracts, other than annuity contracts, subject to (a) of this section; (ii) the commissioners annuity reserve valuation method for annuity contracts subject to (a) of this section; and (iii) minimum reserves for all other policies or contracts subject to (a) of this section; (B) which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in (e) of this section and the minimum valuation standards consistent with those requirements; (C) for policies and contracts subject to a principle-based valuation under (e) of this section, (i) requirements for the format of reports to the director under (e)(5)(C) of this section that include information necessary to determine whether the valuation is appropriate and in compliance with this section; (ii) assumptions for risks over which the insurer does not have significant control or influence; (iii) procedures for corporate governance and oversight of the actuarial function and a process for appropriate waiver or modification of the procedures; (D) for policies and contracts not subject to a principle-based valuation under (e) of this section, the minimum valuation standard (i) must be consistent with the minimum standard of valuation in AS 21.18.110; or (ii) if there is no applicable minimum standard in AS 21.18.110, must develop reserves that quantify the benefits, guarantees, and funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring; (E) other requirements, including those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of insurer experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and (F) the data and form of the data required under (f) of this section, directions for submitting the data, and other requirements, including data analyses and reporting of analyses; (4) in the absence of a specific valuation requirement or if the director determines that a specific valuation requirement in the valuation manual is not in compliance with this section, the insurer shall, with respect to those requirements, comply with minimum valuation standards in AS 21.18.110; (5) the director may engage a qualified actuary, at the expense of the insurer, to perform an actuarial examination of the insurer, to determine the appropriateness of a reserve assumption or method used by the insurer, or to review and determine an insurer's compliance with a requirement of this section; the director may rely on the opinion of a qualified actuary engaged by the director of another state, district, or territory of the United States regarding provisions contained in this section; in this paragraph, engage includes employ and contract; (6) the director may require an insurer to change an assumption or method if the director determines the change is necessary to comply with the requirements of the valuation manual or this section, and the insurer shall adjust the reserves as required by the director. (e) An insurer shall establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual: (1) quantify the benefits, guarantees, and funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts and, for policies or contracts with significant tail risk, that reflect conditions appropriately adverse to quantify the tail risk; (2) incorporate assumptions, risk analysis methods, and financial models and management techniques that are consistent with, but not necessarily identical to, those used in the insurer's overall risk assessment process while recognizing potential differences in financial reporting structures and prescribed assumptions or methods; (3) incorporate assumptions that are derived in one of the following manners: (A) the assumptions are prescribed in the valuation manual; (B) for assumptions that are not prescribed, the assumptions shall be established using the insurer's available experience, to the extent it is relevant and statistically credible; to the extent that data is not available, relevant, or statistically credible, the assumptions shall be established using other relevant or statistically credible experience; (4) provide margins for uncertainty, including adverse deviation and estimation error, so that the greater the uncertainty the larger the margin and resulting reserve; (5) for an insurer using a principle-based valuation for one or more policies or contracts subject to this subsection as specified in the valuation manual, (A) establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual; (B) provide to the director an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation; the controls shall be designed to ensure that all material risks inherent in the liabilities and associated assets subject to the valuation are included in the valuation and that valuations are made in accordance with the valuation manual; the certification shall be based on the controls in place as of the end of the preceding calendar year; (C) develop and file with the director upon request a principle-based valuation report that complies with standards prescribed in the valuation manual; (6) a principle-based valuation may include a prescribed formulaic reserve component. (f) An insurer shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual. (g) The use of information in this section is subject to the following provisions: (1) except as provided in this subsection, an insurer's confidential information is not a public record under AS 40.25.100 - 40.25.295, except that, the director may use the confidential information in any regulatory or legal action brought against the insurer as a part of the director's official duties; (2) the director or another person who received confidential information while acting under the authority of the director is not permitted or required to testify in any private civil action concerning the confidential information; (3) to assist in the performance of the director's duties, the director may share confidential information (A) with other state, federal, and international regulatory agencies and with the National Association of Insurance Commissioners and its affiliates and subsidiaries; (B) in the case of confidential information specified in (i)(1)(A) and (D) of this section, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal, and international law enforcement officials; (C) under (A) and (B) of this paragraph only if the recipient agrees and has the legal authority to agree to maintain the confidentiality and privileged status of the documents, materials, data, and other information in the same manner and to the same extent required for the director; (4) the director may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, or information from the National Association of Insurance Commissioners and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions, and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data, or other information received with notice or the understanding that the document material, data, or information is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, data, or other information; (5) the director may enter into agreements governing the sharing and use of information consistent with this section; (6) a disclosure to the director under this section or sharing confidential information as authorized in (3) of this subsection does not constitute a waiver of a claim of confidentiality. (h) Notwithstanding (g) of this section, confidential information specified in (i)(1)(A) and (D) of this section (1) may be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under (c) of this section or principle-based valuation report developed under (e)(5)(C) of this section because of an action required by this section or by regulations adopted under this section; (2) may otherwise be released by the director with the written consent of the insurer; and (3) is not confidential after any portion of a memorandum in support of an opinion submitted under (c) of this section or a principle-based valuation report developed under (e)(5)(C) of this section is cited by the insurer in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the insurer to the news media. (i) In this section, (1) confidential information means (A) a memorandum in support of an opinion submitted under (c) of this section and documents, materials, and other information, including working papers and copies of them, created, produced, or obtained by or disclosed to the director or another person in connection with the memorandum; (B) documents, materials, and other information, including working papers and copies of them, created, produced, or obtained by or disclosed to the director or another person in the course of an examination made under (d)(5) of this section; however, if an examination report or other material prepared in connection with an examination made under AS 21.06.120 - 21.06.150 is not held as private and confidential information under AS 21.06.120 - 21.06.150, an examination report or other material prepared in connection with an examination made under (d)(5) of this section is not confidential information to the same extent as if the examination report or other material had been prepared under AS 21.06.120 - 21.06.150; (C) reports, documents, materials, and other information developed by an insurer in support of or in connection with an annual certification by the insurer under (e)(5)(B) of this section evaluating the effectiveness of the insurer's internal controls with respect to a principle-based valuation and other documents, materials, and other information, including working papers and copies of them, created, produced, or obtained by or disclosed to the director or another person in connection with the reports, documents, materials, and other information; (D) a principle-based valuation report developed under (e)(5)(C) of this section and other documents, materials, and other information, including working papers and copies of them, created, produced, or obtained by or disclosed to the director or another person in connection with the report; and (E) documents, materials, data, and other information submitted by an insurer under (f) of this section, known as experience data and experience materials, other documents, materials, data, and other information, including working papers and copies of them, created or produced in connection with the experience data, or documents, materials, data, or other information that includes any potentially insurer-identifying or personally identifiable information that is provided to or obtained by the director together with experience data, experience materials, and other documents, materials, data, and other information, including working papers and copies of them, created, produced, or obtained by or disclosed to the director or another person in connection with the experience materials; (2) law enforcement agency, National Association of Insurance Commissioners, and regulatory agency, includes an employee, agent, consultant, or contractor of the law enforcement agency, National Association of Insurance Commissioners, or regulatory agency.
The director may adopt regulations to implement this chapter.
For the purposes of this chapter, the value or amount of an investment acquired, held, or invested in or an investment practice engaged in under this title, unless otherwise specified in this title, must be the value at which assets of an insurer are required to be reported for accounting purposes under this title and as required under procedures prescribed in published accounting and valuation standards of the National Association of Insurance Commissioners, including the purposes and procedures manual of the securities valuation office, the valuation of securities manual, the accounting practices and procedures manual, and the annual statement instructions or valuation procedures officially adopted by the National Association of Insurance Commissioners.
In this chapter, (1) accident and health insurance means a contract that incorporates morbidity risk and provides protection against economic loss resulting from accident, sickness, or a medical condition or a contract as may be specified in the valuation manual; (2) admitted asset means an asset allowed by AS 21.18.010 to be included in the determination of the financial condition of a domestic or foreign insurer or the United States branch of an alien insurer; (3) affiliate has the meaning given in AS 21.22.200; (4) appointed actuary means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in AS 21.18.112; (5) controlling or controlled has the meaning given in AS 21.22.200 and includes a person that individually, or in combination with other persons, owes to the insurer an amount that exceeds 50 percent of the insurer's total premiums in the course of collection as stated on the insurer's financial statement; (6) deposit-type contract means a contract that does not incorporate mortality or morbidity risks or a contract specified in the valuation manual; (7) insurer means an entity that has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in (A) this state and has at least one of those policies in force or on claim; or (B) another state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state; (8) ledger asset means an asset recorded on the general ledger of an insurer; (9) life insurance means a contract that incorporates mortality risk, including an annuity and pure endowment contract, or a contract specified in the valuation manual; (10) nonadmitted assets means an asset recorded on the insurer's ledger that is not allowed by AS 21.18.010 to be included in the determination of the financial condition of a domestic or foreign insurer or the United States branch of an alien insurer; (11) nonledger asset means an asset not recorded on the general ledger of an insurer; (12) policyholder behavior means an action of a policyholder, contract holder, or another person with the right to elect options; (13) principle-based valuation means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer under AS 21.18.112(e), as specified in the valuation manual; (14) qualified actuary means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the qualification standards of the American Academy of Actuaries and who meets the requirements specified in the valuation manual; (15) solvent means able to satisfy all current and future obligations and operate as an ongoing entity; (16) tail risk means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or when there are observed events of very significant size or magnitude; (17) valuation manual means the manual of valuation instructions adopted by the National Association of Insurance Commissioners as specified in AS 21.18.112(d).
This chapter applies only to an investment and investment practice of a domestic insurer and a United States branch of an alien insurer entered through this state. This chapter does not apply to separate accounts of a life insurer.
(a) Insurers shall invest in or lend their funds on the security of, and shall hold as invested assets, only the eligible investments prescribed in this chapter. (b) [Repealed,  85 ch 50 SLA 1990.]  (c) Eligibility of an investment shall be determined as of the date of its making or acquisition. (d) An investment limitation based upon the amount of the insurer's assets or particular funds shall relate to the assets or funds shown by the insurer's annual statement most recently required to be filed with the director. (e) For purposes of determining compliance with investment limitations imposed under this chapter, the director or an insurer shall use admitted asset values.
As provided under 15 U.S.C. 77r-1(b) and (c) (Secondary Mortgage Market Enhancement Act of 1984), securities that are purchased, held, or invested in by an insurer are subject to AS 21.18.170 and regulations adopted under AS 21.21.420, and other applicable provisions of this title.
(a) The custodian for assets, securities, or investments of the insurer may be only a bank, trust company, securities firm, or clearing corporation that is properly authorized by the insurer and approved by the director. (b) When securities are deposited with a clearing corporation, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of the clearing corporation with any other securities deposited with the clearing corporation by any person, regardless of the ownership of the securities, and certificates representing securities of small denominations may be merged into one or more certificates of larger denominations. The records of any custodian through which an insurer holds securities in a clearing corporation must show that the securities are held for the insurer and for which accounts of the insurer. Ownership of, and other interest in, the securities may be transferred by bookkeeping entry on the books of the clearing corporation without physical delivery of certificates representing the securities. (c) A custodial agreement between an insurer and an institution holding the assets, securities, or investments of the insurer must be in writing and must be authorized by a resolution of the board of directors of the insurance company or of an authorized committee of the board. The terms of the custodial agreement must comply with the requirements of the director.
The director shall adopt regulations regarding insurance company investments that are consistent with the defined limits standards for investments of the National Association of Insurance Commissioners.
(a) Until the provisions of (b) of this section have been fulfilled, a person may not (1) unless the person is an issuer, make a tender or an offer for or a request or an invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the purchase, the person would, directly or indirectly or by conversion or by exercise of any right to acquire, be in control of the insurer; or (2) enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or a person controlling a domestic insurer. (b) A statement containing the information required by AS 21.22.020 shall be filed by the person making a proposal described in (a) of this section with the director before the time copies of the proposal are first published, sent, or given to security holders of the insurer. The insurer shall publish, send, or give copies of the statement to the insurer's stockholders. The proposal is subject to approval by the director under AS 21.22.030. (c) If a proposal described in (a) of this section is to be made by means of a registration statement under 15 U.S.C. 77a - 77aa (Securities Act of 1933) or in circumstances requiring the disclosure of similar information under 15 U.S.C. 78a - 78mm (Securities Exchange Act of 1934), or under a state law requiring similar registration or disclosure, the person required to file the statement under (b) of this section may use those documents in furnishing the information called for by that statement. (d) If the person required to file the statement under (b) of this section is a partnership, limited partnership, syndicate, or other group, the director may require that the information be given with respect to each (1) partner of the partnership or limited partnership; (2) member of the syndicate or group; and (3) person who controls a partner or member. (e) If any person, partner, or member required to file the statement under (b) of this section is a corporation, the director may require that the information be given with respect to (1) that corporation; (2) each officer and director of that corporation; and (3) each person who is directly or indirectly the beneficial owner of more than 10 percent of the outstanding voting securities of that corporation. (f) If any material change occurs in the facts set out in the statement filed with the director and sent to the insurer under this section, an amendment setting out the change, together with copies of all documents and other material relevant to the change, shall be filed with the director and sent to the insurer within two business days after the person learns of the change. The insurer shall send the amendment to its shareholders. (g) The provisions of this section do not apply to an offer, request, invitation, agreement, or acquisition that the director by order may exempt as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of the domestic insurer. (h) A person controlling a domestic insurer seeking to divest, in any manner, its controlling interest in the domestic insurer shall file with the director, and provide a copy to the insurer, confidential notice of the person's proposed divestiture at least 30 days before the cessation of control. The director shall determine whether a party seeking to divest or to acquire a controlling interest in an insurer is required to file for and obtain approval of the transaction. The information is confidential until the conclusion of the transaction unless the director, in the director's discretion, determines that confidential treatment will interfere with enforcement of this section. If a statement referred to in (b) of this section is otherwise filed, this subsection does not apply. (i) For a transaction subject to this section, an acquiring person also shall file a preacquisition notification with the director that contains the information set out in AS 21.22.065(c). A failure to file the notification may be subject to penalties specified in AS 21.22.065(i). (j) In this section, domestic insurer includes any person controlling a domestic insurer unless that person is either directly or through its affiliates primarily engaged in business other than the business of insurance. In this subsection, person includes a securities broker holding, in the usual and customary broker's function, more than 20 percent of the voting securities of an insurer or of a person controlling an insurer.
(a) The statement to be filed with the director under AS 21.22.010 shall be made under oath or affirmation and must contain the following information: (1) the name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in AS 21.22.010 is to be effected, who will be called the acquiring party, as follows: (A) if the person is an individual, the principal occupation of the person and all offices and positions held during the past five years, and all felony convictions and misdemeanor convictions involving moral turpitude during the past 10 years; (B) if the person is not an individual, (i) a report of the nature of its business operations during the past five years or for whatever lesser period the person and any of its predecessors have been in existence; (ii) an informative description of the business intended to be done by the person and the person's subsidiaries; and (iii) a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to those positions; the list shall include for each individual under this sub-subparagraph the information required by (A) of this paragraph; (2) a description of the consideration used or to be used in effecting the merger or other acquisition of control, including (A) the source, nature, and amount; (B) a description of any transaction in which funds were or are to be obtained for a purpose under this paragraph; and (C) the identity of persons furnishing the consideration; however, if a source of the consideration is a loan made in the lender's ordinary course of business, the director shall keep the identity of the lender confidential, if the person filing the statement so requests; (3) fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years or for whatever lesser period that an acquiring party and any predecessors of the acquiring party have been in existence, and similar unaudited information as of a date not earlier than 90 days before the filing of the statement; (4) any plans or proposals that each acquiring party may have to (A) liquidate the insurer; (B) sell its assets or merge or consolidate it with any person; or (C) make any other material change in its business or corporate structure or management; (5) the number of shares of any security referred to in AS 21.22.010 that each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in this chapter, and a statement as to the method by which the fairness of the proposal was determined; (6) the amount of each class of any security referred to in AS 21.22.010 that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) a full description of any contracts, arrangements, or understandings with respect to any security referred to in AS 21.22.010 in which an acquiring party is involved, including transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies; this description must identify the persons with whom the contracts, arrangements, or understandings have been entered into; (8) a description of the purchase of any security referred to in AS 21.22.010 during the 12 calendar months preceding the filing of the statement by an acquiring party, including the dates of purchase, the names of the purchasers, and consideration paid or agreed to be paid; (9) a description of any recommendations to purchase a security referred to in AS 21.22.010 made during the 12 calendar months preceding the filing of the statement by an acquiring party or by anyone based on interviews or at the suggestion of the acquiring party; (10) copies of all tender offers for, requests or invitations for tenders of exchange offers for, and agreements to acquire or exchange any securities referred to in AS 21.22.010 and, if distributed, of additional soliciting material; (11) the terms of any agreement, contract, or understanding made with a broker-dealer as to solicitation of securities referred to in AS 21.22.010 for tender and the amount of any fees, commissions, or other compensation to be paid to a broker-dealer; (12) any additional information as the director may by order or regulation prescribe as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest. (b) In addition to the other requirements in this section, a person required to file a statement under AS 21.22.010 shall provide (1) the annual enterprise risk statement specified in AS 21.22.060(n) for so long as control exists; and (2) an acknowledgment that the person and all subsidiaries within the person's control in the insurance holding company system will provide information to the director upon request as necessary to evaluate enterprise risk to the insurer. (c) In this section, consideration includes a pledge of the stock of an insurer or the insurer's subsidiary.
(a) The director shall approve a merger or other acquisition of control referred to in AS 21.22.010 unless, after a public hearing, the director finds that (1) after the change of control, the domestic insurer referred to in AS 21.22.010 would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed; (2) the effect of the merger or other acquisitions of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly in this state; (3) the financial condition of an acquiring party is such that it might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders or the interests of any remaining securityholders who are unaffiliated with the acquiring party; (4) the terms of the offer, request, invitation, agreement, or acquisition referred to in AS 21.22.010 are unfair and unreasonable to the securityholders of the insurer; (5) the plans or proposals that the acquiring party has to liquidate the insurer, sell its assets, or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest; (6) the competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or (7) the acquisition is likely to be hazardous or prejudicial to the insurance-buying public. (b) The public hearing referred to in (a) of this section must be held within 60 days after the statement required by AS 21.22.010 is filed and determined to be complete by the director. The director shall give notice of at least 20 days of the hearing to the person filing the statement. The person filing the statement shall give notice of at least seven days of the hearing to the insurer and to other persons as may be designated by the director. The director shall issue a decision within the 60-day period preceding the effective date of the proposed transaction. The procedure in AS 21.06.210 applies to a public hearing under this section. (c) In evaluating the effect of a merger or other acquisition under (a)(2) of this section, the (1) information requirements of AS 21.22.065(c)(1) and the standards of AS 21.22.065(d)(1), (2), and (e) apply; (2) merger or other acquisition may not be disapproved if the director finds that a situation meeting the criteria in AS 21.22.065(g) exists; and (3) director may condition the approval of the merger or other acquisition on the removal of a basis for disapproval within a specified period. (d) The director may retain at the acquiring person's expense an attorney, actuary, accountant, or other expert not otherwise a part of the director's staff, if reasonably necessary to assist the director in reviewing the proposed acquisition of control. (e) If the proposed acquisition of control would require the approval of more than one insurance regulator, the public hearing referred to under (a) and (b) of this section may be held on a consolidated basis upon request of the person filing the statement referred to in AS 21.22.010. That person shall file the statement referred to in AS 21.22.010 with the National Association of Insurance Commissioners within five days after making the request for a public hearing. The director may opt out of a consolidated hearing and shall provide notice to the applicant of the opt-out within 10 days after receipt of the statement referred to in AS 21.22.010. A hearing conducted on a consolidated basis must be public and must be held within the United States before the insurance regulators of the states in which the insurers are domiciled. The director may attend the hearing in person or telephonically.
All statements, amendments, or other material filed under AS 21.22.010, and all notices of public hearings held under AS 21.22.030, shall be mailed by the insurer to its shareholders within five business days after the insurer has received those statements, amendments, other materials, or notices. The expenses of mailing shall be borne by the person making the filing. As security for the payment of those expenses, the person making the filing shall file with the director an acceptable bond or other deposit in an amount to be determined by the director.
The courts of this state are given jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the director under this chapter and over all actions involving that person arising out of violations of this chapter, and each person is considered to have performed acts equivalent to and constituting an appointment of the director to be the lawful attorney of the person upon whom may be served all lawful process in any action or proceeding arising out of a violation of this chapter. Copies of all lawful process shall be transmitted by registered or certified mail by the director to the person at the last known address of the person.
(a) Except as provided in (c) of this section, an insurer that is authorized to do business in this state and that is a member of an insurance holding company system shall register with the director. An insurer that is subject to registration under this section shall register not later than 15 days after the insurer becomes subject to registration, unless the director, for good cause shown, extends the time for registration; if the time is extended, the insurer shall register within the extended time. (b) An insurer subject to registration shall file a registration statement, on a form provided by the director, that must contain current information about (1) the capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer; (2) the identity and relationship of every member of the insurance holding company system; (3) the following agreements in force and transactions currently outstanding or that have occurred in the last calendar year between the insurer and its affiliates: (A) loans, other investments, or purchases, sales, or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates; (B) purchases, sales, or exchanges of assets; (C) transactions not in the ordinary course of business; (D) guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business; (E) all management and service contracts and all cost-sharing arrangements; (F) reinsurance agreements; (G) dividends and other distributions to shareholders; and (H) consolidated tax allocation agreements; (4) other matters concerning transactions between registered insurers and any affiliates that may be included from time to time in a registration form adopted or approved by the director; (5) a pledge of the insurer's stock, including stock of a subsidiary or controlling affiliate, for a loan made to a member of the insurance holding company system; (6) if requested by the director, the financial statements of or within an insurance holding company system, including all affiliates or the most recently filed parent corporation financial statements that have been filed with the United States Securities and Exchange Commission; financial statements may include annual audited financial statements filed with the United States Securities and Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 1933), as amended, or 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), as amended; (7) statements that the insurer's board of directors is responsible for and oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and (8) other information required by the director by regulation. (c) An authorized insurer is not required to register under (a) of this section if the insurer is a member of a holding company system subject to registration requirements and standards under the laws or regulations of its state of domicile that are substantially similar to those contained in this chapter, except that the director may require the insurer to file a copy of the registration statement, the summary outline as described in (l) of this section, or other information filed in its state of domicile. (d) Information need not be disclosed on the registration statement filed under (b) of this section if that information is not material for the purposes of this section. Unless the director by regulation or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, investments, or the aggregate of a series of related transactions, involving one-half of one percent or less of an insurer's admitted assets or five percent or less of the policyholder's surplus as of the 31st day of December of the calendar year in which the transaction took place are not considered material for purposes of this section. (e) Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions on amendment forms provided by the director within 30 days after the end of the month in which it learns of each change or addition; however, subject to AS 21.22.100, each registered insurer shall report all dividends and other distributions to shareholders within 15 business days following their declaration. (f) The director shall terminate the registration of an insurer that demonstrates that it no longer is a member of an insurance holding company system. (g) The director may require or allow two or more affiliated insurers subject to registration under this section to file a consolidated registration statement or consolidated reports amending their consolidated registration statement or their individual registration statements. (h) The director may allow an insurer that is authorized to do business in this state and that is part of an insurance holding company system to register on behalf of an affiliated insurer that is required to register under (a) of this section and to file all information and material required to be filed under this section. (i) This section does not apply to any insurer, information, or transaction to the extent that the director by regulation or order exempts the insurer, information, or transaction from this section. (j) A person may file with the director a disclaimer of affiliation with an authorized insurer or the disclaimer may be filed by the insurer or a member of an insurance holding company system. The disclaimer must fully disclose all material relationships and bases for affiliation between that person and that insurer as well as the basis for disclaiming the affiliation. A disclaimer of affiliation is considered granted unless the director, within 30 days after receipt of a complete disclaimer, notifies the disclaiming party that the disclaimer is disallowed. If the disclaimer is disallowed, the disclaiming party may request a hearing under AS 21.06.180 - 21.06.240. (k) An insurer subject to registration under (a) of this section shall register annually by May 1 of each year for the previous calendar year unless, for good cause shown, the director extends the time for registration. The director may require an insurer that is allowed to register as provided under (c) of this section to furnish a copy of (1) the registration statement; (2) the summary specified in (l) of this section; or (3) other information filed by the insurer with the insurance regulatory authority of the insurer's state of domicile. (l) An annual registration statement filed under (k) of this section must contain a summary outline of items in the current registration statement representing changes from the prior registration statement. (m) A person within an insurance holding company system subject to registration shall provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this chapter. (n) The ultimate controlling person of an insurer subject to registration shall file an annual enterprise risk report. The report must, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that may pose enterprise risk to the insurer. The report shall be filed with the lead state insurance regulator of the insurance holding company system as determined by the procedures in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.
(a) Unless exempted in (j) of this section, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state. (b) If an acquisition violates the standards established in (d) and (f) of this section, the director may enter an order requiring an involved insurer to cease doing business in this state with respect to the line or lines of insurance involved in the violation or denying the application of an acquired or acquiring insurer for a license to do business in this state. Within 30 days of the issuance of the order, the involved insurer may submit a plan to remedy the anticompetitive effect of the acquisition within a reasonable time. Based upon a plan or other information submitted, the director shall specify the conditions, if any, under a time period during which the aspects of the acquisition causing a violation of the standards of this section would be remedied and the order vacated or modified. The order is stayed by the insurer's submission of a plan and shall be rescinded if the acquisition is not consummated. (c) An acquisition that meets the requirements under (a) of this section is subject to an order under (b) of this section unless the acquiring person files a preacquisition notification and the waiting period has expired. The person to be acquired may file a preacquisition notification. A preacquisition notification by a person to be acquired may not be filed in place of a preacquisition filing by an acquiring person. The preacquisition notification (1) must be in a form and contain the information prescribed in regulations adopted by the director relating to insurance markets that, under (j)(5) of this section, cause the acquisition not to be exempt from the provisions of this section; the director may require additional material and information the director considers necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standards of this section; (2) may include an opinion of an economist regarding the competitive effect of the acquisition in this state accompanied by a summary of the education and experience indicating the economist's ability to render an informed opinion; and (3) must be followed by a waiting period beginning on the date of receipt by the director of a preacquisition notification and ending on the earlier of the 30th day after the date of receipt or termination of the waiting period by the director unless, before the end of the waiting period, the director requires the submission of additional information relevant to the proposed acquisition, in which event the waiting period shall end on the 30th day after receipt of the additional information by the director or termination of the waiting period by the director, whichever is earlier. (d) The director may enter an order under (b) of this section regarding an acquisition if the insurer fails to file adequate information in compliance with (c) of this section or if there is substantial evidence that the acquisition may substantially lessen competition, create a monopoly in a line of insurance in this state or significantly increase an insurer's market concentration. In determining whether an acquisition violates competitive standards under this subsection, the director shall consider the following: (1) an acquisition covered under (a) of this section involving two or more insurers competing in the same market is prima facie evidence of a violation of the competitive standards (A) if the market is highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B4 percent4 percent or more10 percent2 percent or more15 percent1 percent or more; (B) if the market is not highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B5 percent5 percent or more10 percent4 percent or more15 percent3 percent or more19 percent1 percent or more. (2) an acquisition covered under (a) of this section involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standard if (A) there is a significant trend toward increased concentration in the market, which occurs when the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eighth largest, has increased by seven percent or more of the market over a period extending from any base year five to 10 years before the acquisition up to the date of the acquisition; (B) one of the insurers involved is an insurer in a grouping of large insurers showing the requisite increase in market share; and (C) another involved insurer's market share is two percent or more. (e) A percentage not shown in the tables contained in (d) of this section may be interpolated proportionately to the percentage that is shown. The insurer with the largest share of the market shall be considered Insurer A. If more than two insurers are involved, a market share that exceeds the total of the two columns in the table by the insurers involved is prima facie evidence of a violation of the competitive standards contained in (d) of this section. (f) Even though an acquisition does not violate the competitive standard under (d) of this section, the director may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition does violate the competitive standard under (d) of this section, a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under (d) of this section include market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry into and exit out of the market. The burden of showing substantial evidence of a violation of the competitive standards rests with the director. (g) An order may not be entered under (b) of this section if (1) the acquisition will yield substantial economy of scale or economy in resource utilization that cannot be achieved in another way and the public benefits that would arise from the economy exceed the public benefits that would arise from not lessening competition; or (2) the acquisition will substantially increase the availability of insurance and the public benefits of the increase exceed the public benefits that would arise from not lessening competition. (h) A person who violates a cease and desist order of the director under (b) of this section may, after hearing and on order of the director, be subject to the suspension or revocation of a license, a civil penalty not to exceed $10,000 for each day of violation, or both. (i) An insurer or other person who fails to make a preacquisition filing required by (c) of this section and who also fails to demonstrate a good faith effort to comply with filing requirements shall be subject to a fine of not more than $50,000. (j) This section does not apply to (1) an acquisition subject to approval or disapproval by the director under AS 21.22.010; (2) a purchase of securities solely for investment purposes if the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in an insurance market in this state; if a purchase of securities for investment purposes results in a presumption of control under AS 21.22.200(3), it is not solely for investment purposes unless the insurance supervisory official of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary insurance supervisory official to the director; (3) the acquisition of a person by another person resulting in a change of control of an insurer when both persons are neither directly nor through affiliates primarily engaged in the business of insurance if preacquisition notification is filed with the director under (c) of this section 30 days before the proposed effective date of the acquisition; however, the preacquisition notification is not required for exclusion if the acquisition would otherwise be excluded under this subsection; (4) the acquisition of an already affiliated person; (5) an acquisition if, as an immediate result of the acquisition, (A) the combined market share of the involved insurers would not exceed five percent of a market; (B) there would not be an increase in a market share of the larger writer; or (C) the combined market share of the involved insurers would not exceed 12 percent of a market and the market share of the larger writer would not increase by more than two percent of a market; (6) an acquisition for which a preacquisition notification would be required under this section due solely to the resulting effect on the ocean marine insurance line of business; or (7) an acquisition of an insurer whose domiciliary supervisory insurance official affirmatively finds that the insurer is in a failing condition, there are no feasible alternatives to improving this condition, the public benefits of improving the insurer's condition through the acquisition exceed the public benefits that would arise from not lessening competition, and these findings are communicated by the domiciliary supervisory insurance official to this state's director. (k) AS 21.22.150, 21.22.160, and 21.22.180 do not apply to acquisitions covered under this section.
If at any time the director determines that any material transaction entered into between an insurer and any of its affiliates does not meet the standards set out in AS 21.22.080, the director may, after hearings conducted in accordance with AS 21.06, require the insurer and the affiliate to terminate, set aside, or modify the transaction as considered appropriate by the director to make the transaction conform to those standards. An insurer may submit a proposed material transaction to the director for review and the director may issue an opinion that the transaction meets the standard set out in AS 21.22.080. The opinion creates a rebuttable presumption that neither the insurer, director, officer, employee, nor agent committed a wilful violation of this chapter by entering into the transaction. The opinion does not prohibit the director from subsequently exercising authority under this section.
Material transactions by registered insurers with their affiliates are subject to the following standards: (1) the terms shall be fair and reasonable; (2) charges or fees for services performed shall be reasonable; (3) expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; (4) the books, accounts, and records of each party to the transactions shall be maintained so as to disclose clearly and accurately the nature and details of the transactions including accounting information that is necessary to support the reasonableness of the charges or fees to the respective parties; (5) the insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates or performance under a material transaction with an affiliate shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs; and (6) agreements for cost-sharing services and management must include the provisions required by regulations adopted by the director.
(a) Transactions involving a domestic insurer and a person in its insurance holding company system, including amendments or modifications of affiliate agreements previously filed under AS 21.22.080 that are subject to a materiality standard in (1) - (7) of this subsection, may not be entered into unless the insurer has notified the director in writing of the insurer's intention to enter into the transaction at least 30 days before the transaction, or a shorter period if allowed by the director, and the director has not disapproved the transaction within the required notice period. The notice of amendments or modifications must include the reasons for the change and the financial effect on the domestic insurer. A domestic insurer shall provide to the director notice, within 30 days after a termination of a previously filed agreement, for determination of the type of filing required, if any. The requirements in this section apply to the following transactions: (1) a sale, purchase, exchange, loan or extension of credit, or investment, provided the transaction is equal to or exceeds (A) with respect to insurers other than life insurers, the lesser of three percent of the insurer's admitted assets or 25 percent of surplus that pertains to policyholders, as of December 31 of the previous calendar year; or (B) with respect to life insurers, three percent of the insurer's admitted assets as of December 31 of the previous calendar year; (2) a loan or extension of credit to a person who is not an affiliate, where the insurer makes loans or extensions of credit with the agreement or understanding that the proceeds of the transaction, in whole or in substantial part, are to be used to make a loan or extension of credit to, purchase an asset of, or make an investment in an affiliate of the insurer making the loan or extension of credit, provided the transaction is equal to or exceeds (A) with respect to insurers other than life insurers, the lesser of three percent of the insurer's admitted assets or 25 percent of surplus that pertains to policyholder surplus, as of December 31 of the previous calendar year; or (B) with respect to life insurers, three percent of the insurer's admitted assets as of December 31 of the previous calendar year; (3) a reinsurance agreement or modification, including (A) a reinsurance pooling agreement; (B) an agreement in which the reinsurance premium or change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the three years after entering into the agreement or modification, equals or exceeds five percent of surplus that pertains to policyholders as of December 31 of the previous calendar year, including an agreement that may require as consideration the transfer of assets from an insurer to a nonaffiliate if an agreement or understanding exists between the insurer and nonaffiliate that a portion of the assets will be transferred to one or more affiliates of the insurer; (4) a management agreement, service contract, tax allocation agreement, guarantee, or cost-sharing arrangement; (5) a material transaction specified by regulation that the director determines may adversely affect the interests of the insurer's policyholders; (6) a guarantee if made by a domestic insurer, except that a guarantee that is quantifiable as to amount is not subject to the notice requirements of this subsection unless it exceeds the lesser of one-half of one percent of the insurer's admitted assets or 10 percent of surplus that pertains to policyholders as of December 31 of the previous calendar year; a guarantee that is not quantifiable as to amount is subject to the notice requirements of this subsection; and (7) a direct or an indirect acquisition or investment in a person that controls an insurer or in an affiliate of the insurer in an amount that, together with the person's present holdings in the investment, exceeds two and one-half percent of surplus that pertains to policyholders; direct or indirect acquisitions or investments in subsidiaries authorized under this title or regulations adopted by the director or in nonsubsidiary insurance affiliates that are subject to the provisions of this chapter are exempt from this requirement. (b) Nothing in (a) of this section authorizes or permits a transaction that, in the case of an insurer not a member of the same holding company system, would violate a provision of law. (c) A domestic insurer may not enter into a transaction that is part of a plan or series of similar transactions with persons within the holding company system if the purpose of the separate transaction is to avoid the statutory threshold amount and avoid review that would otherwise occur. If the director determines that this separate transaction is entered into over a 12-month period for this purpose, the director may impose penalties under AS 21.22.065(i), 21.22.170, AS 21.36.360(a), and 21.36.910. (d) The director, in reviewing a transaction under this section, shall consider whether the transaction complies with the standards provided in AS 21.22.080 and whether the transaction may adversely affect the interests of policyholders. (e) A domestic insurer shall notify the director within 30 days of an investment of a domestic insurer in a corporation if, after the investment, the total investment by the insurance holding company system in a corporation exceeds 10 percent of the corporation's voting securities.
For the purposes of this chapter, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered: (1) the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria; (2) the extent to which the insurer's business is diversified among the several lines of insurance; (3) the number and size of risks insured in each line of business; (4) the extent of the geographical dispersion of the insurer's insured risk; (5) the nature and extent of the insurer's reinsurance program; (6) the quality, diversification, and liquidity of the insurer's investment portfolio; (7) the recent past and projected future trend in the value of the insurer's investments; (8) the surplus as regards policyholders maintained by other comparable insurers; (9) the adequacy of the insurer's reserves; and (10) the quality and liquidity of investments in affiliates made under AS 21.21; the director may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever the director determines the investment warrants it.
(a) A domestic insurer may not pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until (1) 30 days after the director has received notice of the declaration of the dividend or distribution and has not within that period disapproved its payment; or (2) the director has approved its payment within the 30-day period. (b) For purposes of this section, an extraordinary dividend or distribution includes a dividend or distribution of cash or other property, the fair market value of which together with that of other dividends or distributions made within the preceding 12 months exceeds the lesser of (1) 10 percent of the insurer's surplus as regards policyholders as of December 31 of the preceding year; or (2) the net gain from operations of the insurer, if the insurer is a life insurer, or the net investment income, if the insurer is not a life insurer, for the 12-month period ending December 31 of the preceding year; but does not include pro rata distributions of any class of the insurer's own securities. In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two calendar years that has not already been paid out as dividends. The carry forward provision shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years. (c) Notwithstanding AS 21.69.490, an insurer may declare an extraordinary dividend or distribution that is conditional upon the director's approval. A declaration confers no rights upon shareholders until (1) the director has approved the payment of the dividend or distribution; or (2) the director has not disapproved the payment within the 30-day period referred to in (a) of this section.
(a) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer may not be relieved of an obligation or liability to which the officers and directors would otherwise be subject to by law, and the insurer shall be managed so as to assure the insurer's separate operating identity consistent with this title. (b) This section does not preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, property, or services with one or more other persons under arrangements meeting the standards of AS 21.22.080.
(a) In addition to the director's authority to examine insurers under AS 21.06.120 - 21.06.170, the director may examine an insurer registered under AS 21.22.060 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis. (b) The director may (1) order an insurer registered under AS 21.22.060 to produce the records, books, or other information or papers in the possession of the insurer or its affiliates that are reasonably necessary to determine compliance with this chapter; (2) order an insurer registered under AS 21.22.060 to produce information not in the possession of the insurer if the insurer can obtain access to the information under contractual relationships, statutory obligations, or other method; in the event the insurer cannot obtain the information requested by the director, the insurer shall provide the director a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information; if the director determines that the detailed explanation is without merit, the director may, after notice and hearing, require the insurer to pay a penalty of $250 for each day's delay in providing the requested information, or may suspend or revoke the insurer's license; (3) in the event the insurer fails to comply with an order under this subsection, examine or issue subpoenas to the insurer's affiliates to obtain the information. (c) The director may retain, at the registered insurer's expense, attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff as may be necessary to assist in the conduct of an examination under (a) of this section. Any persons so retained are under the direction and control of the director and shall act in a purely advisory capacity. (d) Each registered insurer producing for examination records, books, and papers under (a) of this section is liable for and shall pay the expense of an examination in accordance with AS 21.06.160.
(a) With respect to an insurer registered under AS 21.22.060, and in accordance with (c) of this section, the director may participate in a supervisory college for a domestic insurer that is part of an insurance holding company system with international operations to determine the insurer's compliance with this chapter. The director may (1) initiate the establishment of a supervisory college; (2) clarify the membership and participation of other supervisors in the supervisory college; (3) clarify the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor; (4) coordinate the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and (5) establish a crisis management plan. (b) An insurer subject to this section is liable for and shall pay the reasonable expenses of the director's participation in a supervisory college in accordance with (c) of this section, including reasonable travel expenses. Under this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the director may establish a regular assessment to the insurer for the payment of those expenses. (c) To assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes, and as part of the examination of individual insurers in accordance with AS 21.22.110, the director may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies. The director may enter into agreements in accordance with AS 21.06.060 and AS 21.22.120 to share confidential information between the director and regulatory agencies or other members of the supervisory college. (d) Nothing in this section delegates to the supervisory college the director's authority to regulate or supervise an insurer or its affiliates under this title.
(a) The director may act as the group-wide supervisor for an internationally active insurance group in accordance with this section. However, the director may acknowledge another regulatory official as the group-wide supervisor if the internationally active insurance group (1) does not have substantial insurance operations in the United States; (2) has substantial insurance operations in the United States but not in this state; or (3) has substantial insurance operations in the United States and this state, but the director has determined under (b) or (f) of this section that the other regulatory official is the appropriate group-wide supervisor; an insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the director make a determination or acknowledgment of a group-wide supervisor under this section. (b) In cooperation with other state, federal, and international regulatory agencies, the director shall identify a single group-wide supervisor for an internationally active insurance group. The director may determine that the director is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the director may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The director shall consider the following factors when making a determination or acknowledgment under this subsection: (1) the place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group's written premiums, assets, or liabilities; (2) the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group; (3) the location of the executive offices or largest operational offices of the internationally active insurance group; (4) whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the director determines to be (A) substantially similar to the system of regulation provided under the laws of this state; or (B) otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and (5) whether another regulatory official acting or seeking to act as the group-wide supervisor provides the director with reasonably reciprocal recognition and cooperation; a regulatory official identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor; the regulatory official shall consider the factors listed in this subsection when making an acknowledgment under this subsection and shall make the acknowledgment in cooperation with, and subject to, the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group and in consultation with the internationally active insurance group. (c) Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the director shall acknowledge that regulatory official as the group-wide supervisor. However, the director shall make a determination or acknowledgment of the appropriate group-wide supervisor for the internationally active insurance group under (b) of this section in the event of a material change in the internationally active insurance group that results in (1) the internationally active insurance group's insurers domiciled in this state holding the largest share of the group's premiums, assets, or liabilities; or (2) this state being the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group. (d) Under AS 21.22.110, the director may collect from an insurer registered under AS 21.22.060 the information necessary to determine whether the director may act as the group-wide supervisor of an internationally active insurance group or if the director may acknowledge another regulatory official to act as the group-wide supervisor. Before issuing a determination that an internationally active insurance group is subject to group-wide supervision, the director shall notify the insurer registered under AS 21.22.060 and the ultimate controlling person within the internationally active insurance group. Upon notification, the internationally active insurance group has a minimum of 30 days to provide the director with additional information pertinent to the pending determination. The director may publish on the division's Internet website the identity of internationally active insurance groups that the director has determined are subject to group-wide supervision by the director. (e) If the director is the group-wide supervisor for an internationally active insurance group, the director may (1) assess the enterprise risks in the internationally active insurance group to ensure (A) the material financial condition and liquidity risks to members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and (B) reasonable and effective mitigation measures are in place; (2) request from a member of an internationally active insurance group subject to the director's supervision information necessary and appropriate to assess enterprise risk, including information about the members of the internationally active insurance group regarding (A) governance, risk assessment, and management; (B) capital adequacy; and (C) material intercompany transactions; (3) coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of the internationally active insurance group that are engaged in the business of insurance; (4) communicate with other state, federal, and international regulatory agencies for members in the internationally active insurance group and share relevant information subject to the confidentiality provisions under AS 21.22.120, through supervisory colleges under AS 21.22.115 or otherwise; (5) enter into agreements with, or obtain documentation from, an insurer registered under AS 21.22.060, a member of the internationally active insurance group, or a state, federal, or international regulatory agency for members of the internationally active insurance group, providing the basis for, or otherwise clarifying, the director's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials; the agreements or documentation may not serve as evidence in a proceeding against an insurer or person in an insurance holding company system not domiciled or incorporated in this state or doing business in this state or otherwise subject to jurisdiction in this state; and (6) perform other group-wide supervision activities, consistent with the authorities and purposes set out in this subsection. (f) If the director acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the group-wide supervisor, the director may reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor under the following conditions: (1) the director's cooperation is in compliance with the laws of this state; and (2) the regulatory official acknowledged as the group-wide supervisor recognizes and cooperates with the director's activities as a group-wide supervisor for other internationally active insurance groups, where applicable; if recognition and cooperation is not reasonably reciprocal, the director may refuse recognition and cooperation. (g) The director may enter into agreements with, or obtain documentation from, an insurer registered under AS 21.22.060, an affiliate of the insurer, or other state, federal, and international regulatory agencies for members of the internationally active insurance group, that provide the basis for, or otherwise clarify, a regulatory official's role as group-wide supervisor. (h) A registered insurer subject to this section is liable for and shall pay the reasonable expenses of the director's participation in the administration of this section, including the engagement of attorneys, actuaries, and other professionals, and all reasonable travel expenses.
(a) All information, documents, holding company analyses, insurer profile summaries, and copies of the information and documents obtained by or disclosed to the director or any other person in the course of an examination or investigation made under AS 21.22.110 and all information reported under AS 21.22.020(b), 21.22.060, 21.22.085 - 21.22.105, and 21.22.117 and all preacquisition notification information received under AS 21.22.065 shall be given confidential treatment under AS 21.06.060. However, if the director, after giving the insurer and its affiliates who would be affected by publication of the information notice and opportunity to be heard, determines that the interests of policyholders, shareholders, or the public will be served by the publication of the information, the director may publish all or part of the information in the manner the director considers appropriate. (b) The director may (1) share documents, materials, or other information, including the confidential information under (a) of this section, with state, federal, and international regulatory agencies, the National Association of Insurance Commissioners and its affiliates and subsidiaries, and state, federal, and international law enforcement authorities, including members of a supervisory college described in AS 21.22.115, if the recipient agrees in writing to maintain the confidentiality of the document, material, or other information and has verified in writing the legal authority to maintain confidentiality; (2) not share confidential documents, material, or information reported under AS 21.22.060(n) with the insurance regulator of another state, unless the statutes or regulations of the other state are substantially similar to this section and the other state has agreed in writing not to disclose the information; (3) enter into a written agreement with the National Association of Insurance Commissioners governing sharing and use of information obtained under this chapter that must (A) specify procedures and protocols regarding the confidentiality and security of information shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries under this chapter, including procedures and protocols for sharing by the National Association of Insurance Commissioners with state, federal, or international regulators; (B) specify that ownership of information shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries under this chapter remains with the director and that the National Association of Insurance Commissioners' use of the information is subject to the direction of the director; (C) require prompt notice to be given to an insurer whose confidential information in possession of the National Association of Insurance Commissioners under this chapter is subject to a request or subpoena to the National Association of Insurance Commissioners for disclosure or production; and (D) require the National Association of Insurance Commissioners and its affiliates and subsidiaries to consent to intervention by an insurer in a judicial or administrative action in which the National Association of Insurance Commissioners and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries under this chapter. (c) The director or a person who receives documents, materials, or other information while acting under the authority of the director or with whom documents, materials, or other information are shared under this chapter may not be permitted or required to testify in any private civil action concerning confidential documents, materials, or information subject to (a) of this section. (d) The sharing of information by the director under this chapter does not constitute a delegation of regulatory authority or rulemaking. The director is solely responsible for the administration, execution, and enforcement of this chapter. (e) A waiver of an applicable privilege or claim of confidentiality in the documents, materials, or information under (a) of this section may not be given as a result of disclosure to the director under this section or as a result of sharing as authorized under (b) of this section. (f) Documents, materials, or other information in the possession or control of the National Association of Insurance Commissioners under this chapter (1) are confidential by law; (2) are not subject to (A) AS 40.25.110 - 40.25.220; (B) subpoena; or (C) discovery or admissible in evidence in any private action.
The director may adopt regulations to carry out the provisions of this chapter.
If it appears to the director that an insurer or a director, officer, employee, or agent of an insurer has violated or is about to violate this chapter or a regulation adopted or an order issued by the director under this chapter, the director may apply to the superior court in the judicial district in which the principal office of the insurer is located or if the insurer has no office in this state then to the superior court in the first judicial district for an order enjoining the insurer or a director, officer, employee, or agent of the insurer from the violation, and for other relief as the nature of the case and the interests of the insurer's policyholders, creditors and shareholders or the public may require.
(a) A security that is the subject of any agreement or arrangement regarding acquisition, or that is acquired or to be acquired, in contravention of this chapter or a regulation adopted or an order issued by the director under this chapter may not be voted at a shareholders' meeting or be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though those securities were not issued and outstanding; but an action taken at such a meeting may not be invalidated by the voting of those securities, unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. (b) If an insurer or the director has reason to believe that a security of the insurer has been or is about to be acquired in contravention of this chapter or a regulation adopted or an order issued by the director under this chapter, the insurer or the director may apply to the superior court in the first judicial district or the superior court in the judicial district in which the insurer has its principal place of business to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of this chapter or a regulation adopted or an order issued by the director under this chapter, to enjoin the voting of any security so acquired, to void any vote of a security already cast at a meeting of shareholders, and for other relief as the nature of the case and the interests of the insurer's policyholders, creditors and shareholders or the public may require. (c) This section does not apply to a security that constitutes an acquisition covered by AS 21.22.065.
(a) If a person has acquired or is proposing to acquire voting securities in violation of this chapter or a regulation adopted or an order issued by the director under this chapter, the insurer or the director may make an application in the superior court in the first judicial district or the superior court in the judicial district in which the insurer has its principal place of business to seize or sequester any voting securities of the insurer owned directly or indirectly by that person, and the court may issue an order with respect to those securities as may be appropriate to effectuate this chapter. For the purposes of this chapter the situs of the ownership of the securities of domestic insurers is considered to be in this state. (b) This section does not apply to a security that constitutes an acquisition covered by AS 21.22.065.
(a) An insurer failing, without just cause, to file a registration statement required under this chapter shall be required, after notice and hearing under AS 21.06.170 - 21.06.240, to pay a $200 fine for each day the insurer fails to file the registration. The maximum penalty under this subsection is $50,000. The director may reduce the penalty if the insurer demonstrates to the director that the imposition of the penalty would be a financial hardship to the insurer. (b) A director or officer of an insurance holding company system who knowingly violates, participates in, assents to, or knowingly permits an officer or agent of an insurer to engage in transactions or make investments that have not been properly reported or submitted under AS 21.22.060, 21.22.085, or 21.22.100, or that violate this chapter, shall pay, in the director's or officer's individual capacity, a fine of not more than $50,000 for each violation, after notice and hearing under AS 21.06.170 - 21.06.240. In determining the amount of the fine, the director shall take into account the appropriateness of the fine with respect to the gravity of the violation, the history of previous violations, and other matters as justice may require. (c) If the director has reason to believe that an insurer subject to this chapter, or a director, officer, employee, or agent of the insurer, has engaged in a transaction or entered into a contract that is subject to AS 21.22.080 - 21.22.105, and that would not have been approved had the approval been requested, the director may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing under AS 21.06.170 - 21.06.240, the director may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public. (d) If the director has reason to believe that a person has committed a violation of AS 21.22.010 or 21.22.020 that prevents the full understanding of the enterprise risk to an insurer by its affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of rehabilitation in accordance with AS 21.78.090.
(a) An insurer or a director, officer, employee, or agent of an insurer who knowingly violates this chapter is guilty of a class C felony. (b) A director, officer, or employee of an insurance holding company system who knowingly subscribes to or makes or causes to be made a false statement, false report, or false filing with the intent to deceive the director under this chapter is guilty of a class C felony. (c) An insurer may not pay a fine imposed by a court on a director, officer, employee, or agent that is sentenced under (a) or (b) of this section. The fine must be paid by the director, officer, employee, or agent in the director's, officer's, employee's, or agent's individual capacity. (d) In this section, knowingly has the meaning given in AS 11.81.900(a).
(a) If it appears to the director that a person has committed a violation of this chapter that so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, then the director may proceed as provided in AS 21.78 to take possession of the property of that domestic insurer and to conduct its business. (b) This section does not apply to a violation involving a security that constitutes an acquisition covered by AS 21.22.065.
If the director finds, after giving notice and an opportunity to be heard, that a person has committed a violation of this chapter that makes the continued operation of an insurer contrary to the interests of its policyholders or the public, the director may suspend, revoke, or refuse to renew the insurer's license or authority to do business in this state for a period that the director finds is required for the protection of policyholders or the public. Such a determination by the director must be accompanied by specific findings of fact and conclusions of law.
In this chapter, unless the context requires otherwise, (1) acquisition means an agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes the acquisition of voting securities, assets, bulk reinsurance, and mergers; (2) affiliate or affiliated means a person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the persons specified; (3) control, controlling, controlled by, and under common control with means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person; control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any other person; this presumption may be rebutted by a showing made in the manner provided by AS 21.22.060(j) that control does not exist in fact; the director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support that determination, that control exists in fact, notwithstanding the absence of a presumption to that effect; (4) domestic insurer has the meaning given in AS 21.97.900 and, in addition, for the purposes of this chapter, includes an insurer that has been authorized to do business in this state and that, during its three preceding fiscal years taken together, or during any lesser period of time if it has been licensed to transact its business in this state only for a lesser period of time, has written an average of more gross premiums in this state than it has written in its state of domicile during the same period, and the gross premiums written constitute 33 percent or more of its total gross premiums written everywhere in the United States for the three-year or lesser period, as reported in its three most recent annual statements; (5) enterprise risk means an activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system as a whole including anything that would cause the insurer's risk based capital to fall into company action level under AS 21.14.020 or would cause the insurer to be impaired or in imminent danger of becoming impaired, as defined in AS 21.97.900 and regulations adopted by the director; (6) group-wide supervisor means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the director under AS 21.22.117 to have sufficient significant contacts with the internationally active insurance group; (7) highly concentrated means a market in which the share of the four largest insurers is 75 percent or more of the market; (8) insurance holding company system means a system consisting of two or more affiliated persons, one or more of which is an insurer; (9) insurer has the meaning given in AS 21.97.900 and includes a company or group of companies under common management, ownership, or control; it does not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, a state or political subdivision of a state; (10) internationally active insurance group means an insurance holding company system that includes an insurer registered under AS 21.22.060 and that meets the following criteria: (A) insurers that are part of the insurance holding company system write premiums in at least three countries; (B) the percentage of gross premiums written outside the United States is at least 10 percent of the insurance holding company system's total gross written premiums; and (C) based on a three-year rolling average, the total assets of the insurance holding company system are at least $50,000,000,000 or the total gross written premiums of the insurance holding company system are at least $10,000,000,000. (11) involved insurer means an insurer that either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger; (12) market or insurance market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state; in determining the relevant product and geographical markets, the director shall give due consideration to, among other things, the definitions or guidelines adopted by the National Association of Insurance Commissioners and to information submitted by parties to the acquisition; in the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, the line being that used in the annual statement required to be filed by insurers doing business in this state, and the relevant geographical market is assumed to be this state; (13) person means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of these entities acting in concert, but does not include a joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property, or a securities broker performing not more than the usual and customary broker's function; (14) security holder means one who owns any security of a specified person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of them; (15) statement value means the value that an insurer is instructed by the securities valuation office of the National Association of Insurance Commissioners to carry on the insurer's financial statement and that represents an investment; (16) subsidiary means an affiliate controlled by a specified person directly or indirectly through one or more intermediaries; (17) supervisory college means a forum for cooperation and communication among the involved state, federal, and international regulators established for the fundamental purpose of facilitating the effectiveness of supervision of entities that belong to an insurance holding company system. (18) voting security includes any security convertible into or evidencing a right to acquire the right to vote for management and the right to vote on other matters as provided in a corporation's articles of incorporation.
An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.
Unless exempted under AS 21.23.040, an insurer or the insurance group of which the insurer is a member shall conduct an own risk and solvency assessment consistent with the own risk and solvency assessment guidance manual (1) annually; and (2) when significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member occur.
(a) If requested by the director, an insurer shall submit an own risk and solvency assessment summary report or any combination of reports that together contain the information described in the own risk and solvency assessment guidance manual that is applicable to the insurer or the insurance group of which the insurer is a member. The director may not request more than one report a year. The insurer shall submit the report to the director within 30 days after the request, unless the insurer requests an extension in writing and the director grants the request. If an insurer is a member of an insurance group, the insurer shall submit the report required by this subsection at least annually if the director is the lead state regulator of the insurance group as determined by the procedures in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners. (b) For a report submitted under this section, an insurer's or insurance group's chief risk officer or other executive having responsibility for the oversight of the insurer's enterprise risk management process shall sign the report and attest, to the best of the officer's or executive's belief and knowledge, that the insurer applies the enterprise risk management process described in the report and that a copy of the report has been provided to the insurer's board of directors or the appropriate committee of the board. (c) An insurer may comply with (a) of this section by providing the most recent and substantially similar report or reports provided by the insurer or another member of the insurance group of which the insurer is a member to the insurance regulator of another state or a foreign jurisdiction, if that report provides information that is comparable to the information described in the own risk and solvency assessment guidance manual. A report in a language other than English must be accompanied by a translation of that report into the English language.
(a) An insurer is exempt from the requirements of this chapter if (1) the insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and the National Flood Insurance Program, of less than $500,000,000; and (2) the insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and the National Flood Insurance Program, of less than $1,000,000,000. (b) If an insurer qualifies for an exemption under (a)(1) of this section, but the insurance group of which the insurer is a member does not qualify for an exemption under (a)(2) of this section, then the own risk and solvency assessment summary report required under AS 21.23.030 must include every insurer in the insurance group. This requirement may be satisfied by the submission of more than one own risk and solvency assessment summary report for a combination of insurers provided the combination of reports includes every insurer within the insurance group. (c) If an insurer does not qualify for exemption under (a)(1) of this section, but the insurance group of which the insurer is a member qualifies for exemption under (a)(2) of this section, then the only own risk and solvency assessment summary report that may be required under AS 21.23.030 is the report applicable to that insurer. (d) An insurer that does not qualify for exemption under (a) of this section may apply to the director for a waiver from the requirements of this chapter based on unique circumstances. In deciding whether to grant a request for a waiver, the director may consider the type and volume of business written, ownership and organizational structure, and any other factor that the director considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the director shall coordinate with the lead state regulator and with the other domiciliary regulators in considering whether to grant the insurer's request for a waiver. (e) Notwithstanding the exemptions stated in this section, the director may require that an insurer maintain a risk management framework, conduct an own risk and solvency assessment, and file an own risk and solvency assessment summary report (1) based on unique circumstances, including the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; (2) if the insurer has risk based capital for company action level event as set out in AS 21.14, meets one or more of the standards of an insurer considered to be impaired or in imminent danger of becoming impaired as defined in AS 21.97.900 and in regulations adopted by the director, or otherwise exhibits qualities of a troubled insurer as determined by the director. (f) If an insurer that qualified for an exemption under (a) of this section no longer qualifies for that exemption because of changes in premium as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall comply with the requirements of this chapter within one year after the year the threshold in (a) of this section is exceeded.
(a) The own risk and solvency assessment summary report under AS 21.23.030 must be prepared in compliance with the own risk and solvency assessment guidance manual, subject to the requirements of (b) of this section. The insurer shall maintain documentation and supporting information relating to the assessment and make the documentation and information available on examination or on request of the director. (b) The director shall use the procedures currently used in the analysis and examination of multistate or global insurers and insurance groups when reviewing the report and additional requests for information.
Documents, materials, or other information, including the own risk and solvency assessment summary report, that are obtained by, created by, or disclosed to the director or another person under this chapter are confidential and are considered trade secrets and proprietary business information subject to AS 21.06.060 and AS 21.22.120. A third-party consultant is subject to the information sharing requirements of AS 21.22.120(b).
An insurer shall pay $1,000 for each day the insurer fails to file the report within the time required in AS 21.23.030(a), not to exceed $365,000. The director may reduce the penalty under this section if the insurer demonstrates to the director that the imposition of the penalty is a financial hardship to the insurer.
The director may adopt regulations to implement, define, and enforce the provisions of this chapter.
In this chapter, (1) insurance group means those insurers and affiliates included in an insurance holding company system as defined in AS 21.22.200; (2) insurer has the meaning given in AS 21.97.900, except that it does not include agencies, authorities, or instrumentalities of the United States or a possession or territory of the United States, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state; (3) own risk and solvency assessment means a confidential internal assessment, appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group of the material and relevant risks associated with the insurer's or insurance group's current business plan and the sufficiency of capital resources to support those risks; (4) own risk and solvency assessment guidance manual means the Own Risk and Solvency Assessment Guidance Manual developed and most recently adopted by the National Association of Insurance Commissioners; (5) own risk and solvency assessment summary report means a confidential, high-level summary of an insurer's or insurance group's own risk and solvency assessment; (6) risk management framework means a set of internal policies or procedures that address an insurer's or insurance group's risk culture and governance, risk identification and prioritization, risk appetite, tolerance and limits, risk management controls, and risk reporting and communication as described in and most recently adopted by the own risk and solvency assessment guidance manual.
The following deposits of insurers when made through the director shall be accepted and held and are subject to the provisions of this chapter: (1) deposits required under this title for authority to transact insurance in this state; (2) deposits of domestic insurers when made under the laws of other states, provinces, and countries as requirement for authority to transact insurance in the state, province, or country; (3) deposits in the additional amounts that are permitted to be made under AS 21.24.100.
The deposits shall be held for purposes as follows: (1) deposits made in this state under AS 21.09.090 shall be held for the purpose stated in that section; (2) a deposit made in this state by a domestic insurer transacting insurance in another state, province, or country, in accordance with the laws of the other state, province, or country, shall be held for the protection of all creditors or for the other purpose or purposes that may be specified under those laws; (3) deposits required under AS 21.09.270 shall be held for the purposes required by the retaliatory law and specified in the director's order requiring the deposit to be made.
(a) All deposits required under AS 21.09.090 for authority to transact insurance in this state shall consist of certificates of deposit or any combination of rated credit instruments of the United States, Canada, or a state of the United States. (b) Deposits of a domestic insurer held in this state under the laws of another state, province, or country shall be comprised of assets of the kinds described in (a) of this section, and of the additional kind or kinds of securities required or permitted by the laws of the state, province, or country except common stocks, mortgages of any kind, and real estate. (c) Deposits of foreign insurers made in this state under AS 21.09.270 shall consist of the assets required by the director under the law.
(a) Deposits made in this state under this title shall be made through the office of the director under custodial arrangements as required or approved by the director consistent with the purposes of the deposit, with an established safe deposit institution, bank, or trust company located in this state selected by the insurer with the director's approval. (b) [Repealed,  34 ch 1 FSSLA 2005.]  (c) If of convenience to the insurer in the buying, selling, and exchange of securities making up its deposit, and in the collection of interest and other income currently accruing on the securities, the insurer may, with the director's advance written approval, deposit a portion of the securities under custodial arrangements with an established bank or trust company located outside this state, if receipts representing all the securities are issued by the custodial bank or trust company and are held in custody subject to the requirements of (a) of this section. (d) The form and terms of all depositary or custodial agreements shall be as prescribed or approved by the director consistent with the applicable provisions of this title. (e) The compensation and expenses of the depositary or custodian shall be borne by the insurer.
(a) The director shall give to the depositing insurer vouchers of all assets and securities deposited by it in this state through the director as provided in this title. (b) The director shall keep a record of the assets and securities comprising each deposit, showing as far as practical the amount and market value of each item, and all transactions regarding them.
The director and the state are not liable for the safekeeping of a deposit by the depositary or custodian.
All securities not negotiable by delivery and deposited under this title shall be assigned to the director and successors in office. In the case of securities held under custodial arrangements outside this state under AS 21.24.040(c), the custodian's receipt for the securities shall be delivered, if negotiable, or assigned to the director if thereby legal title to the securities is vested in the director. The insurer shall transfer or convey to the director and successors in office all other assets so deposited. Upon release to the insurer of the asset or security the director shall reassign or transfer or reconvey it to the insurer.
The director may before acceptance for deposit of any particular asset or security, or at any time thereafter while so deposited, have the asset or security appraised by competent appraisers. The reasonable costs of the appraisal shall be borne by the insurer.
If the insurer remains solvent and is in compliance with this title it may (1) demand, receive, sue for, and recover the income from the assets or securities deposited; (2) exchange and substitute for the deposited assets or securities, or any part thereof, other eligible assets or securities of equivalent or greater value; (3) at any reasonable time inspect the deposit.
An insurer may deposit and have on deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this title by no more than 20 percent of the required or permitted deposit or $50,000, whichever is the larger amount, for the purpose of absorbing fluctuations in the value of assets and securities deposited and to facilitate the exchange and substitution of the assets and securities. During the solvency of the insurer an excess shall be released to the insurer upon its request. During the insolvency of the insurer the excess deposit shall be released only in accordance with AS 21.24.130(d).
If the market value of assets and securities of an insurer held on deposit in this state, or in another state under custodial arrangements authorized by AS 21.24.040(c), falls below the amount required under this title, the insurer shall promptly deposit other or additional assets or securities eligible for deposit under this chapter and in an amount sufficient to cure the deficiency. If the insurer fails to cure the deficiency within 20 days after receipt of notice by registered mail from the director, the director shall immediately revoke the insurer's certificate of authority.
(a) Each deposit made in this state by an insurer under this title, including assets and securities held in another state under custodial arrangements permitted by AS 21.24.040(c), shall be held for as long as there is any outstanding liability of the insurer as to which the deposit was required. Each deposit required under AS 21.09.270 shall be held for so long as the basis of the retaliation exists. (b) Upon the request of a domestic insurer, the director shall return to the insurer the whole or any portion of the assets and securities of the insurer held on deposit when the director is satisfied that the assets and securities to be returned are subject to no liability and are no longer required to be held by any provision of law or purposes of the original deposit. If the insurer has reinsured all of its outstanding risks in another insurer or insurers authorized to transact insurance in this state, the director shall deliver the assets and securities to the insurer or insurers assuming the risks, upon written notice to the director by the domestic insurer that the assets and securities have been assigned, transferred, and set over to the reinsuring insurer or insurers, which notice shall be accompanied by a verified copy of the assignment, transfer, or conveyance. (c) The director shall return to a foreign insurer any deposit made in this state by the insurer, when (1) the insurer has ceased transacting insurance in this state, or in the United States, and the insurer is not subject to liability in this state on account of which the deposit was held; (2) the deposit is no longer required by a provision of law; (3) the insurer, during its solvency, has made a similar deposit in another state and has filed with the director the certificate of evidence thereof, under the conditions provided for in AS 21.09.090(b)(1) or (2). Upon the effectuation of a merger or consolidation of an insurer that has made a deposit in this state, the director shall return the deposit to the resulting or surviving corporation, or to any person it may designate for that purpose, provided that the resulting or surviving corporation is or becomes authorized to transact an insurance business in this state. (d) If a domestic insurer is subject to delinquency proceedings under AS 21.78, the director shall yield the assets and securities held on deposit under AS 21.09.090(b) to the receiver, conservator, rehabilitator, or liquidator of the domestic insurer. The director may release the deposit directly to the guaranty fund of which the insurer is a member if the right to receive all or a portion of the deposit is assigned to the guaranty fund. (e) A release of deposited assets may not be made except upon application to and the written order of the director. The director is not personally liable for a release of a deposit or part thereof made in good faith. (f) If a foreign insurer that is a member of the Alaska Life and Health Insurance Guaranty Association (AS 21.79) or the Alaska Insurance Guaranty Association (AS 21.80) is found to be insolvent by a proceeding under AS 21.78 or by a court of competent jurisdiction in another state, the director shall take control of the insurer's deposit made under AS 21.09.090(b). The deposit assets shall be released to the applicable guaranty association upon a showing to the director that the association paid a valid loss, loss expense, or contractual obligation that is within the purpose of the deposit. After the director determines that all losses, loss expense liabilities, or contractual obligations that were incurred on the insurer's policies written in this state for which the deposit was required have been paid, the director shall pay the remaining deposit assets to the receiver, conservator, rehabilitator, or liquidator of the insurer, or to another properly designated official who succeeds to the management and control of the insurer's assets. (g) If an insurer is not a member of the Alaska Life and Health Insurance Guaranty Association established by AS 21.79 or the Alaska Insurance Guaranty Association established by AS 21.80, the director shall take control of the insurer's deposit made under AS 21.09.090(b) if the insurer is found to be insolvent by a proceeding under AS 21.78 or by a court of competent jurisdiction in another state. The director shall release the deposit assets to the receiver, conservator, rehabilitator, or liquidator of the insurer, or to any other properly designated official who succeeds to the management and control of the insurer's assets.
(a) Except as provided otherwise in this chapter, a person may not act as or represent to be an insurance producer, managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster in this state or relative to a subject resident, located, or to be performed in this state unless licensed under this chapter. A person may not act as or represent to be a managing general agent, reinsurance intermediary broker, or reinsurance intermediary manager representing an insurer domiciled in this state regarding a risk located outside this state unless licensed by this state. (b) An insurance producer, a managing general agent, a reinsurance intermediary broker, a reinsurance intermediary manager, or a surplus lines broker may not solicit or take applications for, procure, place for others, or otherwise transact business for a kind or class of insurance for which the person is not licensed. (c) A third-party administrator is not required to be licensed as a managing general agent if the third-party administrator (1) is registered under AS 21.27.630 - 21.27.660; or (2) only investigates and adjusts claims and is licensed under this chapter as an independent adjuster. (d) A licensee may not use a fictitious name or alias unless the licensee's legal name and fictitious name or alias are on the license. (e) An employee of an insurer who responds to requests from existing policyholders on existing policies is not required to be licensed under this section if the employee (1) is not directly compensated based on volume of premiums that may result from those services; and (2) does not transact insurance. (f) A person who performs management services under a written contract for an admitted insurer is not required to be licensed as a managing general agent if (1) either (A) the person is a United States manager of the United States branch of an alien admitted insurer; or (B) the person's compensation is not based on the volume of premium written; and (2) the person (A) is a wholly-owned subsidiary of the admitted insurer; (B) wholly owns the admitted insurer; or (C) is a wholly-owned subsidiary of the insurance holding company subject to AS 21.22 that owns or controls the admitted insurer. (g) A person who performs management services for an admitted reinsurer is not required to be licensed as a reinsurance intermediary manager if (1) the person's compensation is not based on the volume of premium written and the person (A) is a wholly-owned subsidiary of the admitted insurer; (B) wholly owns the admitted insurer; or (C) is a wholly-owned subsidiary of an insurance holding company subject to AS 21.22 that owns or controls the admitted insurer; (2) the person is a United States manager of the United States branch of an alien admitted insurer; or (3) the person is the manager of a group, association, pool, or organization of insurers that does joint underwriting and that is subject to examination by its resident insurance regulator in a state that (A) the director has determined has enacted provisions substantially similar to those contained in this chapter; and (B) is accredited by the National Association of Insurance Commissioners. (h) This chapter does not apply to a person (1) licensed to practice as an attorney at law while the person is acting as an attorney at law; or (2) who sells, solicits, or negotiates a (A) service contract on a motor vehicle subject to registration under AS 28.10.011; or (B) home warranty; in this subparagraph, home warranty has the meaning given in AS 21.03.021(e)(2)(C). (i) A person licensed under AS 21.75 as an attorney-in-fact, or a person who meets the requirements for exemption from licensure under AS 21.75, is not required to be additionally licensed under this chapter while acting on behalf of subscribers and within the scope and authority of a subscribers agreement of a reciprocal insurer or exchange licensed under AS 21.75. (j) This section does not apply to a person who (1) is employed on salary or hourly wage by a person licensed under this section solely for the performance of accounting, clerical, stenographic, and similar office duties; (2) only secures and forwards information required for the purposes of, and does not receive a commission for, any of the following services: (A) performing administrative services related to (i) group life insurance; (ii) group property and casualty insurance; (iii) group annuities; (iv) group or blanket accident and health insurance; (B) enrolling individuals under plans for the types of insurance or annuities specified in (A) of this paragraph; (C) issuing certificates under plans for the types of insurance or annuities specified in (A) of this paragraph, or otherwise assisting in administering those plans; (D) performing administrative services related to mass-marketed property and casualty insurance; (3) is employed on salary by a licensee at the licensee's place of business, is supervised by and reports directly to a licensee in the firm, and who, after explaining that the matter must be reviewed by a licensee, may (A) furnish premium estimates from published or printed lists of standard rates if the person does not advise, counsel, or suggest what coverage may be needed, or otherwise solicit insurance coverage; (B) arrange appointments for a licensee if the person does not solicit insurance coverage; (C) record information from an applicant or policyholder and complete for the licensee's personal review and signature, a certificate of insurance that is not a contract of insurance; the licensee's signature may be by facsimile; (D) inform a policyholder of the type of coverage shown in the licensee's policy record if the person does not advise that an event or hypothetical event is or is not covered; or (E) in the physical presence of the licensee, record information from an applicant or policyholder and complete for a licensee's personal review and personal signature, applications, binders, endorsements, or identification cards if the person discloses to the applicant or policyholder that the applicant or policyholder may review the matter with a licensee; (4) is an employee of an insurer or an organization employed by an insurer and is engaged in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and is not individually engaged in the sale, solicitation, or negotiation of insurance; (5) advertises in this state through printed publications or electronic mass media, the distribution of which is not limited to residents of this state, if the person (A) performs no other insurance-related activities in this state; (B) does not intend to solicit in this state; and (C) does not sell, solicit, or negotiate insurance of risks resident, located, or to be performed in this state; (6) is not a resident of this state, but sells, solicits, or negotiates commercial property and casualty insurance for an insured with risks located in more than one state if the person is licensed as an insurance producer in the state where the insured maintains its principal place of business and the contract of insurance covers risks located in that state; (7) is a salaried full-time employee who counsels or advises the person's employer regarding the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, if the employee does not sell or solicit insurance or receive a commission from the sale or solicitation of insurance; (8) is an employer or association or the employer's or association's officer, director, employee, or the trustee of an employee trust plan, if the person is not compensated, directly or indirectly, for transacting insurance and is engaged in the administration or operation of a plan offering employee benefits for the employer's or association's own employees, or the employees of its subsidiaries or affiliates; to qualify under this paragraph, the plan must include insurance for employees; (9) is an officer, director, or employee of an admitted insurer who does not receive a commission on policies written or sold to risks resident, located, or to be performed in this state if the officer's, director's, or employee's functions are executive, administrative, managerial, clerical, or a combination of these and are only indirectly related to the transaction of insurance; relate to underwriting or loss control; or are in the capacity of an agency supervisor where the activities are limited to providing technical assistance to insurance producers and whose activities do not include transacting insurance; (10) is an employee of a licensed independent adjuster or an employee of an affiliate of a licensed independent adjuster with not more than 25 people under the supervision of one licensed independent adjuster or licensed producer who collects or furnishes claim information for portable electronics insurance issued under AS 21.36.515 to insureds or claimants and enters the information into an automated claims adjudication system; the automated claims adjudication system must be a preprogrammed computer system designed for the collection, data entry, calculation, and final resolution of portable electronics insurance claims that (A) may be used only by a licensed independent adjuster, licensed agent, or supervised individuals operating under this section; (B) must comply with the claims payment requirements of this title; and (C) must be certified as compliant with this paragraph by a licensed independent adjuster that is an officer of a licensed entity under this chapter. (k) In addition to the business activities expressly exempt from licensing under this section, the director may adopt regulations that exempt other activities from the licensing requirements of this section.
(a) For the protection of the people of this state, the director may not issue or renew a license except in compliance with this chapter and may not issue a license to a person, or to be exercised by a person, found by the director to be untrustworthy, incompetent, or who has not established to the satisfaction of the director that the person is qualified under this chapter. (b) To qualify for issuance or renewal of an individual license, an applicant or licensee shall comply with this title and regulations adopted under AS 21.06.090 and (1) shall be 18 years of age or older; (2) if for a resident license, shall be a bona fide resident before issuance of the license and actually reside in the state; (3) shall successfully pass an examination required under AS 21.27.060; (4) shall be a trustworthy person; (5) may not use or intend to use the license for the purpose principally of writing controlled business, as defined in AS 21.27.030; (6) may not have committed an act that is a cause for denial, nonrenewal, suspension, or revocation of a license in this state or another jurisdiction. (c) To qualify for issuance or renewal of a license as a firm insurance producer, a firm managing general agent, a firm reinsurance intermediary broker, a firm reinsurance intermediary manager, a firm surplus lines broker, or a firm independent adjuster, an applicant or licensee shall (1) comply with (b)(4) and (5) of this section; (2) maintain a lawfully established place of business in this state, except when licensed as a nonresident under AS 21.27.270; (3) designate one or more compliance officers for the firm, except that not more than one compliance officer may be designated for each class of authority; (4) provide to the director documents necessary to verify the information contained in or made in connection with the application; and (5) notify the director, in writing, not later than 30 days after a change in the firm's compliance officer. (d) If the director finds that the applicant or licensee is qualified and that application, license, or renewal fees have been paid, the director may issue or renew the license. (e) [Repealed,  94(a) ch 23 SLA 2011.]  (f) The director may adopt regulations establishing additional education or experience requirements for applicants, licensees, and continuing education providers under this chapter upon due consideration of the availability and accessibility of education and training opportunities in rural areas of the state. Regulations adopted under this subsection are subject to the following provisions: (1) additional educational or experience requirements may not apply to a licensee who has been licensed by the division of insurance before January 1, 1980; (2) a licensee shall complete at least 24 credit hours of approved continuing education courses during each two-year license period; (3) if a licensee has accumulated more credit hours than required under (2) of this subsection by the end of the license period, a maximum of eight hours may be carried over to meet the requirements of (2) of this subsection in the next license period; (4) a program or seminar may not be approved as an acceptable continuing education program unless it is a formal program of learning that contributes to the professional competence of the licensee; individual study programs or correspondence courses may be used to fulfill continuing education requirements if approved by the director; (5) a nonresident licensee is exempt from the requirements of this subsection. (g) The director shall establish a continuing education advisory committee. The committee consists of one representative from the division of insurance, one life and health insurance representative, one property and casualty insurance representative, and one independent insurance adjuster representative. Each committee representative from the insurance industry must possess a valid, current insurance license issued in this state for the field to be represented. (h) The director may make arrangements, including contracting with an outside agency, for administrative services.
(a) A licensee shall notify the director in writing not later than 30 days after a change in residence, place of business, legal name, fictitious name or alias, mailing address, electronic mailing address, telephone number, or compliance officer. A licensee shall report to the director in writing any administrative action taken against the licensee by a governmental agency of another state, by a governmental agency of another jurisdiction, or by a financial industry regulatory authority sanction or arbitration proceeding not later than 30 days after the final disposition of the action. A licensee shall submit to the director the final order and other relevant legal documents in the action. A licensee shall report to the director any criminal prosecution of the licensee in this or another state or jurisdiction not later than 30 days after the date of filing of the criminal complaint, indictment, information, or citation in the prosecution. The licensee shall submit to the director a copy of the criminal complaint, calendaring order, and other relevant legal documents in the prosecution. (b) In addition to any other penalty provided by law, a failure to notify the director as required by this section is cause for denial, nonrenewal, suspension, or revocation of a license.
(a) The director may not issue an insurance producer, a managing general agent, or a surplus lines broker license to a person if the director has reasonable cause to believe that the applicant for the license would, during the 12-month period immediately following issuance of the license, earn or receive an aggregate amount in commission, service fees, brokerage, or other valuable consideration, directly or indirectly, by whatever name called, represented by the controlled business that exceeds 50 percent of the aggregate amount of compensation, commission, service fees, brokerage, or other valuable consideration represented by all other insurance business that would be procured by or through the applicant. (b) The vendor who is title holder of property being sold under an installment purchase contract is not considered to be the owner of the property for the purposes of this section. (c) A licensee may not earn or receive an aggregate amount in commission, service fees, brokerage, or other valuable consideration, directly or indirectly, by whatever name called, represented by the controlled business that exceeds 50 percent of the aggregate amount in compensation, commission, service fees, brokerage, or other valuable consideration represented by all other insurance business in a calendar year. (d) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440. (e) Controlled business means insurance procured or to be procured by or through the person upon (1) the life, person, or property of the person or those of the person's spouse or relatives by blood or marriage to the second degree; (2) the life, person, or property of the employer or firm of the person, or of an officer, director, stockholder, or member of the employer or firm of the person, other than members of mutual insurers, or of a spouse of the employer, officer, director, stockholder, or member; (3) the life, person, or property of the ward or employees of the person, or upon persons or property under the person's supervision or control as trustee under an indenture or decree, or as administrator or executor of an estate.
(a) Application for a license shall be made to the director upon forms prescribed by the director. As a part of or in connection with the application, the applicant shall furnish information concerning the applicant's identity, personal history, experience, business record, purposes, and other pertinent facts that the director may reasonably require. The applicant shall declare, subject to penalty of denial, nonrenewal, suspension, or revocation of a license issued by the director, that the statements made in or in connection with the application are true, correct, and complete to the best of the applicant's knowledge and belief. Payment of an application fee established under AS 21.06.250 must be submitted with the application. (b) [Repealed,  47 ch 29 SLA 1987.]  (c) In addition to any other penalty provided by law, a person wilfully misrepresenting a fact required to be disclosed in or in connection with the application or other information required by this section is subject to the penalties provided for under AS 21.27.440. (d) The director may require an applicant or licensee at any time, including at the time of license renewal, to supply current information of the type made in or supplemental to an application. (e) As part of the application required by (a) of this section, a resident applicant shall furnish to the director a full set of fingerprints and the fees required by the Department of Public Safety under AS 12.62.160 for criminal justice information and a national criminal history record check so that the director may obtain criminal justice information as provided under AS 12.62 about the applicant. The director shall submit the completed fingerprint card and fees to the Department of Public Safety for a report of criminal justice information under AS 12.62 and a national criminal history record check under AS 12.62.400. (f) If, through inaction, an applicant fails to complete the application process, the applicant's application filed with the director under (a) of this section is considered withdrawn. The withdrawal becomes effective 120 days after the filing of the application. If the director has initiated administrative action with respect to an application, withdrawal becomes effective at the time and on the conditions required by an order issued under this chapter.
(a) Except as provided in this chapter, an applicant for an individual license and a compliance officer applicant for a firm license shall, before the issuance of the license, personally take and pass, to the satisfaction of the director, an examination that tests the knowledge and competence of the applicant as to the applicant's duties and responsibilities as a licensee and the insurance statutes and regulations of the state. (b) If the director determines that a licensee has violated this title or that a licensee has conducted affairs under the license that cause the director reasonably to desire further evidence of the qualifications of the licensee, the director may at any time require the licensee to personally take and pass, to the satisfaction of the director, an examination that tests the knowledge and competence of the licensee as to the licensee's duties and responsibilities as a licensee, or the insurance laws of the state. (c) An individual who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in that individual's prior home state is not required to pass the examination required by (a) of this section in order to secure the same authority in this state. The exemption available under this subsection applies only if the application is received within 90 days after the cancellation of the applicant's previous license in the applicant's prior home state and (1) the applicant's prior home state verifies that, at the time of cancellation, the applicant held an insurance producer license that was in good standing in that state; or (2) the insurance producer licensing database records for the prior home state that are maintained by the National Association of Insurance Commissioners or its affiliates or subsidiaries indicate that the applicant is or was licensed in good standing for the kind of license requested. (d) This section does not apply to an applicant (1) for a limited license under AS 21.27.150(a)(1), (4), (5), or (8); or (2) who, at any time within the one-year period immediately preceding the date the current pending application is received by the division, had been licensed in good standing in this state under a license requiring substantially similar qualifications as required by the license applied for. (e) The director may make available a printed manual specifying in general terms the subjects that may be covered in an examination for a particular license.
(a) The answers of the applicant to an examination shall be written by the applicant under the director's supervision, and the written examination may be supplemented by oral examination at the director's discretion. (b) The director shall give examinations at the times and places that the director considers necessary to reasonably serve the convenience of the director, applicants, and licensees. (c) The director may require a waiting period of reasonable duration before giving a new examination to an applicant who has failed to pass a previous similar examination. (d) The director may make arrangements, including contracting with an outside testing service, for administering examinations and collecting a nonrefundable fee.
(a) An appointment is required to be made in accordance with this section when one or more of the following has occurred: (1) an admitted insurer appoints a managing general agent in this state or relative to a subject resident, located, or to be performed in this state; (2) a managing general agent appoints an insurance producer as its subagent in this state or relative to subjects resident, located, or to be performed in this state; (3) a domestic reinsurer appoints a reinsurance intermediary manager; (4) a reinsurance intermediary manager appoints an insurance producer as its subagent in this state. (b) An admitted insurer shall appoint an insurance producer as its agent in this state or relative to a subject resident, located, or to be performed in this state not later than 30 days after the date that a written agency contract is executed or the first insurance application is submitted to the admitted insurer by the licensed insurance producer. (c) An individual who has entered into an employment contract with a licensed firm that is appointed as an agent or a managing general agent on behalf of an admitted insurer under this section may not be required to also have an appointment under this section if the individual has entered into an employment contract with that firm for a specific class of authority. (d) The authorized or apparently authorized acts on behalf of an appointing insurer of an insurance producer appointed under this section are considered the acts of that insurer. (e) An insurer and managing general agent shall maintain a current list of all appointments made or required to be made under this section that identifies the licensee's name, licensee's mailing address, license number, and effective date of appointment. (f) An insurance producer shall maintain a list of all appointments made or required to be made under this section that identifies the insurer's name, insurer's mailing address, and effective date of appointment. (g) An insurer, managing general agent, or insurance producer shall reply in writing within three working days to an inquiry of the director regarding an appointment.
(a) An appointment under AS 21.27.100 continues in force until the appointment is terminated in writing. (b) If an insurer, reinsurer, or authorized representative discovers information showing that the appointee whose appointment was terminated has engaged in an activity identified in AS 21.27.410 during the period of the appointment, the insurer, reinsurer, or authorized representative shall, on a form or in a format prescribed by the director, promptly notify the director. (c) Within 15 days after providing notification in accordance with (b) of this section, the insurer, reinsurer, or authorized representative shall mail a copy of the notification to the appointee at the last address on record with the insurer, reinsurer, or authorized representative. The notice must be provided by certified mail, return receipt requested, postage prepaid, or by overnight delivery using a nationally recognized mail carrier. (d) Within 30 days after the appointee receives notification in accordance with (c) of this section, the appointee may file written comments concerning the substance of the notification with the director and shall provide a copy of the written comments to the insurer, reinsurer, or authorized representative. The written comments filed with the director must be included with each report distributed or disclosed concerning a reason about the termination of the appointment. (e) If requested by the director, an insurer, a reinsurer, or an authorized representative shall provide to the director additional information, documents, records, or other data pertaining to a termination or activity of a licensee under this title. (f) A notice of termination submitted to the director under this section must include a statement of the reasons for the termination. A statement of the reasons for termination is confidential and not subject to inspection and copying under AS 40.25.110. A statement of reasons for the termination may not be admitted as evidence in a civil action or an administrative proceeding against an insurer, reinsurer, or authorized representative by or on behalf of a person affected by the termination, except when the action or proceeding involves perjury, unsworn falsification in the second degree, fraud, or failure to comply with this subsection. (g) If an insurer, a reinsurer, or an authorized representative fails to report as required under this section or is found by a court to have knowingly or intentionally falsely made that report, the director may, after notice and hearing, suspend or revoke the license or certificate of authority of the insurer, reinsurer, or authorized representative and may impose a penalty in accordance with AS 21.27.440.
If a person has met the applicable requirements of AS 21.27.020 and 21.27.270, the director shall issue a license for one or more of the following lines of authority: (1) life insurance coverage on natural persons; in this paragraph, life insurance coverage (A) includes benefits of endowment and annuities; and (B) may include benefits in the event of death or dismemberment by accident and benefits for disability income; (2) health insurance coverage for sickness, bodily injury, or accidental death; in this paragraph, health insurance coverage may include benefits for disability income; (3) property insurance coverage for the direct or consequential loss for damage to property of every kind; (4) casualty insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property; in this paragraph, casualty insurance includes surety insurance as defined in AS 21.12.080; (5) variable life and variable annuity products insurance coverage; (6) personal lines property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes; (7) limited lines credit insurance; (8) [Repealed,  66 ch 41 SLA 2016.] (9) [Repealed,  66 ch 41 SLA 2016.] (10) any insurance for which a limited lines license may be issued under AS 21.27.150.
(a) A license must be in the form the director prescribes and must set out (1) the name and address of the licensee and, if the licensee is required to have a place of business, the physical address of the place of business; (2) the type, class, and lines of authority the licensee is licensed to handle; (3) the effective date and expiration date of the license; (4) each condition, if any, under which the license is granted; (5) the date of issuance of the license; (6) each fictitious name and alias under which the licensee may do business; and (7) other information required by the director. (b) A license issued by the director does not in itself create any authority, actual, apparent, or inherent, in the holder of the license to represent or commit an insurer.
(a) A firm shall have a firm license, the scope of which includes all lines and classes of authority of each individual employee of the firm. (b) A firm may not be licensed as an insurance producer, managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster, or transact insurance unless each individual employed by the firm as an insurance producer, managing general agent, surplus lines broker, trainee independent adjuster, or independent adjuster is licensed and has entered into an employment contract with the firm. (c) If the director determines under AS 21.06.170 - 21.06.240 that a firm knew or should have known of an act or representation made on the firm's behalf by a person not licensed as required by this chapter, the firm and the firm's compliance officer are subject to the penalties provided under AS 21.27.440.
(a) The director may issue a (1) travel insurance limited producer license to a person who is appointed under AS 21.27.100 and who sells travel insurance; in this paragraph, travel insurance has the meaning given in AS 21.27.152; (2) title insurance limited producer license to a person whose place of business is located in this state and whose sole purpose is to be appointed by and act on behalf of a title insurer; (3) bail bond limited producer license to a person who is appointed by and acts on behalf of a surety insurer pertaining to bail bonds; (4) motor vehicle rental agency limited producer license to a person and, subject to the approval of the director, to employees of the person licensed that the licensee authorizes to transact the business of insurance on the licensee's behalf if, as to an employee, the licensee complies with (D) of this paragraph and if the licensee (A) rents to others, without operators, (i) private passenger motor vehicles, including passenger vans, minivans, and sport utility vehicles; or (ii) cargo motor vehicles, including cargo vans, pickup trucks, and trucks with a gross vehicle weight of less than 26,000 pounds that do not require the operator to possess a commercial driver's license; (B) rents motor vehicles only to persons under rental agreements that do not exceed a term of 90 days; (C) transacts only the following kinds of insurance: (i) motor vehicle liability insurance with respect to liability arising out of the use of a vehicle rented from the licensee during the term of the rental agreement; (ii) uninsured or underinsured motorist coverage, with minimum limits described in AS 21.96.020(c) and (d) arising from the use of a vehicle rented from the licensee during the term of the rental agreement; (iii) insurance against medical, hospital, surgical, and disability benefits to an injured person and funeral and death benefits to dependents, beneficiaries, or personal representatives of a deceased person if the insurance is issued as incidental coverage with or supplemental to liability insurance and arises out of the use of a vehicle rented from the licensee during the term of the rental agreement; (iv) personal effects insurance, including loss of use, with respect to damage to or loss of personal property of a person renting the vehicle and other vehicle occupants while that property is being loaded into, transported by, or unloaded from a vehicle rented from the licensee during the term of the rental agreement; (v) towing and roadside assistance with respect to vehicles rented from the licensee during the term of the rental agreement; and (vi) other insurance as may be authorized by regulation by the director; (D) notifies the director in writing, not later than 30 days after employment, of the name, date of birth, social security number, location of employment, and home address of an employee authorized by the licensee to transact insurance on the licensee's behalf; and (E) provides other information as required by the director; (5) nonresident limited producer license to a person; a license that the director issues under this paragraph grants the same scope of authority as a limited lines producer license issued to the person by the person's home state; (6) credit insurance limited producer license to a person who sells limited lines credit insurance; (7) miscellaneous limited producer license to a person who transacts insurance in this state that restricts the person's authority to less than the total authority for a line of authority described in AS 21.27.115(1) - (6); (8) portable electronics limited producer license to a vendor that sells or offers portable electronics insurance as defined in AS 21.36.515; the following provisions apply to a license issued under this paragraph: (A) a vendor shall file with the director a sworn application for a license under this paragraph on a form prescribed and furnished by the director; the vendor shall provide the name, residence address, location of the vendor's home office, and other information required by the director for an employee or officer that is designated by the vendor as the person responsible for the vendor's compliance with the requirements of this chapter; however, if the vendor derives more than 50 percent of its revenue from the sale of portable electronics insurance, the vendor shall provide the information required under this subparagraph for all officers, directors, and shareholders of record having beneficial ownership of 10 percent or more of any class of securities registered under the federal securities law; (B) a portable electronics limited producer license issued under this paragraph must authorize the employees or authorized representatives of a vendor to transact portable electronics insurance at each location at which a vendor offers portable electronics to customers in this state; and (C) the employees or authorized representatives of the vendor may transact portable electronics insurance and are not required to obtain a limited producer license if (i) the employees or authorized representatives are not compensated based primarily on the number of customers enrolled for coverage; however, an employee or authorized representative may receive compensation for activities under the license that is incidental to the employee's or authorized representative's overall compensation; (ii) the insurer issuing the portable electronics insurance provides a training program for employees and authorized representatives of the portable electronics limited producer licensee that includes instruction about the portable electronics insurance offered to customers and the disclosures required under AS 21.36.515; and (iii) the vendor maintains a register of each location in the state where the vendor offers portable electronics insurance and submits the register to the director not later than 30 days after the director requests the register; (9) crop insurance limited producer license to a person who sells or offers crop insurance coverage for damage to crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease, or other yield- reducing conditions or perils provided by the private insurance market or that is subsidized by the Federal Crop Insurance Corporation, including multi-peril crop insurance. (b) [Repealed,  82 ch 81 SLA 2001.] 
(a) A person that makes, arranges, or offers travel services may transact travel insurance by offering, issuing for delivery, issuing, or renewing travel insurance to its customers on behalf of and under the direction of a person holding a travel insurance limited producer license under AS 21.27.150. (b) A person may transact travel insurance under (a) of this section only if the person is included in the register maintained by the travel insurance limited producer under (e)(1) of this section. (c) A person transacting travel insurance under (a) of this section may not (1) evaluate or interpret the terms, benefits, and conditions of travel insurance; (2) evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or (3) represent that the person is a licensed insurer, licensed producer, or insurance expert. (d) A person transacting travel insurance under (a) of this section shall provide to its prospective customers (1) a description of the terms of the insurance coverage; (2) a description of the claims process; (3) a description of the review and return or cancellation process; (4) the identity and contact information for the insurer and the travel insurance limited producer; (5) notice that a customer is not required to purchase travel insurance as a condition to purchasing other travel products or services; and (6) a statement that a person transacting travel insurance may provide general information about the insurance offered, including a description of the coverage and price, but is not qualified or authorized to answer questions about the terms and conditions of the insurance offered or to evaluate the adequacy of the customer's insurance coverage. (e) A travel insurance limited producer licensed under this section shall (1) maintain, in a format prescribed by the director, a register of each person who transacts travel insurance on behalf of and under the direction of the travel insurance limited producer and make the register available to the director on request; the register must include (A) the identity and contact information of the person transacting travel insurance; (B) the identity of a person who directs or controls the person who transacts travel insurance; and (C) the federal employment identification number of a person who directs or controls the person who transacts travel insurance; (2) certify that the person transacting travel insurance complies with 18 U.S.C. 1033; and (3) require a person transacting travel insurance satisfactorily to complete a training program that, at a minimum, contains instruction on the type of insurance offered, ethical practices, and the disclosures that must be provided to its prospective customers; the training program may be reviewed by the director. (f) A travel insurance limited producer is liable for the acts of a person transacting travel insurance on behalf of and under the direction of the producer. The travel insurance limited producer shall designate one of its employees as the person responsible for the travel insurance limited producer's compliance with applicable travel insurance laws and regulations. (g) Travel insurance may be provided under an individual policy or under a group or master policy. (h) In this section, travel insurance (1) means insurance coverage for personal risks connected to travel, including (A) trip interruption or cancellation; (B) lost baggage or personal effects; (C) damage to accommodations or rental vehicles; or (D) sickness, accident, disability, or death occurring during travel; (2) does not include comprehensive medical insurance that provides coverage during trips lasting six months or longer.
An insurance producer, managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster is only required to have one license inclusive of all kinds or combination of kinds or all classes or combination of classes of insurance the insurance producer, managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster is licensed to handle.
(a) In addition to any other requirements in this title, a bond required under this title or an alternative indemnity permitted under this section shall meet the following requirements: (1) it shall be continuous in form; (2) it shall remain in force until the licensee is released from liability by the director or until cancelled by the issuer; (3) without prejudice to any liability accrued before the effective cancellation, it may be cancelled if the director receives 60 days advance written notice; (4) the amount required to be maintained must be maintained unimpaired; and (5) it shall be in favor of insurers, insureds, and this state. (b) A bond may only be issued by an admitted insurer authorized to transact surety insurance in this state, or by a surplus lines insurer on the most recent list of eligible surplus lines insurers published by the director, that is acceptable to the director. (c) For a firm licensee, a single bond or an alternative indemnity permitted under this section may combine the sureties required (1) by separate sections of this title; and (2) for separate places of business. (d) [Repealed,  83 ch 81 SLA 2001.]  (e) Except as provided in this title, the director may adopt, by regulation, a deposit of cash, a certificate of deposit, or letter of credit as an alternative to a bond if the deposit of cash, certificate of deposit, or letter of credit meets the requirements of this section, other provisions of this title, and other requirements established by the director.
(a) A firm may enter into an employment contract with a licensed individual to conduct business under the supervision of and in the name of the firm. The employment contract must be in writing and must specify the lines and classes of authorities of the individual and the firm. The individual and the firm shall retain a copy of the contract and shall reply in writing within three working days to an inquiry of the director regarding any business transacted by the individual and the firm. (b) The firm shall examine the credentials of the individual to determine that the individual is licensed to conduct the kinds of business described in the contract. (c) A licensed individual may, if authorized by the firm and an insurer for which the firm is an agent, issue on the firm's behalf contracts of insurance in accordance with a written agency employment contract. (d) A firm shall be responsible for the actions of an individual transacting insurance under the firm's employment contracts. In any disciplinary proceeding under this title, the existence of the employment contract shall be prima facie evidence that the firm knew of the activities of the individual. (e) The individual and the firm shall maintain a current list of all of their respective contracts that identifies, for each contract, the parties to the contract, the parties' mailing addresses, electronic mailing addresses, and telephone numbers, and the parties' license numbers, and the effective and termination dates of employment. (f) A licensee shall retain the records of an employment contract and make the records available for examination and inspection by the director, at any business time during the five years immediately following the date of the termination of the employment contract unless the director orders a longer period of retention. If the licensee assumes the business of another licensee or former licensee by merger, purchase, or otherwise, the requirements of AS 21.27.350(c) apply.
(a) In accordance with P.L. 106-102 (Gramm-Leach-Bliley Act), the director shall issue a license to a nonresident license applicant on terms that are reciprocal with those of the applicant's home state. Notwithstanding any contrary provision of this chapter, the director may by order waive any license application requirement in this chapter to achieve reciprocity to license a nonresident in accordance with P.L. 106-102 (Gramm-Leach-Bliley Act). (b) Unless the director denies or refuses to renew a license under AS 21.27.410, the director shall issue a nonresident producer, limited lines, surplus lines broker, managing general agent, reinsurance intermediary broker, or reinsurance intermediary manager license to a person who is not a resident of this state if (1) the person is currently licensed and is in good standing in the person's home state; the director may verify the person's licensing status through the producer licensing database records maintained by the National Association of Insurance Commissioners or its affiliates or subsidiaries; (2) the person has paid the fees required under AS 21.06.250 and has submitted to the director (A) the license application the person submitted to the person's home state; or (B) if the person is not a firm, a completed uniform application or, if a firm, the uniform business entity application; and (3) the person's home state awards nonresident producer, limited lines, surplus lines, managing general agent, reinsurance intermediary broker, and reinsurance intermediary manager licenses to residents of this state on the same basis as does this state. (c) Notwithstanding (b) of this section, the director may require a person applying for a (1) nonresident license to furnish the person's fingerprints as required of a person applying for a license under AS 21.27.040(e); (2) surplus lines broker license under this section to have, and maintain while licensed in this state, the bond required of a person applying for a license under AS 21.27.790(2); and (3) nonresident license to comply with the premium fiduciary account requirements of AS 21.27.360 and the regulations adopted under that statute. (d) A person licensed as a limited lines producer in the person's home state shall receive a nonresident limited lines producer license granting the same scope of authority as the license issued by the producer's home state. (e) In addition to the other requirements of this chapter, a person may not be licensed as a nonresident licensee until the person files a power of attorney as follows: (1) an applicant shall appoint the director as attorney to receive service of legal process issued against the licensee in this state upon a cause of action arising in this state or relative to a subject resident, located, or to be performed in this state; service upon the director as attorney shall constitute effective legal service upon the licensee; and (2) the appointment shall be irrevocable for as long as there could be a cause of action against the licensee arising out of an insurance transaction in this state or relative to a subject resident, located, or to be performed in this state. (f) Duplicate copies of legal process against a licensed or formerly licensed nonresident licensee shall be served upon the director either by a peace officer or through certified mail with return receipt requested. At the time of service, the plaintiff shall pay to the director a fee set under AS 21.06.250. (g) Upon receiving a service of process, the director shall immediately send one of the copies of the process by certified mail, return receipt requested, to the licensed or formerly licensed nonresident licensee at the last address of record filed with the director. (h) A nonresident applicant for an independent adjuster license who only adjusts claims related to portable electronics insurance under AS 21.36.515 and who is licensed as an independent adjuster and in good standing in the applicant's home state does not have to meet the requirements of AS 21.27.060 or 21.27.830 to be licensed under this section. A resident of Canada may not be licensed as an independent adjuster under this section unless the applicant has obtained a resident independent adjuster license in another state or declared another state the applicant's home state and obtained an independent adjuster license in that state. (i) If a nonresident independent portable electronics adjuster applicant's home state does not license independent adjusters, the independent portable electronics adjuster applicant may designate the applicant's home state as any state in which the applicant is licensed in good standing.
The director may issue a license authorized by this chapter to a nonresident of this state who does not have a home state if that person meets all the requirements of this chapter for that license applicable to a resident of this state applying for the same license.
(a) A person licensed under this chapter shall have and maintain at least one place of business that is physically accessible to the public in this state unless the person holds a nonresident license and principally conducts transactions in another state. However, the nonresident licensee must have at least one physically accessible place in the nonresident licensee's home state. The requirements of this subsection do not apply to a nonresident independent portable electronics adjuster that has designated a state or territory other than the nonresident adjuster's resident state as the nonresident adjuster's home state or to a licensee who only conducts business in life or health insurance or annuities. (b) [Repealed,  34 ch 1 FSSLA 2005.] 
(a) A licensee shall document each action taken in regard to an insurance transaction. The documentation must contain all notes, work papers, documents, and similar material, and be in sufficient detail that relevant events, the dates of those events, and all persons participating in those events can be identified. The documentation must include a record of each insurance contract procured, issued, or countersigned, together with the names of the insurers and insureds, the amount of premium paid or to be paid, and a statement of the subject of the insurance; the names of other licensees from whom business is accepted, and of persons to whom commissions or allowances are promised or paid; and a record of each investigation or adjustment undertaken or consummated, and a statement of the fee, commission, or other compensation received or to be received on account of the investigation or adjustment. (b) A licensee shall keep at the licensee's place of business or at the place of business of an admitted insurer a complete record of transactions under the license. An admitted insurer shall maintain records received from a licensee as required by this section. (c) The records of a particular transaction shall be retained and kept open for examination and inspection by the director at any business time during the five years immediately after the date of the completion of the transaction or 10 years for reinsurance transactions, unless the director orders a longer period of retention. If a licensee assumes the business of another licensee or former licensee by merger, purchase, or otherwise, the compliance officer of the assuming licensee firm shall provide to the director in writing each location where the assumed licensee's records are maintained by the assuming licensee during the period in which the records must be kept available and open to the inspection of the director. A formerly licensed person shall provide to the director in writing each location where records shall be maintained during the period in which the records of a particular transaction must be kept available and open to the examination and inspection of the director. A formerly licensed person may, with the permission of the director, arrange to have a current licensee or the home office of the last known insurer of each policyholder maintain the records open to the examination and inspection of the director during the period in which the records must be maintained. (d) In addition to the record required under (a) of this section, a licensee shall have and maintain at the licensee's principal place of business current accounting and financial records maintained under generally accepted accounting principles. (e) A licensee shall reply in writing within 10 working days to a records inquiry of the director. The director may inspect or request summary or detailed copies of records for examination by the division. Accounting and financial records inspected or examined under this section are confidential when in the possession of the division, but may be used by the director in a proceeding against the licensee. For purposes of this section, the records of a firm shall include and be considered the records of an individual licensee who has entered into an employment contract with the firm.
(a) A licensee involved in the procuring or issuance of an insurance contract shall report to the insurer the exact amount of consideration charged as a premium for the contract. The amount charged shall be shown in the contract and in the records of the licensee. (b) Except as provided under (h) of this section, all money, except that made payable to the insurer, representing premium taxes and fees, premiums, or return premiums received by the licensee shall be received by the licensee as a fiduciary and shall be promptly accounted for and paid to the person entitled to the money. Money held by the licensee as a fiduciary may not be commingled or otherwise combined with other money not held by the licensee as a fiduciary. (c) In addition to any other penalty provided by law, a person who the director has determined has acted to divert or appropriate money held as a fiduciary for personal use shall be ordered to make restitution and shall be subject to suspension or revocation under AS 21.27.420 - 21.27.430 of all licenses and a civil penalty not to exceed $50,000 for each violation. (d) A licensee may only commingle premium taxes and fees, premiums, and return premiums with additional money for the purpose of advancing premiums, establishing reserves for the payment of return premiums, or reserves for receiving and transmitting premium or return premium money. (e) Money held by a licensee as a fiduciary may not be treated as a personal asset, as collateral for a personal or business loan, or as a personal asset or income on a financial statement, except that money held by the licensee as a fiduciary may be included in a financial statement of the licensee if clearly identified as assets held by the licensee as a fiduciary. (f) This section does not apply to an individual licensee who has entered into an employment contract with a firm and who acts solely on behalf of a firm that maintains compliance with this section. (g) [Repealed,  223 ch 67 SLA 1992.]  (h) A licensee who transacts the business of insurance under a motor vehicle rental agency limited producer license under AS 21.27.150(a)(4) is not required to hold money collected from a person for the purchase of rental motor vehicle insurance coverage in a separate fiduciary account if (1) the fees for the rental insurance coverage are itemized and are a part of a rental motor vehicle transaction; and (2) the insurer has given written consent that the money need not be segregated from other money received by the licensee and the consent is signed by an officer of the insurer. (i) The director of insurance may adopt regulations to implement, define, and enforce this section.
(a) Except as provided in (c) and (d) of this section, a licensee may not compensate a person, other than a licensee who is acting within the scope of the person's license, for transacting insurance in this state or relative to a risk resident, located, or to be performed in this state. (b) Except as provided in (c) and (d) of this section, a person may not be promised or paid, directly or indirectly, compensation for transacting a kind or class of insurance for which the person is not then licensed to transact or for insurance that the person is prohibited by this title from transacting. (c) An unlicensed person who refers a customer or potential customer to a licensee and who does not discuss specific terms and conditions of a policy or give opinions or advice regarding insurance may be compensated for the referral, if the compensation (1) for each referral is (A) nominal; (B) on a one-time basis; and (C) fixed in amount by referral; (2) does not depend on whether the customer or potential customer purchases the insurance; and (3) is not contingent on the volume of insurance transacted. (d) An insurer or insurance producer may compensate an insurance agency or another person if that person does not transact the business of insurance in this state and the payment does not violate AS 21.36.100 or 21.36.120. (e) A person who is no longer licensed in this state may be paid renewal or other deferred compensation for selling, soliciting, or negotiating insurance in this state if the person (1) was required to be licensed under this chapter at the time of the sale, solicitation, or negotiation; and (2) held that required license. (f) In addition to any other penalty provided by law, the director may suspend or revoke the license of a licensee participating in a violation of this section. The director may order a licensee who violates this section to pay a penalty of not more than three times the compensation promised or paid.
(a) Except as provided in this title, the director may renew a license biennially on a date set by the director if the licensee continues to be qualified under this chapter and, on or before the license expiration date, meets all renewal requirements established by regulation, submits a renewal application, and pays the renewal license fees set under AS 21.06.250 for each license authority to the director. A licensee is responsible for knowing the date that a license expires and for renewing a license before expiration. The director shall notify the licensee of the license renewal 30 days before the renewal date. (b) If a license is not renewed on or before the renewal date set by the director, the license expires. A licensee may not act as or represent to be an insurance producer, managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster during the time a license has expired. The director may reinstate an expired license if the person continues to qualify for the license and pays renewal license fees and a delayed renewal penalty. Reinstatement does not exempt a person from a penalty provided by law for transacting business while unlicensed. A license may not be renewed if it has expired for two years or longer. (c) If a licensee does not wish to renew a license issued under this chapter, the licensee shall surrender the license to the director on or before the close of business of the renewal date in the manner prescribed in AS 21.27.460. (d) The director shall mail a notice of expiration stating the reason for the expiration to a licensee at the licensee's last address on record with the director. The director shall obtain a certificate of mailing from the United States Postal Service. (e) A trainee license issued to an independent adjuster shall be for a term not to exceed 12 months and may not be renewed. (f) [Repealed,  14 ch 6 SLA 2012.] 
(a) The director may issue a temporary license only to a person who, except for experience, training, or the taking of an examination, meets all qualifications for a permanent license and if the person is (1) the surviving spouse, next of kin, or the administrator or executor of a deceased licensed insurance producer or managing general agent; (2) the spouse, next of kin, employee, or legal guardian of a licensed insurance producer or managing general agent who is disabled from transacting insurance because of sickness, mental illness, or injury; (3) a surviving member, officer, or employee of a firm licensed as insurance producer or managing general agent upon the death of the compliance officer of the firm holding the same licenses as the firm; or (4) the designee of a licensed insurance producer who enters active service in the armed forces of the United States, but only for insurance relating to insurers for whom the licensee was acting as an agent. (b) Except as otherwise provided by law, a temporary license may not be in effect for more than 90 consecutive days and may not be renewed or reissued for more than one additional 90-day period. (c) A temporary licensee may not be appointed by an insurer for which a licensed insurance producer or managing general agent was not appointed at the time of death or commencement of disability. (d) [Repealed,  34 ch 23 SLA 2018.]
(a) On the complaint of a person or on the motion of the director, the director may conduct an investigation to determine whether a person has violated this chapter. (b) If the director determines that a person has violated this chapter, the director shall serve an order upon the person charged requiring that person to cease and desist from engaging in the act or practice. A person aggrieved by the cease and desist order may demand a hearing under AS 21.06.170 - 21.06.240. (c) If the director believes that a person has violated a cease and desist order issued under (b) of this section, the director may certify the relevant facts to the superior court for proceedings under AS 44.62.590. In addition to the penalties and remedies provided for in AS 44.62.590, the superior court, upon finding that the cease and desist order has been violated, may order the violator to comply with the order, pay a penalty of not more than $100,000 for each violation, revoke or suspend the violator's license, and bar the violator from transacting the business of insurance in the future.
(a) The director may deny issuance of or not renew a license or may suspend or revoke a license issued under this chapter for any of the following: (1) a cause for which issuance of the license or its renewal could have been denied had it then existed and been known to the director; (2) a violation or participation in a violation of a provision of this title; (3) wilful misrepresentation or fraud by the licensee or applicant to obtain or attempt to obtain a license; (4) misappropriation, conversion to personal use, or illegally withholding money required to be held in a fiduciary capacity by a licensee or applicant; (5) with intent to deceive, material misrepresentation of the terms or effect of an insurance contract by a licensee or applicant; (6) twisting in violation of AS 21.36.050 or rebating in violation of AS 21.36.100 by a licensee or applicant; (7) conviction of a felony; (8) the conduct of affairs under a license if the licensee exhibits conduct considered by the director to reflect incompetence or untrustworthiness, or to be a source of potential injury and loss to the public; (9) the licensee or applicant dealing with, or attempting to deal with, or to exercise a power relative to, insurance outside the scope of the license of the licensee or applicant; (10) a licensee or applicant engaging in or about to engage in an unfair or fraudulent insurance transaction; (11) suspension or revocation of a license in another jurisdiction; (12) forgery of another's name to an application for insurance by a licensee or applicant; (13) accepting insurance business from a person not licensed as required by this title if the applicant or licensee knew or should have known that the person was unlicensed. (b) The license of a firm and its compliance officer may be denied, nonrenewed, suspended, or revoked for a violation or cause that relates to a person representing or acting on behalf of the firm.
(a) After a hearing under AS 21.06.170 - 21.06.240, if the director determines that a person has violated a provision of this title and that the person's license should be suspended or revoked, the director shall issue an order effective 10 days after the date of issuing that the license is suspended or revoked. (b) After a hearing under AS 21.06.170 - 21.06.240, if the director determines the person has violated a provision of this title, the director may place conditions on a person's license if the director finds that the conditions will protect the public from injury or potential injury. (c) With the consent of an applicant or licensee, the director may issue or renew a license with restrictions upon the scope of the person's license or may otherwise restrict or condition the activities of the licensee if the director determines that the person has violated the provisions of this title or to protect the public from injury or potential injury. (d) Without prior hearing, the director may order summary suspension of a license if the director finds that protection of the public requires emergency action and incorporates that finding in an order. The suspension is effective on the date specified in the order or on the date of mailing by first class mail to the licensee's business address on record with the division, whichever is later. If the licensee requests a hearing, the director shall conduct a hearing on the suspension within a reasonable time but not later than 20 days after the effective date of the summary suspension unless the person whose license is suspended requests a later date. At the hearing, the director shall determine if the suspension should be continued or withdrawn and, if proper notice is given, may determine if the license should be revoked. The director shall issue a decision within 30 days after the conclusion of the hearing. If the director decides to continue the suspension or revoke the license, the suspension or revocation must be based on one or more grounds in AS 21.27.410. The summary suspension continues until the decision is issued. AS 21.06.190 and AS 44.64.030 are not applicable to a hearing under this subsection.
(a) An order suspending a license shall specify the period during which the license is suspended. A period of suspension may not exceed 12 months. (b) An order revoking a license shall specify the period during which the person may not seek to be licensed in this state or licensed relative to a subject resident, located, or to be performed in this state. (c) In addition to any other penalty provided by law, a person whose license has been suspended or revoked shall pay a penalty equal to all or a portion of the compensation received during the suspension or revocation relating to the transaction of insurance.
(a) In addition to any other penalty provided by law, a person that the director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to (1) a civil penalty equal to the compensation promised, paid, or to be paid, directly or indirectly, to a person in regard to each violation; (2) either a civil penalty of not more than $10,000 for each violation or a civil penalty of not more than $25,000 for each violation if the director determines that the person wilfully violated the provisions of this chapter; and (3) denial, nonrenewal, suspension, or revocation of a license. (b) An order issued by the director that levies a civil penalty shall specify the time period within which the civil penalty must be fully paid. The period may not be less than 15 days or more than one year after the date of the order. Upon failure to pay a civil penalty when due, the director shall revoke, without further hearing, all licenses of the licensee not already revoked.
(a) A license issued under this chapter is the property of the state. Within 10 days of an order or notice of nonrenewal, suspension, or revocation of the license, the licensee or other person having possession or custody of the license shall deliver it to the director either personally or by certified mail. (b) If a license is lost, stolen, or destroyed while in the possession of the licensee or person, the director may accept, in lieu of the return of the license, an affidavit of the licensee or other person responsible for or involved in the safekeeping of the license concerning the facts of the loss, theft, or destruction. (c) Upon a change in the state of residence, a place of business, a mailing address, or in the compliance officer of a firm, a license subject to the change shall be surrendered to the director within 10 days either personally or by certified mail and the division shall reissue the license reflecting the changes if the licensee continues to satisfy the qualifications under this chapter.
In this chapter, (1) accredited state means a state in which the insurance department or regulatory agency of that state has qualified as meeting the minimum financial regulatory standards adopted and established by the National Association of Insurance Commissioners; (2) affiliate or affiliated has the meaning given in AS 21.22.200; (3) appointment means an act by a person evidencing a grant of authority to another to act on the grantor's behalf; (4) captive insurer means an insurer owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies or, in the case of groups and associations, an insurance organization owned by the insureds whose exclusive purpose is to insure risks of member organizations and group members and their affiliates; (5) cession means a unit of insurance, passed to a reinsurer by a primary insurer that issued the policy to the original insured, that may transfer part or all of a single risk, defined in the policy, or a defined group of business as agreed to in a contract of reinsurance; (6) class of authority means the authority held by a person under a license as an insurance producer, managing general agent, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster, or under registration as a third-party administrator; (7) comparable business means the same lines or kinds of insurance, the same classes of risks, similar policy limits, and quality of business; (8) compliance officer means a licensee designated for a specific line and class of authority under this chapter who is responsible for a firm's compliance with the insurance statutes and regulations of this state; (9) control, controlling, and controlled by have the meaning given in AS 21.22.200; (10) controlled insurer (A) means (i) an admitted insurer domiciled in this state or domiciled in a state that is not an accredited state having a law substantially similar to AS 21.27.570 that is controlled, directly or indirectly, by an insurance producer; (ii) a risk retention group as defined in 15 U.S.C. 3901, as amended; (B) does not include a captive insurer; (11) controlling insurance producer means an insurance producer that, directly or indirectly, controls an insurer; (12) home state, with respect to (A) an insurance producer, means the District of Columbia or a state or territory of the United States in which an insurance producer maintains the producer's principal place of residence or principal place of business and is licensed to act as an insurance producer; (B) an independent portable electronics adjuster, means the District of Columbia or a state or territory of the United States in which an independent portable electronics adjuster maintains the independent portable electronics adjuster's principal place of residence or principal place of business and is licensed to act as an independent adjuster or, if the state or territory of the United States of the independent portable electronics adjuster's principal place of residence or principal place of business does not license independent adjusters, the state or territory of the United States designated by the independent portable electronics adjuster where the independent portable electronics adjuster is licensed; (13) independent portable electronics adjuster means an independent adjuster who collects, furnishes, or enters claim information for portable electronics insurance issued under AS 21.36.515; (14) independent qualified actuary means an actuary who is a member of the American Academy of Actuaries and who is not affiliated with, an employee, principal, the direct owner or indirect owner of, or in any way controlled by the insurer, managing general agent, reinsurance intermediary broker, or reinsurance intermediary manager; (15) individual means a natural person required to be licensed under AS 21.27.010; (16) insurance holding company system has the meaning given in AS 21.22.200; (17) insurance producer means a person who sells, solicits, or negotiates insurance or insurance products; (18) interim profits means the excess of income over expenses and claim reserves determined before the expiration of all claim liabilities and contract obligations of the insurer to the insured; (19) license means, unless the context requires otherwise, a document issued by the director authorizing a person to act for the type, class, and lines of authority specified in the document; (20) limited lines means those lines of insurance defined in AS 21.27.150 or any other line of insurance that the director designates by order as a limited line; (21) limited lines credit insurance includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the director of insurance determines must be designated a form of limited lines credit insurance; (22) negotiate means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract if the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers; (23) physical presence or physically present means contemporaneously available in the licensee's place of business; (24) resident means (A) for an individual, a natural person who is domiciled in this state, whose principal place of business is in this state, who has a present intent to remain in this state while licensed, and who manifests that intent by establishing an ongoing physical presence in this state; (B) for a firm, a person whose principal place of business is in this state; (25) retrocession means a transaction in which a reinsurer cedes to another reinsurer all or part of the risk that the reinsurer has previously assumed; (26) sells means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company; (27) solicit means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company; (28) subagent means an agent reporting to a managing general agent or reinsurance intermediary manager and not directly to an insurer; (29) subsidiary has the meaning given in AS 21.22.200; (30) transact or transact business means sell, solicit, or negotiate insurance or insurance products; (31) underwrite means the authority to accept or reject risk on behalf of the insurer; (32) uniform application means the most recent version of the uniform application of the National Association of Insurance Commissioners; (33) uniform business entity application means the most recent version of the uniform business entity application of the National Association of Insurance Commissioners.
In addition to the general qualifications under AS 21.27.020, to qualify for issuance or renewal of an insurance producer license, an applicant or licensee (1) must possess the competence necessary to fulfill the responsibilities of an insurance producer; (2) if previously licensed in good standing in this state as an insurance producer, must not have had a license suspended or revoked within the previous four calendar years; (3) for a license with a scope that includes variable contracts, must either be currently registered with the federal Securities and Exchange Commission as a broker-dealer or personally take and pass, to the satisfaction of the director, tests of the knowledge and competence of the applicant concerning securities.
(a) A person may not act as or represent to be a representative of, authorized or appointed agent of, or other term implying a contractual relationship with a particular admitted insurer, or accept applications on behalf of an admitted insurer, unless the person is licensed as an insurance producer under this chapter and is or becomes an appointed agent of the admitted insurer under AS 21.27.100. (b) An admitted insurer or managing general agent of an admitted insurer may not enter into an agency agreement with an insurance producer unless the managing general agent and the insurance producer are licensed under this chapter and there is in effect a written agency agreement that specifically sets out the duties, functions, powers, authority, and compensation of all parties to the contract. The written agreement shall be kept in the permanent records of the insurer or managing general agent, if any, and the insurance producer, and be open to inspection by the director. (c) All money collected for the account of an insurer shall be held by the insurance producer as a fiduciary. (d) An agency agreement may not be assigned in whole or in part by the insurance producer. (e) If the agency agreement permits the insurance producer to settle a claim on behalf of the insurer (1) a claim must be reported to the insurer within 30 days; (2) a copy of the claim file shall be sent to the insurer; (3) all insurance claim files shall be the property of the insurer or managing general agent, if any, and insurance producer, but upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or the insurer's estate; the insurance producer shall have reasonable access to and the right to copy the files on a timely basis. (f) An insurance producer is subject to the unfair trade practice and fraud provisions under AS 21.36. (g) The insurance producer may not (1) bind reinsurance or retrocessions on behalf of the insurer; (2) commit the insurer to participate in insurance or reinsurance syndicates; (3) appoint an agent or subagent; (4) jointly employ an individual who is employed by the insurer or by the managing general agent; or (5) delegate insurance producer authority to another person. (h) Except as provided under AS 21.27.560, an agency appointment may not extend, directly or indirectly, to a client for whom the insurance producer is a producing broker or for whom insurance is exported to nonadmitted insurers under AS 21.34. (i) A reinsurance intermediary manager may not enter into an agency agreement with an insurance producer unless both parties are licensed under this chapter and there is in effect a written agency agreement that specifically sets out the duties, functions, powers, authority, and compensation of all parties to the agreement. The written agreement shall be kept in the permanent records of the reinsurance intermediary manager, the reinsurer, and the insurance producer, and be open to inspection by the director. A written agreement must contain the following minimum provisions: (1) money collected for the account of a reinsurer must be held by the insurance producer as a fiduciary; (2) the agreement may not be assigned in whole or in part by the insurance producer; (3) the agreement may not permit the insurance producer to settle claims on behalf of the reinsurer or reinsurance intermediary manager; and (4) the insurance producer may not (A) jointly employ an individual who is employed with the reinsurer or reinsurance intermediary manager; or (B) delegate insurance producer authority to another person.
(a) A client who appoints an insurance producer as its broker in this state or relative to a subject resident, located, or to be performed in this state shall execute a written contract that specifically sets out the duties, functions, powers, authority, and compensation of the insurance producer, if the broker is compensated by a fee paid by the client or by a combination of a fee paid by a client and a commission paid by an insurer with which coverage has been placed. The written contract shall be kept in the permanent records of the insurance producer and be open to inspection by the director. (b) The insurance producer may not knowingly accept payment of a premium for coverage until the coverage has been authorized by the insurer. This subsection does not apply to renewal of existing coverage placed by the insurance producer or to a premium deposit for the purchase of insurance. A premium deposit shall be returned to the client if coverage is not obtained within 10 working days. (c) An insurance producer appointed as a client's broker may only receive compensation if the compensation is a (1) fee that requires the insurance producer to offset or reimburse the client for the full amount of a commission earned by the insurance producer; (2) combination of a fee paid by a client and a commission paid by an insurer with which coverage is placed that may offset or reimburse a client for all or part of a commission earned by the insurance producer if the amount of the commission is disclosed to the client; or (3) commission paid by an insurer with which coverage has been placed. (d) A contract between a client and an insurance producer may not be assigned in whole or in part by the insurance producer. (e) An insurance producer appointed as a broker by a client may act as an appointed agent of an admitted insurer and may accept an application, bind coverage, and collect a premium from the client on behalf of the admitted insurer. (f) [Repealed,  52 ch 34 SLA 2015.] (g) Money paid by a client to an insurance producer for insurance premiums shall be held by the insurance producer as a fiduciary. (h) An insured shall be entitled to coverage or a return premium and the premium shall be considered received by the insurer if the premium payment made to the insurance producer was, at the time made, designated for specific coverage, and the insurer accepted or acknowledged coverage by issuing a policy binder or other evidence of temporary insurance, or the insurance producer received information from the insurer in the normal course of business that the insurance had been granted. (i) Except as provided under (c) and (e) of this section, this section does not alter the common law of agency as applied to transactions under this title.
(a) If the aggregate amount of gross written premium on business placed by a controlling insurance producer exceeds five percent of the admitted assets of the controlled insurer for a calendar year as reported in the insurer's most recent financial statement filed with the director, the controlling insurance producer may not place business with the controlled insurer and the controlled insurer may not accept business from the controlling insurance producer unless a written contract is in effect between the parties that (1) establishes the responsibilities of each party, indicates each party's share of responsibility for each particular function, and specifies the division of responsibilities; (2) has been approved by the board of directors of the controlled insurer; (3) contains the following minimum provisions: (A) the controlled insurer may terminate the contract for cause upon written notice sent to the controlling producer and shall suspend the authority of the controlling insurance producer to write business during a dispute regarding the cause for termination; (B) the controlling insurance producer shall render accounts to the controlled insurer detailing all transactions, including information in the accounts necessary to support compensation, commissions, charges, and other fees received by, or owing to, the controlling producer; (C) the controlling insurance producer shall remit money due under the contract to the controlled insurer at least monthly; (D) premiums or installments collected shall be due not later than 90 days after the effective date of coverage placed with the controlled insurer; (E) money collected for the account of a controlled insurer shall be held by the controlling insurance producer as a fiduciary, except a controlling insurance producer not required to be licensed under this chapter shall act as a fiduciary in compliance with the requirements of its domiciliary jurisdiction; (F) all payments on behalf of the controlled insurer shall be held by the controlling insurance producer as a fiduciary; (G) the controlling insurance producer shall maintain separate records for each controlled insurer in a form usable by the controlled insurer; the controlled insurer or its authorized representative shall have the right to audit and the right to copy all accounts and records related to the controlled insurer's business; the director, in addition to authority granted in this title, shall have access to all books, bank accounts, and records of the controlling insurance producer in a form usable to the director; (H) the contract may not be assigned in whole or in part by the controlling insurance producer; (I) the controlled insurer shall provide, and the controlling producer shall follow, written underwriting standards, rules, procedures, and manuals that must include the conditions for acceptance or rejection of risks, including types of risks that may be written, maximum limits of liability, applicable exclusions, territorial limitations, policy cancellation provisions, the maximum policy term, the rating system, and basis of the rates to be charged; (J) the underwriting standards, rules, procedures, and manuals shall be the same as those applicable to comparable business placed with the controlled insurer by insurance producers other than the controlling insurance producer; (K) the rates and terms of the controlling insurance producer's compensation including commissions, charges, and other fees may not be greater than those applicable to comparable business placed with the controlled insurer by insurance producers other than the controlling insurance producer; (L) the controlled insurer shall establish a limit, that may be different for each kind or class of business, on the amount of premium that the controlling insurance producer may place with the controlled insurer in relation to the controlled insurer's surplus and total writings; (M) the controlled insurer shall notify the controlling insurance producer if an applicable limit is approached and the controlling insurance producer may not place and the controlled insurer may not accept business if the limit under (L) of this paragraph has been reached; (N) if the contract provides that the controlling insurance producer, on insurance placed with the controlled insurer, is to be compensated contingent upon the controlling insurer's profits on the placed insurance, the contingent compensation may not be determined or paid until (i) at least five years after the premiums are earned on casualty business and at least one year after the premiums are earned on any other insurance; (ii) a later period established by the director for specified kinds or classes of insurance; and (iii) not until the profits have been verified under (b) of this section; (O) the controlling insurance producer may negotiate but may not bind reinsurance on behalf of the controlled insurer on insurance that the controlling insurance producer places with the controlled insurer, except that the controlling insurance producer may bind facultative reinsurance contracts under obligatory agreements if the contract with the controlled insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverage and amounts or percentages that may be reinsured, and commission schedules; and (4) provides that the controlled insurer has an audit committee composed of independent members of the board of directors that meet at least annually with management, the insurer's independent certified public accountants, and an independent actuary specialist acceptable to the director to review the adequacy of the insurer's reserves for losses incurred and outstanding. (b) In addition to any other required loss reserve certification, the controlled insurer shall annually obtain the opinion of an independent qualified actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the controlling insurance producer. The controlled insurer shall file with the director on or before April 1 of each year an opinion of an independent actuary attesting to the adequacy of the reserves for losses incurred and outstanding and reporting the loss ratios for each kind and class of business placed with the controlled insurer by the controlling producer. (c) The controlled insurer shall annually report by kind and class of insurance in a form acceptable to the director the amount of compensation paid to the controlling producer, the percentage the compensation represents to the net premiums written, the amount of compensation paid to uncontrolling producers, and the percentage the compensation represents to the net premiums written. (d) A controlling insurance producer may be examined by the director as if it were the controlled insurer. (e) If the conservator, rehabilitator, or liquidator of a controlled insurer or formerly controlled insurer has reason to believe that the controlled insurer or formerly controlled insurer suffered loss or damage arising out of a failure to comply with this section by the controlling producer or another person, the conservator, rehabilitator, or liquidator may maintain a civil action for recovery of damages or other relief for the benefit of the controlled insurer or its estate. (f) In addition to any other liability and without intent to limit in any manner the rights of policyholders, claimants, auditors, creditors, or third parties, if the director determines after a hearing under AS 21.06.170 - 21.06.240 that a controlling insurance producer caused losses arising out of a violation of this section to a controlled insurer, the director may order the controlling insurance producer to make restitution to the controlled insurer, the rehabilitator, or the liquidator of the controlled insurer for the loss. (g) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440 and a controlled insurer's certificate of authority may be suspended or revoked. The director may also order the controlling producer to cease placing business with the controlled insurer. (h) This section does not apply to (1) a person appointed to act on behalf of the controlled insurer as a managing general agent under this chapter; (2) a person who receives no compensation based upon the amount of premiums written with the controlled insurer and who places insurance only with the controlled insurer, only with the controlled insurer and an admitted member or admitted members of the insurer's holding company system, or only with the controlled insurer's parent, affiliate, or subsidiary if admitted in this state; (3) a person who does not accept insurance placements directly from an insured and who only accepts insurance placements from a nonaffiliated subagent; (4) a controlled insurer and its controlling insurance producer if, except for insurance written through a residual market facility under this title, insurance placements are accepted only from a controlling producer, an insurance producer controlled by the controlled insurer, or a producer that is a subsidiary of the controlled insurer; (5) [Repealed,  52 ch 34 SLA 2015.] (6) a risk apportionment plan under AS 21.39.150 or an assigned risk pool under AS 21.39.155. (i) Except as provided in this section, AS 21.22 applies to all parties within an insurance holding company system subject to this section. (j) A controlling insurance producer may not be appointed as a broker by a client in this state or relative to a subject resident, located, or to be performed in this state unless, in a form acceptable to the director, the controlling insurance producer has disclosed in writing to the client the relationship between the controlling insurance producer and controlled insurer, each client has acknowledged receipt of the disclosure, and a copy of the acknowledged disclosure is maintained by the controlling insurance producer in its records. The records shall be available for inspection by the director.
In addition to the general qualifications under AS 21.27.020, the director may require that a managing general agent maintain (1) a bond in an amount acceptable to the director and that requires the managing general agent to conduct business under this title; and (2) an errors and omissions insurance policy acceptable to the director.
A managing general agent has only the authority consistent with this title that is conferred by an admitted insurer. A managing general agent, resident or nonresident, qualified and licensed under this chapter, may exercise the powers conferred by this title upon insurance producers and independent adjusters only for the kinds or classes of insurance and within the scope authorized by the insurer appointing the managing general agent.
(a) An insurer may not transact business with a managing general agent unless (1) the insurer holds a certificate of authority in this state; (2) the managing general agent is licensed under this chapter or has filed a certification with the director certifying that the managing general agent is operating only for a foreign insurer and is licensed by its resident insurance regulator in a state that the director has determined has enacted provisions substantially similar to those contained in this chapter and the state is accredited by the National Association of Insurance Commissioners; (3) a written contract is in effect between the parties that establishes the responsibilities of each party, indicates both party's share of responsibility for a particular function, and specifies the division of responsibilities; (4) a written contract between an insurer and a managing general agent contains the following provisions: (A) the insurer may terminate the contract for cause upon written notice sent by certified mail to the managing general agent and may suspend the underwriting authority of the managing general agent during a dispute regarding the cause for termination; (B) the managing general agent shall render accounts to the insurer detailing all transactions and remit all money due under the contract to the insurer at least monthly; (C) all money collected for the account of an insurer shall be held by the managing general agent as a fiduciary; (D) all payments on behalf of the insurer shall be held by the managing general agent as a fiduciary; (E) the managing general agent may not retain more than three months' estimated claims payments and allocated loss adjustment expenses; (F) the managing general agent shall maintain separate records for each insurer in a form usable by the insurer; the insurer or its authorized representative shall have the right to audit and the right to copy all accounts and records related to the insurer's business; the director, in addition to authority granted in this title, shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the director; (G) the contract may not be assigned in whole or in part by the managing general agent; (H) if the contract permits the managing general agent to do underwriting, the contract must include the following: (i) the managing general agent's maximum annual premium volume; (ii) the rating system and basis of the rates to be charged; (iii) the types of risks that may be written; (iv) maximum limits of liability; (v) applicable exclusions; (vi) territorial limitations; (vii) policy cancellation provisions; (viii) the maximum policy term; and (ix) that the insurer shall have the right to cancel or not renew a policy of insurance subject to applicable state law; (I) if the contract permits the managing general agent to settle claims on behalf of the insurer, the contract must include the following: (i) written settlement authority must be provided by the insurer and may be terminated for cause upon the insurer's written notice sent by certified mail to the managing general agent or upon the termination of the contract, but the insurer may suspend the settlement authority during a dispute regarding the cause of termination; (ii) claims shall be reported to the insurer within 30 days; (iii) a copy of the claim file shall be sent to the insurer upon request or as soon as it becomes known that the claim has the potential to exceed an amount determined by the director or exceeds the limit set by the insurer, whichever is less, involves a coverage dispute, may exceed the managing general agent's claims settlement authority, is open for more than six months, involves extra contractual allegations, or is closed by payment in excess of an amount set by the director or an amount set by the insurer, whichever is less; (iv) each party shall comply with unfair claims settlement statutes and regulations; (v) transmission of electronic data at least monthly if electronic claim files are in existence; and (vi) claim files shall be the property of both the insurer and managing general agent; upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or the insurer's estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis; (J) if the contract provides for sharing of interim profits by the managing general agent and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, by controlling claim payments, or in any other manner, interim profits may not be paid to the managing general agent until (i) one year after they are earned for property insurance business and five years after they are earned on casualty business; (ii) a later period established by the director for specified kinds or classes of insurance; and (iii) not until the profits have been verified under (d) of this section; (K) the insurer shall provide a copy of the contract to the director within 30 days after entering into a contract with a managing general agent; and (L) the insurer shall provide written notification to the director within 30 days of the termination of a contract with a managing general agent. (b) The managing general agent may not (1) bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts under obligatory agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverage and amounts or percentages that may be reinsured, and commission schedules; (2) commit the insurer to participate in insurance or reinsurance syndicates; (3) appoint a subagent unless the scope of the subagent's license as an insurance producer includes the kinds and classes of insurance for which the subagent is appointed; (4) pay or commit the insurer to pay a claim, net of reinsurance, the amount of which exceeds one percent of the insurer's policyholder's surplus as of December 31 of the last completed calendar year without the prior written approval of the insurer for the settlement and the approval is received after the insurer has been notified in writing that the claim settlement will exceed one percent of the insurer's policyholder's surplus as of December 31 of the last completed calendar year; (5) collect a payment from a reinsurer or commit the insurer to a claim settlement with a reinsurer without prior written approval of the insurer, but if prior written approval is given, a complete report must be forwarded to the insurer within 30 days; (6) permit a subagent to serve on the insurer's board of directors; (7) jointly employ an individual who is employed with the insurer; or (8) delegate managing general agent authority to another person. (c) In a form acceptable to the director, a managing general agent shall annually provide and an insurer shall annually obtain a copy of certified financial statements of each managing general agent with which the insurer has done business. The financial statements shall be prepared by an independent certified public accountant if the managing general agent, with or without authority, either separately or with affiliates, directly or indirectly produces or underwrites an amount of gross written premium equal to or more than five percent of the policy holder's surplus in a quarter or year, as reported in the insurer's last annual statement. (d) In addition to any other required loss reserve certification, if a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an independent qualified actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. The insurer retains an independent responsibility to determine the adequacy of its loss reserves, including those established by its managing general agents. (e) An insurer shall at least semiannually conduct an on-site review of the underwriting and claims processing operations of the managing general agent if the managing general agent, with or without authority, either separately or with affiliates, directly or indirectly produces or underwrites an amount of gross written premium equal to or more than five percent of the policy holder's surplus in a quarter or year, as reported in the insurer's last annual statement. (f) An insurer shall review its books and records quarterly to determine if a person or insurance producer has acted as its managing general agent. If an insurer determines that a person or insurance producer has acted as its managing general agent, the insurer shall promptly notify the person or insurance producer and the director of the determination and the insurer and person or insurance producer must fully comply with the provisions of this chapter within 30 days. (g) An insurer may not appoint to its board of directors an officer, director, employee, subagent, insurance producer, or controlling shareholder of its managing general agent. (h) The actual or apparently authorized acts of the managing general agent are considered the acts of the insurer upon whose behalf it is acting. (i) A managing general agent may be examined by the director as if it were the insurer. (j) If the director determines after a hearing under AS 21.06.170 - 21.06.240 that a managing general agent caused loss or damage arising out of a violation of AS 21.27.590 - 21.27.630 to an insurer, the director may order the managing general agent to make restitution to the insurer, receiver, rehabilitator, or liquidator of the insurer for the loss. Restitution ordered under this subsection is in addition to any other liability of the managing general agent and does not affect the rights of a policy holder, claimant, creditor, or third party. The director may, at the request of the insurer, maintain or bring a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors or seek other appropriate relief. If an order of rehabilitation or liquidation of the insurer has been entered under AS 21.78, the receiver appointed under the order determines that a person has not materially complied with AS 21.27.590 - 21.27.630 or an order of the director, and the insurer suffers loss or damage from the noncompliance, the receiver may bring a civil action for the recovery of damages or other appropriate sanctions for the benefit of the insurer. (k) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440 and an insurer's certificate of authority may be suspended or revoked. (l) In this section, transact has the meaning given in AS 21.97.900.
(a) A person may not act as or represent to be a third-party administrator in this state or relative to a subject resident, located, or to be performed in this state, unless registered under this chapter or in another jurisdiction under AS 21.27.650. A person may not act as or represent to be a third-party administrator representing an insurer domiciled in this state regarding a risk located outside this state unless registered by this state under the provisions of this chapter. (b) A third-party administrator may not transact business for a kind or class of authority for which the person is not registered. (c) Except as otherwise provided in this chapter, a third-party administrator shall be registered under AS 21.27.630 - 21.27.660 unless the third-party administrator only investigates and adjusts claims and is licensed under this chapter as an independent adjuster. (d) A third-party administrator may not use a fictitious name or alias unless the licensee's legal name and fictitious name or alias are on the registration. (e) A person who is an employee of an admitted insurer, who acts within the course and scope of that employment, and within the scope of the insurer's certificate of authority is not required to be registered under this section. (f) A person who performs management services for an admitted insurer is not required to be registered as a third-party administrator if the person's compensation is not based on the volume of premium written and the person (1) is a wholly-owned subsidiary of the admitted insurer; (2) wholly owns the admitted insurer; (3) is a wholly-owned subsidiary of the insurance holding company that owns or controls the admitted insurer; (4) is a United States manager of the United States branch of an alien admitted insurer; or (5) is the manager of a group, association, pool, or organization of admitted insurers that does joint underwriting if it is subject to examination by the authorized insurance regulator in the state in which the person's principal place of business is located. (g) A credit union or a financial institution subject to supervision or examination by federal or state banking authorities, or a mortgage lender, that performs no functions other than advancing premiums to the insurer and collecting a debt from the insured is not required to be registered as a third-party administrator. (h) A credit card issuing company that performs no functions, including adjustment or settlement of claims, other than advancing and collecting premiums from its credit card holders who have authorized collection is not required to be registered as a third-party administrator. (i) A person who only provides services to bona fide employee benefit plans that are established by an employer or an employee organization, or both, for which the insurance laws of this state are preempted under the Employee Retirement Income Security Act of 1974, is not required to be additionally registered as a third-party administrator if the person certifies to the director on or before February 1 of each year its exempt status. (j) A third-party administrator (1) shall apply for registration under the procedures of AS 21.27.040; (2) shall renew its registration under the procedures of AS 21.27.380; and (3) is subject to hearings and orders on violations; denial, nonrenewal, suspension, or revocation of registration; penalties; and surrender of registration under the procedures set out in AS 21.27.405 - 21.27.460. (k) An insurer that holds a certificate of authority issued by the director and is in good standing under this title is not required to be registered as a third-party administrator in this state. (l) A person that is not required to be registered as a third-party administrator under (e) - (k) of this section must file a certification with the director that the person meets the requirements for exemption. (m) A person who is an employee of a third-party administrator and who acts within the course and scope of that employment and within the scope of the written contract required under AS 21.27.650(a)(4) is not required to be registered as a third-party administrator under this section. The third-party administrator is responsible for the acts of its employees regulated under this title.
(a) The director may not issue or renew a registration except in compliance with this chapter and may not issue a registration to a person, or to be exercised by a person, found by the director to be untrustworthy, incompetent, financially irresponsible, or who has not established to the satisfaction of the director that the person is qualified under this chapter. (b) To qualify for issuance or renewal of a registration, an applicant or registrant shall comply with this title, regulations adopted under AS 21.06.090, and (1) be a trustworthy person; (2) have active working experience in administrative functions that, in the director's opinion, exhibits the ability to competently perform the administrative functions of a third-party administrator; (3) not have committed an act that is a cause for denial, nonrenewal, suspension, or revocation of a registration or license in this state or another jurisdiction; (4) maintain a lawfully established place of business as described in AS 21.27.330 in this state, unless licensed as a nonresident under AS 21.27.270; (5) disclose to the director all owners, officers, directors, or partners, if any; (6) designate a compliance officer for the firm; (7) provide in or with its application (A) all basic organizational documents of the third-party administrator, including articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement, and other applicable documents and all endorsements to the required documents; (B) the bylaws, rules, regulations, or similar documents regulating the internal affairs of the administrator; (C) the names, mailing addresses, physical addresses, official positions, and professional qualifications of persons who are responsible for the conduct of affairs of the third-party administrator, including the members of the board of directors, board of trustees, executive committee, or other governing board or committee; the principal officers in the case of a corporation, or the partners or members in the case of a partnership, limited liability company, limited liability partnership, or association; shareholders holding directly or indirectly 10 percent or more of the voting securities of the third-party administrator; and any other person who exercises control or influence over the affairs of the third-party administrator; (D) certified financial statements for the preceding two years, or for each year and partial year that the applicant has been in business if less than two years, prepared by an independent certified public accountant establishing that the applicant is solvent, that the applicant's system of accounting, internal control, and procedure is operating effectively to provide reasonable assurance that money is promptly accounted for and paid to the person entitled to the money, and any other information that the director may require to review the current financial condition of the applicant; and (E) a statement describing the business plan, including information on staffing levels and activities proposed in this state and in other jurisdictions and providing details establishing the third-party administrator's capability for providing a sufficient number of experienced and qualified personnel in the areas of claims handling, underwriting, and record keeping; (8) provide to the director documents necessary to verify the statements contained in or in connection with the application; and (9) notify the director, in writing, not later than 30 days after (A) a change in compliance officer, residence, place of business, mailing address, or phone number; (B) the final disposition of an administrative action taken against the registrant by a governmental agency of another state, by a governmental agency of another jurisdiction, or by a financial industry regulatory authority sanction or arbitration proceeding; in addition, a registrant shall submit to the director documents relating to the final disposition on, including the final order and other relevant legal documents in, the action; or (C) a conviction of a misdemeanor or felony of the third-party administrator, its officers, directors, partners, owners, or employees. (c) The director may require that a third-party administrator maintain (1) a bond as described in AS 21.27.190 in an amount acceptable to the director and conditioned in that the third-party administrator will conduct business as required by this title; and (2) an errors and omissions insurance policy acceptable to the director. (d) If the director finds that the applicant or registrant is qualified and that application, registration, or renewal fees have been paid, the director may issue or renew the registration.
(a) An insurer may not transact business with a third-party administrator unless (1) the insurer holds a certificate of authority in this state if required under this title; (2) the third-party administrator is registered under this chapter or the third-party administrator has filed a certification with the director certifying that the third-party administrator is operating only for a foreign insurer other than a self-funded multiple employer welfare arrangement regulated under AS 21.85 and is registered as a third-party administrator by the third-party administrator's resident insurance regulator in a state that the director has determined has enacted provisions substantially similar to those contained in AS 21.27.630 - 21.27.650 and that is accredited by the National Association of Insurance Commissioners; (3) the third-party administrator provides the director on January 1, April 1, July 1, and October 1 of each year (A) a list of persons who supervise or have responsibility over personnel performing administrative functions, including claims administration and payment, marketing administrative functions, premium accounting, premium billing, coverage verification, underwriting, or certificate issuance upon a subject resident, located, or to be performed in this state; (B) a list of current insurers under contract; and (C) other information the director may require; (4) a written contract is in effect between the parties that establishes the responsibilities of each party, indicates both parties' share of responsibility for a particular function, and specifies the division of responsibilities; (5) there is in effect a written contract between the insurer and third-party administrator that contains the following provisions: (A) the insurer may terminate the contract for cause upon written notice sent by certified mail to the third-party administrator and may suspend the underwriting authority of the third-party administrator during a dispute regarding the cause for termination; but the insurer must fulfill all lawful obligations with respect to policies affected by the written agreement, regardless of any dispute between the insurer and the third-party administrator; (B) the third-party administrator shall render accounts to the insurer detailing all transactions and remit all money due under the contract to the insurer at least monthly; (C) all money collected for the account of an insurer shall be held by the third-party administrator as a fiduciary; (D) all payments on behalf of the insurer shall be held by the third-party administrator as a fiduciary; (E) the third-party administrator may not retain more than three months' estimated claims payments and allocated loss adjustment expenses; (F) the third-party administrator shall maintain separate records for each insurer in a form usable by the insurer; the insurer or its authorized representative shall have the right to audit and the right to copy all accounts and records related to the insurer's business; the director, in addition to other authority granted in this title, shall have access to all books, bank accounts, and records of the third-party administrator in a form usable to the director; any trade secrets contained in books and records reviewed by the director, including the identity and addresses of policyholders and certificate holders, shall be kept confidential, except that the director may use the information in a proceeding instituted against the third-party administrator or the insurer; (G) the contract may not be assigned in whole or in part by the third-party administrator; (H) if the contract permits the third-party administrator to do underwriting, the contract must include the following: (i) the third-party administrator's maximum annual premium volume; (ii) the rating system and basis of the rates to be charged; (iii) the types of risks that may be written; (iv) maximum limits of liability; (v) applicable exclusions; (vi) territorial limitations; (vii) policy cancellation provisions; (viii) the maximum policy term; and (ix) that the insurer shall have the right to cancel or not renew a policy of insurance subject to applicable state law; (I) if the contract permits the third-party administrator to administer claims on behalf of the insurer, the contract must include the following: (i) written settlement authority must be provided by the insurer and may be terminated for cause upon the insurer's written notice sent by certified mail to the third-party administrator or upon the termination of the contract, but the insurer may suspend the settlement authority during a dispute regarding the cause of termination; (ii) claims shall be reported to the insurer within 30 days; (iii) a copy of the claim file shall be sent to the insurer upon request or as soon as it becomes known that the claim has the potential to exceed an amount determined by the director or exceeds the limit set by the insurer, whichever is less, involves a coverage dispute, may exceed the third-party administrator's claims settlement authority, is open for more than six months, involves extra contractual allegations, or is closed by payment in excess of an amount set by the director or an amount set by the insurer, whichever is less; (iv) each party to the contract shall comply with unfair claims settlement statutes and regulations; (v) transmission of electronic data must occur at least monthly if electronic claim files are in existence; and (vi) claim files shall be the sole property of the insurer; upon an order of liquidation of the insurer, the third-party administrator shall have reasonable access to and the right to copy the files on a timely basis; and (J) the contract may not provide for commissions, fees, or charges contingent upon savings obtained in the adjustment, settlement, and payment of losses covered by the insurer's obligations; but a third-party administrator may receive performance-based compensation for providing hospital or other auditing services or may receive compensation based on premiums or charges collected or the number of claims paid or processed. (b) If the insurer is domiciled in this state or the third-party administrator has a place of business in this state, a copy of the contract must be filed with and approved by the director at least 30 days before the third-party administrator transacts business on behalf of the insurer. If the contract is not required to be approved in advance by the director, the insurer shall provide written notification to the director within 30 days of the entry into or termination of a contract with a third-party administrator; the notice must include a statement of duties to be performed by the third-party administrator on behalf of the insurer, the kinds and classes of insurance for which the third-party administrator has authorization to act, and other information required by the director. (c) If the contract provides for the third-party administrator to receive or collect premiums, payment by or on behalf of the insured of premiums for insurance to the third-party administrator shall be presumed to have been received by the insurer; payment of return premiums or claim payments forwarded by the insurer to the third-party administrator may not be presumed to have been received by the person entitled to the money until the payments are received by the insured or claimant. Nothing in this subsection limits the rights that the insurer may have against the third-party administrator resulting from the failure of the third-party administrator to make payments to persons entitled to money. (d) Policies, certificates, booklets, termination notices or other written communications delivered by the insurer to the third-party administrator for delivery to the insured or covered individuals shall be delivered by the third-party administrator within 10 days after receipt of instructions from the insurer to deliver them. (e) When the services of a third-party administrator are utilized, the third-party administrator shall provide a written notice, approved in writing by the insurer, to a covered person advising the person of the identity of the insurer and the relationship between the third-party administrator, the policyholder, and the insurer. (f) The third-party administrator may not (1) bind reinsurance or retrocessions on behalf of the insurer; (2) commit the insurer to participate in insurance or reinsurance syndicates; (3) pay or commit the insurer to pay a claim, net of reinsurance, the amount of which exceeds one percent of the insurer's policyholder's surplus as of December 31 of the last completed calendar year without prior written approval of the insurer for the settlement; the approval of an insurer must be received after the insurer has been notified in writing that the claim settlement will exceed one percent of the insurer's policyholder's surplus as of December 31 of the last completed calendar year; (4) collect a payment from a reinsurer or commit the insurer to a claim settlement with a reinsurer without prior written approval of the insurer, but if prior written approval is given, a complete report must be forwarded to the insurer within 30 days; (5) serve on the insurer's board of directors; (6) jointly employ an individual who is employed by the insurer; (7) delegate third-party administrator authority to another person; (8) solicit applications for insurance or renewals of insurance directly through employees or by appointments of insurance producers as its subagents unless its employees or the insurance producers appointed under the procedures set out in AS 21.27.100 and 21.27.110 are licensed for the kinds or classes of insurance and the solicitation or renewals are within the scope of authority granted by the insurer contracting with the third-party administrator; or (9) advertise the business underwritten by an insurer unless the advertising has been approved in writing by the insurer in advance of its use. (g) In a form acceptable to the director, a third-party administrator shall annually provide to the insurer and an insurer shall annually obtain a copy of certified financial statements prepared by an independent certified public accountant of each third-party administrator with which the insurer has done business. (h) In addition to any other required loss reserve certification, if a third-party administrator establishes loss reserves, the insurer shall annually obtain the opinion of an independent qualified actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the third-party administrator. The insurer retains an independent responsibility to determine the adequacy of its loss reserves, including those established by its third-party administrators. (i) If a third-party administrator provides services for more than 100 certificate holders on behalf of an insurer, the insurer shall at least semiannually conduct a review of the operations of the third-party administrator. At least one review required under this subsection must be an on-site review. (j) A third-party administrator shall maintain records as described in AS 21.27.350. (k) An insurer may not appoint to its board of directors an officer, director, employee, subagent, insurance producer, or controlling shareholder of its third-party administrator. (l) An actual or apparently authorized act of the third-party administrator is considered to be the act of the insurer upon whose behalf the third-party administrator is acting. (m) A third-party administrator may be examined by the director under AS 21.06.120 as if it were the insurer. (n) If the director determines after a hearing under AS 21.06.170 - 21.06.240 that a third-party administrator caused loss arising out of a violation of AS 21.27.630 - 21.27.650 to an insurer, the director may order the third-party administrator to reimburse the insurer, the rehabilitator, or the liquidator of the insurer for the loss. Reimbursement ordered under this subsection is in addition to any other liability of the third-party administrator and does not affect the rights of a policyholder, claimant, creditor, or third-party. (o) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440 and an insurer's certificate of authority may be suspended or revoked. (p) [Repealed,  34 ch 1 FSSLA 2005.]  (q) The director may, without advance notice or hearing, immediately suspend by order the registration of a third-party administrator if the director finds that one or more of the following circumstances exist: (1) the third-party administrator is insolvent or impaired; (2) a proceeding for bankruptcy, receivership, conservatorship, or rehabilitation, or another delinquency proceeding regarding the third-party administrator has been commenced in any state or by a governmental agency of another jurisdiction; (3) the third-party administrator is in an unsound condition, or is in a condition or using methods or practices that render its further transaction of insurance injurious to policy holders or the public. (r) An insurer shall review its books and records quarterly to determine whether a person or insurance producer has acted as the insurer's third-party administrator. If an insurer determines that a person or insurance producer has acted as the insurer's third-party administrator, the insurer shall promptly notify the person or insurance producer and the director of this determination. The insurer and the person or insurance producer must fully comply with the provisions of this chapter not later than 30 days after notification.
In AS 21.27.630 - 21.27.660, (1) insurer includes the Comprehensive Health Insurance Association created under AS 21.55.010 and any person issued or required to obtain a certificate of authority under this title to transact life insurance, annuities, and health insurance or to provide coverage for the cost of medical care; (2) transact has the meaning given in AS 21.97.900.
In addition to the general qualifications under AS 21.27.020, the director may require that a reinsurance intermediary broker maintain (1) a bond in an amount acceptable to the director in favor of insurers and this state that requires the reinsurance intermediary broker to conduct business under this title; and (2) an errors and omissions insurance policy acceptable to the director.
(a) Except as provided in (b) of this section, an insurer may not transact business with a reinsurance intermediary broker unless the insurer holds a certificate of authority in this state, the reinsurance intermediary broker is licensed in this state, and there is in effect a written contract between the parties that establishes the responsibilities of each party, indicates each party's share of responsibility for each particular function, and specifies the division of responsibilities. The written contract shall be kept in the permanent records of the insurer and the reinsurance intermediary broker, be open to inspection by the director, and must contain the following minimum provisions: (1) the insurer may terminate the reinsurance intermediary broker's authority at any time by written notice sent by certified mail; (2) the reinsurance intermediary broker shall render accounts to the insurer detailing all transactions including information necessary to support all commissions, charges, and other fees received by or owing to the reinsurance intermediary broker and remit the money due under the contract to the insurer within 30 days of receipt; (3) money collected for the account of an insurer shall be held by the reinsurance intermediary broker as a fiduciary; (4) the reinsurance intermediary broker shall maintain separate accounts and records for each insurer and maintain the records in a form usable by the insurer; the insurer or the authorized representative of the insurer shall have access and the right to audit and the right to copy all accounts and records related to the insurer's business; the director, in addition to the other authority granted in this title, shall have access to all books, bank accounts, and records of the insurance intermediary broker in a form usable to the director; (5) the insurer shall establish written standards for the cession or retrocession of all risks, and the reinsurance intermediary broker shall comply with those standards; (6) the reinsurance intermediary broker shall disclose to the insurer all its relationships with insurers and reinsurers to whom risks are ceded or retroceded; and (7) the contract may not be assigned in whole or in part by the reinsurance intermediary broker. (b) An insurer may use a nonresident reinsurance intermediary broker who is not licensed under this chapter if the reinsurance intermediary broker has filed a certification with the director that the reinsurance intermediary broker is operating only for a foreign insurer and the person is licensed in good standing as a resident reinsurance intermediary broker by an insurance regulator of another state that is accredited by the National Association of Insurance Commissioners. Upon written request, the director may grant written permission for a domestic insurer to use an alien reinsurance intermediary broker not licensed by and without a place of business in a jurisdiction subject to accreditation by the National Association of Insurance Commissioners if the alien reinsurance intermediary broker has filed a certification with the director that the reinsurance intermediary broker is operating only for a domestic insurer and is licensed in good standing by its domiciliary insurance regulator. The domestic insurer and unlicensed reinsurance intermediary broker are subject to all other requirements of this section. (c) An insurer may not employ a person who is employed by a reinsurance intermediary broker with which it transacts business, unless the reinsurance intermediary broker is under common control with the insurer and subject to AS 21.22. (d) In a form acceptable to the director, a reinsurance intermediary broker shall annually provide and an insurer shall annually obtain a copy of certified financial statements of each reinsurance intermediary broker with which the insurer has done business, prepared by the independent certified public accountant. (e) If the director determines after a hearing under AS 21.06.170 - 21.06.240 that a reinsurance intermediary broker caused losses or damage arising out of a violation of AS 21.27.670 - 21.27.700 to an insurer or reinsurer, the director may order the reinsurance intermediary broker to make restitution to the insurer, reinsurer, receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer. Restitution ordered under this subsection is in addition to any other liability of the reinsurance intermediary broker and does not affect the rights of a policyholder, claimant, creditor, or third party. The director may, at the request of the insurer, maintain or bring a civil action brought by or on behalf of the reinsurer or insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the reinsurer or insurer and its policyholders and creditors or seek other appropriate relief. If an order of rehabilitation or liquidation of the insurer has been entered under AS 21.78, the receiver appointed under the order determines that a person has not materially complied with AS 21.27.670 - 21.27.700 or an order of the director, and the insurer suffers loss or damage from the noncompliance, the receiver may bring a civil action for the recovery of damages or other appropriate sanctions for the benefit of the insurer. (f) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440 and an insurer's certificate of authority may be suspended or revoked. (g) In this section, transact has the meaning given in AS 21.97.900.
In addition to any other records requirements under this title, a reinsurance intermediary broker shall maintain in organized form a record of each transaction including (1) the type of contract, limits, underwriting restrictions, classes or risks, and territory; (2) the period of coverage, including effective and expiration dates, cancellation provisions, and required notice of cancellation; (3) the reporting and settlement requirements of balances; (4) the rate used to compute the reinsurance premium; (5) the names and addresses of reinsurers; (6) the rate of all reinsurance commissions, including the commissions on retrocessions handled by the reinsurance intermediary broker; (7) the related correspondence and memoranda; (8) the proof of placement; (9) the details regarding retrocessions handled by the reinsurance intermediary broker including the identity of retrocessionaires and the percentage of each contract assumed or ceded; (10) the financial records of premium and loss accounts; (11) if the reinsurance intermediary broker procures a reinsurance contract on behalf of an admitted ceding insurer (A) written evidence directly from an assuming reinsurer that it has agreed to assume the risk; or (B) written evidence, if placed through a representative of the assuming reinsurer other than an employee, that the reinsurer had delegated binding authority to the representative; and (12) additional information that is customary or that may be required by the director.
In addition to the general qualifications under AS 21.27.020, the director may require that a reinsurance intermediary manager maintain (1) a bond in an amount acceptable to the director that requires the reinsurance intermediary manager to conduct business under this title; and (2) an errors and omissions insurance policy acceptable to the director.
A reinsurance intermediary manager has only the authority that is consistent with this title and that is conferred by the reinsurer. A reinsurance intermediary manager, resident or nonresident, qualified and licensed under this chapter, may exercise the powers conferred by this title upon insurance producers and independent adjusters only for the kinds or classes of insurance and within the scope that reinsurance intermediary is authorized by the reinsurer appointing the reinsurance intermediary manager.
(a) A reinsurer may not transact business with a reinsurance intermediary manager unless there is in effect a written contract approved by the reinsurer's board of directors between the parties that establishes the responsibilities of each party, indicates each party's share of responsibility for each particular function, and specifies the division of responsibilities. (b) The contract required under (a) of this section must include the following provisions: (1) the reinsurer may terminate the contract for cause upon written notice sent by certified mail to the reinsurance intermediary manager and may suspend the underwriting authority of the reinsurance intermediary manager during a dispute regarding the cause for termination; (2) the reinsurance intermediary manager shall render accounts to the reinsurer detailing all transactions including information necessary to support all commissions, charges, and other fees received by or owing to the reinsurance intermediary manager and remit all money due under the contract to the insurer at least monthly; (3) money collected for the account of a reinsurer shall be held by the reinsurance intermediary manager as a fiduciary; (4) the reinsurance intermediary manager shall maintain a separate bank account for each reinsurer that it represents; (5) all payments on behalf of the reinsurer shall be held by the reinsurance intermediary manager as a fiduciary; (6) the reinsurance intermediary manager may retain not more than three months estimated claims payments and allocated loss adjustment expenses; (7) the reinsurance intermediary manager shall maintain separate accounts and records for each reinsurer and maintain the records in a form usable by the reinsurer; the reinsurer or its authorized representative shall have access and the right to audit and the right to copy all accounts and records related to the reinsurer's business; the director, in addition to the other authority granted in this title, shall have access to all books, bank accounts, and records of the reinsurance intermediary manager in a form usable to the director; (8) the contract may not be assigned in whole or in part by the reinsurance intermediary manager; (9) the reinsurer shall establish written underwriting and rating standards for the acceptance, rejection, or cession of all risks and the reinsurance intermediary manager shall comply with the standards; (10) compensation including rates, terms, purposes of commissions, charges, and other fees that the reinsurance intermediary manager may levy against the reinsurer; (11) if the contract permits the reinsurance intermediary manager to settle claims on behalf of the reinsurer, (A) written settlement authority must be provided by the reinsurer and may be terminated for cause upon the insurer's written notice by certified mail to the reinsurance intermediary manager or upon the termination of the contract; the reinsurer may suspend the settlement authority during a dispute regarding the cause of termination; (B) claims shall be reported to the reinsurer within 30 days; (C) a copy of the claim file shall be sent to the reinsurer upon request or as soon as it becomes known that the claim (i) has the potential to exceed an amount determined by the director or exceeds the limit set by the insurer, whichever is less; (ii) involves a coverage dispute; (iii) may exceed the reinsurance intermediary manager's claims settlement authority; (iv) is open for more than six months; (v) involves extra contractual allegations; or (vi) is closed by payment in excess of an amount set by the director or an amount set by the insurer, whichever is less; (D) the reinsurance intermediary manager shall comply with unfair claims settlement statutes and regulations; (E) transmission of electronic data at least once a month if electronic claims files are in existence; (F) claim files shall be the property of both the reinsurer and reinsurance intermediary manager, but upon an order of liquidation of the reinsurer, the files shall become the sole property of the reinsurer or the reinsurer's estate; the reinsurance intermediary manager shall have reasonable access to and the right to copy the files on a timely basis; (12) if the contract provides for sharing of interim profits by the reinsurance intermediary manager, the interim profits may not be paid until (A) one calendar year after the end of each underwriting period for property risks and five years after the end of each underwriting period for casualty risks; (B) a later period established by the director for specified kinds or classes of insurance; and (C) the profits have been verified under (e)(2) of this section; (13) the reinsurance intermediary manager may not (A) cede retrocessions on behalf of the reinsurer, except that the reinsurance intermediary manager may cede facultative retrocessions under obligatory agreements if the contract with the reinsurer contains reinsurance underwriting guidelines including a list of reinsurers with which automatic agreements are in effect, and, for each reinsurer, the coverage and amounts or percentages that may be reinsured, and commission schedules; (B) commit the reinsurer to participate in reinsurance syndicates; (C) appoint a subagent unless the scope of the subagent's license as an insurance producer includes the kinds and classes of insurance for which the subagent is appointed; (D) pay or commit the reinsurer to pay a claim, net of retrocessions, the amount of which exceeds one percent of the reinsurer's policyholder's surplus as of December 31 of the last completed calendar year without the prior written approval of the reinsurer for the settlement and the approval is received after the reinsurer has been notified in writing that the claim settlement will exceed one percent of the reinsurer's policyholder's surplus as of December 31 of the last completed calendar year; (E) collect payment from a retrocessionaire or commit the reinsurer to a claim settlement with a retrocessionaire without prior written approval of the reinsurer, but if prior written approval is given, a complete report shall be forwarded to the reinsurer within 30 days; (F) jointly employ an individual who is employed with the reinsurer; or (G) delegate reinsurance intermediary manager authority to another person; (14) if the insurer is domiciled in this state or the reinsurance intermediary manager has a place of business in this state, a copy of the contract must be filed with and approved by the director at least 30 days before the reinsurance intermediary manager transacts business on behalf of the reinsurer; if the reinsurer is not domiciled in this state or the reinsurance intermediary manager transacts business relative to a subject resident, located, or to be performed in this state from a place of business not physically located in this state, a copy of the contract required in this section must be filed with and approved by the director at least 30 days before the reinsurance intermediary manager transacts business on behalf of the insurer in this state or relative to a subject resident, located, or to be performed in this state if the insurer or the reinsurance intermediary manager are domiciled in a state not accredited by the National Association of Insurance Commissioners; and (15) if the contract is not required to be approved in advance by the director, the insurer shall provide written notification to the director within 30 days of the entry into or termination of a contract with a reinsurance intermediary manager; the notice must include a statement of duties to be performed by the reinsurance intermediary manager on behalf of the reinsurer, the kinds and classes of insurance for which the reinsurance intermediary manager has authorization to act, and other information required by the director. (c) Binding authority for all retrocession contracts or participation in reinsurance syndicates may only rest with an officer of the reinsurer who is not affiliated with a reinsurance intermediary manager. (d) In a form acceptable to the director, a reinsurance intermediary manager shall annually provide and a reinsurer shall annually obtain a copy of certified financial statements of each reinsurance intermediary manager that the reinsurer has used, prepared by an independent certified public accountant. (e) The reinsurer shall (1) at least semiannually conduct an on-site review of the underwriting and claims processing operations of each reinsurance intermediary manager; (2) in addition to any other required loss reserve certification, annually obtain the opinion of an independent qualified actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary manager if a reinsurance intermediary manager establishes loss reserves; the reinsurer retains an independent responsibility to determine the adequacy of its loss reserves, including those established by its reinsurance intermediary manager; and (3) provide written notification to the director by certified mail within 30 days of the termination of a contract with a reinsurance intermediary manager. (f) The reinsurance intermediary manager shall disclose to the reinsurer a relationship with an insurer before ceding or assuming risks with the insurer under the contract. (g) A reinsurer may not appoint to its board of directors an officer, director, employee, subagent, insurance producer, or controlling shareholder of its reinsurance intermediary manager. (h) Within the scope of the actual or apparent authority, the acts of the reinsurance intermediary manager are considered the acts of the reinsurer upon whose behalf it is acting. (i) A reinsurance intermediary manager may be examined by the director as if it were the insurer. (j) If the director determines after a hearing under AS 21.06.170 - 21.06.240 that a reinsurance intermediary manager caused losses or damage arising out of a violation of AS 21.27.730 - 21.27.770 to an insurer or reinsurer, the director may order the reinsurance intermediary manager to make restitution to the insurer, reinsurer, receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer. Restitution ordered under this subsection is in addition to any other liability of the reinsurance intermediary manager and does not affect the rights of a policyholder, claimant, creditor, or third party. The director may, at the request of the insurer, maintain or bring a civil action brought by or on behalf of the reinsurer or insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the reinsurer or insurer and its policyholders and creditors or seek other appropriate relief. If an order of rehabilitation or liquidation of the insurer has been entered under AS 21.78, the receiver appointed under the order determines that a person has not materially complied with AS 21.27.730 - 21.27.770 or an order of the director, and the insurer suffers loss or damage from the noncompliance, the receiver may bring a civil action for the recovery of damages or other appropriate sanctions for the benefit of the insurer. (k) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440 and an insurer's or reinsurer's certificate of authority may be suspended or revoked. (l) In this section, transact has the meaning given in AS 21.97.900.
In addition to any other records requirements under this chapter, a reinsurance intermediary manager shall maintain in organized form a complete record of each transaction including (1) the type of contract, limits, underwriting restrictions, classes or risks, and territory; (2) the period of coverage, including effective and expiration dates, cancellation provisions, and required notice of cancellation; (3) disposition of outstanding reserves on covered risks; (4) the reporting and settlement requirements of balances; (5) the rate used to compute the reinsurance premium; (6) the names and addresses of reinsurers; (7) the rate of all reinsurance commissions, including the commissions on retrocessions handled by the reinsurance intermediary broker and reinsurance intermediary manager; (8) related correspondence and memoranda; (9) proof of placement; (10) details regarding retrocessions handled by the reinsurance intermediary broker and reinsurance intermediary manager including the identity of retrocessionaires and the percentage of each contract assumed or ceded; (11) financial records of premium and loss accounts; and (12) if the reinsurance intermediary broker procures a reinsurance contract on behalf of an admitted ceding insurer or when the reinsurance intermediary manager places a reinsurance contract on behalf of a ceding insurer, written evidence (A) directly from an assuming reinsurer that it has agreed to assume the risk; or (B) that the reinsurer had delegated binding authority to the representative, if placed through a representative of the assuming reinsurer other than an employee of the assuming reinsurer.
In addition to the general qualifications under AS 21.27.020, to qualify for issuance or for renewal of a resident surplus lines broker license, an applicant or licensee shall (1) be licensed as either an insurance producer or managing general agent for property and casualty lines of authority; (2) if required by the director by regulation, maintain a bond as described in AS 21.27.190 in an amount acceptable to the director that requires the surplus lines broker to conduct business under this title, promptly remit the taxes and fees required by law, return premiums promptly when due, and pay proper losses promptly; (3) if the director requires, maintain an errors and omissions insurance policy acceptable to the director.
In addition to any other records requirements under this chapter, a surplus lines broker shall maintain in organized form a complete record including (1) the amount of insurance and perils insured; (2) a complete description of property insured and the location of the property; (3) gross premium charged; (4) a return premium paid; (5) the rate of premium charged upon the several items of property; (6) the effective date of the contract and the terms of the contract; (7) the name and address of the insured; (8) the name and address of the insurer; (9) the amount of tax and other sums to be collected from the insured; (10) the allocation of taxes by state under AS 21.34.180; (11) evidence of insurance issued in compliance with AS 21.34.100; (12) the identity and license number of the producing broker; (13) any confirming correspondence from the insurer or the representative of the insurer; and (14) the application.
In addition to other action available under this title, the director may deny issuance of or not renew a license, or may suspend or revoke a license of a surplus lines broker issued under this chapter for any of the following causes: (1) removal of the resident surplus lines broker's office from this state; (2) removal of the resident surplus lines broker's accounts and records from this state during the period within which the accounts and records are required to be maintained under this chapter; (3) removal of the nonresident surplus lines broker's accounts and records required to be maintained under this chapter from the location described in the license without prior approval of the director; (4) closing of the surplus lines broker's office for a period of more than 45 calendar days, unless permission is granted by the director; (5) failure to make a required report; (6) failure to transmit a required tax or fee on a surplus line premium to this state or a reciprocal state to which a tax is owing; (7) failure to maintain a required bond.
In addition to the general qualifications under AS 21.27.020, to qualify for issuance or renewal of an independent adjuster license, an applicant or licensee shall (1) have at least six months active working experience within the previous two calendar years as either an independent adjuster trainee, an insurance producer, a managing general agent, a reinsurance intermediary broker, a reinsurance intermediary manager, a surplus lines broker, an independent adjuster, or an underwriter or claims adjuster employee of an insurer, and, in the director's opinion, exhibit the ability to competently perform the responsibilities of an independent adjuster; or (2) have been previously licensed in good standing in this state as an independent adjuster within the previous four calendar years and not have had a license suspended or revoked.
(a) An individual resident who does not have the experience with reference to the handling of loss claims but who otherwise meets the requirements of AS 21.27.830, may be employed by a licensed independent adjuster as a trainee independent adjuster, subject to the provisions of this section. (b) Before the individual may handle loss claims, the licensed independent adjuster employing the trainee independent adjuster shall submit to the director the application of the trainee independent adjuster, with the fee set under AS 21.06.250, and receive the trainee independent adjuster license. (c) The director shall revoke a trainee independent adjuster license unless the individual has (1) not later than four months after the effective date of the trainee adjuster license, complied with the independent adjuster licensing requirements of AS 21.27.060 concerning the insurance laws and regulations of this state; (2) not later than eight months after the effective date of the trainee adjuster license, complied with the independent adjuster licensing requirements of AS 21.27.060 concerning the knowledge and competence of the licensee concerning handling of loss claims and the licensee's duties and responsibilities as a licensee; and (3) within 12 months after the effective date of the trainee adjuster license, complied with all other independent adjuster licensing requirements. (d) A person whose trainee independent adjuster license was revoked for failure to meet a requirement of (c) of this section may submit a new application for a trainee independent adjuster license after the person has successfully passed both tests required under (c) of this section. (e) Upon satisfying the requirements of (c) of this section, a trainee independent adjuster shall apply within 30 days for an independent adjuster license. (f) A trainee independent adjuster shall at all times be working at the direction and under the supervision of the employing licensed independent adjuster, and the file and record documentation shall reflect the direction and supervision. The employing licensed independent adjuster and its firm, and the compliance officer, if any, are responsible for all insurance actions of the trainee independent adjuster. (g) A trainee independent adjuster is restricted to participation in a factual investigation and a tentative closing of a loss subject to review and final determination by the employing licensed independent adjuster, and file and record documentation shall reflect compliance with this subsection. (h) A trainee independent adjuster may not participate in a factual investigation and a tentative closing of a loss away from the place of business unless a licensed independent adjuster physically accompanies the trainee. (i) In addition to any other penalty provided by law, (1) a trainee independent adjuster who the director determines has violated the provisions of this section shall have its license terminated; a licensee or other person having possession or custody of the license shall within 30 days surrender the license to the director either personally or by certified mail; (2) if the director determines under AS 21.06.170 - 21.06.240 that the employing licensed independent adjuster knew of or should have known that a trainee independent adjuster violated this section, the employing licensed independent adjuster and firm, and the compliance officer, if any, are subject to the penalties provided under AS 21.27.440.
Without being required by this chapter to be licensed also as an independent adjuster (1) a licensed insurance producer and a licensed managing general agent, incidental to acting as an insurance producer, may act as an adjuster and investigate, adjust, and report upon claims on behalf of and as authorized by an admitted insurer that has appointed the insurance producer or the managing general agent as its agent under AS 21.27.100; (2) a surplus lines broker may act as an adjuster and investigate, adjust, and report upon claims on behalf of and as authorized by a nonadmitted insurer; and (3) a reinsurance intermediary broker or a reinsurance intermediary manager may act as an adjuster and investigate, adjust, and report upon claims on behalf of and as authorized by an insurer or reinsurer under the contract required by this chapter.
(a) A nonresident independent adjuster not licensed by this state who is licensed by and in good standing with its resident state may act as an adjuster and adjust a single loss in this state during a calendar year, or may act as an adjuster and adjust losses arising out of a catastrophe as declared by the director, if, within 10 days after the start of an investigation or adjustment under this section, the nonresident independent adjuster has advised the director in writing of the adjustment and provided the following information: (1) the individual and firm name; (2) the business mailing address; (3) the business physical address and phone number; (4) the licensing state of residence; (5) the resident license number; and (6) other facts that the director may require. (b) A nonresident independent adjuster may be sued upon a cause of action arising in this state arising from an adjustment under this section under the procedure provided in AS 21.33.
In addition to any other records requirements under this chapter, an independent adjuster shall maintain in organized form a complete record of each investigation or adjustment undertaken or consummated, and a statement of the fee, commission, or other compensation received or to be received by the adjuster on account of the investigation or adjustment.
(a) A person may not conduct business in the state as a pharmacy benefits manager unless the person is registered with the director as a third-party administrator under AS 21.27.630.  (b) A pharmacy benefits manager registered under AS 21.27.630 may  (1) contract with an insurer to administer or manage pharmacy benefits provided by an insurer for a covered person, including claims processing services for and audits of payments for prescription drugs and medical devices and supplies; (2) contract with network pharmacies; (3) set the cost of multi-source generic drugs under AS 21.27.945; and  (4) adjudicate appeals related to multi-source generic drug reimbursement.
(a) A pharmacy benefits manager shall biennially renew a registration with the director. (b) To renew a registration under this section, a pharmacy benefits manager shall pay a renewal fee established by the director. The director shall set the amount of the renewal fee to allow the renewal and oversight activities of the division to be self- supporting.
(a) When a pharmacy benefits manager conducts an audit of the records of a pharmacy, the period covered by the audit of a claim may not exceed two years from the date that the claim was submitted to or adjudicated by the pharmacy benefits manager, whichever is earlier. Except as required under AS 21.36.495, a claim submitted to or adjudicated by a pharmacy benefits manager does not accrue interest during the audit period.  (b) A pharmacy benefits manager conducting an on-site audit shall give the pharmacy written notice of at least 10 business days before conducting an initial audit. (c) A pharmacy benefits manager may not conduct (1) an audit during the first seven calendar days of any month unless agreed to by the pharmacy; (2) more than one on-site audit of a pharmacy within a 12-month period; or (3) on-site audits of more than 250 separate prescriptions at one pharmacy within a 12-month period unless fraud by the pharmacy or an employee of the pharmacy is alleged. (d) If an audit involves clinical or professional judgment, the individual conducting the audit must (1) be a pharmacist who is licensed and in good standing under AS 08.80; or  (2) conduct the audit in consultation with a pharmacist who is licensed and in good standing under AS 08.80.  (e) A pharmacy, in responding to an audit, may use (1) verifiable statements or records, including medication administration records of a nursing home, assisted living facility, hospital, physician, or other authorized practitioner, to validate the pharmacy record; (2) a legal prescription to validate claims in connection with prescriptions, refills, or changes in prescriptions, including medication administration records, prescriptions transmitted by facsimile, electronic prescriptions, or documented telephone calls from the prescriber or the prescriber's agent. (f) A pharmacy benefits manager shall audit each pharmacy under the same standards and parameters as other similarly situated pharmacies in a network pharmacy contract in this state.
(a) When a pharmacy benefits manager conducts an audit of a pharmacy, the pharmacy benefits manager shall base a finding of overpayment or underpayment by the pharmacy on the actual overpayment or underpayment and not on a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs, except as provided in (b) of this section. (b) A pharmacy benefits manager may resolve a finding of overpayment or underpayment by entering into a settlement agreement with the pharmacy. The settlement agreement (1) must comply with the requirements of AS 21.36.125; and (2) may be based on a statistically justifiable projection method. (c) A pharmacy benefits manager may not include the dispensing fee amount in a finding of an overpayment unless (1) a prescription was not actually dispensed; (2) the prescriber denied authorization; (3) the prescription dispensed was a medication error by the pharmacy; or (4) the identified overpayment is solely based on an extra dispensing fee.
(a) When a pharmacy benefits manager conducts an audit of a pharmacy, the pharmacy benefits manager shall base the recoupment of overpayments on the actual overpayment of the claim, except as provided in AS 21.27.915(b). (b) A pharmacy benefits manager conducting an audit of a pharmacy may not (1) use extrapolation in calculating recoupments or penalties for audits, unless required by state or federal contracts; (2) assess a charge-back, recoupment, or other penalty against a pharmacy solely because a prescription is mailed or delivered at the request of a patient; or (3) receive payment (A) based on a percentage of the amount recovered; or (B) for errors that have no actual financial harm to the patient or medical plan.
(a) A pharmacy benefits manager shall deliver a preliminary audit report to the pharmacy audited within 60 days after the conclusion of the audit. (b) A pharmacy benefits manager shall allow the pharmacy at least 30 days following receipt of the preliminary audit report to provide documentation to the pharmacy benefits manager to address a discrepancy found in the audit. A pharmacy benefits manager may grant a reasonable extension upon request by the pharmacy. (c) A pharmacy benefits manager shall deliver a final audit report to the pharmacy within 120 days after receipt of the preliminary audit report, settlement agreement, or final appeal, whichever is latest.
(a) A pharmacy benefits manager conducting an audit shall establish a written appeals process. (b) Recoupment of disputed funds or repayment of funds to the pharmacy benefits manager by the pharmacy, if permitted by contract, shall occur, to the extent demonstrated or documented in the pharmacy audit findings, after final internal disposition of the audit, including the appeals process. If the identified discrepancy for an individual audit exceeds $15,000, future payments to the pharmacy may be withheld pending finalization of the audit. (c) A pharmacy benefits manager may not assess against a pharmacy a charge- back, recoupment, or other penalty until the pharmacy benefits manager's appeals process has been exhausted and the final report or settlement agreement issued.
When a pharmacy benefits manager conducts an audit of a pharmacy, the pharmacy benefits manager may not consider unintentional clerical or record-keeping errors, including typographical errors, writer's errors, or computer errors regarding a required document or record, to be fraudulent activity. In this section, fraudulent activity means an intentional act of theft, deception, misrepresentation, or concealment committed by the pharmacy.
The requirements of AS 21.27.901 - 21.27.955 do not apply to an audit (1) in which suspected fraudulent activity or other intentional or wilful misrepresentation is evidenced by a physical review, a review of claims data, a statement, or another investigative method; or (2) of claims paid for under the medical assistance program under AS 47.07.
(a) A pharmacy benefits manager shall (1) make available to each network pharmacy at the beginning of the term of the network pharmacy's contract, and upon renewal of the contract, the methodology and sources used to determine the drug pricing list; (2) provide a telephone number at which a network pharmacy may contact an employee of a pharmacy benefits manager to discuss the pharmacy's appeal; (3) provide a process for a network pharmacy to have ready access to the list specific to that pharmacy; (4) review and update applicable list information at least once every seven business days to reflect modification of list pricing; (5) update list prices within one business day after a significant price update or modification provided by the pharmacy benefits manager's national drug database provider; and (6) ensure that dispensing fees are not included in the calculation of the list pricing. (b) When establishing a list, the pharmacy benefits manager shall use (1) the most up-to-date pricing data to calculate reimbursement to a network pharmacy for drugs subject to list prices; (2) multi-source generic drugs that are sold or marketed in the state during the list period.
(a) A pharmacy benefits manager shall establish a process by which a network pharmacy, or a network pharmacy's contracting agent, may appeal the reimbursement for a multi-source generic drug. A pharmacy benefits manager shall resolve an appeal from a network pharmacy within 10 calendar days after the network pharmacy or the contracting agent submits the appeal. (b) A network pharmacy, or a network pharmacy's contracting agent, may appeal a reimbursement from a pharmacy benefits manager for a multi-source generic drug if the reimbursement for the drug is less than the amount that the network pharmacy can purchase from two or more of its contracted suppliers. (c) A pharmacy benefits manager may grant a network pharmacy's appeal if an equivalent multi-source generic drug is not available at a price at or below the pharmacy benefits manager's list price for purchase from national or regional wholesalers who operate in the state. If an appeal is granted, the pharmacy benefits manager shall adjust the reimbursement of the network pharmacy to equal the network pharmacy acquisition cost for each paid claim included in the appeal. (d) If the pharmacy benefits manager denies a network pharmacy's appeal, the pharmacy benefits manager shall provide the network pharmacy with the (1) reason for the denial; (2) national drug code of an equivalent multi-source generic drug that has been purchased by another network pharmacy located in the state at a price that is equal to or less than the pharmacy benefits manager's list price within seven days after the network pharmacy appeals the claim; and (3) name of a pharmaceutical wholesaler who operates in the state in which the drug may be acquired by the challenging network pharmacy. (e) A network pharmacy may request a hearing under AS 21.06.170 - 21.06.240 for an adverse decision from a pharmacy benefits manager within 30 calendar days after receiving the decision. The parties may present all relevant information to the director for the director's review. (f) The director shall enter an order that (1) grants the network pharmacy's appeal and directs the pharmacy benefits manager to make an adjustment to the disputed claim; (2) denies the network pharmacy's appeal; or (3) directs other actions considered fair and equitable.
In AS 21.27.901 - 21.27.955,  (1) audit means an official examination and verification of accounts and records; (2) claim means a request from a pharmacy or pharmacist to be reimbursed for the cost of filling or refilling a prescription for a drug or for providing a medical supply or device; (3) extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, invalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, invalid claims, or other errors actually measured in a sample of claims; (4) list means the list of multi-source generic drugs for which a predetermined reimbursement amount has been established such as a maximum allowable cost or maximum allowable cost list or any other list of prices used by a pharmacy benefits manager; (5) multi-source generic drug means any covered outpatient prescription drug that the United States Food and Drug Administration has determined is pharmaceutically equivalent or bioequivalent to the originator or name brand drug and for which there are at least two drug products that are rated as therapeutically equivalent under the United States Food and Drug Administration's most recent publication of Approved Drug Products with Therapeutic Equivalence Evaluations; (6) network pharmacy means a pharmacy that provides covered health care services or supplies to an insured or a member under a contract with a network plan to act as a participating provider; (7) pharmacy has the meaning given in AS 08.80.480;  (8) pharmacy acquisition cost means the amount that a pharmaceutical wholesaler or distributor charges for a pharmaceutical product as listed on the pharmacy's invoice; (9) pharmacy benefits manager means a person that contracts with a pharmacy on behalf of an insurer to process claims or pay pharmacies for prescription drugs or medical devices and supplies or provide network management for pharmacies; (10) recoupment means the amount that a pharmacy must remit to a pharmacy benefits manager when the pharmacy benefits manager has determined that an overpayment to the pharmacy has occurred.
The legislature declares that insurance transactions with nonadmitted insurers are so affected with a public interest as to require regulation, taxation, supervision, and control of the transactions and matters relating to nonadmitted insurance as provided in this chapter in order to (1) protect the insureds and claimants of this state in transactions involving the purchase of insurance from nonadmitted insurers; (2) avoid the obstacle of resorting to distant forums for the purpose of asserting legal rights under policies issued by nonadmitted insurers; (3) provide a method of substituted service of process upon nonadmitted insurers for proceedings before the director and in the courts in this state; (4) provide for the public the ability to self-procure insurance directly from nonadmitted insurers; (5) protect the revenue of the state; (6) protect regulated, admitted insurers from unregulated and unfair competition by nonadmitted insurers; (7) regulate and supervise the effectuation of nonadmitted insurance under the laws of this state and 15 U.S.C. 1011; and (8) maintain reliable insurance markets.
(a) The transaction of insurance by an unauthorized person or nonadmitted insurer is equivalent to and constitutes an irrevocable appointment by that person or insurer, binding upon the person or insurer, the executor, administrator, or personal representative of the person or insurer, or its successor in interest if a corporation, of the director and the successors of the director in office to be the lawful attorney of that person or insurer upon whom may be served all legal process in any action, suit, or proceeding in any court arising out of a transaction of insurance in this state or relative to a subject resident, located, or to be performed in this state by that person or nonadmitted insurer, except in an action, suit, or proceeding by the director or by the state. The transaction of insurance by an unauthorized person or nonadmitted insurer is acceptance by that person or insurer that legal process so served has the same legal force and validity as personal service of process in this state upon the person or insurer, or upon the executor, administrator, or personal representative of the person or insurer, or its successor in interest if a corporation. (b) Service of process shall be made by leaving two copies in the hands or office of the director and paying to the director for the use of the state a fee set under AS 21.06.250 for each person or insurer. A certificate by the director showing the service, which shall be attached to the original or third copy of the process presented to the director for that purpose, is sufficient evidence of service. Service upon the director as attorney shall be service upon the principal. (c) The director shall immediately mail one copy of the process to the defendant at its last known principal place of business and shall keep a record of all process so served upon the director, which shall show the day and hour of service. This service of process is sufficient, provided notice of the service and a copy of the process are sent within 10 days by registered mail by the plaintiff or the attorney of the plaintiff to the defendant at the last known principal place of business of the defendant and the defendant's receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and the affidavit of the plaintiff or the attorney of the plaintiff showing compliance with this subsection are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear, or within additional time that the court may allow. (d) Service of process in an action, suit, or proceeding described in (a) of this section, in addition to the manner provided in (b) and (c) of this section, is valid if served upon a person in this state who on behalf of an unauthorized person or nonadmitted insurer is doing any transaction of insurance, and if a copy of the process is sent within 10 days by registered mail by the plaintiff or the attorney of the plaintiff to the defendant at the last known principal place of business of the defendant and the defendant's receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed and the affidavit of the plaintiff or the attorney of the plaintiff showing compliance with this subsection are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear, or within additional time that the court may allow. (e) A plaintiff or complainant is not entitled to a judgment by default in an action, suit or proceeding in which the process is served under this section unless there is compliance with the Rules of Civil Procedure governing default judgments. (f) Nothing contained in this section limits or abridges the right to serve a process, notice, or demand upon a person or insurer in any other manner now or hereafter permitted by law.
(a) The transaction of insurance by an unauthorized person or nonadmitted insurer is equivalent to and constitutes an irrevocable appointment by that person or insurer, binding upon the person or insurer, the executor, administrator, or personal representative of the person or insurer, or its successor in interest if a corporation, of the lieutenant governor and the successors in office of the lieutenant governor to be the lawful attorney of that person or insurer upon whom may be served all legal process in any action, suit, or proceeding in any court by the director or by the state and upon whom may be served any notice, order, pleading, or process in any proceeding before the director and that arises out of the transaction of insurance in this state or relative to a subject resident, located, or to be performed in this state by that person or insurer. The transaction of insurance by an unauthorized person or nonadmitted insurer is acceptance by that person or insurer that legal process in the court action, suit, or proceeding and any notice, order, pleading, or process in an administrative proceeding before the director so served has the same legal force and validity as personal service of process in this state upon the person or insurer, or upon the executor, administrator, or personal representative of that person or insurer, or its successor in interest if a corporation. (b) The service of process in the action, suit, or proceeding in any court or the notice, order, pleading, or process in the administrative proceeding authorized by (a) of this section shall be made by leaving two copies in the hands or office of the lieutenant governor. A certificate by the lieutenant governor showing the service, which shall be attached to the original or third copy of the process presented to the lieutenant governor for that purpose, is sufficient evidence of service. Service upon the lieutenant governor as attorney shall be service upon the principal. (c) The lieutenant governor shall immediately mail one copy of the court process or notice, order, pleading, or process in proceedings before the director to the defendant in the court proceeding or to whom the notice, order, pleading, or process in the administrative proceeding is addressed or directed at the last known principal place of business of the defendant and shall keep a record of all process so served that shall show the day and hour of service. The service is sufficient, provided notice of the service and a copy of the court process or the notice, order, pleading, or process in the administrative proceeding are sent within 10 days after service by registered mail by the plaintiff or the attorney of the plaintiff in the court proceeding or by the director in the administrative proceeding to the defendant in the court proceeding or by whom the notice, order, pleading, or process in the administrative proceeding is addressed or directed at its last known principal place of business of the defendant in the court or administrative proceeding, and the defendant's receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and the affidavit of the plaintiff or the attorney of the plaintiff in a court proceeding or of the director in an administrative proceeding, showing compliance are filed with the clerk of the court in which the action, suit, or proceeding is pending or with the director in administrative proceedings, on or before the date the defendant in the court or administrative proceeding is required to appear or respond, or within additional time that the court or director may allow. (d) A plaintiff or complainant may not obtain a judgment or determination by default in a court or administrative proceeding in which court process or notice, order, pleading, or process in proceedings before the director is served under this section until there is compliance with the Rules of Civil Procedure regarding default judgments. (e) This section does not limit or abridge the right to serve a process, notice, order, pleading, or demand upon a person or insurer in any other manner now or hereafter permitted by law. (f) The attorney general, upon request of the director, is authorized to proceed in the courts of this or another state or in a federal court or agency to enforce an order or decision in a court proceeding or in an administrative proceeding before the director.
(a) Before an unauthorized person or nonadmitted insurer files or causes to be filed a pleading, a court action, suit, or proceeding or a notice, order, pleading, or process in an administrative proceeding before the director instituted against the person or insurer, by service made as provided in AS 21.33.021 or 21.33.025, the person or insurer shall either (1) deposit with the clerk of the court in which the action, suit, or proceeding is pending, or with the director in administrative proceedings before the director, cash or securities or bond with an admitted insurer to be approved by the court, or the director, in an amount to be fixed by the court or the director sufficient to secure the payment of a final judgment that may be rendered in the court proceeding or in the administrative proceeding before the director; however the court, or the director in administrative proceedings before the director, may in its or the director's discretion make an order dispensing with the deposit or bond where the insurer makes a showing satisfactory to the court or the director that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy a final judgment that may be entered in the court action, suit, or proceeding or in an administrative proceeding before the director; or (2) obtain admission to transact insurance in this state through a certificate of authority issued under this title. (b) The court in an action, suit, or proceeding in which service is made as provided in AS 21.33.021 or AS 21.33.025, or the director in an administrative proceeding before the director in which service is made as provided in AS 21.33.025, may order postponement that may be necessary to afford the defendant reasonable opportunity to comply with (a) of this section and to offer a defense in the court action or administrative proceeding. (c) Nothing in (a) of this section may be construed to prevent an unauthorized person or nonadmitted insurer from filing a motion to quash a writ or to set aside service made as provided in AS 21.33.021 or 21.33.025 on the ground that the unauthorized person or insurer has not transacted insurance in this state or relative to a subject resident, located, or to be performed in this state or that the person on whom service was made under AS 21.33.021(d) was not transacting insurance in this state or relative to a subject resident, located, or to be performed in this state.
In an action against an unauthorized person or nonadmitted insurer upon a contract of insurance issued or delivered in this state to a resident or to a corporation authorized to do business in this state, if the person or insurer has failed for 30 days after demand before the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that the refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include the fee in the judgment that may be rendered in the action. Failure of the person or insurer to defend the action shall be considered prima facie evidence that its failure to make payment was vexatious and without reasonable cause.
(a) A person may not directly or indirectly act as agent for, or otherwise represent, assist, or aid on behalf of another, a nonadmitted insurer in the transaction of insurance in this state. (b) This section does not apply to (1) matters authorized to be done by the director; (2) surplus lines insurance effected and written under AS 21.34; (3) transactions for which a certificate of authority is not required under this title; (4) reinsurance; (5) the property and operations of railroads or aircraft primarily engaged in interstate or foreign commerce and wet marine and transportation insurance; (6) life insurance, health insurance, and annuity contracts when solicited solely by mail or when not solicited, negotiated, or procured in this state; (7) transactions subsequent to issuance of a policy not covering a subject resident, located, or to be performed in this state at time of issuance and lawfully solicited, written, or delivered outside this state. (c) In addition to other penalties under this title, a person who represents or aids a nonadmitted insurer in violation of this chapter is subject to the penalties provided in AS 21.33.065. This chapter does not preclude the insured from enforcing, under the terms and provisions of the contract and the laws of this state, the insured's rights under a contract entered into in violation of this chapter. (d) If the nonadmitted insurer fails to pay a claim or loss within the provisions of the insurance contract, a person who assisted or in any manner aided directly or indirectly in the procurement of the insurance contract, shall be liable to the insured for the full amount under the provisions of the insurance contract.
A nonadmitted insurer may not commence or maintain an action in law or equity in this state to enforce a right arising out of a transaction of insurance in this state except with respect to (1) claims under policies lawfully written in this state; (2) liquidation of assets and liabilities, other than the collection of new premiums, resulting from its former admitted operations in this state; (3) transactions subsequent to issuance of a policy not covering a subject resident, located, or to be performed in this state at time of issuance and lawfully solicited, written, or delivered outside this state; (4) surplus lines insurance coverage exported under AS 21.34; (5) reinsurance; (6) the continuation and servicing of life insurance, health insurance policies, or annuity contracts remaining in force as to residents of this state where the insurer has withdrawn from the state and is not transacting new insurance; (7) servicing of policies written by an admitted insurer in a state to which the insured has moved but in which the insured is not licensed, until the term of the policy expires; (8) claims under policies covering wet marine and transportation insurance, including vessels of 50 displacement tons or less.
(a) When the director has reason to believe that insurance has been effectuated by or for a person in this state with a nonadmitted insurer, the director shall in writing order the person to produce for examination all insurance contracts and other documents evidencing insurance with nonadmitted insurers and to disclose to the director the amount of insurance, name and address of each insurer, gross amount of premium paid or to be paid, the name and address of the person or persons assisting or aiding in the solicitation, negotiation, or effectuation of the insurance, and other information required by the director. (b) [Repealed,  26 ch 117 SLA 1984.]  (c) In case of a failure of any person to comply with the director's order under (a) of this section, the superior court, on application of the director, may issue an order requiring the production of the records and information sought by the director. (d) [Repealed,  60 ch 38 SLA 2002.] 
(a) Except as to premiums on lawfully procured surplus lines insurance exported under AS 21.34 and premiums on independently procured insurance on which a tax has been paid under AS 21.33.061, every nonadmitted insurer shall pay to the director, on or before March 1 following the calendar year in which the insurance was procured, continued, or renewed, a premium-receipts tax of 3.7 percent of gross premiums written for the insurance other than wet marine and transportation insurance and a premium-receipts tax of three-fourths of one percent of gross premiums charged for the wet marine and transportation insurance if the insured's home state is this state. If the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the tax payable shall be computed based on an amount equal to that portion of the gross premiums allocated under (b) of this section to this state, plus an amount equal to the portion of the premiums allocated under (b) of this section to other properties, risks, or exposures located or to be performed outside of this state. The insurance on subjects resident, located, or to be performed in this state procured through negotiations or an application, in whole or in part occurring or made in or from in or out of this state, or for which premiums in whole or in part are remitted directly or indirectly from in or out of this state, shall be considered to be insurance procured or continued or renewed in this state. The tax paid by the insurer under this section is in lieu of all insurer taxes and fire department dues. In this subsection, premium includes all premiums, membership fees, assessments, dues, and any other consideration for insurance. (b) In determining the amount of premiums taxable in this state, all premiums written, procured, or received in this state shall be considered written on property or a subject located or resident in this state, except premiums that are properly allocated or apportioned and reported as taxable premiums of another state. In determining the amount of gross premiums taxable in this state covering a subject resident, located, or to be performed both inside and outside the state, the tax due shall be computed on that portion of the policy premium that is attributable to the subject resident, located, or to be performed in this state and that relates to the kind of insurance being placed as determined by reference to an allocation schedule as follows: (1) if a policy covers more than one classification, (A) for any portion of the coverage identified by a classification on the allocation schedule, the tax shall be computed by using the allocation schedule for the corresponding portion of the premium; (B) for any portion of the coverage not identified by a classification on the allocation schedule, the tax shall be computed by using an alternative equitable method of allocation for the property or subject; (C) for any portion of the coverage where the premium is indivisible, the tax shall be computed by using the method of allocation that pertains to the classification describing the predominant coverage. (2) if the information provided is insufficient to substantiate the method of allocation used or if the director determines that the method is incorrect, the director shall determine the equitable and appropriate amount of tax due to the state as follows: (A) by use of the allocation schedule where the subject is appropriately identified in the schedule; (B) where the allocation schedule does not identify a classification appropriate to the coverage, the director may give acceptance by significant weight to documented evidence of the underwriting bases and other criteria used by the insurer or may give consideration to other available information to the extent it is sufficient and relevant, including the percentage of the insured's physical assets in this state, the percentage of the insured's sales in this state, the percentage of income or resources derived from this state, and the amount of premium tax paid to another jurisdiction for the policy. (c) This section does not apply to insurance of risks of the state or a political subdivision of the state, or to insurance of aircraft primarily engaged in interstate or foreign commerce. (d) On default of a nonadmitted insurer in the payment of the tax, the insured shall pay the tax within 30 days after written notice from the director of the default by the nonadmitted insurer. If the tax prescribed by this section is not paid by the nonadmitted insurer within the time stated or by the insured within the time stated after notice of default by the nonadmitted insurer, the tax may be increased by (1) a late payment fee of $1,000 or 10 percent of the tax due, whichever is greater; (2) interest at the rate of one percent a month or part of a month from the date the payment was originally due to the date paid; and (3) a penalty not to exceed $100 a day or 25 percent of the tax due, whichever is greater, from the date the payment was due to the date paid.
(a) Every insured who procures or causes to be procured or continues or renews insurance with a nonadmitted insurer, or an insured or self-insurer who so procures or continues excess loss, catastrophe or other insurance, upon a subject of insurance resident, located, or to be performed in this state, other than insurance lawfully procured through a surplus lines broker under AS 21.34 shall, within 30 days after the date the insurance was procured, continued, or renewed, file a report with the director in writing and in a form prescribed by the director. The report must show the name and address of the insured, name and address of the insurer, the subject of the insurance, a general description of the coverage, the amount of premium currently charged, and additional pertinent information required by the director. (b) Insurance in a nonadmitted insurer of a subject of insurance resident, located, or to be performed in this state procured through negotiations or an application, in whole or in part occurring or made in or from in or out of this state, or for which premiums in whole or in part are remitted directly or indirectly from in or out of this state, is considered to be insurance procured or continued or renewed in this state within the intent of (a) of this section. (c) If the insured's home state is this state, the insured shall pay to the director, on or before March 1 following the calendar year in which the insurance was procured, continued, or renewed, a tax of 3.7 percent of the gross premiums paid for the insurance other than wet marine and transportation insurance, less any return premiums. For wet marine and transportation insurance, if the insured's home state is this state, the insured shall pay to the director a tax of three-fourths of one percent of the gross premiums paid for the wet marine and transportation insurance. If the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the tax payable shall be computed based on an amount equal to that portion of the gross premiums allocated under (d) of this section to this state, plus an amount equal to the portion of the premiums allocated under (d) of this section to other properties, risks, or exposures located or to be performed outside of this state. In the event of cancellation and rewriting of the insurance contract, the additional premium for tax purposes is the premium in excess of the unearned premium of the cancelled insurance contract. In this subsection, premium includes all premiums, membership fees, assessments, dues, and any other consideration for insurance. (d) In determining the amount of premiums taxable in this state, all premiums written, procured, or received in this state shall be considered written on property or a subject located or resident in this state, except premiums that are properly allocated or apportioned and reported as taxable premiums of another state. In determining the amount of gross premiums taxable in this state, the tax due shall be computed on that portion of the policy premium that is attributable to a subject resident, located, or to be performed in this state and that relates to the kind of insurance being placed as determined by reference to an allocation schedule as follows: (1) if a policy covers more than one classification, (A) for any portion of the coverage identified by a classification on the allocation schedule, the tax shall be computed by using the allocation schedule for the corresponding portion of the premium; (B) for any portion of the coverage not identified by a classification on the allocation schedule, the tax shall be computed by using an alternative equitable method of allocation for the property or subject; (C) for any portion of the coverage where the premium is indivisible, the tax shall be computed by using the method of allocation that pertains to the classification describing the predominant coverage; (2) if the information provided is insufficient to substantiate the method of allocation used, or if the director determines that the method is incorrect, the director shall determine the equitable and appropriate amount of tax due to this state as follows: (A) by use of the allocation schedule where the subject is appropriately identified in the schedule; (B) where the allocation schedule does not identify a classification appropriate to the coverage, the director may give significant weight to documented evidence of the underwriting bases and other criteria used by the insurer or may give consideration to other available information to the extent sufficient and relevant, including the percentage of the insured's physical assets in this state, the percentage of the insured's sales in this state, the percentage of income or resources derived from this state, and the amount of premium tax paid to another jurisdiction for the policy. (e) [Repealed,  223 ch 67 SLA 1992.]  (f) The attorney general, upon request of the director, shall proceed in the courts of this or another state or in a federal court or agency to recover the tax not paid within the time prescribed in this section. (g) This section does not apply to insurance of risks of the state or a political subdivision of the state, to insurance of aircraft primarily engaged in interstate or foreign commerce, to life insurance, to health insurance, or to annuity contracts. (h) This section does not abrogate or modify, and may not be construed or considered to abrogate or modify, a provision of AS 21.33.037 or 21.33.042 or another provision of this chapter. (i) [Repealed,  223 ch 67 SLA 1992.]  (j) If the tax payable under (c) of this section is not paid within the time stated, the tax may be increased by (1) a late payment fee of $1,000 or 10 percent of the tax due, whichever is greater; (2) interest at the rate of one percent a month or part of a month from the date the payment was due to the date paid; and (3) a penalty not to exceed $100 a day or 25 percent of the tax due, whichever is greater, from the date the payment was due to the date paid.
The director is authorized to participate in an agreement with another state for the purposes of collecting and disbursing to the other state any premium tax collected under this chapter and payable to the other state and for receiving from the other state premium tax it has collected and is owed to this state. To the extent that another state where a portion of the properties, risks, or exposures reside has failed to enter into an agreement with this state, the director shall retain all of the net premium tax collected by this state.
(a) A person other than an insured, who in this state represents or aids a nonadmitted insurer in violation of AS 21.33.037, is subject to a civil penalty of not more than $50,000 in addition to applicable criminal penalties and other penalties prescribed in this title. (b) In addition to any other penalty provided, a person who violates a provision of this chapter is subject to a civil penalty of not more than $10,000 for the first offense and not more than $100,000 for each succeeding violation. (c) [Repealed,  223 ch 67 SLA 1992.] 
In order that the director may effectively administer this chapter, a person who has placed insurance with an unauthorized insurer shall, upon the director's order, produce for the examination of the director all policies and other documents evidencing the insurance and shall disclose to the director the amount of premiums paid or agreed to be paid for the insurance and other information required by the director. For each refusal to obey the order, in addition to any other penalties prescribed in this title, the person is subject to a civil penalty of not more than $25,000 following an appropriate hearing as provided in AS 21.06.170 - 21.06.230.
In this chapter, (1) export means to place surplus lines insurance with a nonadmitted insurer; (2) transaction of insurance means the solicitation, negotiation, procurement, effectuation, or renewal of insurance; forwarding of applications; delivery of policies or contracts; inspection of risks; fixing of rates; investigation or adjustment of claims or losses; collection or forwarding of premiums; or transaction of matters subsequent to effectuation of the contract of insurance and arising out of it; (3) unauthorized person means a person not licensed as a surplus lines broker, or not a salaried employee of the insured; (4) wet marine and transportation insurance has the meaning given in AS 21.34.900.
The legislature declares that insurance transactions with nonadmitted insurers are so affected with a public interest as to require regulation, taxation, supervision, and control of the transactions and matters relating to nonadmitted insurance. The purpose of this chapter includes (1) protection of persons seeking insurance in this state; (2) permission for surplus lines insurance to be placed with reputable and financially sound nonadmitted insurers and to be exported from this state under this chapter; (3) establishment of a system of regulation that will (A) permit orderly access to surplus lines insurance in this state; and (B) encourage admitted insurers to provide new and innovative types of insurance and make them available to consumers in this state; and (4) protection of the revenues of this state.
(a) Insurance other than reinsurance, wet marine and transportation insurance, insurance independently procured, life insurance, health insurance except as provided in AS 21.34.035, and annuity contracts may be procured through a surplus lines broker licensed under AS 21.27 from nonadmitted insurers if (1) the insurer is an eligible surplus lines insurer; (2) the full amount, kind, or class of insurance cannot be obtained from insurers who are admitted to do business in this state; (3) the producing broker has conducted and documented a diligent search among insurers who are admitted to transact business in this state and are actually writing the particular kind or class of insurance required by the client in this state; (4) the director authorizes an exception to (2) of this section by regulation or by written authorization for an individual placement upon written request by the broker; and (5) all other requirements of this chapter are met. (b) If a policyholder meets the standards of an exempt commercial purchaser under this title and regulations adopted by the director, insurance may be procured from a surplus lines broker without complying with (a)(2), (3), and (4) of this section if (1) the broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that the insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight; and (2) the exempt commercial purchaser has subsequently requested in writing that the broker procure or place the insurance from a nonadmitted insurer. (c) In this section, (1) amount means limit, sublimit, retention, and broadening or restrictive endorsement; (2) class means rating class; (3) kind means one or more kinds of insurance as defined in AS 21.12.
Subscription policies or joint underwriting of insurance other than reinsurance, wet marine and transportation insurance, insurance independently procured, life insurance, health insurance, and annuity contracts by a combination of authorized insurers and nonadmitted insurers is a surplus lines insurance placement in its entirety, is subject to this chapter, is not subject to AS 21.39, AS 21.42.120, or 21.42.130, and losses or claims are not covered by AS 21.80 (Alaska Insurance Guaranty Association Act).
(a) Workers' compensation insurance may be placed in and written by a nonadmitted insurer if (1) the director considers it in the best interest of the public and issues an order to that effect; (2) the insurance is written in accordance with this chapter; and (3) all conditions established for writing workers' compensation insurance in a nonadmitted market receive compliance. (b) The rates and rating plans for workers' compensation insurance are subject to AS 21.39. The surplus lines broker is responsible for making the filings required under AS 21.39 and for maintaining the records required in that chapter. (c) Insurance placed or written in a nonadmitted insurer and the activities of the surplus lines broker relating to that transaction are subject to the applicable provision of this title. (d) The minimum capital and surplus required is two times that required in AS 21.34.040(c)(1).
(a) Except for a multiple employer welfare arrangement, health care insurance may be placed in and written by a nonadmitted insurer if (1) the director finds it is in the best interest of the public and issues an order to that effect; and (2) the insurance is in compliance with this chapter. (b) The rates and rating methods for health care insurance placed and written under this section are subject to AS 21.51.405 and AS 21.54.015. The surplus lines broker shall make the filings required under AS 21.51.405 and AS 21.54.015 and maintain the records and accounts as required under AS 21.87.230. (c) Health care insurance may not be procured under this chapter (1) for the purpose of obtaining a lower premium rate than acceptable by an authorized insurer; or (2) for obtaining a competitive advantage. (d) Insurance placed in or written by a nonadmitted insurer and the activities of the surplus lines broker relating to that transaction are subject to this title. (e) In this section, health care insurance has the meaning given in AS 21.12.050(b).
(a) Coverage may be placed in a nonadmitted insurer by a surplus lines broker only if (1) at the time of placement, the nonadmitted insurer meets all the requirements of this section; and (2) the surplus lines broker is licensed under AS 21.27. (b) The nonadmitted insurer must establish satisfactory evidence of good repute and financial integrity to be eligible. (c) A nonadmitted insurer may be eligible to provide coverage in this state if it qualifies under one of the following: (1) a foreign but nonalien stock insurer may qualify under this subsection if it has the minimum unimpaired basic capital and additional surplus equal to that required in its domiciliary jurisdiction, or maintains $15,000,000, whichever is greater; (2) a foreign but nonalien mutual insurer, a reciprocal insurer, or a mutual protection and indemnity association may qualify under this subsection if it has the minimum unimpaired basic surplus and additional surplus equal to that required in its domiciliary jurisdiction or maintains $15,000,000, whichever is greater; (3) an alien insurer other than an alien mutual protection and indemnity association may qualify under this subsection if it meets the minimum requirements in (1) or (2) of this subsection and maintains in the United States an irrevocable trust fund in an amount not less than $2,500,000 in a solvent federally insured bank acceptable to the director, as security to the full amount, for the protection of all its policyholders and creditors of each member of the mutual insurer, reciprocal insurer, or mutual protection and indemnity association in the United States; the trust fund must consist of instruments of substantially the same character and quality as those that are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this state or of irrevocable, clean, and unconditional letters of credit; the trust fund must have an expiration date that at no time is less than five years; (4) a Lloyd's syndicate or an insurer belonging to a similar group, including incorporated and individual unincorporated insurers, may qualify if it maintains a trust fund jointly and severally with the other members of the group in an amount not less than $50,000,000, as security to the full amount, for the protection of all policyholders and creditors of each member of the group in the United States; the incorporated members may not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of solvency regulation and control by the group's domiciliary regulator as are the unincorporated members; the trust fund must consist of instruments of substantially the same character and quality as those that are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this state or of irrevocable, clean, and unconditional letters of credit; the trust fund must have an expiration date that at no time is less than five years; (5) each syndicate or insurer belonging to an insurance exchange created by the laws of individual states may qualify if the insurance exchange maintains capital and surplus, or the substantial equivalent, of not less than $50,000,000 in the aggregate; for insurance exchanges that maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall maintain minimum capital and surplus, or the substantial equivalent, of not less than $3,000,000; in the event the insurance exchange does not maintain funds for the protection of all its policyholders, each individual syndicate shall meet the minimum requirements of (1) or (2) of this subsection; (6) an alien mutual protection and indemnity association may qualify under this subsection if it has the minimum unimpaired basic capital and additional surplus equal to that required in its domiciliary jurisdiction or $10,000,000, whichever is greater, and maintains in the United States an irrevocable trust fund in an amount not less than $1,000,000 in a federally insured bank acceptable to the director, as security to the full amount, for the protection of all its policyholders and creditors or each member of the mutual protection and indemnity association in the United States; the trust fund must consist of instruments of substantially the same character and quality as those that are eligible investments for the capital and statutory reserves of admitted insurers authorized to write wet marine and transportation insurance in this state or of irrevocable, clean, and unconditional letters of credit; the trust fund must have an expiration date that at no time is less than five years; (7) an insurer not domiciled in the United States or its territories qualifies under this subsection if it is listed on the Quarterly Listing of Alien Insurers maintained by the National Association of Insurance Commissioners International Insurers Department. (d) A nonadmitted insurer may be eligible to provide coverage in this state if it files with the director or the director's designee a copy of its current annual financial statement that has been certified by the insurer. The financial statement must be filed with and approved by the regulatory authority in the domicile of the nonadmitted insurer, or certified by an accounting or auditing firm licensed in the jurisdiction of the insurer's domicile. A foreign insurer shall provide the approved or certified financial statement not more than six months after the close of the reporting period. An alien insurer shall provide the approved or certified financial statement not more than nine months after the close of the reporting period. In the case of an insurance exchange, the statement may be an aggregate combined statement of all underwriting syndicates operating during the period reported upon. (e) The capital and surplus requirements of this section shall be calculated based upon generally accepted accounting practices used in the United States of America. (f) If an insurer has less than the minimum capital and surplus required in (c) of this section, the insurer may satisfy the requirements of this section upon an affirmative finding of acceptability by the director. The director's finding must be based on factors including quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. The director may not make an affirmative finding of acceptability when the nonadmitted insurer's capital and surplus is less than $4,500,000. (g) The director may participate in interstate agreements formed for the purpose of developing additional and alternative nationwide uniform eligibility requirements that are applicable to nonadmitted insurers domiciled in another state or territory of the United States.
(a) In addition to meeting the requirements of AS 21.34.040, a nonadmitted insurer shall be considered an eligible surplus lines insurer if it appears on the most recent list of eligible surplus lines insurers published by the director. The list is to be published at least semiannually by (1) posting the list on the division's Internet website; and (2) providing a copy of the list to a person on request to the division. (b) Nothing in this section requires the director to place or maintain the name of a nonadmitted insurer on the list of eligible surplus lines insurers. (c) A nonadmitted insurer shall be removed from the list of eligible surplus lines insurers if the nonadmitted insurer fails to meet the requirement under AS 21.34.040(d). However, the director may reinstate a nonadmitted insurer on the list of eligible surplus lines insurers if the nonadmitted insurer has remedied the reason for removal from the list.
Only that portion of a risk eligible for export for which the full amount of coverage is not procurable from eligible surplus lines insurers may be placed with another nonadmitted insurer that does not appear on the list of eligible surplus lines insurers published under AS 21.34.050 but nonetheless meets the requirements of AS 21.34.040 and a regulation adopted under this chapter. The surplus lines broker seeking to provide coverage through an unlisted nonadmitted insurer shall within 30 days after placing the coverage notify the director in writing on a form prescribed by the director the amount and percentage of each risk to be placed and naming each nonadmitted insurer with which placements are intended. Within 30 days after placing the coverage, the surplus lines broker shall also send written notice to the insured and the producing broker that the insurance, or a portion of it, has been placed with the unlisted nonadmitted insurer.
(a) If after a review of a nonadmitted insurer and consideration of factors including quality of management, capital and surplus of a parent company, underwriting profit, investment income trends, trade practices, reserving practices, company record, and reputation within the industry, the director finds the insurer to be unacceptable, the director may declare the nonadmitted insurer to be ineligible. (b) The director may issue an order declaring a nonadmitted insurer ineligible if at any time the director has reason to believe that the nonadmitted insurer (1) is in unsound financial condition; (2) is no longer eligible under AS 21.34.040; (3) has wilfully violated the laws of this state or another state; or (4) does not reasonably investigate and make prompt payment of just losses and claims in this state or another state. (c) The director shall promptly mail notice of all declarations under (b) of this section to each licensed surplus lines broker.
(a) A surplus lines broker shall execute and file with the report required by AS 21.34.170 a written report, which shall be kept confidential, regarding each surplus lines insurance transaction occurring in the preceding period. The report must include (1) the name and address of the insured; (2) the identity of each insurer including the National Association of Insurance Commissioners company number and the percentage of coverage provided by each; (3) a complete description of the subject and location of the risk; (4) the amount of gross premium written for the insurance; and (5) other information required by the director. (b) Instead of the report required in (a) of this section, the director may order that evidence of insurance be filed with the surplus lines association and that the surplus lines association provide periodic reports regarding insurance transactions to the director. (c) [Repealed,  53 ch 96 SLA 2004.]  (d) A transaction, as used in this section, is any placement of coverage as well as changes in coverage that result in an increase or decrease of premiums, taxes, or fees.
(a) A surplus lines association of surplus lines brokers may be formed to (1) facilitate and encourage compliance by its members with the laws of this state and the regulations relative to surplus lines insurance; (2) attend National Association of Insurance Commissioners meetings and participate in task forces and work groups; (3) communicate with organizations of admitted insurers with respect to the proper use of the surplus lines market; (4) receive and disseminate to its members information relative to surplus lines coverages; and (5) contract with the director to receive reports and affidavits under AS 21.34.080, verify that coverage has been placed with eligible surplus lines insurers, verify the amount of taxes under AS 21.34.180 and fees under AS 21.34.190 for surplus lines insurance for each surplus lines broker, and to prepare periodic reports as required by the director. (b) The surplus lines association shall file with the director (1) a copy of its constitution, its articles of agreement of association, or its certificate of incorporation; (2) a copy of its bylaws and regulations governing its activities; (3) a current list of its members; (4) the name of a resident of this state upon whom notices or orders of the director or processes issued at the director's instruction may be served; (5) an agreement that the director may examine the surplus lines association in accordance with this section; and (6) a schedule of its membership fees and assessments. (c) A surplus lines association is subject to the same penalties under this title as a surplus lines broker. (d) The director may, by order, require that all surplus lines brokers, as a condition of continued licensure under this chapter, join the surplus lines association. (e) The surplus lines association shall maintain its place of business in this state.
(a) When surplus lines insurance is placed, the surplus lines broker shall promptly deliver to the named insured or the producing broker the policy or, if the policy is not then available, a cover note, binder, or other evidence of insurance. The cover note, binder, or other evidence of insurance for the named insured shall be executed by the surplus lines broker and must contain a summary of all material facts that would regularly be included in the policy, the description and location of the subject of insurance, a general description of the coverages of the insurance, the premium and rate charged and taxes to be collected from the insured, the name and address of the insured, the name of each surplus lines insurer and the percentage of the entire risk assumed by each, the name of the surplus lines broker, and the license number of the surplus lines broker. (b) A surplus lines broker may not issue or deliver evidence of insurance or purport to insure or represent that insurance will be or has been written by an eligible surplus lines insurer, or a nonadmitted insurer under AS 21.34.060, unless the surplus lines broker has authority from the insurer to cause the risk to be insured or has received information from the insurer in the regular course of business that the insurance has been granted. (c) If, after delivery of evidence of insurance, there is a change in the identity of the insurers or the percentage of the risk assumed by an insurer or another material change in coverage from that stated in the surplus lines broker's original evidence of insurance or in other material concerning the evidenced insurance, the surplus lines broker shall promptly issue and deliver to the insured or the producing broker an appropriate substitute for or endorsement of the original document, accurately showing the current status of the coverage and the insurer's responsibility. (d) A surplus lines broker who fails to comply with this section is subject to the penalties in AS 21.34.230. (e) Every evidence of insurance negotiated, placed, or procured under this chapter issued by a surplus lines broker must bear the name of the surplus lines broker, which may not be covered, concealed, or obscured by the producing broker, and the following legend in at least 10-point type: This is evidence of insurance procured and developed under the Alaska Surplus Lines Law, AS 21.34. It is not covered by the Alaska Insurance Guaranty Association Act, AS 21.80. (f) A producing broker or other licensee may issue to a person, other than the named insured, a certificate as evidence of insurance negotiated, placed, or procured under this chapter. The certificate must bear the name of the surplus lines broker, which may not be covered, concealed, or obscured by the producing broker, and the following legend in at least 10-point type: This is evidence of insurance procured and developed under the Alaska Surplus Lines Law, AS 21.34. It is not covered by the Alaska Insurance Guaranty Association Act, AS 21.80.
(a) A contract of insurance placed by a surplus lines broker under this chapter is not binding upon the insured and a premium charged is not due and payable until (1) the surplus lines broker has notified the insured in writing, a copy of which shall be maintained by the surplus lines broker with the records of the contract, available for examination, that the insurer with whom the surplus lines broker places the insurance does not hold a certificate of authority issued by this state and is not subject to its supervision, and, in the event of the insolvency of the surplus lines insurer, losses will not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act); or (2) the producing broker has notified the insured and the surplus lines broker in writing, a copy of which shall be maintained by the producing broker and the surplus lines broker with the records of the contract, available for examination, that the insurer with whom the surplus lines is placed does not hold a certificate of authority issued by this state and is not subject to this state's supervision, and, in the event of the insolvency of the surplus lines insurer, losses will not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act). (b) Nothing in this section may be construed as nullifying an agreement by an insurer to provide insurance.
Insurance contracts procured under this chapter shall be valid and enforceable as to all parties.
A payment of premium to a surplus lines broker acting for a person other than itself in negotiating, continuing, or reviewing a policy of insurance under this chapter, is considered to be payment to the insurer, notwithstanding conditions or stipulations in the policy or contract to the contrary.
A surplus lines broker licensed by this state may originate surplus lines insurance or accept surplus lines insurance from another surplus lines broker licensed by this state or a producing broker licensed by this state as to the kind and class of insurance involved. The surplus lines broker may compensate the producing broker or surplus lines broker for the insurance.
(a) A surplus lines broker shall file with the director, on forms prescribed by the director, a report of all surplus lines insurance, by type of insurance as required to be reported in the annual statement that must be filed with the director by admitted insurers. The report must include all surplus lines insurance transactions during the preceding period showing the aggregate gross premiums written, the aggregate return premiums, the amount of aggregate tax remitted to this state, and the amount of aggregate tax remitted to each other state for which an allocation is made under AS 21.34.180. The forms shall be filed quarterly on March 1, June 1, September 1, and December 1 of each year. (b) Instead of the report required under (a) of this section, the director may order that evidence of insurance be filed with surplus lines association and that the association file periodic reports regarding insurance transactions to the director. (c) The surplus lines broker shall pay a penalty for late filing of the report, according to the rate established in regulations adopted by the director.
(a) In addition to collecting the full amount of gross premiums written by an insurer for surplus lines insurance, the surplus lines broker shall collect and pay to the director a tax of 2.7 percent on the net premium, which is the total gross premiums written, less any return premiums, for the insurance. Where the home state of the insured is this state and the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the tax payable shall be computed based on an amount equal to 2.7 percent on that portion of the net premiums allocated under (f) of this section to this state, plus an amount equal to the portion of the premiums allocated under (f) of this section to other states or territories based on the tax rates and fees applicable to other properties, risks, or exposures located or to be performed outside of this state. (b) The surplus lines broker may not absorb the tax or any part of it and may not rebate, for any reason, any part of the tax. (c) If, under AS 21.09.210, an admitted insurer is required to collect and pay premium tax on a portion of a subscription policy, the surplus lines broker is not required to collect any amount that would constitute double taxation of that portion of the insurance. (d) The director may participate in an agreement with another state formed for the purpose of collecting and disbursing to a remitting state any funds collected under (a) of this section applicable to other properties, risks, or exposures located or to be performed outside of this state. To the extent that another state where a portion of the properties, risks, or exposures resides has failed to enter into an agreement with this state, the director shall retain all of the net premium tax collected by this state. (e) At the time of filing the quarterly report as set out in AS 21.34.170, each surplus lines broker shall pay the premium tax due for transactions occurring during the period covered by the report. The tax must be paid by electronic or other means as specified by the director. (f) In determining the amount of premiums taxable in this state, all premiums written, procured, or received in this state shall be considered written on properties, risks, or exposures located or to be performed in this state except premiums that are properly allocated or apportioned and reported as taxable premiums of a remitting state. Allocation of the amount of premiums taxable for surplus lines insurance covering properties, risks, or exposures only partially located or to be performed in this state shall be determined by reference to an allocation schedule established by regulation adopted by the director subject to the following: (1) if a policy covers more than one classification, the following apply: (A) for any portion of the coverage identified by a classification on the allocation schedule, the tax shall be computed by using the allocation schedule for the corresponding portion of the premium; (B) for any portion of the coverage not identified by a classification on the allocation schedule, the tax shall be computed by using an alternative equitable method of allocation for the property or risk; (C) for any portion of the coverage where the premium is indivisible, the tax shall be computed by using the method of allocation that pertains to the classification describing the predominant coverage; (2) if the information provided by the surplus lines broker is insufficient to substantiate the method of allocation used by the surplus lines broker, or if the director determines that the broker's method is incorrect, the director shall determine the equitable and appropriate amount of tax due to this state as follows: (A) by use of the allocation schedule if the risk is appropriately identified in the schedule; (B) if the allocation schedule does not identify a classification appropriate to the coverage, the director may give significant weight to documented evidence of the underwriting bases and other rating criteria used by the insurer; the director may also consider other available information to the extent sufficient and relevant, including the percentage of the insured's physical assets in this state, the percentage of the insured's sales in this state, the percentage of income or resources derived from this state, and the amount of premium tax paid to another jurisdiction for the policy. (g) If the amount of tax due under (a) of this section is less than $50 in any jurisdiction, the tax must be paid in the jurisdiction in which the reports and summary of exported business are filed. (h) The director shall, at least annually, furnish to the commissioner of a remitting state a copy of all filings reporting an allocation of taxes required by this section. (i) This section does not apply to insurance of risks of state government or its political subdivisions, to an agency of state government or its political subdivisions, or to insurance of aircraft primarily engaged in interstate or foreign commerce. (j) A surplus lines broker shall pay to the division a late payment fee of $50 a month plus five percent of the tax due each calendar month or part of a month during which the broker fails to pay the full amount of the tax or a portion of the tax and interest at the rate of one percent of the tax due each calendar month or part of a month for the period the broker fails to pay the tax. The late payment fee, not including interest, may not exceed $250 plus 25 percent of the tax due. The tax payment shall be made in the form required by the director, or a penalty shall be added to the tax equal to 25 percent of the tax due, not to exceed $2,000, with a minimum penalty of $100. In addition to any other penalty provided by law, if the provisions of this section are wilfully violated, a civil penalty may be assessed of not more than $10,000. The director may suspend or revoke the license of a broker that fails to pay its taxes, a penalty, or a late payment fee required under this section.
(a) The fee for filing the statement under AS 21.34.180(e) is an amount equal to one percent on gross premium charged less any return premiums as reported on the statement. The surplus lines broker shall pay the fee at the time of filing of the statement. (b) If the filing fee is not paid when due, an additional late payment fee of $250 plus two percent of the fee due per month, or part of a month, shall become due and payable by the surplus lines broker.
(a) If the tax collectible under AS 21.34.180 or the fee collectible under AS 21.34.190 by a surplus lines broker is not paid within the time prescribed, the tax, fee, or both, and late payment fees, along with appropriate penalties, may be collected by distraint or by an action in court, against the surplus lines licensee and the surety on the bond filed under AS 21.27.790. (b) [Repealed,  223 ch 67 SLA 1992.]  (c) In addition to penalties provided in this chapter, failure to pay tax within the time prescribed is subject to penalties provided in AS 21.36.910.
(a) A surplus lines insurer may be sued upon a cause of action arising in this state under a surplus lines insurance contract made by it or evidence of insurance issued or delivered by the surplus lines broker under the procedure provided in AS 21.33. A policy issued by the surplus lines broker shall contain a provision stating the substance of this section and designating the person to whom the director shall mail process. (b) Each surplus lines insurer assuming a surplus lines risk is considered to have subjected itself to this chapter. (c) The remedies provided in this section are in addition to other methods provided by law for service of process upon insurers.
(a) In addition to any other penalty provided by law, a person that the director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to (1) a civil penalty equal to the compensation promised, paid or to be paid, directly or indirectly, to a licensee in regard to each violation; and (2) either a civil penalty of not more than $10,000 for each violation or a civil penalty of not more than $25,000 for each violation if the director determines that the person wilfully violated the provisions of this chapter. (b) A violation of this chapter is cause for denial, nonrenewal, suspension, or revocation of a license.
If any provision of this chapter, or the application of a provision of this chapter to any person or circumstance, is held invalid, the remainder of the chapter and the application of that provision to persons or circumstances, other than those as to which it is held invalid, shall not be affected.
The director may adopt regulations to implement, define, and enforce the provisions of this chapter.
In this chapter, (1) affiliate or affiliated means, with respect to an insured, any entity that controls, is controlled by, or is under common control with the insured; (2) affiliated group means any group of entities that are all affiliated; (3) capital means money paid in for stock or other evidence of ownership; (4) control means, for purposes of an entity having control over another entity, (A) the entity, directly or indirectly or acting through one or more other persons, owns, controls, or has the power to vote 25 percent or more of any class of voting securities of the other entity; or (B) the entity controls, in any manner, the election of a majority of the directors or trustees of the other entity; (5) eligible surplus lines insurer means a nonadmitted insurer with which a surplus lines broker may place surplus lines insurance under AS 21.34.040; (6) exempt commercial purchaser has the meaning given under 15 U.S.C. 8206 (Nonadmitted and Reinsurance Reform Act of 2010); (7) export means to place surplus lines insurance with a nonadmitted insurer; (8) home state, for purposes of determining the home state of an insured in a multistate placement of nonadmitted insurance, is defined as follows: (A) except as provided in (B) of this paragraph, home state means, with respect to an insured, (i) the state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or (ii) if 100 percent of the insured risk is located out of the state referred to in (i) of this subparagraph, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated; (B) if two or more insureds from an affiliated group are named insureds on a single policy, home state under (A) of this paragraph is based on the member of the affiliated group that has the largest percentage of premium attributed to it under the insurance contract; (C) for purposes of (A) of this paragraph, the principal place of business of an insured is the state where the insured maintains its headquarters and where the insured's high-level officers direct control and coordinate the business activities of the insured; (9) kind of insurance means one of the kinds of insurance defined in AS 21.12.040 - 21.12.110; (10) producing broker means the insurance producer or surplus lines broker licensed under AS 21.27 dealing directly with the client seeking insurance; (11) reciprocal state means a state that the director has determined has enacted provisions substantially similar to those contained in AS 21.34.170 and 21.34.180; (12) remitting state means a state that has entered into an agreement with this state for remitting to this state any premium tax collected by the other state on premiums allocated to properties, risks, or exposures located in this state; (13) surplus, as used in the financial requirements of AS 21.34.040, means money over and above liabilities and capital of the insurer for the protection of policyholders; (14) transaction of insurance means the solicitation, negotiation, procurement, effectuation, or renewal of insurance; forwarding of applications; delivery of policies or contracts; inspection of risks; fixing of rates; investigation or adjustment of claims or losses; collection or forwarding of premiums; or transaction of matters subsequent to effectuation of the contract of insurance and arising out of it; (15) wet marine and transportation insurance means one or more of the following: (A) insurance upon, of interest in, or relating to vessels, crafts, hulls, except vessels of 50 displacement tons or less; (B) insurance of marine builders risks, marine war risks, and contracts of marine protection and indemnity insurance; (C) insurance of freight and disbursements pertaining to a subject of insurance coming within this paragraph; or (D) insurance of personal property and interests in personal property, in course of exportation from or importation into a country or in the course of coastal or inland water transportation, including transportation by land, water, or air from point of origin to final destination in connection with any and all risks or perils of navigation, transit, or transportation, and while being repaired for and while awaiting shipment, and during any delays, transshipment, or reshipment incident to them.
The purpose of this chapter is to regulate an act or a trade practice in the business of insurance in accordance with the intent of Congress as expressed in 15 U.S.C. 1011 - 1015 (McCarran-Ferguson Act) by defining or providing for determination of all the practices in this state that constitute an unfair method of competition or an unfair or deceptive act or practice and by prohibiting them.
A person may not engage in an act or a trade practice in this state or relative to a subject resident, located, or to be performed in this state that is defined in this chapter as, or determined under this chapter to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.
(a) A person may not violate the applicable provisions of AS 21.56.180. (b) A person may not sell a membership in an association or labor union for the purpose of qualifying an individual for group insurance. (c) A person that sells a membership in an association may not offer group insurance for purposes of selling membership in an association or labor union.
(a) A person may not make, issue, circulate, broadcast, or have made, issued, circulated, or broadcast an estimate, circular, statement, illustration, comparison, assertion, or other written, electronic, or oral presentation that (1) misrepresents the benefits, advantages, conditions, sponsorship, source, or terms of an insurance policy or a health discount plan; (2) misrepresents the dividends or share of the surplus to be received on an insurance policy; (3) misrepresents an insurance policy as being a share or shares of stock; (4) makes a false or misleading statement as to the dividends or shares of the surplus previously paid on an insurance policy; (5) misrepresents or makes a misleading statement as to the financial condition of an insurer or as to the legal reserve system upon which a life insurer operates; (6) uses a name or title of an insurance policy or class of insurance policies misrepresenting its true nature; (7) is a misrepresentation for the purpose of inducing, or that tends to induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy; (8) is a misrepresentation for the purpose of effecting or tending to effect a pledge or assignment of or loan against an insurance policy; (9) appears to be an actual policy for a named individual when it is merely an advertisement; (10) does not clearly designate the name of the insurer providing the coverage or about which the statements are made; (11) is in any other way misleading, false, or deceptive; (12) misrepresents a health discount plan as a form or type of insurance; (13) describes a health discount plan using common insurance terminology; or (14) misrepresents that a health discount plan is underwritten by or associated with an insurer. (b) In this section, misrepresentation includes any statement or omission of a statement that when taken in the context of the whole presentation may tend to mislead or deceive the person or persons addressed.
A person may not make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over a radio or television station, or in any other way, an advertisement, announcement, or statement containing an assertion, representation, or statement with respect to the business of insurance or with respect to a person in the conduct of the person's insurance business, that is untrue, deceptive, or misleading.
A person may not make or issue, or cause to be made or issued, a written or oral statement misrepresenting or making incomplete comparisons as to the terms, conditions, or benefits contained in a policy for the purpose of inducing or attempting or tending to induce the policyholder to lapse, forfeit, surrender, retain, exchange, or convert an insurance policy.
(a) A person may not knowingly file with a public official, or knowingly make, publish, disseminate, circulate, or deliver to a person, or place before the public, or knowingly cause, directly or indirectly, to be made, published, disseminated, circulated, delivered to a person, or placed before the public, a false statement of the financial condition of a person in the insurance business. (b) A person may not make a false entry in a book, report, or statement of a person in the insurance business, knowing it to be a false entry, or knowingly omit to make a true entry of a material fact pertaining to the business of a person in the insurance business in a book, report, or statement. (c) A person may not, directly or indirectly, in connection with an audit, review, or communication required under AS 21.09.200, (1) make or cause to be made a materially false or misleading statement to an accountant; or (2) omit to state or cause another person to omit to state any material fact necessary in order to make other statements made not misleading to an accountant. (d) A person may not, directly or indirectly, take any action to coerce, manipulate, mislead, or fraudulently influence any accountant engaged in the performance of an audit under AS 21.09.200 if that person knew or should have known that the action, if successful, could result in rendering the insurer's financial statement materially misleading.
(a) A person may not make, publish, disseminate, or circulate, directly or indirectly, or aid, abet, or encourage the making, publishing, disseminating, or circulating of an oral or written statement or a pamphlet, circular, article, or literature that is false, or maliciously critical of or derogatory to the financial condition of a person in the insurance business or proposing to enter the insurance business and that is calculated to injure a person engaged or proposing to engage in the business of insurance. (b) A person providing the director with information concerning the financial condition or an act or a practice of a licensee of the division is immune from liability for defamation.
A person may not enter into an agreement to commit, or by any concerted action commit, an act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.
(a) A person may not make or permit unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for a contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contract. (b) A person may not make or permit unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for a policy or contract of health insurance or in the benefits payable, or in any of the terms or conditions of the contract, or in any other manner whatever. (c) A person may not make or permit arbitrary or unfair discrimination between insureds or property having like insuring or risk characteristics, in the premium or rates charged for a policy or contract of property, casualty, surety, marine, wet marine or transportation insurance, or in the dividends or other benefits payable on the insurance, or in the selection of it, or in any other of the terms and conditions of the insurance. (d) Except to the extent necessary to comply with AS 21.42.365 and AS 21.56, a person may not practice or permit unfair discrimination against a person who provides a service covered under a group health insurance policy that extends coverage on an expense incurred basis, or under a group service or indemnity type contract issued by a health maintenance organization or a nonprofit corporation, if the service is within the scope of the provider's occupational license. In this subsection, provider means a state licensed physician, physician assistant, dentist, osteopath, optometrist, chiropractor, advanced practice registered nurse, pharmacist, naturopath, physical therapist, occupational therapist, marital and family therapist, psychologist, psychological associate, licensed clinical social worker, licensed professional counselor, certified direct-entry midwife, or dental hygienist holding an advanced practice permit.
An insurer may not deny a claim if a risk, hazard, or contingency insured against is the dominant cause of a loss and the denial occurs because an excluded risk, hazard, or contingency is also in a chain of causes but operates on a secondary basis.
Except as otherwise expressly provided by law, a person may not knowingly permit or offer to make or make a contract of life insurance, life annuity or health insurance, or agreement under the contract other than as plainly expressed in the contract, or pay, allow, give or offer to pay, allow, or give, directly or indirectly, as inducement to the insurance, or annuity, a rebate of premiums payable on the contract, or a special favor or advantage in the dividends or other benefits, or paid employment or contract for services of any kind, or any valuable consideration or inducement whatever not specified in the contract; or directly or indirectly give, sell, purchase or offer to agree to give, sell, purchase, or allow as inducement to the insurance or annuity or in connection therewith, whether or not to be specified in the policy or contract, an agreement of any form or nature promising returns, profits, stocks, bonds, or other securities, or interest present or contingent in the contract or as measured by the contract, of an insurance company or other corporation, association, or partnership, or dividends or profits accrued or to accrue under the contract; or offer, promise, or give anything of value that is not specified in the contract.
Nothing in AS 21.36.090, 21.36.100, and AS 21.54.100 may be construed as including within the definition of discrimination or rebates any of the following practices: (1) in the case of a contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, if the bonuses or abatement of premiums is fair and equitable to policyholders and for the best interests of the insurer; (2) in the case of a life insurance policy issued on industrial debit, preauthorized check, bank draft, or similar plans, making allowance to policyholders who have made premium payments directly to an office of the insurer or by preauthorized debit, check, bank draft, or similar plan, in an amount that fairly represents the saving in collection expense; (3) readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or a subsequent policy year of insurance thereunder, which may be made retroactive only for that policy year; (4) issuance of life or health insurance policies or annuity contracts at rates less than the usual rates of premiums for the policies or contracts, or modification of premium or rate based on amount of insurance; but the issuance or modification may not result in reduction in premium or rate in excess of savings in administration and issuance expenses reasonably attributable to the policies or contracts; (5) a reward under a wellness program established under a health care plan that favors an individual if the wellness program meets the following requirements: (A) the wellness program is reasonably designed to promote health or prevent disease; (B) an individual has an opportunity to qualify for the reward at least once a year; (C) the reward is available for all similarly situated individuals; (D) the wellness program has alternative standards for individuals who are unable to obtain the reward because of a health factor; (E) alternative standards are available for an individual who is unable to participate in a reward program because of a health condition; (F) the insurer provides information explaining the standard for achieving the reward and discloses the alternative standards; and (G) the total rewards for all wellness programs under the health insurance policy do not exceed 20 percent of the cost of coverage.
(a) A property, casualty, or surety insurer or its employee or representative, or an agent, or solicitor may not pay, allow, give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance or after insurance has been effected, a rebate, discount, abatement, credit, or reduction of the premium named in the policy of insurance, or a special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement, not specified in the policy, except to the extent provided for in an applicable filing with the director as provided by law. (b) An insured named in a policy, or an employee of the insured may not knowingly receive or accept directly or indirectly, a rebate, discount, abatement, credit, or reduction of premium, or special favor or advantage or valuable consideration or inducement. (c) An insurer may not make or permit an unfair discrimination between insureds or property having like insuring or risk characteristics, in the premium or rates charged for insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the insurance. (d) Nothing in this section may be construed as prohibiting the payment of commissions or other compensation to persons duly transacting business under AS 21.27, or as prohibiting an insurer from allowing or returning to its participating policyholders, members, or subscribers, lawful dividends, savings, or unabsorbed premium deposits.
(a) A person may not commit any of the following acts or practices: (1) misrepresent facts or policy provisions relating to coverage of an insurance policy; (2) fail to acknowledge and act promptly upon communications regarding a claim arising under an insurance policy; (3) fail to adopt and implement reasonable standards for prompt investigation of claims; (4) refuse to pay a claim without a reasonable investigation of all of the available information and an explanation of the basis for denial of the claim or for an offer of compromise settlement; (5) fail to affirm or deny coverage of claims within a reasonable time of the completion of proof-of-loss statements; (6) fail to attempt in good faith to make prompt and equitable settlement of claims in which liability is reasonably clear; (7) engage in a pattern or practice of compelling insureds to litigate for recovery of amounts due under insurance policies by offering substantially less than the amounts ultimately recovered in actions brought by those insureds; (8) compel an insured or third-party claimant in a case in which liability is clear to litigate for recovery of an amount due under an insurance policy by offering an amount that does not have an objectively reasonable basis in law and fact and that has not been documented in the insurer's file; (9) attempt to make an unreasonably low settlement by reference to printed advertising matter accompanying or included in an application; (10) attempt to settle a claim on the basis of an application that has been altered without the consent of the insured; (11) make a claims payment without including a statement of the coverage under which the payment is made; (12) make known to an insured or third-party claimant a policy of appealing from an arbitration award in favor of an insured or third-party claimant for the purpose of compelling the insured or third-party claimant to accept a settlement or compromise less than the amount awarded in arbitration; (13) delay investigation or payment of claims by requiring submission of unnecessary or substantially repetitive claims reports and proof-of-loss forms; (14) fail to promptly settle claims under one portion of a policy for the purpose of influencing settlements under other portions of the policy; (15) fail to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; or (16) offer a form of settlement or pay a judgment in any manner prohibited by AS 21.96.030; (17) violate a provision contained in AS 21.07. (b) The provisions of this section do not create or imply a private cause of action for a violation of this section. (c) The director of insurance shall adopt regulations to implement, define, and enforce this section.
A person may not issue or deliver or permit its agents, officers, or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in a common law corporation, or securities, or an advisory board contract or other similar contract of any kind promising returns and profits as an inducement to insurance.
If property insurance is required in connection with a debt or loan, the debtor or borrower has the reasonable right to select the insurance producer and insurer through whom the insurance is to be placed if (1) the insurance is provided for the protection of the creditor's or lender's interest in the property at the commencement of the risk; or (2) in the case of renewal of insurance, the renewal policy is delivered to the creditor or lender no later than 30 days before the renewal date.
(a) An insurer may retain, invest in, or acquire the whole or a part of the capital stock of another insurer or insurers, or have a common management with another insurer or insurers, unless the retention, investment, acquisition, or common management is inconsistent with a provision of this title, or unless by reason thereof the business of the insurers with the public is conducted in a manner that substantially lessens competition generally in the insurance business or tends to create a monopoly. (b) A person otherwise qualified may be director of two or more insurers that are competitors, unless the effect is to lessen substantially competition between insurers generally or tends materially to create a monopoly.
Except for records subject to health carrier grievance reporting and record keeping requirements established under AS 21.07.005, an insurer shall maintain a complete record of all the complaints received by the insurer since the date of the insurer's last market conduct examination under AS 21.06.120 or for four years, whichever occurs first. This record must indicate the total number of complaints, the classification of each complaint by line of insurance, the nature of each complaint, the disposition of each complaint, and the time it took to process each complaint. For purposes of this section, complaint means any written communication primarily expressing a grievance.
(a) An insurer, whether an authorized or unauthorized insurer, may not make available through a rating plan or form, property, casualty, or surety insurance to a firm, corporation, or association of individuals, a preferred rate or premium based upon a fictitious group of the firm, corporation, or association of individuals. (b) A form or plan of insurance covering a group or combination of persons or risks may not be written or delivered inside or outside this state to cover persons or risks in this state at a preferred rate or on a form other than that offered to persons not in the group or combination and to the public generally, unless the form, plan of insurance, and the rates or premiums to be charged have been submitted to and approved by the director as being not unfairly discriminatory and not otherwise in conflict with (a) of this section or with AS 21.39 to the extent that AS 21.39 is, by its terms, applicable to it. (c) This section does not apply to mortgage guaranty insurance, life insurance, health insurance, or annuity contracts. (d) This section does not apply to workers' compensation insurance when issued to an association of employers formed for purposes other than the purchase of insurance and that (1) has a constitution and bylaws; (2) incorporates a safety program; (3) as a group has preferred characteristics over similar risks written on an individual basis; and (4) has filed and received approval from the director for the rating program to be applied to the group. (e) This section does not apply to insurance coverage under a joint insurance arrangement authorized by AS 21.76. (f) Except as provided in AS 21.36.475, an insurer, whether authorized or unauthorized, may not underwrite an owner controlled insurance program or contractor controlled insurance program. In this subsection, owner controlled insurance program and contractor controlled insurance program have the meanings given in AS 21.36.475.
A surplus lines broker or an insurance producer may not fail to provide evidence of insurance, filings, or reports, or fail to maintain the records, or fail to pay the taxes and fees, required under AS 21.34.
(a) An insurer may not exercise its right to cancel a policy of personal automobile insurance except for the following reasons: (1) nonpayment of premium; or (2) the driver's license or motor vehicle registration of either the named insured or of an operator who resides in the same household as the named insured or who customarily operates a motor vehicle insured under the policy has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period or the 180 days immediately preceding its effective date. (b) During the policy period, a modification of automobile physical damage coverage, except coverage for loss caused by collision, whereby provision is made for the application of a deductible amount not exceeding $100 is not a cancellation of the coverage or of the policy. (c) [Repealed,  47 ch 29 SLA 1987.] (d) This section does not apply to (1) the failure to renew a policy, except as to coverage in force for less than 12 months; (2) a policy that has been in effect less than 60 days at the time notice of cancellation is mailed or delivered by the insurer, unless it is a renewal policy. (e) [Repealed,  47 ch 29 SLA 1987.] (f) An insurer may not exercise its right to cancel a policy of personal insurance other than personal automobile insurance, except for the following reasons: (1) nonpayment of premiums, including nonpayment of additional premiums, calculated in accordance with the current rating manual of the insurer, justified by a physical change in the insured property or a change in its occupancy or use; (2) conviction of the insured of a crime having as one of its necessary elements an act increasing a hazard insured against; (3) discovery of fraud or material misrepresentation made by the insured or a representative of the insured in obtaining the insurance or by the insured in pursuing a claim under the policy; (4) discovery of a grossly negligent act or omission by the insured that substantially increases the hazards insured against; (5) physical changes in the insured property that result in the property becoming uninsurable; or (6) entire abandonment of the property that increases a hazard insured against; if a policy is cancelled under this paragraph, in addition to the notice required under AS 21.36.220, the insurer shall give notice of cancellation of the policy to a lender on file with the insurer at the time of the cancellation; in this paragraph, entire abandonment means the property is no longer occupied by the insured as defined by the policy and does not have contents of substantial utility; however, property is not entirely abandoned if the insured or an agent for the insured demonstrates that the property is being reasonably maintained and monitored for a condition that might cause damage to the property.
(a) An insurer may not exercise its right to cancel a personal insurance policy unless, for a named insured who is (1) less than 70 years of age, a written notice of cancellation is mailed to the named insured as required by AS 21.36.260 at least 30 days before the effective date of cancellation; however, if cancellation is for nonpayment of premium, the notice shall be mailed to the named insured as required by AS 21.36.260 at least 20 days before the effective date of cancellation, and, if cancellation is for a reason described in AS 21.36.210(a)(2), (f)(2), or (f)(3), the notice shall be mailed to the named insured as required by AS 21.36.260 at least 10 days before the effective date of cancellation; and (2) 70 years of age or older, a written notice of cancellation is mailed to the named insured and, if the named insured has made a written request to the insurer, to the named insured's designee as required by AS 21.36.260 at least 30 days before the effective date of cancellation; however, if cancellation is for nonpayment of premium, the notice shall be mailed to the named insured and, if the named insured has made a written request to the insurer, to the named insured's designee as required by AS 21.36.260 at least 20 days before the effective date of cancellation, and, if cancellation is for a reason described in AS 21.36.210(a)(2), (f)(2), or (f)(3), the notice shall be mailed to the named insured and, if the named insured has made a written request to the insurer, to the named insured's designee as required by AS 21.36.260 at least 10 days before the effective date of cancellation; an insurer who provides a personal insurance policy to an insured who is 70 years of age or older shall annually give written notice to the insured of the insured's right to have a designee receive notice as provided in this paragraph. (b) An insurer may not exercise its right to cancel a policy of business or commercial insurance unless a written notice of cancellation is mailed to the named insured as required by AS 21.36.260 and to the agent or broker of record at least 60 days before the effective date of cancellation. However, if cancellation is for nonpayment of premium, or for failure or refusal of the insured to provide the information necessary to confirm exposure or necessary to determine the policy premium, the notice shall be mailed to the named insured as required by AS 21.36.260 and to the agent or broker of record at least 20 days before the effective date of cancellation. If cancellation is (1) for conviction of the insured of a crime having as one of its necessary elements an act increasing a hazard insured against, or (2) for discovery of fraud or material misrepresentation made by the insured or a representative of the insured in obtaining the insurance or by the insured in pursuing a claim under the policy, the notice shall be mailed to the named insured as required by AS 21.36.260 and to the agent or broker of record at least 10 days before the effective date of cancellation. (c) If an insurer cancels a policy under this section, it shall return or credit any unearned premium to the agent or broker of record or directly to the insured or premium finance company, if applicable, before the effective date of cancellation, except that (1) an unearned premium shall be returned or credited within 45 days after notice of cancellation is given, if cancellation is for (A) nonpayment of premium, including nonpayment of additional premiums, calculated in accordance with the current rating manual of the insurer, justified by a physical change in the insured property, a change in its occupancy or use, or a change in payroll, receipts, values, or other exposure units; (B) conviction of the insured of a crime having as one of its necessary elements an act increasing a hazard insured against; (C) discovery of fraud or material misrepresentation made by the insured or a representative of the insured in obtaining the insurance or by the insured in pursuing a claim under the policy; (D) failure or refusal of the insured to provide the information necessary to confirm exposure or necessary to determine the policy premium; (E) a reason described in AS 21.36.210(a)(2); (2) the insurer shall perform or waive the audit before the effective date of the cancellation and return or credit any estimated unearned premium before the effective date of cancellation if the policy is subject to audit and is cancelled for a reason other than those described in (1)(A) - (D) of this subsection. (d) The division may require an insurer to perform an audit that the insurer has elected to waive under (c) of this section. (e) A notice of cancellation of insurance required to be given under this section must include or be accompanied by a statement of the reason for the cancellation.
(a) Except for a health care insurance policy subject to AS 21.51.400 or AS 21.54.130, an insurer may not cancel a health insurance policy unless the insurer provides written notice to a policyholder at least 45 days before the effective date of the cancellation. (b) An insurer shall provide written notice to a policyholder of the specific changes in coverage or the exact change in premium at least 45 days before the effective date of the change in coverage or premium.
(a) Except as provided in AS 21.36.305, if the renewal premium is increased more than 10 percent for a reason other than an increase in coverage or exposure base, or if after renewal there will be a material restriction or reduction in coverage not specifically requested by the insured, written notice shall be mailed to the insured and to the agent or broker of record as required by AS 21.36.260 (1) at least 20 days before expiration of a personal insurance policy; or (2) at least 45 days before expiration of a business or commercial policy. (b) If notice before expiration of the policy is not given as required by (a) of this section, the existing policy shall continue until the insurer provides notice for the time period required by (a) of this section for that policy. (c) This section does not apply to workers' compensation insurance or to business or commercial policies issued under AS 21.34.
(a) An insurer may only fail to renew a personal insurance policy on the policy's annual anniversary. An insurer may not fail to renew a policy unless a written notice of nonrenewal is mailed to the named insured under AS 21.36.260 at least 20 days for a personal insurance policy, and at least 45 days for a business or commercial insurance policy, before the date the policy expires or the anniversary date of a policy written for a term longer than one year or with no fixed expiration date. (b) In addition to the requirements in (a) of this section, an insurer may not fail to renew a homeowner's insurance policy based solely on the earliest claim made by the insured within the three-year period immediately preceding the policy's annual anniversary if the claim arises from a criminal act committed by a third party. In this subsection, homeowner's insurance includes coverage described in AS 21.36.460(i)(7)(B) and (C). (c) If notice of nonrenewal is not given as required by this section, the existing policy shall continue until the insurer provides notice for the period required by this section for the policy. (d) This section does not apply (1) if the insurer has in good faith manifested its willingness to renew; (2) in case of nonpayment of premium for the expiring policy; (3) if the insured fails to pay the premium as required by the insurer for renewal; or (4) to business or commercial policies placed under AS 21.34.
When a policy of automobile liability insurance is cancelled, other than for nonpayment of premium, or is not renewed in accordance with AS 21.36.240, the insurer shall notify the named insured of possible eligibility for automobile insurance through the automobile assigned risk plan, or automobile insurance plan. The notification must accompany or be included in the notice of cancellation or nonrenewal required by AS 21.36.220 and 21.36.240.
(a) If an insurance policy is cancelled, rejected, or rescinded by the (1) insurer, the insurer shall return or credit any unearned premium paid to the agent or broker of record, or directly to the insured or premium finance company, if applicable; or (2) insured, the insurer shall return or credit any unearned premium to the agent or broker of record or directly to the insured or premium finance company, if applicable, less a cancellation fee not to exceed 7.5 percent of the unearned premium; a cancellation fee may not be charged unless the fee is clearly stated in the policy; the insurer shall return or credit the unearned premium less a lawful cancellation fee (A) within 45 days of receipt of the request for cancellation or the effective date of cancellation, whichever is later; or (B) if the policy is selected for audit, within 45 days of completion of an audit; the insurer shall perform and complete an audit within 45 days of receipt of the request for cancellation or the effective date of cancellation, whichever is later. (b) Notwithstanding (a) of this section, if the insurer clearly indicates one or more of the following features in the policy, an insurer may issue a policy (1) whose premium is earned at a varying rate due to seasonality of exposure; (2) that contains a minimum earned premium; or (3) with a fluctuating premium base.
If a notice is required from an insurer under this chapter, the insurer shall (1) mail the notice by first class mail to the last known address of the insured andobtain a certificate of mailing from the United States Postal Service; or (2) transmit the notice by electronic means, to the last known electronic address of the intended recipient, if the insurer can obtain an electronic confirmation of receipt by the intended recipient.
Notwithstanding the failure of an insurer to comply with AS 21.36.210 - 21.36.310, termination of coverage under the policy either by cancellation or nonrenewal is effective on the effective date of any other policy providing similar coverage on the same risk or motor vehicle or a replacement of it.
There is no liability on the part of, and a cause of action of any nature may not arise against, the director of insurance or against an insurer, its authorized representatives, agents, or employees, or a person furnishing to the insurer information as to reasons for cancellation, for any statement made by any of them in a written notice of cancellation, or in any other communication, oral or written, specifying the reasons for cancellation, or the providing of information pertaining to a cancellation or for statements made or evidence submitted at a hearing conducted in connection with a cancellation. However, this immunity from liability does not apply when the information furnished or statement made is untrue and the person furnishing the information or making the statement knew of the lack of truth or was grossly negligent in ascertaining the truth.
(a) A policy with a policy period or term longer than one year or a policy with no fixed expiration date shall be considered to be written for successive policy periods or terms of one year, and termination by an insurer effective on an anniversary date of the policy shall be considered a failure to renew. (b) The rate for a personal automobile insurance policy may not be changed more frequently than once every six months.
(a) An insurer may not increase the premium on a personal automobile insurance policy unless the increase applies to all insureds of the same class. (b) An insurer may not increase the premium or add a surcharge to a personal automobile insurance policy because of the issuance of a citation for a moving traffic violation unless the insured or another person who resides in the insured's household and is covered by the policy has been convicted of the violation or has entered a plea of no contest to the violation. (c) The director shall adopt regulations to determine circumstances under which an insurer may increase the premium or add a surcharge to a personal automobile insurance policy. (d) An insurer that increases the premium or adds a surcharge to a personal automobile insurance policy may only make the increase or surcharge effective on the renewal date of the policy. (e) An insurer that increases the premium or adds a surcharge to a personal automobile insurance policy shall give written notice of the increase or surcharge at least 20 days before it takes effect, stating the reason for the change and the right of appeal under AS 21.39.090. This subsection does not apply to (1) premium increase resulting from a change requested by an insured, if the insured is notified at the time the request is made that the amount of the insured's premium will change as a result of the requested policy change; or (2) rate approved by the director if the insurer gives written notice of a premium increase to the insured at least 20 days before the renewal date of the affected policy.
(a) An insurer may not take adverse action relating to the personal automobile insurance of a driver who commits one or more violations related to an overweight vehicle under AS 45.75.380(a)(10) or (11). (b) In this section, adverse action means the cancellation, refusal to insure, denial or failure to renew, increase in premiums, placement with an affiliate that charges higher premiums or offers less favorable policy terms, or any other action that increases the cost or decreases the extent of coverage or availability of personal automobile insurance to the driver.
In AS 21.36.210 - 21.36.310, (1) business or commercial insurance means insurance other than personal insurance, reinsurance, life insurance, health insurance, fidelity and surety insurance, title insurance, or an annuity contract; (2) nonpayment of premium means failure of the named insured to discharge when due any obligations of the named insured in connection with the payment of premium on a policy, or any installment of the premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit; (3) personal automobile insurance means insurance not related to business or commercial activities, covering automobile liability, uninsured or underinsured motorists, automobile medical payments, or automobile physical damage, that is delivered or issued for delivery in this state, and under which the insured vehicles are of the following types only: (A) a motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance, nor rented to others; or (B) any other four-wheel motor vehicle with a load capacity of 1,500 pounds or less that is not used in the occupation, profession, or business of the insured, nor used as a public or livery conveyance, nor rented to others; (4) personal insurance has the meaning given in AS 21.36.460(i); (5) renewal or renew means (A) the issuance and delivery of an insurance policy at the end of the policy period, that replaces a policy previously issued and delivered by the same insurer; (B) the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term; or (C) the extension of the term of a policy beyond its policy period or term under a provision for extending the policy by payment of a continuation premium.
A financial institution may not allow a person to transact insurance in an office of the institution or on behalf of the institution, unless the person is licensed as required under AS 21.27.
(a) A person may not (1) require, as a condition to the lending of money or extension of credit, or a renewal of the loan or extension of credit, that the obligee of the money or credit negotiate a policy or contract of insurance through any particular person or group of persons; (2) disapprove the insurance policy provided by a borrower for the protection of property securing credit or a loan if disapproval is based on other than reasonable standards uniformly applied and relating to the extent of coverage required and the financial soundness and the services of the insurer; the standards may not discriminate against a particular type of insurer or call for the disapproval of a policy containing coverage in addition to that required; (3) unless charges are required when the person handling the insurance transaction is a licensee, require a consumer, insurer, broker, or agent to pay a separate charge for handling an insurance policy required as security for a loan on real property, or to pay a separate charge to substitute the insurance policy of one insurer for that of another, except that interest may be charged on premium loans or premium advancements in accordance with the security instrument. (b) A person shall (1) use separate documents for an insurance transaction, other than credit insurance or flood insurance, and for a credit transaction; and (2) maintain separate and distinct records relating to insurance transactions, including consumer complaint information, and make the records available to the director for inspection upon notice. (c) A person may not include insurance premiums in a primary credit transaction without the consent of the consumer. (d) Nothing in this section prohibits a person from informing a consumer or prospective consumer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent on the procurement of acceptable insurance by the consumer, or that insurance is available from the person.
In the sale of insurance by a financial institution, a person may not engage in any practice or use an advertisement that may tend to mislead or deceive a consumer or cause a consumer to erroneously believe that (1) the insurance is backed by or a return on the insurance is guaranteed by the state, the federal government, the person, or the Federal Deposit Insurance Corporation; (2) the state or federal government (A) will pay a claim under an insurance contract that is an obligation of or was sold by the person; (B) is responsible for the insurance sales activities of the person; or (C) guarantees the credit of the person; (3) for insurance that contains investment risk, the insurance does not contain investment risk, the principal may not be lost, or the value of the insurance may not decline; (4) the lending of money, extension of credit, or a renewal of a loan is conditioned on the purchase of insurance from the person and that insurance may not be purchased from another source.
(a) In the sale of insurance by a financial institution, a person shall disclose both orally and in writing to a consumer before the initial purchase of insurance that (1) the insurance is not a deposit or other obligation of the person; (2) the insurance is not guaranteed by the person or the person soliciting insurance; (3) the insurance is not insured by the Federal Deposit Insurance Corporation or other agency of the United States, the financial institution, or the person; (4) if the insurance contains risk, the insurance contains investment risk and the insurance may lose value; (5) the consumer is not required to negotiate a policy or contract of insurance through any particular person or group of persons as a condition to the lending of money or extension of credit, or a renewal of the loan or extension of credit, except that the person may impose reasonable requirements uniformly applied and relating to the extent of coverage required and the financial soundness and the services of the insurer and that the standards may not discriminate against a particular type of insurer or require disapproval of a policy containing coverage in addition to that required. (b) A person shall also provide the disclosures required in (a) of this section to a consumer both orally and in writing at the time of application for an extension of credit. (c) If an application for insurance is made by telephone, written disclosure as required in (a) of this section must be mailed to the consumer within three working days. (d) A person may provide the disclosures required in (a) of this section electronically, if (1) the consumer affirmatively consents to electronic disclosure; and (2) the disclosures are provided in a format that the consumer is able to access at a later time by a method such as through printing or storing the disclosures electronically. (e) A person shall provide the disclosures required in (a) of this section in a meaningful form and in a conspicuous, simple, direct, and understandable manner that is designed to call attention to the information provided. (f) A person shall obtain a written acknowledgment or, in the case of an electronic disclosure provided in compliance with (d) of this section, a written or electronic acknowledgment, by the consumer that the consumer received the disclosures as required in this section. (g) This section does not require that a person provide the disclosures required in this section in advertisements that are of a general nature or that describe or list the services or products offered by a financial institution or on behalf of a financial institution. (h) In this section, meaningful form means (1) for other than an electronic form, a form of disclosure that is provided to a consumer orally and in writing; (2) for an electronic form, a disclosure that a consumer cannot electronically bypass before purchasing insurance.
In AS 21.36.317 - 21.36.325, unless the context otherwise requires, (1) consumer means a person who obtains, applies to obtain, or is solicited to obtain insurance from or on behalf of a financial institution; (2) financial institution means a bank holding company under 12 U.S.C. 1841 (Bank Holding Company Act of 1956); a credit union under 12 U.S.C. 1752 (Federal Credit Union Act); a bank, savings bank, savings and loan association, or trust company, or any depository institution under 12 U.S.C. 1813(c)(1); and any other person authorized to take federally insured deposits and make loans in the state; financial institution includes any employee or agent of a financial institution and any nondepository affiliate or subsidiary of a financial institution but only in the instances when the nondepository affiliate or subsidiary is soliciting the sale or purchase of insurance recommended or sponsored by, on the premises of, or in connection with a product offering of the financial institution; financial institution does not include an insurer.
(a) A person who has a conviction for a felony involving dishonesty or a breach of trust may not engage or participate in the business of insurance without receiving prior written consent by the director or by the insurance regulatory official of the person's home state as required under 18 U.S.C. 1033 and 1034 (Violent Crime Control and Law Enforcement Act of 1994). (b) A person who fails to seek prior written consent from the director under (a) of this section is in violation of this chapter. (c) A person who is engaged in the business of insurance may not knowingly permit the participation in the business of insurance by a person who has been convicted of a felony involving dishonesty or breach of trust except as allowed under (a) of this section.
(a) A person may not commit a fraudulent or criminal insurance act involving an insurance transaction that is subject to the provisions of this title. The penalty for a fraudulent or criminal insurance act described in this section is in addition to a civil penalty levied under this title. (b) A fraudulent insurance act is committed by a person who, with intent to injure, defraud, or deceive, (1) collects a sum as premium or charge for insurance if the insurance has not been provided or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy authorized under this title; (2) presents to an insurer a written or oral statement in support of a claim for payment or other benefit under an insurance policy, knowing that the statement contains false, incomplete, or misleading information or omits information concerning a matter material to the claim; (3) assists or conspires with another to prepare or make a written or oral statement that is presented to an insurer in support of a claim for a benefit under an insurance policy, knowing that the statement contains false, incomplete, or misleading information or omits information concerning a matter material to the claim; (4) wilfully collects as premium or charge for insurance a sum in excess of the premium or charge applicable to the insurance as specified in the policy by the insurer in accordance with the applicable classifications and rates approved by the director, or in cases where classifications and rates are not subject to approval, the premiums and charges applicable to the insurance as specified in the policy and fixed by the insurer; (5) fails to make disposition of funds received or held or misappropriates funds received or held representing premiums or return premiums; (6) fails to pay its tax liability under this title when due; or (7) makes a written or oral statement in response to an insurer's inquiries related to another person's claim for payment or other benefit under an insurance policy, knowing that the statement contains false, incomplete, or misleading information or omits information concerning a matter material to the claim. (c) A fraudulent insurance act is committed by a person forming or proposing to form an insurer, an insurance holding corporation, a stock corporation to finance an insurer or insurance production, a corporation to manage an insurer, a corporation to be attorney-in-fact for a reciprocal insurer, or a syndicate for any of these purposes that advertises, or solicits or receives funds, agreement, stock subscription, or membership on account unless the person has applied for and has received from the director a solicitation permit as required by AS 21.69. (d) A fraudulent insurance act is committed by a person who makes a false sworn statement that the person does not believe to be true as to matter material to an examination, investigation, or hearing of the division. (e) A fraudulent insurance act is committed by a person if (1) as to a matter material to an examination, investigation, or hearing by the division, the person makes two or more sworn statements that are irreconcilably inconsistent to the degree that one of them is necessarily false; and (2) the person does not believe one of the statements to be true at the time the statement is made. (f) A fraudulent insurance act is committed by a person who with intent to deceive, knowingly exhibits a false account, document, or advertisement, relative to the affairs of an insurer, a corporation, or syndicate of the kind described in AS 21.69.060, formed or proposed to be formed. (g) A fraudulent insurance act is committed by a person who wrongfully removes or attempts to remove records from the place where they are required to be kept under AS 21.69.390(a) or who conceals or attempts to conceal records from the director. (h) [Repealed,  34 ch 52 SLA 2015.]  (i) A criminal insurance act is committed by a person doing business in this state or relative to a subject resident, located, or to be performed in this state who knowingly (1) writes, places, or causes to be written or placed in this state or relative to a subject resident, located, or to be performed in this state a policy, duplicate policy, or contract of insurance of any kind or character, or general or floating policy upon persons or property resident, situated, or located in this state, from or through a person not authorized to transact business under AS 21.27 or a risk retention group or purchasing group not registered under AS 21.96.090; or (2) pays a commission or other form of remuneration to a person, firm, or organization for the writing or placing of insurance coverage in this state or relative to a subject resident, located, or to be performed in this state unless that person, firm, or organization is authorized under AS 21.27 to transact the kind or class of insurance written or placed, or, in the case of a risk retention group or purchasing group, is registered under AS 21.96.090. (j) A criminal insurance act is committed by a person in this state or relative to a subject resident, located, or to be performed in this state who acts as an insurance producer, managing general agent, third-party administrator, reinsurance intermediary broker, reinsurance intermediary manager, surplus lines broker, or independent adjuster without being licensed by the director as required under this title or as a risk retention group or purchasing group without being registered as required under AS 21.96.090. A criminal insurance act is committed by an insurance producer, managing general agent, third-party administrator, reinsurance intermediary broker, reinsurance intermediary manager, or surplus lines broker who solicits or takes application for, procures, or places for others any insurance for which the person is not licensed as required under AS 21.27 or for which the license of the person has been suspended or revoked. A criminal insurance act is committed by a person in this state or relative to a subject resident, located, or to be performed in this state who acts as or on behalf of a risk retention group or a purchasing group that is not registered under AS 21.96.090. (k) A criminal insurance act is committed by an insurance producer, managing general agent, third-party administrator, reinsurance intermediary broker, reinsurance intermediary manager, or surplus lines broker who knowingly compensates or offers to compensate in any manner a person other than an insurance producer, managing general agent, third-party administrator, reinsurance intermediary broker, reinsurance intermediary manager, or surplus lines broker licensed as required under this title in this or another jurisdiction, for procuring or in any manner helping to procure applications for or to place insurance in this state. A criminal insurance act is committed by a person in this state or relative to a subject resident, located, or to be performed in this state who acts as or on behalf of a risk retention group or a purchasing group that is not registered under AS 21.96.090. This subsection does not apply to the payment of compensation that is not contingent upon volume of business transacted in the form of salaries to the regular employees of the insurance producer, managing general agent, third-party administrator, reinsurance intermediary broker, reinsurance intermediary manager, or surplus lines broker. (l) A criminal insurance act is committed by a person who has placed insurance with an unauthorized insurer and refuses to obey an order by the director to produce for examination all policies and other documents evidencing the insurance and the amount of premiums paid or agreed to be paid for the insurance. (m) A criminal insurance act is committed by a director of a domestic stock or mutual insurer who votes for or concurs in a declaration or payment of a dividend to stockholders or members other than as authorized under AS 21.69.490 - 21.69.500. (n) A criminal insurance act is committed by an agent, managing general agent, third-party administrator, reinsurance intermediary broker, reinsurance intermediary manager, or other representative of an insurer involved in the procuring or issuance of an insurance contract who intentionally fails to report to the insurer the exact amount of consideration charged as premium for the contract and to maintain records showing that information. (o) A fraudulent insurance act is committed by a person who, with intent to injure, defraud, or deceive, knowingly makes a false or fraudulent statement or representation in or with reference to an application for insurance. (p) A fraudulent insurance act is committed by a person who (1) violates a provision of this title or a regulation issued under it; (2) falsely makes, completes, or alters a certificate of insurance or other document relating to insurance; (3) knowingly possesses a forged certificate of insurance or other document relating to insurance; or (4) knowingly issues a forged certificate of insurance or other document relating to insurance. (q) A fraudulent or criminal insurance act described in (1) (b) of this section that is committed to obtain $10,000 or more is a class B felony; (2) (c), (d), or (p)(4) of this section is a class B felony; (3) (b) of this section that is committed to obtain $500 or more but less than $10,000 is a class C felony; (4) (e), (f), (g), or (p)(2) or (3) of this section is a class C felony; (5) (b) of this section that is committed to obtain less than $500 is a class A misdemeanor; (6) (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor; (7) (o) of this section is a class B misdemeanor; and (8) (p)(1) of this section is a class B misdemeanor unless another specific penalty is provided for the violation of the provision. (r) The director may adopt regulations to implement, define, and enforce this section. (s) For the purpose of this section, the charging and collection by surplus line brokers licensed under AS 21.27 of the amount of applicable state and federal taxes and filing fees under AS 21.34 is not considered a premium or charge for insurance.
(a) A person is not liable for civil damages for filing a report with or furnishing other information whether written or oral, concerning suspected, anticipated, or completed fraudulent acts to (1) law enforcement officials, their agents, and employees; (2) the National Association of Insurance Commissioners, the division of insurance, an agency in a state that regulates insurance, or an organization established to detect and prevent fraudulent insurance acts, their agents, employees, or designees; (3) a person involved in the prevention and detection of fraudulent insurance acts or that person's employees, agents, or representatives. (b) This section does not preclude liability for civil damages as a result of reckless, wilful, or intentional misconduct.
A claim form must contain a statement that states in substance the following: A person who knowingly and with intent to injure, defraud, or deceive an insurance company files a claim containing false, incomplete, or misleading information may be prosecuted under state law. A lack of the statement on a claim form does not constitute a defense to prosecution under this title.
(a) An insurer or licensee that has reason to believe that a fraudulent claim has been made against it shall send the director a report disclosing information that the director may require. (b) An insurer or licensee that has reason to believe that an insurance producer with which it is doing business is involved in a defalcation, embezzlement, or violation of the provisions of AS 21.36.030, 21.36.050, or 21.36.360 shall immediately send the director a report disclosing the basis for that belief and any other information that the director may require. (c) An insurer or licensee, its employee or agent, or another person acting in good faith is not civilly liable for damages resulting from the filing of the report or the furnishing of information required by this section or by the director. (d) The director shall investigate facts reported under this section and shall refer facts indicating a violation of law to the appropriate prosecutor or agency.
(a) The papers, reports, documents, and evidence received under AS 21.36.390 or an investigation arising out of information received under AS 21.36.390 are not subject to public inspection for so long as the director considers confidentiality to be in the public interest or reasonably necessary to complete an investigation or protect the person investigated from unwarranted injury. Papers, reports, documents, and evidence relative to an investigation under this section are confidential and not subject to subpoena unless, after notice to the director and a hearing, a court determines the director would not be unduly hindered by public inspection. (b) An investigator of the director is not subject to subpoena in a civil action by a court of this state to testify concerning a matter that the investigator has knowledge of under a pending insurance fraud investigation by the director.
(a) If material the director seeks to obtain is located outside the state, the material may be made available to the director to examine at the place where the material is located. The director may designate representatives, including officials of the state in which the material is located, to inspect the material on behalf of the director. (b) The director may respond to a request from an official of another state under procedures established in (a) of this section.
(a) A person transacting insurance in this state may not (1) refuse to issue or renew insurance coverage; (2) limit the scope of insurance coverage; (3) cancel an existing policy of insurance; (4) deny a covered claim; or (5) increase the premium on an insurance policy if the refusal, cancellation, denial, or increase results only from the fact that the person was a victim of domestic violence or a provider of services to victims of domestic violence. (b) The provisions of (a) of this section may not prevent an insurer from underwriting or rating (1) for a medical condition, including a medical condition resulting from domestic violence, in the same manner as it would for a person who is not a victim of domestic violence; or (2) a person based on known frequency of losses in the same manner the insurer would for a person who is not a victim of domestic violence. (c) In this section, domestic violence means the occurrence of one or more of the following by a current or former family member, household member, intimate partner, or caretaker: (1) attempting to cause, causing, or threatening another person with physical harm, severe emotional distress, psychological trauma, rape, or sexual assault; (2) engaging in a course of conduct or repeatedly committing acts toward another person, including following the person without proper authority, under circumstances that place the person in reasonable fear of bodily injury or physical harm; (3) subjecting another person to false imprisonment; or (4) attempting to cause or causing damage to property so as to intimidate or attempt to control the behavior of another person.
An insurer who refuses to provide insurance coverage to an applicant initially applying for insurance shall (1) inform the applicant that the applicant has a right to know the reason for the refusal; and (2) upon receipt of a written request from the applicant, provide a written explanation of the refusal to the applicant.
In AS 21.36.430 - 21.36.440, insurer includes (1) an insurer, as defined in AS 21.97.900; (2) a group health plan, as defined in 29 U.S.C. 1167(1) (Employee Retirement Income Security Act of 1974); (3) a health maintenance organization, as defined in AS 21.86.900; (4) a hospital service corporation or medical service corporation, as defined in AS 21.87.330; (5) the Comprehensive Health Insurance Association, established in AS 21.55.010; and (6) an entity offering a service benefit plan, as referred to in 42 U.S.C. 1396g-1.
(a) If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer shall disclose, either on the insurance application or at the time the insurance application is taken, and at the time of renewal, that the insurer will obtain credit information in connection with the application or renewal. The disclosure required under this subsection shall be in writing or in the same medium as the application for insurance or the notice of renewal. Use of the following statement constitutes compliance with this subsection: In connection with this application for insurance or notice of renewal, we will review your credit report or obtain or use a credit-based insurance score based on the information contained in your credit report. We may use this information to decide whether to insure you or how much to charge. If an insurer uses a third party to calculate the consumer's insurance score, the disclosure required under this subsection must also contain language similar to: We may use a third party in connection with the development of your insurance score. (b) An insurer that takes adverse action involving personal insurance against a consumer based in whole or in part on credit history or insurance score shall provide notice of the adverse action, in writing, to the consumer. The notice must (1) clearly and specifically state the significant factors of the credit history or insurance score that resulted in the adverse action, in a manner that allows the consumer to identify the basis for the adverse action; (2) inform the consumer that the consumer is entitled to (A) request reconsideration of the adverse action; and (B) a free copy of the consumer's report under 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act); (3) inform the consumer that the consumer has the right to correct errors in the credit report; (4) advise the consumer on ways to improve the consumer's insurance score; (5) provide information to assist the consumer with the error correction process; and (6) inform the consumer (A) that reasonable exceptions to the insurer's rates, rating classifications, company or tier placement, or underwriting rules or guidelines are available for a consumer who has experienced, and whose credit history has been affected by, one or more extraordinary life circumstances listed under AS 21.36.461; (B) how the consumer may request an exception from the insurer; and (C) that, for a request for an exception to be considered by the insurer, the consumer must submit the request to the insurer not later than 60 days after receiving the notice under this subsection. (c) An insurer may use a consumer's credit history or insurance score to cancel, deny, nonrenew, underwrite, or rate personal insurance only in combination with other substantive underwriting factors. If an insurer uses a consumer's credit history or insurance score, not later than 24 months after the insurer most recently used the consumer's credit history or insurance score to underwrite or rate a policy, the insurer shall reunderwrite and rerate the policy based on the consumer's current (1) credit history or insurance score and current risk characteristics; or (2) risk characteristics but not including, in whole or in part, the consumer's credit history or insurance score; for the purposes of this subsection, (A) refusal to offer personal insurance coverage to a consumer constitutes denial of personal insurance; and (B) an offer of placement with an affiliate insurer does not constitute denial of coverage. (d) An insurer may not (1) cancel, deny, nonrenew, underwrite, or rate personal insurance coverage based in whole or in part on (A) the absence of credit history or the inability to determine the consumer's credit history if the insurer has received accurate and complete information from the consumer; this subparagraph does not apply if the insurer treats the consumer as if the consumer had neutral credit information as approved by the director; (B) credit inquiries not initiated by the consumer; (C) credit inquiries relating to insurance coverage if identified on a consumer's credit report; (D) credit inquiries by the consumer for the consumer's own credit information; (E) multiple lender inquiries if coded on the consumer's credit report as being for automobile, boat, recreation vehicle, or home mortgage loans, unless all inquiries under that code within a 30-day period are counted as one; (F) credit history or an insurance score based on collection accounts identified with a medical industry code; (G) the consumer's use of a particular type of credit card, charge card, or debit card or the absence of a credit card; (H) the consumer's total available line of credit; however, the consumer's ratio of debt to total available line of credit may be considered; (I) the age of the most recent automobile or home loan obtained by the consumer; however, an insurer may consider the bill payment history or total number of loans; or (J) the person's age when credit is established; (2) use the credit history of the consumer when the consumer is adversely affected by a joint account owner who was the spouse of the consumer or a joint account owner who is the spouse of the consumer and who is a party to a divorce or dissolution action against the consumer; this paragraph applies only if the consumer provides written notice to the insurer that identifies the credit information that is adversely affected by the joint account owner; this paragraph does not prevent the use of credit history that is not identified by the consumer as required by this paragraph; (3) use an insurance score that is calculated using the income, age, sex, address, zip code, census block, ethnic group, religion, marital status, or nationality of the consumer as a factor; (4) use credit history to cancel, deny, nonrenew, underwrite, or rate a personal insurance policy if the history is obtained more than 90 days before the policy is cancelled, denied, nonrenewed, underwritten, or rated; this paragraph does not require an insurer to reevaluate a consumer's credit history more frequently than is required under (c) of this section; (5) use an insurance score derived from an insurance scoring model to determine eligibility for an insurance payment plan; this paragraph does not prohibit the use of credit history to evaluate the ability of the consumer to make payments. (e) If incorrect credit history is used to underwrite or rate personal insurance coverage and a consumer is charged higher premiums or offered less favorable policy terms due to the disputed credit history, the insurer shall reissue or rerate the policy retroactive to the effective date of the current policy term, and the policy, as reissued or rerated, shall provide premiums and policy terms the consumer would have been eligible for if accurate credit history had been used to underwrite or rate the policy. If an insurer determines that the insured has overpaid a premium, the insurer shall refund to the insured the amount of overpayment calculated back to the last 12 months of coverage or the actual policy period, whichever period is shorter. This subsection applies only if the consumer discovers the incorrect credit history within 12 months after the policy is issued, resolves the dispute as described under (f) of this section or under the process in 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act), and notifies the insurer in writing that the dispute has been resolved. (f) If the use of disputed credit history results in denial or cancellation of personal insurance coverage, an insurer shall reunderwrite the coverage without the use of credit information as a factor. This subsection applies only if, within 10 days following denial or cancellation, the consumer provides a reconsideration certification to the insurer that sets forth any items of the credit history that are disputed and that indicates that the consumer has initiated the dispute resolution process in 15 U.S.C. 1681 (Fair Credit Reporting Act) by requesting a copy of the consumer's credit report. An insurer's reconsideration certification form (1) is subject to filing and approval by the director under AS 21.42.120; and (2) shall be provided by an insurer to the consumer at the time of denial or cancellation. (g) This section does not require an insurer to use credit history for any purpose. (h) An insurer shall indemnify, defend, and hold the insurer's producers harmless from all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of an insurance producer who obtains or uses credit information or insurance scores for an insurer if the insurance producer follows the instructions of or procedures established by the insurer and complies with any applicable law or regulation. This subsection does not provide a consumer or other insured with a cause of action that does not exist in the absence of this subsection. (i) In this section, (1) adverse action has the meaning given in 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act) and includes (A) cancellation, denial, or failure to renew personal insurance coverage; (B) charging a higher insurance premium for personal insurance than would have been offered if the credit history or insurance score had been more favorable, whether the charge is by (i) application of a rating rule; (ii) assignment to a rating tier that does not have the lowest available rates; or (iii) placement with an affiliate company that does not offer the lowest rates available to the consumer within the affiliate group of insurance companies; or (C) any reduction or adverse or unfavorable change in the terms of coverage or amount of personal insurance due to a consumer's credit history or insurance score; a reduction or adverse or unfavorable change in the terms of coverage occurs when (i) coverage provided to the consumer is not as broad in scope as coverage requested by the consumer but available to other insureds of the insurer or any affiliate; or (ii) the consumer is not eligible for benefits that are available through affiliate insurers; (2) affiliate has the meaning given in AS 21.22.200; (3) consumer means an individual policyholder or applicant for insurance; (4) consumer report has the meaning given in 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act); (5) credit history means written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing, or credit capacity that is used or expected to be used, or collected in whole or in part, for the purpose of serving as a factor in determining personal insurance premiums or eligibility for coverage; (6) insurance score means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit history; (7) personal insurance means (A) private passenger automobile or motorcycle coverage; (B) homeowner coverage, including mobile homeowner's, manufactured homeowner's, condominium owner's, and renter's coverage; (C) dwelling property coverage; (D) earthquake coverage for a residence or personal property; (E) personal liability and theft coverage; (F) personal property inland marine coverage; (G) personal boat, watercraft, snowmobile, and recreational vehicle coverage; and (H) umbrella insurance coverage.
(a) Except as provided in AS 21.36.460(d), an insurer that uses a consumer's credit history or insurance score shall provide reasonable exceptions to the insurer's rates, rating classifications, company or tier placement, or underwriting rules or guidelines for a consumer who has experienced, and whose credit history or insurance score has been affected by, one or more of the following extraordinary life circumstances: (1) a catastrophe, as declared by the director under AS 21.06.080; (2) a serious illness or injury, or a serious illness of or injury to an immediate family member; (3) the death of a spouse, child, or parent; (4) divorce or the involuntary interruption of spousal support or maintenance payments; (5) identity theft; (6) loss of employment for three months or more as a result of involuntary termination; (7) military overseas deployment; or (8) other extraordinary life circumstances where a prudent person would consider an exception to the insurer's rates, rating classifications, company or tier placement, or underwriting rules or guidelines to be reasonable. (b) If a consumer submits a request for an exception under AS 21.36.460(b), an insurer may require the consumer to (1) provide reasonable written and independently verifiable documentation of the extraordinary life circumstances; (2) demonstrate that the circumstances had a direct and meaningful effect on the consumer's credit information. (c) If a consumer submits a request for an exception under AS 21.36.460(b), an insurer may (1) grant an exception; (2) grant an exception if the consumer asks for consideration of repeated events; and (3) grant an exception if the insurer previously had considered a request. (d) An insurer may not be considered out of compliance with a law or rule relating to underwriting, rating, or rate filing as a result of granting an exception under this section. (e) Not later than 30 days after the insurer receives sufficient documentation of the information requested from the consumer under (b) of this section, the insurer shall provide notice to the consumer, in writing, that the exception is (1) granted and the adverse action will not be taken; or (2) denied and the adverse action will be maintained. (f) If an exception is denied and the adverse action will be maintained, the insurer's notice under (e) of this section must include (1) the insurer's reason for denying the request for an exception and for maintaining the adverse action; and (2) information notifying the consumer of the consumer's right to appeal the adverse action resulting from the denial of the consumer's request for an exception to the director. (g) A consumer, aggrieved by an adverse action resulting from the denial of the consumer's request for an exception may appeal the adverse action to the director not later than 30 days after receiving the insurer's notice under (e) of this section. The appeal must include the consumer's reason for opposing the adverse action and for requesting the exception. (h) The director shall make a decision on the consumer's appeal not later than 30 days after receiving the appeal and shall provide the decision to both the insurer and the consumer. The decision must include an explanation of the decision and must be based on (1) what a prudent person would consider to be a fair and reasonable decision given the consumer's circumstances; and (2) the record, which must be limited to the following: (A) the insurer's notice of adverse action provided to the consumer under AS 21.36.460(b); (B) the consumer's request for an exception submitted to the insurer under AS 21.36.460(b); (C) any information submitted by the consumer to the insurer under (b) of this section; (D) the insurer's notice provided to the consumer under (e) of this section; (E) the consumer's appeal submitted to the director under (g) of this section; and (F) if requested by the director, additional information necessary to make a fair and reasonable decision. (i) The hearing and appeal procedures provided for in AS 21.06.180 - 21.06.230 do not apply to consumer appeals submitted to the director under (g) of this section. (j) Nothing in this section may be construed to provide a consumer with a cause of action that does not exist in the absence of this section. (k) In this section, (1) adverse action is limited to an adverse action defined in AS 21.36.460(i) that is based, in whole or in part, on the consumer's credit history or insurance score as affected by one or more extraordinary life circumstances; (2) consumer has the meaning given in AS 21.36.460(i).
(a) An insurance policy that provides coverage only against property damage to a motor vehicle and that does not provide liability coverage required under AS 28.22.101(d) must contain the following statement printed in bold face type: This policy provides insurance only against damage to the motor vehicle. This policy does not insure against bodily injury, death, or property damage liability and does not satisfy the mandatory motor vehicle liability insurance requirements of AS 28.22.011. (b) If the insured under a policy described in (a) of this section is not the owner of the motor vehicle, the insurer shall provide a copy of the policy to the owner.
A person may not violate the viatical settlement transaction provisions of AS 21.96.110 or regulations adopted under AS 21.96.110.
(a) An owner controlled insurance program or a contractor controlled insurance program is subject to both AS 21.39 and AS 21.42, must be approved by the director, and shall be allowed only for a major construction project. Owner controlled and contractor controlled insurance programs are limited to property insurance as defined in AS 21.12.060 and casualty insurance as defined in AS 21.12.070. (b) In this section, an owner controlled or contractor controlled insured program does not include (1) builder's risk or course of construction insurance; (2) insurance relating to the transportation of cargo or other property; (3) insurance covering one or more affiliates, subsidiaries, partners, or joint venture partners of a person; or (4) insurance policies endorsed to name one or more persons as additional insureds. (c) In this section, (1) contractor means a person who meets the definition of contractor in AS 08.18.171 and who undertakes the performance of a construction project for a project owner, its agent, or its representative; (2) contractor controlled insurance program means an insurance program where one or more insurance policies are procured on behalf of a contractor, its agent, or its representative, by its insurance producer, as defined in AS 21.27.990, for the purpose of insuring the contractor and one or more of the following: (A) the project owner; (B) a subcontractor; (C) an architect; (D) an engineer; or (E) a person performing professional services; (3) major construction project means the process of constructing a structure, building, facility, or roadway or major renovation of more than 50 percent of an existing structure, building, facility, or roadway having a contract cost of more than $50,000,000 of a definite term at a geographically defined project site; (4) owner controlled insurance program means an insurance program where one or more insurance policies are procured on behalf of a project owner, its agent, or its representative, by its insurance producer, as defined in AS 21.27.990, for the purpose of insuring the project owner and one or more of the following: (A) the contractor; (B) a subcontractor; (C) an architect; (D) an engineer; or (E) a person performing professional services; (5) project owner means a person who, in the course of the person's business, engages the service of a contractor for the purpose of working on a construction project; (6) subcontractor means a person to whom a contractor sublets all or part of a contractor's initial undertaking.
(a) A health care insurer that offers a health care insurance plan in the individual market shall comply with the genetic information nondiscrimination requirements established under 42 U.S.C. 300gg-53. (b) A health care insurer that offers a health care insurance plan in the group market shall comply with the genetic information nondiscrimination requirements established under 42 U.S.C. 300gg-1(b)(3), 42 U.S.C. 300gg-1(c) - (f), and 42 U.S.C. 300gg-91. (c) In this section, (1) group market has the meaning given in AS 21.54.500; (2) health care insurance plan has the meaning given in AS 21.54.500; (3) health care insurer has the meaning given in AS 21.54.500; (4) individual market has the meaning given in AS 21.51.500.
(a) A health care insurer may not deny enrollment of a child under the health care insurance of the child's parent on the ground that the child (1) was born out of wedlock; (2) is not claimed as a dependent on the parent's federal income tax return; (3) does not reside with the parent; or (4) does not reside in the health care insurer's service area. (b) If a parent is required under AS 25.27.020(a)(9) or 25.27.060(c) to provide medical support for a child and the parent is eligible for family health care insurance coverage through an insurer, the parent's health care insurer (1) shall allow the parent to enroll the child under the family health care insurance coverage without regard to restrictions relating to enrollment periods if the child is otherwise eligible; (2) shall, if the parent fails to apply for enrollment of a child under (1) of this subsection, enroll the child under the parent's family health care insurance coverage upon application by the child's other parent or custodian, the child support services agency, or the Department of Family and Community Services; and (3) may not disenroll or eliminate health care insurance coverage of the child unless the insurer has received written evidence that (A) the parent with the insurance coverage is no longer required by court order or administrative order to provide the child's medical support; or (B) the child is or will be enrolled in comparable health care insurance coverage through another insurer that will take effect not later than the effective date of the disenrollment or elimination of coverage. (c) A health care insurer who provides health care insurance coverage of a child through family health care insurance coverage of a parent who does not have sole physical custody of the child shall (1) provide to the child's other parent or custodian the information that may be necessary for the child to obtain benefits through the family health care insurance coverage; (2) allow the child's other parent or custodian, or the child's health care provider with the parent's or custodian's approval, to submit claims for covered services without the approval of the parent whose health care insurance covers the child; and (3) make payment on claims submitted under (2) of this subsection directly to the child's other parent or custodian, the health care provider, or a state agency to which the child's medical support rights have been assigned under AS 25.27.120 or AS 47.07.025. (d) If an individual is covered for health benefits from an insurer, the insurer may not impose requirements on a state agency to which the rights of the individual under AS 25.27.120 or AS 47.07.025 have been assigned that are different from requirements applicable to an agent or assignee of other individuals covered by the insurer. (e) In this section, health care insurer has the meaning given in AS 21.54.500 and includes the Comprehensive Health Insurance Association as described in AS 21.55.010.
A person licensed under AS 21.27 may not (1) enter into any insurance transaction in which the premium is financed by other than the licensee unless the person providing the financing is licensed under and in compliance with AS 06.40 or is exempted from licensure under AS 06.40.020; or (2) finance premiums or extend credit to persons purchasing insurance except as provided in regulations adopted by the director; the director shall adopt regulations establishing the conditions under which licensees may extend credit or finance premiums except that in no event may the regulations permit a rate of interest on amounts lent or credit extended greater than that provided in AS 06.40.120.
(a) A health care insurer shall pay or deny indemnities under a health care insurance policy, whether or not services were provided by a participating provider, within 30 calendar days after the insurer or a third-party administrator under contract with the insurer receives a clean claim. (b) If a health care insurer does not pay or denies a health care insurance claim, the insurer shall give notice to the covered person, or to the provider of the medical care services or supplies if the claim was assigned or if the covered person elected direct payment under AS 21.51.120(a)(2) or AS 21.54.020(a), of the basis for denial or the specific information that is needed for the insurer to adjudicate the claim. The health care insurer shall provide the notice required under this subsection within 30 calendar days after the insurer or third-party administrator under contract with the insurer receives the claim. (c) If a health care insurer does not provide the notice as required under (b) of this section, the claim is presumed a clean claim, and interest shall accrue at a rate of 15 percent annually beginning on the day following the day that the notice was due and continues to accrue until the date that the claim is paid. (d) If a health care insurer provides the notice required under (b) of this section and requests specific information that is needed to adjudicate the claim, the insurer shall pay the claim not later than 15 calendar days after receipt of the information specified in the notice or within 30 days after receipt of the claim. If a health care insurer does not pay the claim within the time period required under this subsection, the claim is presumed to be a clean claim, interest at a rate of 15 percent accrues, and interest continues to accrue until the date the claim is paid. (e) For purposes of (c) and (d) of this section, if only a portion of a claim is covered under the terms of the insurance policy, interest accrues based only on the portion of the claim that is covered. (f) For the purposes of this section, a claim is considered paid on the day payment is mailed or transmitted electronically. (g) If interest is accrued on a claim under (c) or (d) of this section, a health care insurer may not include the amount of interest accrued in calculating an applicable limit on benefits payable to a covered person or other person claiming payments under the health insurance policy. (h) A health care insurer is not required to pay interest due as a result of the application of (c) or (d) of this section if the amount of the interest is $1 or less. (i) In this section, (1) clean claim means a claim that does not have a defect or impropriety, including a lack of any required substantiating documentation, or a particular circumstance requiring special treatment that prevents timely payment of the claim; (2) health care insurer has the meaning given in AS 21.54.500.
(a) A person may not represent, directly or indirectly, to be a financial planner, investment adviser, consultant, financial counselor, or similar specialist engaged in the business of giving financial planning or advice relating to investments, insurance, real estate, tax matters, or trust and estate matters when the person is in fact only engaging in the sale of insurance. (b) A person may not engage in the business of financial planning and solicit the sale of a product or service on the basis that the person is an insurance salesperson or that a commission for the sale of an insurance product will be received in addition to a fee for financial planning without full disclosure to the client before the execution of the agreement required in (c) of this section. (c) A person licensed under this title may not charge a fee other than a commission for financial planning unless the fee is based upon a written agreement signed before the performance of a service under the agreement. The insurance salesperson shall provide the client a copy of the signed agreement at the time of signing. The agreement must specifically state the service for which a fee is to be charged and how the fee will be determined or calculated. The agreement must provide that the client is under no obligation to purchase an insurance product. The licensee shall retain a copy of the agreement for not less than five years after completion of services and the agreement shall be available to the director upon request.
(a) A person may not sell, market, promote, advertise, or otherwise distribute a health discount plan unless (1) each advertisement, policy, document, information, statement, or other communication regarding the health discount plan and the plan itself contain a statement, in bold and prominent type, that the health discount plan is not insurance; (2) the discounts offered under the health discount plan are specifically authorized by a contract with each provider of the services or supplies listed in conjunction with the plan; (3) the health discount plan states the name, address, and telephone number of the administrator of the plan; (4) the person makes readily available to the consumer a complete, accurate, and up-to-date list of providers participating in the plan that offer discounted health care services or supplies in the consumer's local area and the discounts offered by the providers; (5) the person provides the consumer the right to cancel the health discount plan within 30 days after purchase of the plan; and (6) the person provides the consumer with a full refund of all payments made, except for a nominal processing fee, within 30 days after notification of cancellation of the plan under (5) of this subsection. (b) The director may adopt regulations to implement this section and to establish additional requirements intended to prohibit unfair or deceptive practices relating to health discount plans.
The director shall adopt regulations regarding the release of financial and health information regarding an individual who seeks to obtain, obtains, or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family, or household purposes. The regulations must be at least as restrictive as the model regulations adopted under the National Conference of Insurance Legislators Financial Information Privacy Protection Model Act, adopted by the National Conference of Insurance Legislators Executive Committee on November 17, 2000, and amended on March 2, 2001.
(a) Portable electronics insurance may be offered, issued for delivery, issued, or renewed only if the insurer makes available to customers written material stating (1) a summary of the material terms of the insurance, including (A) the identity of the insurer; (B) the identity of the vendor offering or selling the portable electronics insurance; (C) the amount of the premium for coverage to be paid by the customer; (D) the period for which coverage is effective; (E) deductible amounts, and how the deductible is to be paid; (F) the benefits of the coverage; (G) the process for filing a claim; (H) requirements for returning a device to the vendor or insurer, including related costs; (I) proof-of-loss requirements; (2) whether the portable electronic device may be repaired or replaced by the insurer in response to a claim; (3) whether similar make and model reconditioned devices or nonoriginal manufacturer parts and equipment may be used by the insurer in response to a claim; (4) that the insurance offered may duplicate coverage in a homeowner's, renter's, or other similar insurance policy; (5) that the customer is not obligated to purchase insurance to purchase, lease, or service a portable electronic device; and (6) that the customer may cancel enrollment for coverage at any time and receive a refund or credit based on a proration of the premium amount paid by the customer for the period that coverage was effective. (b) The written materials required by this section are not subject to the requirements of AS 21.42.120. (c) Portable electronics insurance may be offered on a month-to-month or other periodic basis as a group or master policy issued to a vendor under which an individual customer may elect to enroll for coverage. The insurer offering coverage under a group or master policy shall establish eligibility and underwriting standards for customers electing to enroll in coverage for each portable electronics insurance program. (d) Portable electronics insurance may be offered as commercial inland marine insurance. (e) A premium for portable electronics insurance may be billed and collected by the vendor of portable electronics. A charge to the customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services must be itemized separately from the charges for the purchase, lease, or service of a portable electronic device. If the coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the consumer that the coverage is included with the portable electronics or related services. Vendors collecting premiums for portable electronics insurance are not required to maintain premiums in a segregated account if the vendor is authorized by the producer or insurer to hold premiums in an alternative manner and pays the premiums to the insurer within 60 days after receipt. Premiums received by a vendor from a customer purchasing portable electronics insurance shall be held in a fiduciary capacity for the benefit of the insurer. A vendor may receive compensation for billing and collection services. (f) A portable electronics insurance policy may be changed or terminated as follows: (1) an insurer may cancel or change the terms and conditions of the policy; the insurer shall provide the vendor and enrolled customers with at least 30 days' notice and shall provide the vendor with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating that a change in the terms and conditions has occurred and a summary of material changes; (2) an insurer may, upon 15 days' notice, terminate an enrolled customer's enrollment under a portable electronics insurance policy for fraud or material misrepresentation in obtaining coverage or in the presentation of a claim under the terms of the policy; (3) an insurer may, without prior notice, immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy (A) for nonpayment of premium; (B) if the enrolled customer ceases to have an active service contract with the vendor; or (C) if an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within 30 calendar days after exhaustion of the limit; however, if notice is not sent within 30 calendar days, enrollment shall continue, notwithstanding the exhaustion of the aggregate limit of liability, until the insurer sends notice of termination to the enrolled customer; (4) if a portable electronics insurance policy is terminated by a vendor, the vendor shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination; the written notice shall be mailed or delivered to the enrolled customer at least 30 days before the termination; (5) if a policy of portable electronics insurance is terminated by an insurer or a vendor, the insurer or vendor shall, within 60 days after termination, return any unearned premium to the person who paid the premium; (6) if notice or correspondence with respect to a policy of portable electronics insurance is required under this section or is otherwise required by law, the notice or correspondence must be in writing; notices and correspondence may be sent either by mail or by electronic means as follows: (A) if the notice or correspondence is mailed, it shall be sent to the vendor of portable electronics at the vendor's mailing address specified for that purpose and to the vendor's affected enrolled customers' last known mailing addresses on file with the insurer; the insurer or vendor of portable electronics shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service; (B) if the notice or correspondence is sent by electronic means, it shall be sent to the vendor of portable electronics at the vendor's electronic mail address specified for that purpose and to the vendor's affected enrolled customers' last known electronic mail addresses as provided by each enrolled customer to the insurer or vendor of portable electronics; for purposes of this subparagraph, an enrolled customer's provision of an electronic mail address to the insurer or vendor of portable electronics shall be considered consent to receive notices and correspondence electronically; the insurer or vendor of portable electronics shall maintain proof that the notice or correspondence was sent; (7) notice or correspondence required by this section or otherwise required by law may be sent on behalf of an insurer or vendor by a producer appointed by the insurer. (g) A portable electronics insurance policy must provide that, in the event of a covered loss under more than one policy, the portable electronics policy will provide primary coverage. (h) In this section, (1) portable electronics insurance (A) means insurance offered, issued for delivery, delivered, or renewed by a vendor engaged in the business of selling, leasing, or servicing portable electronic devices to cover the loss, theft, mechanical failure, malfunction, damage, repair, or replacement of a small electronic device, including a cell phone, laptop computer, electronic tablet, GPS device, radio, portable music player, or associated accessory; (B) does not include (i) a service contract described in AS 21.03.021(e); (ii) a policy of insurance covering a seller's or a manufacturer's obligations under a warranty; or (iii) a homeowner's, renter's, private passenger automobile, commercial multiperil, or similar policy that covers loss or theft of portable electronics; (2) vendor means a business entity in the business of selling or leasing portable electronics and related services and accessories.
(a) If the director believes that a person engaged in the insurance business is engaging in this state in an unfair method of competition or in an unfair or deceptive act or practice in the conduct of the business that is not defined as being unfair or deceptive under this chapter, the director shall hold a hearing on the matter, if the director believes it would be in the public interest to do so after giving notice of the hearing and of the charges. Upon conclusion of the hearing the director shall make a written report of the findings of fact relative to the charges and serve a copy upon the person and any intervenor at the hearing. (b) If the report charges a violation of this chapter and if the method of competition, act, or practice has not been discontinued, the director may, through the attorney general of this state, at any time after the service of the report, cause an action to be instituted to enjoin and restrain the person from engaging in the method, act, or practice. In the action the court may grant a restraining order or injunction upon just terms, but the state may not be required to give security before the issuance of the order or injunction. If a record of the proceedings in the hearing before the director was made, a certified transcript, including all evidence taken and the report and findings, shall be received in evidence in the action. (c) If the director's report made under (a) of this section, or order on hearing made under AS 21.36.910 does not charge a violation of this chapter, an intervenor in the proceedings may appeal from the order or report within the time and in the manner provided for appeals from the director generally. (d) In addition to the unfair methods and unfair or deceptive acts or practices expressly defined in this title, the director may adopt regulations to define other methods of competition and other acts and practices related to the business of insurance that are unfair or deceptive.
(a) On the complaint of a person or on the motion of the director, the director may conduct an investigation to determine whether a person is engaged in an unfair method of competition or unfair or deceptive act or practice prohibited by this chapter. (b) If there are grounds for believing that a person is engaged in an act or practice prohibited by this chapter, the director may institute proceedings under AS 21.06.170 - 21.06.240. (c) If the director determines that a person violated this chapter, the director shall serve upon the person charged an order requiring that person to cease and desist from engaging in the act or practice. (d) In addition to an order issued under (c) of this section, the director may, after a hearing, order restitution, assess a penalty of not more than $2,500 for each violation or $25,000 for engaging in a general business practice in violation of this chapter. (e) If the director determines after a hearing that the person charged knew or should have known that the person was in violation of this chapter, in addition to the penalty prescribed in (d) of this section, a suspension or revocation of the person's license and a penalty of not more than $25,000 for each violation or $250,000 for engaging in the general business practice in violation of this chapter may also be ordered by the director. (f) If the director believes that a person has violated a cease and desist order issued under (c) of this section, the director may certify the relevant facts to the superior court in the appropriate district, for proceedings under AS 44.62.590. In addition to the penalties and remedies provided for in AS 44.62.590, the superior court, upon finding that the cease and desist order has been violated, may order the violator to comply with the order, pay an additional penalty of not more than $1,000,000 for each violation, may revoke or suspend the violator's license, and may bar the violator from transacting the business of insurance in the future. (g) In determining the penalty imposed under (d) and (e) of this section, the director shall consider the amount of loss or harm caused by the violation and the amount of benefit derived by the person by reason of the violation and may consider other factors, including the seriousness of the violation, the promptness and completeness of remedial action, whether the violation was a single act or a trade practice, and deterrence of the violator or others. (h) If the violation is a single act prohibited under AS 21.36.125 that results in loss or harm, the director may require restitution or issue a cease and desist order but may not impose a penalty that includes a fine or require other remedial action, unless the violation results in loss or harm and is intentional. This subsection does not affect the director's authority to impose a penalty for multiple acts prohibited under AS 21.36.125 or a penalty for an act prohibited under a provision of law other than AS 21.36.125.
The director may seek injunctive relief to aid in the enforcement of the provisions of this chapter.
The powers vested in the director by this chapter are in addition to any other powers to enforce penalties, fines, or other forfeitures authorized by law with respect to acts and practices declared in this chapter to be unfair or deceptive.
The purpose of this chapter is to promote the public welfare by regulating insurance rates in order that they will not be excessive, inadequate, or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate making and in other matters within the scope of this chapter. Nothing in this chapter is intended (1) to prohibit or discourage reasonable competition, or (2) to prohibit or encourage, except to the extent necessary to accomplish the purpose of this chapter, uniformity in insurance rates, rating systems, rating plans or practices. This chapter shall be liberally interpreted to carry into effect the intent of this section.
(a) This chapter applies to all forms of casualty insurance, including fidelity, surety, and guaranty bonds, to all forms of fire, marine, and inland marine insurance, and to a combination of any of them, or risks or operations in this state. Inland marine insurance includes insurance defined by statute, or by interpretation of statute, or if not defined or interpreted, by ruling of the director, or as established by general custom of the business, as inland marine insurance. (b) This chapter does not apply to (1) reinsurance, other than joint reinsurance to the extent stated in AS 21.39.110; (2) health insurance; (3) insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine insurance policies; (4) insurance against loss of or damage to aircraft or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of aircraft; or, to insurance of hulls of aircraft, including their accessories and equipment; (5) insurance written under AS 21.34, except as provided in AS 21.34.030(b).
(a) Rates, including loss costs under AS 21.39.043 or any other provision of law, shall be made in accordance with the following provisions: (1) rates shall not be excessive, inadequate, or unfairly discriminatory; (2) consideration shall be given to past and prospective loss experience inside and outside this state; to the conflagration and catastrophe hazards; to a reasonable margin for underwriting profit and contingencies; to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers; to past and prospective expenses both countrywide and those specially applicable to this state; and to all other relevant factors inside and outside this state; (3) the systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the requirements of the operating methods of the insurer or group of insurers with respect to any kind of insurance, or with respect to a subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable; (4) risks may be grouped by classifications for the establishment of rates and minimum premiums; classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both; the standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses; (5) in the case of fire insurance rates, consideration may be given to the experience of the fire insurance business during a period of not more than the most recent five-year period for which experience is available; (6) when there is an established program to inspect new and existing dwellings and the program has been certified by the director as likely to reduce the incidence of fires in inspected dwellings, then in any rate plan used in this state, dwellings that have been found by the inspection to meet the standards established by the program shall have credits applied to the rate in amounts approved by the director. (b) Except to the extent necessary to meet the provisions of (a)(1) of this section, uniformity among insurers in matters within the scope of this section is neither required nor prohibited. (c) In this section dwelling means a residential structure containing not more than four family living units.
(a) Credit history may not be used to determine personal insurance rates or premiums or to make underwriting decisions unless the insurance scoring models are filed with the director. Insurance scoring models include all attributes and factors used in the calculation of an insurance score, statistical validation, documentation, appropriate loss information, and any other relevant factors. (b) Information filed under (a) of this section (1) is confidential, shall be considered a trade secret, and is not subject to public inspection under AS 21.06.060; (2) may be released or otherwise shared as provided in AS 21.06.060; and (3) shall be filed by the insurer and may not be filed by a third party or vendor. (c) An insurer shall comply with AS 21.36.460 when using credit history to calculate a personal insurance score or determine personal insurance premiums or rates. (d) Notwithstanding (b) of this section, the director shall make available to the public a general description of the insurance scoring models filed under (a) of this section. A general description of insurance scoring models may not disclose any trade secrets contained in the models. (e) In this section, (1) credit history has the meaning given in AS 21.36.460; (2) insurance score has the meaning given in AS 21.36.460; (3) personal insurance has the meaning given in AS 21.36.460.
(a) Each insurer shall file with the director, except as to inland marine risks, which, by general custom of the business, are not written according to manual rates or rating plans, and except for rates for commercial insurance for which the director, by regulation authorizes an informational filing as set out in (k) of this section, every manual, minimum, class rate, rating schedule, loss cost adjustment, or rating plan and every other rating rule, and each modification of any of them that it proposes to use. Each filing (1) shall be made under the applicable filing procedures in AS 21.39.041, 21.39.210, or 21.39.220; (2) must state the proposed effective date; the effective date may be (A) a specific date; (B) the date the filing is approved by the director; or (C) a date conditioned on some other event when approved by the director; and  (3) must indicate the character and extent of the coverage contemplated. (b) An insurer may satisfy its obligation to make filings by becoming a member of, or a subscriber to, a licensed rating organization that makes filings and by authorizing the director to accept the filings on its behalf, except that nothing in this chapter may be construed as requiring an insurer to become a member of or a subscriber to a rating organization. (c) The director shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this chapter. (d) When a filing is not accompanied by the information upon which the insurer supports the filing, and the director does not have sufficient information to determine whether the filing meets the requirements of this chapter, the director shall require the insurer to furnish the information upon which the insurer supports the filing. The waiting period in AS 21.39.041(a) or 21.39.220(b) begins on the date the information is furnished to the director. The information furnished in support of a filing may include (1) the experience or judgment of the insurer or rating organization making the filing; (2) the insurer's interpretation of the statistical data it relies upon; (3) the experience of other insurers or rating organizations; (4) any other relevant factors. Specific inland marine rates on risks specially rated, made by a rating organization, shall be filed with the director. (e) Specific inland marine rates on risks specially rated by a rating organization, or a specific filing with respect to a surety or guaranty bond required by law or by court, executive order, or regulation of a public body and not covered by a previous filing, shall become effective when filed and considered to meet the requirements of this chapter until such time as the director reviews the filing and as long thereafter as the filing remains in effect. (f) The director may, by written order, suspend or modify the requirement of filing on a kind of insurance, subdivision or combination of them, or on classes of risks, the rates for which cannot practicably be filed before they are used or the filing and approval of which are, in the director's opinion, not desirable or necessary for the protection of the public. The orders shall be made known to insurers and rating organizations affected by them. The director may make an examination that the director may consider advisable to ascertain whether the rates affected by the order meet the standards set out in AS 21.39.030(a)(2). (g) Upon the written application of the insured describing the unusual characteristics that are not otherwise contemplated in the filed rating plan, the insurer may file a rate other than a rate provided for in an applicable rate filing that may be used on a specific risk. The filing shall be made under the applicable filing procedures in AS 21.39.041 or 21.39.220. (h) An insurer may not make or issue a contract or policy except in accordance with the filings that are in effect for that insurer as provided in this chapter or in accordance with (f), (g), and (i) of this section. This subsection does not apply to contracts or policies for inland marine risks on which filings are not required. (i) An insurer may use a rate less than that provided by a filing otherwise applicable on a specific risk the insurance for which would otherwise be exported under AS 21.34. Within 30 days of this action the insurer shall file a report detailing the information required by the director on a form prescribed by the director. (j) An insurer who has submitted an application for a certificate of authority under AS 21.09.110 and a filing of policy forms under AS 21.42.120 may file a proposed rating system as described in this section. The director's approval of the rating system is contingent upon the issuance of a certificate of authority under AS 21.09.120. (k) The director (1) may adopt regulations detailing the format and content of a rating system filing under this section; (2) shall adopt regulations consistent with the National Association of Insurance Commissioners Property and Casualty Model Rate and Policy Form Act, including those provisions relating to the format and content of informational filings for rates for commercial insurance; the provisions of AS 21.39.030(a) apply to an informational filing authorized by the director; in this paragraph, informational filing means a filing that the director does not approve before its use and that meets the format and content requirements of regulations adopted by the director.
(a) Except for workers' compensation prospective loss cost filings and workers' compensation assigned risk pool rates by a rating organization under AS 21.39.043, an insurer or rating organization shall file medical malpractice, workers' compensation and assigned risk plan rating systems as specified in AS 21.39.040(a) with the director for review and approval prior to use. Each filing shall be on file for a waiting period of 15 days before it becomes effective. This period may be extended by the director for an additional period not to exceed 15 days if the director gives written notice within the waiting period to the insurer or rating organization that made the filing stating that additional time for the consideration of the filing is required. The director shall approve the filing upon a determination that the filing meets the requirements of this title. (b) The filing must include the effective date. In place of a specific date, the insurer or rating organization may specify a reasonable time period after approval for the filing to be effective. (c) Upon written application by the insurer or rating organization, the director may authorize a filing that the director has approved to become effective before the expiration of the waiting period. A filing shall be considered to meet the requirements of this title unless disapproved by the director within the waiting period. (d) If the insurer or rating organization fails to provide information requested by the director under AS 21.39.040(d) within 30 days after the director requests the information, the response period may be extended by the director for an additional 15 days upon written application of the insurer or rating organization within the initial 30-day response period. The director shall consider the failure to provide information as a request by the insurer or rating organization to withdraw the filing from further consideration. (e) A filing and supporting information shall be open to public inspection after the filing becomes effective. (f) If, within the review period provided for in (a) of this section, the director finds that a filing does not meet the requirements of this title, the director shall send to the insurer or rating organization that made the filing written notice of disapproval of the filing specifying in what respects the filing fails to meet the requirements of this title and stating that the filing may not become effective.
(a) On at least an annual calendar year basis, a rating organization shall make a workers' compensation prospective loss cost filing and an assigned risk pool rate filing, even if the rating organization determines that a change in the prospective loss costs or rates is not indicated. (b) A rating organization shall submit a prospective loss cost filing and an assigned risk pool rate filing to the director not less than 125 days before the proposed effective date of each filing. (c) At the time a prospective loss cost filing and assigned risk pool rate filing are submitted to the director under (b) of this section, the rating organization shall make available to any member or subscriber that may be affected by the filings a complete copy of the filings, together with the materials, aggregate data, and other information submitted in support of the filings. The prospective loss cost and assigned risk pool rate filings and supporting information are available for public inspection. Before the hearing under (d) of this section, members and subscribers may submit interrogatories to the rating organization, including requests for additional supporting information concerning the filings. (d) The director shall hold an administrative hearing on whether a prospective loss cost filing meets the requirements of this chapter and whether the filing should be approved, disapproved, or modified, in whole or in part. The director shall hold the hearing not earlier than 20 days and not later than 25 days after the date of receipt of the prospective loss cost filing by the director. The director may adopt regulations governing the conduct of the hearing subject to the following: (1) the director shall sit in a quasi-judicial capacity; (2) an interested party may (A) have a reasonable opportunity to inspect the filing and supporting information and to examine witnesses, including the designated actuary and other witnesses of the rating organization; (B) present witnesses, oral and written testimony, and documentary evidence; and (C) apply for subpoenas to be issued by the director to compel attendance of witnesses and the production of evidence on the interested party's behalf; (3) evidence and testimony from interested parties is limited to matters relevant to a determination of whether the filing's prospective loss costs meet the requirements of this chapter and may include a recommendation for approval, disapproval, or modification of the prospective loss cost filing; (4) the director shall record the hearing; (5) formal rules of pleading or evidence need not be observed; (6) the director may conduct part or all of a hearing by teleconference and allow a witness to testify telephonically; and (7) the director shall leave the hearing record open for 10 days after the date of the hearing, during which time interested parties may submit additional written testimony and documentary evidence concerning the prospective loss cost filing to the director subject to the limitations of (3) of this subsection, and members and subscribers may submit to the rating organization and to the director proposed modifications to the prospective loss cost filing accompanied by the information upon which the member or subscriber supports the modification. (e) The director shall review the prospective loss cost filing and the evidence presented through the hearing process within 15 days after the hearing. The 15-day period may be extended for an additional 15 days if the director gives written notice within the first 15-day period to the rating organization that additional time for consideration of the filing is required. If, under (d)(7) of this section, evidence is provided to support a modification and the rating organization does not include the requested modification in the filing, the director shall require that the rating organization rebut the evidence to show why the modification should not be included. The director may request that the rating organization (1) provide additional supporting information for the filing; or (2) modify the filing based on evidence provided through the hearing process. (f) The rating organization shall file its rebuttal, if required by the director under (e) of this section, and any other information requested under (e)(1) of this section, or its modification of the loss cost filing under (e)(2) of this section within 15 days after receipt of the director's request unless additional time is allowed by the director. The director shall review the rating organization's responses to the director's interrogatories within 15 days after receipt of the response. The 15-day period may be extended for an additional 15 days if the director gives written notice within the first 15-day period to the rating organization that additional time for consideration of the filing is required. (g) Subject to AS 21.06.060(f), all communications under this section between the director, the rating organization, and any interested party concerning a prospective loss cost filing, including the director's interrogatories, the rating organization's written responses, modified filings and all supporting information, except for information related to a particular insured, are part of the filing record and are available for public inspection. (h) The rating organization shall make available to a member or subscriber all information that is available for public inspection under this section as soon as possible after issuance or receipt of the information by the director. Other interested parties may obtain copies of public documents from the director. (i) The director shall issue a written order approving or disapproving the prospective loss cost filing and the assigned risk pool rate filing. The order must include details of the director's reasoning for approving or disapproving the filings. (j) A separate prospective loss cost filing submitted solely to address an amendment to AS 23.30 is not subject to the procedures of this section, but shall be reviewed and approved or disapproved by the director in accordance with AS 21.39.040(d). A filing under this subsection, together with all supporting information and communications between the director and the rating organization, is available for public inspection. (k) A written order of the director under this section is subject to review by appeal to the superior court. An appeal under this section shall be filed with the court within 30 days after the date of the written order. The court shall determine whether the filing of the appeal will operate as a stay of the order. (l) A filing made under this section is subject to all other provisions of this chapter except to the extent that the other provisions are inconsistent with this section. AS 21.39.080 does not apply to a prospective loss cost filing by a workers' compensation rating organization. (m) An assigned risk pool filing is not directly subject to (d) - (h) of this section. (n) In this section, (1) assigned risk pool rate filing means the filing submitted by a rating organization for rates proposed to be charged by the rating organization for the assigned risk pool insurance under AS 21.39.155; (2) interested party means (A) an employer association; (B) an employee or labor association; (C) a producer; (D) a producer association; (E) an insurer member or subscriber of the rating organization; and (F) other persons who are substantially affected by the loss cost filing; (3) prospective loss cost filing means the historical aggregate losses and loss adjustment expenses upon which a portion of a rate is based, adjusted through trending to a future point in time, but does not include expenses, other than loss adjustment expenses, or profit.
(a) Notwithstanding any other provision of this chapter, a rate filing for workers' compensation insurance that classifies a risk in the construction industry may not contain or impose a higher premium rate if the risk upon which the higher rate filing is based consists only of a higher wage rate paid by the employer. (b) The director shall accept a rate filing for workers' compensation insurance if the filing includes a reasonable method of recognizing differences in rates of pay for the construction industry, and the method uses a credit scale that begins at an amount equal to the average weekly wage in this state for the construction industry as determined by the Department of Labor and Workforce Development.
(a) [Repealed,  12 ch 88 SLA 2005.]  (b) If, within 30 days after a specific inland marine rate on a risk especially rated by a rating organization subject to AS 21.39.040(e) has become effective or, if within 30 days after a special surety or guaranty filing subject to AS 21.39.040(e) has become effective, the director finds that the filing does not meet the requirements of this chapter, the director shall send to the rating organization or insurer that made the filing written notice of disapproval of the filing specifying in what respects the filing fails to meet the requirements of this chapter and stating when, within a reasonable period, the filing shall be considered no longer effective. Disapproval shall not affect a contract made or issued before the expiration of the period set out in the notice. (c) If, at any time subsequent to the applicable review period provided for in AS 21.39.041(a) or 21.39.220(b), the director finds that a filing does not meet the requirements of this title, the director shall, after a hearing held upon not less than 10 days written notice specifying the matters to be considered at the hearing and given to each insurer and rating organization that made the filing, issue an order specifying in what respects the filing fails to meet the requirements of this title and stating when, within a reasonable period thereafter, the filing shall be considered no longer effective. Copies of the order shall be sent to each insurer and rating organization that made the filing. The order may not affect a contract or policy made or issued before the expiration of the period set out in the order. (d) A person or organization aggrieved by a filing that is in effect may make written application to the director for a hearing, except that the insurer that made the filing may not be authorized to proceed under this subsection. The application shall specify the grounds to be relied upon by the applicant and the application must show that the person or organization making the application has a specific economic interest affected by the filing. If the director finds that the application is made in good faith, that the applicant has a specific economic interest, that the applicant would be so aggrieved if the grounds are established, and that the grounds otherwise justify holding a hearing, the director shall within 30 days after receipt of the application hold a hearing upon not less than 10 days written notice to the applicant and to every insurer and rating organization that made the filing. A rating or advisory organization has status under this chapter to make application for a hearing on a filing made by an insurer with the director. If, after the hearing, the director finds that the filing does not meet the requirements of this chapter, the director shall issue an order specifying in what respects that the filing fails to meet the requirements of this chapter, and stating when, within a reasonable period thereafter, the filing shall be considered no longer effective. Copies of the order shall be sent to the applicant and to every insurer and rating organization that made the filing. The order shall not affect a contract or policy made or issued before the expiration of the period set out in the order. (e) A filing may not be disapproved if the rates in the filing meet the requirements of this chapter.
The voluntary surrender of a certificate of authority or the failure of the surrendering admitted foreign insurer to continue a certificate of authority in force has the effect of cancelling an approval that the insurer may have received under this chapter, unless the approval has been affirmed by the director at the time of the surrender or noncontinuation of the certificate of authority.
(a) A corporation, an unincorporated association, a partnership, or a person, whether located inside or outside this state, may make application to the director for license as a rating organization for the kinds of insurance, or subdivision or class of risk or a part or combination thereof as are specified in its application and shall file with the application (1) a copy of its constitution, its articles of agreement or association, or its certificate of incorporation, and of its bylaws and regulations governing the conduct of its business; (2) a list of its members and subscribers; (3) the name and address of a resident of this state upon whom notices or orders of the director or process affecting the rating organization may be served; and (4) a statement of its qualifications as a rating organization. If the director finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws and regulations governing the conduct of its business conform to the requirements of law, the director shall issue a license specifying the kinds of insurance, or subdivisions or classes or risks or parts or combinations of them for which the applicant is authorized to act as a rating organization. Each application shall be granted or denied in whole or in part by the director within 60 days after the date of its filing. Licenses issued under this section shall remain in effect for three years unless suspended or revoked by the director. The fee for the license is set under AS 21.06.250. Licenses issued under this section may be suspended or revoked by the director, after hearing upon notice, if the rating organization ceases to meet the requirements of this subsection and (b) of this section. (b) Each rating organization shall notify the director promptly of every change in (1) its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws and regulations governing the conduct of its business; (2) its list of members and subscribers; and (3) the name and address of the resident of this state designated by it upon whom notices or orders of the director or process affecting the rating organization may be served. (c) Subject to regulations that have been approved by the director as reasonable, each rating organization shall permit an insurer that is not a member to be a subscriber to its rating services for the kind of insurance, subdivision, or class of risk or a part or combination of them for which it is authorized to act as a rating organization. Notice of proposed changes in the regulations shall be given to subscribers. Each rating organization shall furnish its rating service without discrimination to its members and subscribers. The reasonableness of a regulation in its application to subscribers, or the refusal of a rating organization to admit an insurer as a subscriber, shall, at the request of a subscriber or an insurer, be reviewed by the director at a hearing held upon at least 10 days' written notice to the rating organization and to the subscriber or insurer. If the director finds that the regulation is unreasonable in its application to subscribers, the director shall order that the regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within 30 days after it was made, the insurer may request a review by the director as if the application had been rejected. If the director finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, the director shall order the rating organization to admit the insurer as a subscriber. If the director finds that the action of the rating organization was justified, the director shall make an order affirming the action. (d) A rating organization may not adopt a regulation that would prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers. (e) Cooperation among rating organizations or among rating organizations and insurers in rate making or other matters within the scope of this chapter is authorized. The filings resulting from the cooperation are subject to the provisions of this chapter that are applicable to filings generally. The director may review the cooperative activities and practices, and if, after a hearing, the director finds that the activity or practice is unfair or unreasonable or inconsistent with this chapter, the director may issue a written order specifying in what respects the activity or practice is unfair or unreasonable or otherwise inconsistent with this chapter, and requiring the discontinuance of the activity or practice. (f) A rating organization may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements, or other evidences of insurance, or the cancellation of them, and may make reasonable rules governing their submission. The rules must contain a provision that in the event an insurer does not within 60 days furnish satisfactory evidence to the rating organization of the correction of an error or omission previously called to its attention by the rating organization, it shall be the duty of the rating organization to notify the director. All information submitted for examination shall be confidential. (g) A rating organization may subscribe for or purchase actuarial, technical, or other service. The services shall be available to all members and subscribers without discrimination.
(a) Each member of or subscriber to a rating organization shall adhere to the filings made on its behalf by the organization except that an insurer may file with the director, in accordance with AS 21.39.040(a), a deviation from the class rates, schedules, rating plans, or rules respecting a kind of insurance, or class of risk within a kind of insurance, or a combination of them. (b) [Repealed,  12 ch 88 SLA 2005.] 
(a) A member or subscriber to a rating organization may appeal to the director from the action or decision of the rating organization in approving or rejecting a proposed change in or addition to the filings of the rating organization and the director shall, after a hearing held upon not less than 10 days written notice to the appellant and to the rating organization, issue an order approving the action or decision of the rating organization or directing it to give further consideration to the proposal, or, if the appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, the director may, on a finding that the action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with the findings, within a reasonable time after the issuance of the order. (b) If the appeal is based upon the failure of the rating organization to make a filing on behalf of the member or subscriber, that is based on a system of expense provisions that differs, in accordance with the right granted in AS 21.39.030(a)(3), from the system of expense provisions included in a filing made by the rating organization, the director shall, if the appeal is granted, order the rating organization to make the requested filing for use by the appellant. In deciding the appeal the director shall apply the standards set out in AS 21.39.030.
Each rating organization and each insurer that makes its own rate shall, within a reasonable time after receiving written request and upon payment of the reasonable charge as it may make, furnish to an insured affected by a rate made by it, or to the authorized representative of the insured, all pertinent information concerning the rate. Each rating organization and each insurer that makes its own rates shall provide within this state reasonable means for a person aggrieved by the application of its rating system to be heard, in person or by an authorized representative, on a written request to review the manner in which the rating system has been applied in connection with the insurance. If the rating organization or insurer fails to grant or reject the request within 30 days after it is made, the applicant may proceed in the same manner as if the application had been rejected. A party affected by the action of the rating organization or the insurer on the request may, within 30 days after written notice of the action, appeal to the director, who, after a hearing held upon not less than 10 days written notice to the appellant and to the rating organization or insurer, may affirm or reverse the action.
(a) Each group, association or other organization of insurers, whether located inside or outside this state, that assists insurers that make their own filings or rating organizations in rate making by the collection and furnishing of loss or expense statistics or by the submission of recommendations, but that does not make filings under this chapter, shall be known as an advisory organization. (b) Each advisory organization shall file with the director (1) a copy of its constitution, its articles of agreement or association, or its certificate of incorporation and of its bylaws and regulations governing its activities; (2) a list of its members; (3) the name and address of a resident of this state upon whom notices or orders of the director or process issued at the direction of the director may be served; and (4) an agreement that the director may examine the advisory organization in accordance with AS 21.39.120. (c) If, after a hearing, the director finds that the furnishing of the information or assistance involves an act or practice that is unfair or unreasonable or otherwise inconsistent with this chapter, the director may issue a written order specifying in what respects the act or practice is unfair or unreasonable or otherwise inconsistent with this chapter, and requiring the discontinuance of the act or practice. (d) An insurer that makes its own filings and a rating organization may not support its filings by statistics or adopt rate making recommendations, furnished to it by an advisory organization that has not complied with this section or with an order of the director involving the statistics or recommendations issued under (c) of this section. If the director finds the insurer or rating organization to be in violation of this subsection the director may issue an order requiring the discontinuance of the violation.
(a) Each group, association, or other organization of insurers that engages in joint underwriting or joint reinsurance is subject to regulation in accordance with this section. In addition, joint underwriting is subject to all other provisions of this chapter, except for AS 21.39.210, and joint reinsurance is subject to AS 21.39.120, 21.39.160, and 21.39.170. (b) If, after a hearing, the director finds that an activity or practice of a group, association, or other organization is unfair or unreasonable or otherwise inconsistent with this chapter, the director may issue a written order specifying in what respects the activity or practice is unfair or unreasonable or otherwise inconsistent with this chapter, and requiring the discontinuance of the activity or practice.
(a) The director shall, at least once in five years, make or cause to be made an examination of each rating organization licensed in this state under AS 21.39.060 and may, as often as the director may consider it expedient, make or cause to be made an examination of each advisory organization referred to in AS 21.39.100 and of each group, association, or other organization referred to in AS 21.39.110. The reasonable costs of the examination shall be paid by the rating organization, advisory organization, or group, association, or other organization examined upon presentation to it of a detailed account of the costs. The officers, manager, agents, and employees of the rating organization, advisory organization, or group, association, or other organization may be examined at any time under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation. In lieu of an examination the director may accept the report of an examination made by the insurance supervisory official of another state, under the laws of that state. (b) A report of an examination may not be made public unless the rating organization, advisory organization, group, association, or other organization examined within 30 days after its receipt of the director's written notice of intention to publicize the report, does not apply to the director for a hearing. If the application is made within the 30 days, the director shall hold a hearing, after first giving reasonable written notice of the time and place, and either approve or disapprove the report as being correct. If the director approves the report or if no application is made for a hearing, the report shall immediately become and be admissible in evidence as a public record, and open to public inspection.
(a) The director shall adopt reasonable regulations and statistical plans, reasonably adapted to each of the rating systems filed with the director, that may be modified and that shall be used by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available at least annually in the form and detail that may be necessary to aid in determining whether rating systems comply with the standards set out in AS 21.39.030. The regulations and plans may also provide for the recording and reporting of expense experience items that are specially applicable to this state and are not susceptible of determination by a prorating of countrywide expense experience. In adopting the regulations and plans, the director shall give due consideration to the rating systems filed with the director and, in order that the regulations and plans may be as uniform as is practicable among the several states, to the regulations and to the form of the plans used for the rating systems in other states. An insurer may not be required to record or report its loss experience on a classification basis that is inconsistent with the rating system filed by it. The director may designate one or more rating organizations or other agencies to assist in gathering the experience and making compilations. The compilations shall be made available, subject to reasonable regulations adopted by the director, to insurers and rating organizations. (b) Reasonable regulations and plans may be adopted by the director for the interchange of data necessary for the application of rating plans. (c) In order to further uniform administration of rate regulatory laws, the director and each insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers, and rating organizations in other states and may consult with them with respect to rate making and the application of rating systems. (d) The director may adopt reasonable regulations necessary to carry out the purposes of this chapter.
A person or organization may not wilfully withhold information from, or knowingly give false or misleading information to, the director, a statistical agency designated by the director, a rating organization, or an insurer, that will affect the rates or premiums chargeable under this chapter. A violation of this section shall subject the one guilty of the violation to the penalties provided in AS 21.39.160.
Agreements may be made among insurers with respect to the equitable apportionment among them of insurance that may be afforded applicants who are in good faith entitled to the insurance but who are unable to procure the insurance through ordinary methods. The insurers may agree among themselves on the use of reasonable rate modifications for the insurance. The agreements and rate modifications are subject to the approval of the director.
(a) The director may require insurers, except a reciprocal insurer formed under AS 21.75, as a condition of writing a line of insurance dealing with medical malpractice or workers' compensation, to participate in an assigned risk pool if the director finds that mandatory carrier participation is in the public interest. (b) The assigned risk pool and the procedures to be followed in administering the pool shall be established by regulation. (c) An insurer may impose a surcharge not to exceed 25 percent of the premium for assigned risk pool insurance, except that a surcharge may not be applied to the first $3,000 in premium in any policy year.
(a) If the director finds, following an appropriate hearing, that a person or organization has violated a provision of this chapter, the director may impose a civil penalty not to exceed $200 or the actual amount of gain, whichever is greater, for each violation, but if the director finds the violation to be wilful the director may impose a penalty of $2,000 or three times the actual amount of gain, whichever is greater, for each violation. The penalties may be in addition to any other penalty provided by law. In this section, gain means the difference between the amount actually charged and the amount that should have been charged under applicable filings of the person or organization. (b) The director may suspend the license of a rating organization or insurer that fails to comply with an order of the director within the time limited by the order or an extension of time granted by the director. The director may not suspend the license of a rating organization or insurer for failure to comply with an order until the time prescribed for an appeal has expired or, if an appeal has been taken, until the order has been affirmed. The director may determine when a suspension of license becomes effective. The suspension shall remain in effect for the period fixed by the director unless the director modifies or rescinds the suspension, or until the order upon which the suspension is based is modified, rescinded, or reversed. (c) A penalty may not be imposed and a license may not be suspended or revoked except upon a written order of the director, stating findings, made after a hearing held upon not less than 10 days written notice to the person or organization specifying the alleged violation.
(a) An insurer or rating organization to which the director has issued an order made without a hearing may, within 30 days after notice to it of the order, make written request to the director for a hearing. The director shall hear the party or parties within 20 days after receipt of the request and shall give not less than 10 days written notice of the time and place of the hearing. Within 15 days after the hearing the director shall affirm, reverse or modify the previous action, specifying the reasons. Pending the hearing and decision the director may suspend or postpone the effective date of the previous action. (b) Nothing contained in this chapter may require the observance at a hearing of formal rules of pleading or evidence. (c) An order or decision of the director is subject to review by appeal to the superior court at the instance of a party in interest. The court shall determine whether the filing of the appeal will operate as a stay of an order or decision of the director. The court may, in disposing of the issue before it, modify, affirm, or reverse the order or decision of the director in whole or in part.
(a) Except for workers' compensation, medical malpractice, and assigned risk plan rates, an insurer's rate level increase or decrease may take effect without prior approval if the cumulative rate level change for all coverages combined, calculated from the effective date to 12 months before the effective date, is not greater than 10 percent. (b) An insurer may make multiple rate filings under this provision during any 12-month period if the cumulative rate level change is within the specified limitation as described in (a) of this section. For an insurer adopting a rating organization prospective loss cost filing, the cumulative rate level change includes both the rating organization's prospective loss cost change as well as the insurer's loss cost adjustment change. (c) Notwithstanding any other provision of this title, for a policy governed by this section, a filing that produces a rate level change within the limitations provided in (a) of this section is effective without prior approval and may take effect on the date specified in the filing, but not earlier than the date it is received by the division. A rate level change within the limitation in (a) of this section may not be applied to a policy until the beginning of the policy period. (d) A filing submitted under (a) of this section must include an exhibit showing the calculation of the overall rate level change and an exhibit showing the insurer's expense provisions. An insurer submitting a loss cost adjustment filing shall include supporting information showing how the loss cost adjustment is calculated. The director may request additional supporting information if the director does not have enough information upon which to determine if the filing meets the requirements of this title. (e) A filing submitted under (a) of this section is considered to comply with this title. However, if the director determines that the filing does not meet the requirements of this title, the director shall issue an order specifying in detail the specific statutes the insurer has violated and the reasons the filing is not in compliance. The order must state a reasonable future date on which the filing is to be considered no longer effective. An order by the director under this subsection is prospective and does not affect any contract issued or made before the effective date of the order. (f) The director may adopt regulations implementing the provisions of this section. (g) This section does not apply to rating organizations or to any impaired or insolvent insurer operating under a rehabilitation plan, an order of supervision, or an impaired financial condition as determined by the director.
(a) An insurer's rate level increase or decrease filing falling outside of the limitation provided in AS 21.39.210(a) is subject to file and use provisions under this section, unless the filing is otherwise exempt from those provisions under another provision in this chapter. A rate filing from a rating organization shall be submitted to the director under the file and use provisions. A rate filing from an insurer operating under a rehabilitation plan, an order of supervision, or an impaired financial condition as determined by the director shall be submitted to the division under the prior approval provisions. The insurer shall submit a filing for a new product or coverage introduction that does not have a rate on file under the file and use provisions. (b) Each insurer shall file with the director all rates, supplementary rate information, and supporting information at least 30 days before the proposed effective date. The director shall review the filing within 15 days. This period may be extended by the director for an additional period not to exceed 15 days if the director gives written notice within the initial 15-day period to the insurer or rating organization that made the filing that states additional time for the consideration of the filing is required. The waiting period is the 30-day period following the date the director receives the filing. (c) The filing must include the effective date that may not be before the end of the waiting period. Upon written application by the insurer or rating organization, the director may authorize a filing that the director has reviewed to become effective before the expiration of the waiting period. (d) A filing shall be considered to meet the requirements of this chapter and to become effective unless disapproved by the director within the waiting period. (e) The director shall disapprove a filing if the director finds that the filing does not meet the requirements of this title. (f) If the insurer or rating organization is unable to provide information requested by the director under AS 21.39.040(d) within 30 days after the director's request, the response period may be extended by the director for an additional 15 days upon written application of the insurer or rating organization within the initial 30-day response period. The director may disapprove the filing for failure to provide the requested information during the response period. The disapproval notice must state a reasonable future date on which the filing is to be considered no longer effective. (g) A filing and supporting information shall be open to public inspection after the director completes the review of the filing or after the filing becomes effective, whichever is later. (h) If within the waiting period in (b) of this section, the director finds that a filing does not meet the requirements of this title, the director shall send to the insurer or rating organization that made the filing, written notice of disapproval of the filing specifying in what respects the filing fails to meet the requirements of this title and shall state a reasonable future date on which the filing is to be considered no longer effective.
Every person who is directly or indirectly the beneficial owner of more than 10 percent of a class of an equity security of a domestic stock insurance company, or who is a director or an officer of the company, shall file with the department within 10 days after becoming the beneficial owner, director, or officer, a statement of the amount of all equity securities of the company of which the person is the beneficial owner. Within 10 days after the close of each calendar month, if there has been a change in ownership during the month, the beneficial owner, director, or officer shall file with the department a statement indicating ownership at the close of the calendar month, the changes in ownership that have occurred during the calendar month, and any other information required by the department. Statements shall be made in a form prescribed by the department.
For the purpose of preventing the unfair use of information that may have been obtained by a beneficial owner of more than 10 percent of a class of an equity security, or by a director or officer by reason of a relationship to a company, the profit realized by the beneficial owner, director, or officer from a purchase and sale, or a sale and purchase, of an equity security of the company within any period of less than six months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company. The profit shall inure to and be recoverable by the company irrespective of the intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold, for a period exceeding six months. Suit to recover the profit may be instituted at law or in equity in the superior court by the company, or by the owner of a security of the company in the name and in behalf of the company if the company fails or refuses to bring a suit within 60 days after request or fails diligently to prosecute the suit. However, a suit to recover profit may not be brought more than two years after the date the profit was realized. This section may not be construed to cover a transaction where the beneficial owner was not a beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved, or cover a transaction or transactions that the department by regulation may exempt as not comprehended within the purpose of the section.
A beneficial owner of more than 10 percent of a class of equity security, or a director or officer, may not, directly or indirectly, sell an equity security of the company if the person selling the security or the principal of that person (1) does not own the security sold, or (2) if owning the security, does not deliver it against the sale within 20 days after the sale or does not within five days after the sale deposit it in the mails or other usual channels of transportation; but a person shall not be considered to have violated this section on proof that notwithstanding the exercise of good faith the person was unable to make the delivery or deposit within the time prescribed, or that to do so would cause undue inconvenience or expense.
AS 21.40.020 does not apply to a purchase and sale, or sale and purchase, and AS 21.40.030 does not apply to a sale, of an equity security of a domestic stock insurance company not then or theretofore held in an investment account, by a dealer in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market, otherwise than on an exchange as defined in the Securities Exchange Act of 1934, as amended, for the security. The department may, by regulations that it considers necessary or appropriate in the public interest, define and prescribe terms and conditions regarding securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.
AS 21.40.010 - 21.40.030 do not apply to foreign or domestic arbitrage transactions unless made in contravention of regulations adopted by the department in carrying out the purposes of this chapter.
AS 21.40.010 - 21.40.030 do not apply to equity securities of a domestic stock insurance company if (1) the securities are registered, or are required to be registered, under 15 U.S.C. 78l ( 12, Securities Exchange Act of 1934), as amended; or (2) the domestic stock insurance company does not have a class of its equity securities held of record by 100 or more persons on the last business day of the year preceding the year in which equity securities of the company would be subject to AS 21.40.010 - 21.40.030 except for the provisions of this section.
The department may, under AS 44.62 (Administrative Procedure Act), adopt regulations necessary for the execution of the functions vested in it by AS 21.40.010 - 21.40.060, and may for that purpose classify domestic stock insurance companies, securities, and other persons or matters within its jurisdiction. A provision of AS 21.40.010 and 21.40.020 imposing a liability does not apply to an act done or omitted in good faith in conformity with a regulation of the department, notwithstanding that the regulation may, after the act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.
In this chapter, (1) domestic stock insurance corporation means a stock insurance corporation organized under the laws of this state or the Territory of Alaska; (2) equity security means a stock or similar security; or a security convertible, with or without considerations, into stock or similar security, or carrying a warrant or right to subscribe to or purchase stock or similar security; or any such warrant or right; or any other security that the department shall consider to be of similar nature and consider necessary or appropriate, by regulations the department may adopt in the public interest or for the protection of investors, to treat as an equity security; (3) officer means a president, vice president, treasurer, actuary, secretary, controller, and any other person who performs for the company functions corresponding to those performed by the foregoing officers.
AS 21.42.010 - 21.42.599 do not apply to (1) reinsurance; (2) policies or contracts not issued for delivery in this state or delivered in this state, except as provided in AS 21.42.120; (3) wet marine and transportation insurance; (4) title insurance, except that AS 21.42.080, 21.42.120, 21.42.130, 21.42.180, 21.42.190 and 21.42.230 do apply.
(a) A person of competent legal capacity may procure or effect an insurance contract on the life or body of the person for the benefit of any person. A person may not procure or cause to be procured an insurance contract upon the life or body of another person unless the benefits under the contract are payable to the individual insured, the personal representatives of the individual insured, or to a person having, at the time the contract was made, an insurable interest in the individual insured. (b) If the beneficiary, assignee, or other payee under a contract made in violation of this section receives from the insurer any benefits from the contract upon the death, disablement, or injury of the person insured, the person insured or the executor or administrator of the person insured may maintain an action to recover the benefits from the person receiving them. (c) Notwithstanding the other provisions of this section, a charitable organization may obtain, by procurement, assignment, or otherwise, life or health insurance on an insured who consents to the issuance of the insurance. In this subsection, charitable organization means a charity that is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code). (d) Notwithstanding (a) of this section, a trustee, acting in a fiduciary capacity, may procure or cause to be procured an insurance contract that is on the life or body of an individual and under which the proceeds of the insurance contract are payable to the trustee, acting in a fiduciary capacity, if (1) the trustee, acting in a fiduciary capacity, owns the insurance contract or the trust itself owns the insurance contract; (2) on the date the contract is made, a settlor of the trust is the individual insured, has an insurable interest in the individual insured, or would have had an insurable interest in the individual insured if the settlor were living at the time the contract was made; in this paragraph, settlor means a person, including a person for whom a fiduciary or agent is acting, who executes the trust instrument; and (3) the proceeds of the contract are primarily for the benefit of a trust beneficiary who has an insurable interest in the individual insured, except that, if the determination of the trust beneficiary's insurable interest is based on (e)(1) of this section, the trust beneficiary's relation by blood or law must be within the third degree. (e) Insurable interest, with reference to life, annuity, or health insurance, includes only the following interests: (1) in the case of persons related closely by blood or by law, a substantial interest engendered by love and affection; (2) in the case of persons other than those described in (1) of this subsection, a lawful and substantial economic interest in having the life, health, or bodily safety of the person insured continue, as distinguished from an interest that would arise only by, or would be enhanced in value by, the death, disablement, or injury of the individual insured; (3) an individual party to a contract or option for the purchase or sale of an interest in a business partnership or firm, or of shares of stock of a closed corporation or of an interest in the shares, has an insurable interest in the life of each individual party to the contract for the purposes of the contract only, in addition to an insurable interest that may otherwise exist as to the life of the individual. (f) A person who has an insurable interest in the life or body of an individual may form a business firm that is substantially or solely for the purpose of purchasing, holding, or administering an insurance contract on the life or body of the individual. In this subsection, firm has the meaning given in AS 21.97.900, but also includes a business trust and a joint venture.
(a) A contract of insurance of property or of an interest in property or arising from property may not be enforced as to the insurance except for the benefit of persons having an insurable interest in the things insured at the time of the loss. (b) The measure of an insurable interest in property is the extent to which the insured might be indemnified by loss, injury, or impairment. (c) In this section, insurable interest means an actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.
When the name of the person insured is specified in a policy insuring property the insurance can be applied only to the proper interest of the person insured.
A change of interest, by will or succession, on the death of the insured does not avoid an insurance of property and the insurance passes to the person taking an interest in the thing insured.
A transfer of interest by one of the several partners, joint owners, or owners in common, who are jointly insured, to the others, does not avoid an insurance of property even though it has been agreed that the insurance shall cease upon an alienation of the thing insured.
(a) A stipulation in a policy of insurance of property for the payment of loss without regard to absence of an insurable interest in the property on the part of the insured, or that the policy shall be received as proof of the interest, is void. (b) A policy executed by way of gaming or wagering is void.
An insurer may make a filing for approval by the director that provides for reimbursement by an insured of losses paid by the insurer under a workers' compensation insurance policy. A form that alters the obligation of the insurer to an employee under AS 23.30.025 or 23.30.030 may not be approved by the director. Filing for approval under this section is not a deviation under AS 21.39.070.
(a) A person of competent legal capacity may contract for insurance. (b) [Repealed,  25 ch 245 SLA 1970.]  (c) [Repealed,  25 ch 245 SLA 1970.]  (d) [Repealed,  25 ch 245 SLA 1970.] 
A life or health insurance contract upon an individual, except a contract of group life insurance or of group or blanket health insurance, may not be made or effectuated unless at the time of the making of the contract the individual insured, being of competent legal capacity to contract, applies for the contract or has consented to it in writing, except in the following cases: (1) a spouse may effectuate the insurance upon the other spouse; (2) a person having an insurable interest in the life of a minor or a person upon whom a minor is dependent for support and maintenance, may effectuate insurance upon the life of or pertaining to the minor; (3) family policies insuring any two or more members of a family may be issued on an application signed by either parent, a stepparent, or by a husband or wife.
(a) If a policy of life or health insurance delivered in this state is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes written request to the insurer for a copy of the application, if any, for the reinstatement or renewal, the insurer shall, within 30 days after receipt of the request at its home office or at one of its branch offices, deliver, or mail to the person making the request a copy of the application. In the case of a request from a beneficiary, the time within which the insurer is required to furnish a copy of the application does not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's vested interest in the policy or contract. (b) An alteration of a written application for a life or health insurance policy may not be made by a person other than the applicant without the written consent of the applicant, except that insertions may be made by the insurer, for administrative purposes only, in a manner that indicates clearly that the insertions are not to be ascribed to the applicant.
All statements and descriptions in an application for an insurance policy or annuity contract, or in negotiations for the policy or contract, by or in behalf of the insured or annuitant, shall be considered to be representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements may not prevent a recovery under the policy or contract unless either (1) fraudulent; (2) material either to the acceptance of the risk, or to the hazard assumed by the insurer; or (3) the insurer in good faith would either not have issued the policy or contract, or would not have issued a policy or contract in as large an amount, or at the same premium or rate, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.
(a) A basic insurance policy or annuity contract form, or application form where written application is required and is to be made a part of the policy or contract, or printed rider or endorsement form or form of renewal certificate, may not be delivered, or issued for delivery in this state, unless the form has been filed with and approved by the director. This provision does not apply to surety bonds or to specially rated inland marine risks, nor to policies, riders, endorsements, or forms of unique character designed for and used with relation to insurance upon a particular subject, or that relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or health insurance policies and are used at the request of the individual policyholder, contract holder, or certificate holder; or to policies of commercial insurance that the director has authorized under (d) of this section to be filed on or before the date of use and that are not subject to the prior approval of the director. The filing required by this section of forms for use in property, marine other than wet marine and transportation coverages, casualty, and surety coverages may be made by a rating organization on behalf of its members and subscribers; but this provision does not prohibit a member or subscriber from filing the forms on its own behalf. (b) Each insurer or rating organization shall submit a filing under one of the following procedures, clearly specifying the filing procedure under which the filing is being made: (1) for prior approval under AS 21.42.123; or (2) for file and use under AS 21.42.125. (c) An order of the director disapproving the form or withdrawing a previous approval shall state the grounds and the particulars in such detail as reasonably to inform the insurer thereof. (d) The director may, by order, require that a form or document be filed for informational purposes or may exempt a form or document from the requirements of this section for a time determined by the director when, in the opinion of the director, this section may not practicably be applied, or the filing or approval of the form or document is, in the opinion of the director, not desirable or necessary for the protection of the public. (e) This section applies to a form used by domestic insurers for delivery in a jurisdiction outside this state, if the insurance supervisory official of that jurisdiction informs the director that the form is not subject to approval or disapproval by the official, and upon the director's order requiring the form to be submitted for review and approval under this section. The applicable same standards shall apply to these forms as apply to forms for domestic use. (f) This section does not apply to a type of insurance subject to AS 21.57 or to policies issued under AS 21.34. (g) An insurer who has submitted an application for a certificate of authority under AS 21.09.110 may file a proposed policy form as described in this section. The director's approval of the policy form is contingent upon the issuance of a certificate of authority under AS 21.09.120. (h) The director may adopt regulations detailing the format and content of the filing of a policy form under this section. (i) The director may by order require an insurance document, form, or type of insurance document or form as specified in the order, to be submitted for prior approval if, in the opinion of the director, the approval of the insurance document, form, or type of insurance document or form is necessary for the protection of the public.
(a) A prior approval filing shall be made not less than 30 days before the effective date. At the end of the 30-day period, the form filed shall be considered approved unless, before the end of the 30-day period, it has been affirmatively disapproved by the director. Approval of the form by the director before the end of the 30-day period constitutes a waiver of the unexpired portion of the waiting period. The director may extend by not more than an additional 30 days the period for approving or disapproving the form, by giving notice of the extension during the initial 30-day period. At the expiration of the extended period, and in the absence of a prior approval or disapproval, the form shall be considered approved. The director may, by order, at any time after the notice, and for cause shown, withdraw the approval. (b) The director may require the insurer or rating organization to revise the filing to comply with this title. Failure of the insurer or rating organization to provide the information within 30 days after the director's request, or an extension of the period by the director for an additional 15 days upon written request of the insurer or rating organization within the response period, is considered to be a request by the insurer or rating organization to withdraw the filing from further consideration. (c) The filing must state an effective date. In place of a specific date, the insurer or rating organization may specify a reasonable time period after approval for the filing to be effective. (d) A prior approval filing shall be open to public inspection after the filing becomes effective.
(a) A file and use filing shall be filed with the director for a waiting period of not less than 30 days. The period may be extended by the director or the insurer or rating organization for an additional 30 days if notice is given within the initial 30-day period that additional time is needed for the consideration of the filing. The filing may become effective at the end of the waiting period unless disapproved by the director before the expiration of the waiting period. (b) The filing must state an effective date that must be after the waiting period. Upon written notice by the insurer or rating organization, the director may authorize a filing that has been reviewed to become effective before the expiration of the waiting period. (c) A file and use form filing must include a signed compliance certificate certifying that the filing complies with this title. An authorized officer or state filings manager of the insurer shall sign the compliance certificate stating that, to the best of the individual's knowledge, the filing complies with this title. The director may issue an order requiring an insurer who submits an incomplete or inaccurate compliance certificate to submit future form filings for prior approval. The order must specify the conditions under which the insurer may again submit filings under this section. In addition to any other penalty provided by law, a person that the director finds has submitted a materially false or misleading compliance certificate may be subject to either a civil penalty of not more than $10,000 for each violation or a civil penalty of not more than $25,000 for each violation if the director finds that the person knowingly violated the provisions of this title. A filing that does not include the signed compliance certificate shall be reviewed under the prior approval procedure under AS 21.42.123. In this subsection, knowingly has the meaning given in AS 11.81.900. (d) The director may require an insurer or rating organization to provide additional information to demonstrate that a file and use filing meets the requirements of this title or to revise the filing to meet the requirements of this title. If an insurer or rating organization fails to provide the information within the waiting period described in (a) of this section, the director shall consider the failure to be a request to withdraw the filing from further consideration. (e) A file and use filing shall be open to public inspection after the filing becomes effective.
The director shall disapprove a form filed under AS 21.42.120 or withdraw a previous approval of the form only if the form (1) is in any respect in violation of or does not comply with this title; (2) contains or incorporates by reference, where incorporation is permissible, an inconsistent, ambiguous, or misleading clause, or exception and condition that deceptively affects the risk purported to be assumed in the general coverage of the contract; (3) has a title, heading, or other indication of its provisions that is misleading; (4) is printed or otherwise reproduced in a manner that renders a provision of the form substantially illegible; (5) provides benefits for Medicare supplement insurance that are unreasonable in relation to the premium charged.
(a) Insurance contracts must contain the standard or uniform provisions that are required by the applicable provisions of this title pertaining to contracts of particular kinds of insurance. The director may waive the required use of a particular provision in a particular insurance policy form on a determination that (1) the provision is unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and (2) the policy is otherwise approved. (b) A policy may not contain a provision inconsistent with a standard or uniform provision used or required to be used, but the director may approve a substitute provision that the director determines is not less favorable in any particular to the insured or beneficiary than the provisions otherwise required. (c) In lieu of the provisions required by this title for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the director. (d) A provision required by this title to be contained in a policy cannot be waived by agreement between the insurer and another person.
(a) An insurance company licensed under AS 21.09, a hospital or medical service corporation licensed under AS 21.87, a fraternal benefit society licensed under AS 21.84, a health maintenance organization licensed under AS 21.86, or a multiple employer welfare arrangement may not issue a stop-loss insurance policy that (1) has an annual attachment point for claims incurred for each individual that is lower than $10,000; (2) has an annual aggregate attachment point for a small employer that is lower than the greatest of (A) $4,000 times the number of individuals covered under the health benefit plan; (B) 120 percent of the expected claims for the health benefit plan for the period covered by the stop-loss insurance policy; or (C) $20,000; (3) has an annual aggregate attachment point for a large employer that is lower than 110 percent of expected claims for the health benefit plan for the period covered by the stop-loss insurance policy; or (4) provides direct coverage of health care expenses of an individual. (b) The director may, by regulation, change the dollar amounts established under (a) of this section to reflect medical costs in this state, including adjustments to reflect changes in the medical care component of the Consumer Price Index for all urban consumers for the Anchorage Metropolitan Area compiled by the Bureau of Labor Statistics, United States Department of Labor. (c) For the purposes of this section, (1) attachment point means the claim amount incurred by an insured group beyond which the insurer incurs a liability for payment; (2) expected claims means the amount of claims that, in absence of a stop-loss insurance policy or other insurance, are projected to be incurred by an insured group through its health benefit plan; (3) health benefit plan has the meaning given in AS 21.54.500; (4) large employer has the meaning given in AS 21.54.500; (5) small employer has the meaning given in AS 21.54.500.
The policy, when issued, shall contain the entire contract between the parties, and neither the insurer nor its agent or representative, nor a person insured by the policy, may make an agreement as to the insurance that is not expressed in the policy. This section does not prohibit the modification of a policy, after issuance, by written rider or endorsement issued by the insurer.
(a) Each policy must specify (1) the names of the parties of the contract; (2) the subject of the insurance; (3) the risks insured against; (4) the time when the insurance thereunder takes effect and the period during which the insurance is to continue; (5) the premium; (6) the conditions pertaining to the insurance. (b) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included. (c) Subsections (a) and (b) of this section do not apply to surety contracts, or to group insurance policies. (d) Each policy and annuity contract issued by an insurer, and the forms thereof filed with the director, must have printed on them an appropriate designating letter or figure, or combination of letters or figures, or terms identifying the respective forms of policies or contracts. When a change is made in the form, the designating letters, figures, or terms must be correspondingly changed.
A policy may contain additional provisions not inconsistent with this title that are (1) required to be inserted by the laws of the insurer's domicile; (2) necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or (3) desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included in it.
(a) The director may approve an insurance policy form in a language other than English if the insurance policy form (1) is filed with a copy of the same material in English; and (2) discloses, in both English and the language other than English, that the English language version is the official version and the non-English language version is for informational purposes only. (b) The English language version of the insurance policy form or associated material shall be the official version for purposes of application and interpretation if the non-English insurance policy form or associated material (1) is provided with a copy of the same material in English; and (2) discloses, in both English and the language other than English, that the English language version is the official version and the non-English language version is for informational purposes only. (c) An insurer may not misrepresent information in an insurance policy form or associated material translated into a language other than English. For purposes of this subsection, misrepresent information means to include a statement or omit a statement when, taken in the context of the whole presentation, the statement or omission may tend to mislead or deceive the person or persons addressed. (d) For purposes of this section, associated material means advertising and marketing information including brochures, pamphlets, or electronic media used to describe or promote the insurance policy form.
A policy may not contain a provision purporting to make a portion of the charter, bylaws, or other constituent document of the insurer, other than the subscribers' agreement or power of attorney of a reciprocal insurer, a part of the contract unless the portion is set forth in full in the policy. A policy provision in violation of this section is invalid.
(a) Each insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney-in-fact, employee, or representative duly authorized by the insurer. (b) A facsimile signature of the executing individual may be used in lieu of an original signature. (c) An insurance contract that is otherwise valid is not rendered invalid by reason of the apparent execution on behalf of the insurer by the imprinted facsimile signature of an individual who is not authorized to execute as of the date of the policy.
(a) Two or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriters' policy bearing their names. Any one insurer may issue policies in the name of an underwriter's department and the policy must plainly show the true name of the insurer. (b) Two or more insurers may, with the approval of the director, issue a combination policy which shall contain provisions substantially as follows: (1) that the insurers executing the policy shall be severally liable for the full amount of loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and (2) that service of process, or of notice or proof of loss required by the policy, upon any of the insurers executing the policy, constitutes service upon all the insurers. (c) This section does not apply to cosurety obligations.
(a) Unless prohibited by federal law, an insurer authorized under AS 21.09 to offer, issue for delivery, deliver, or renew an individual or group health insurance policy for major medical coverage on an expense incurred basis; a health maintenance organization authorized under AS 21.86 to offer a contract to provide major medical health care services on a prepaid basis; or a service corporation authorized under AS 21.87 to offer or renew an individual or group subscriber's contract for major medical coverage shall include a coordination of benefits provision in a major medical policy or contract. (b) The director may adopt regulations to implement this section.
The original insured has no interest in a contract of reinsurance.
An insurance policy, rider, or endorsement issued and otherwise valid that contains a condition or provision not in compliance with the requirements of this title, is not thereby rendered invalid but shall be construed and applied in accordance with the conditions and provisions as would have applied had the policy, rider, or endorsement been in full compliance with this title.
Each insurance contract shall be construed according to the entirety of its terms and conditions as set out in the policy and as amplified, extended, or modified by a rider, endorsement, or application that is a part of the policy.
(a) A binder or other contract for temporary insurance may be made orally or in writing and shall be considered to include all the usual terms of the policy as to which the binder was given together with the applicable endorsements designated in the binder, except as superseded by the clear and express terms of the binder. (b) A binder is not valid after the issuance of the policy with respect to which it was given, or after 90 days from its effective date, whichever period is the shortest. (c) If the policy has not been issued a binder may be extended or renewed after the 90 days with the written approval of the insurer. (d) This section does not apply to life or health insurances.
(a) An insurer shall provide a policy or endorsement to the insured or to the person entitled to it by mail or delivery or by posting on the insurer's Internet website under (c) of this section within a reasonable period of time after its issuance. The insurer is not required to mail, deliver, or post the policy or endorsement until all conditions required by the insurer have been met by the insured. (b) If the original policy is delivered or is required to be delivered to or for deposit with a vendor, mortgagee, or pledgee of a motor vehicle or aircraft, and in which policy an interest of the vendee, mortgagor, or pledgor in or with reference to the vehicle or aircraft is insured, a duplicate of the policy setting out the name and address of the insurer, insurance classification of vehicle or aircraft, type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy or memorandum thereof containing the same information, shall be delivered by the vendor, mortgagee, or pledgee to each vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of the facts shall be printed, written, or stamped conspicuously on the face of the duplicate policy or memorandum. (c) An insurer may provide an insurance policy or endorsement by posting the policy or endorsement on the insurer's Internet website and clearly identifying the posted policy or endorsement purchased by the insured in the declaration page provided to the insured. An insurance policy or endorsement posted under this subsection (1) must contain the standard or uniform provisions required by AS 21.42.140; (2) must be in a form approved by the director under AS 21.42.120; (3) must be posted in a manner that reasonably allows the insured to retrieve and print or save the policy or endorsement from the website without paying a fee; (4) must remain posted on the insurer's Internet website during the time that the policy or endorsement is in effect, be retained by the insurer for not less than three years after the policy or endorsement is no longer in effect, and be made available to the insured on request; and (5) may not include personally identifiable information. (d) The insurer shall notify the insured at the time of issuance or renewal of the method by which the insured may request and the insurer shall provide a paper or electronic copy of the insured's policy or endorsement without the insured paying a fee. (e) If the policy or endorsement change or the means of obtaining policy information from the insurer's Internet website changes, the insurer shall notify the insured in the manner the insurer customarily communicates with an insured.
An insurance policy terminating by its terms at a specified expiration date and not otherwise renewable, may be renewed or extended at the option of the insurer upon a currently authorized policy form and at the premium rate then required for the policy, for a specific additional period or periods by certificate or by endorsement of the policy, without requiring the issuance of a new policy.
Unless otherwise provided by law, the effective date of a change relating to coverage under an insurance contract as a result of a change to this title is the issue date for a new policy or the renewal date for a renewal policy.
A policy may be assignable or nonassignable, depending upon its terms. Subject to its terms relating to its assignability, a life, group life, or health insurance policy, whether issued before or after July 1, 1966, under the terms of which the beneficiary may be changed upon the sole request of the insured, may be assigned either by pledge or transfer of title by an assignment executed by the insured alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. The assignment entitles the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge, or written notice by or on behalf of some other person claiming an interest in the policy that is in conflict with the assignment.
When the proceeds of or payments under a life or health insurance policy or annuity contract, whether issued before or after July 1, 1966, become payable in accordance with the terms of the policy or contract, or the exercise of a right or privilege under the policy or contract and the insurer makes payment in accordance with the terms of the policy or contract or in accordance with a written assignment, the person then designated under the policy as being entitled to the proceeds or payments shall be entitled to receive the proceeds or payments and to give full acquittance for them. The payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of another person that the other person claims to be entitled to the payment or some interest in the policy or contract.
(a) A minor domiciled in this state who has attained the age of 16 years shall be considered competent to receive and to give full acquittance and discharge for a payment or payments in aggregate amount not exceeding $3,000 in any one year made by a life insurer under the maturity, death, or settlement agreement provisions in effect or elected by the minor under a life insurance policy or annuity contract, if the policy, contract, or agreement provides for the payment or payments to the minor, and if before the payment the insurer has not received written notice of the appointment of a duly qualified guardian of the property of the minor. A minor is not competent to alienate to the right to or to anticipate the payments. (b) This section does not require an insurer to determine whether another insurer is effecting a similar payment to the same minor.
An insurer shall furnish, upon written request of the person claiming to have a loss under an insurance contract issued by the insurer, forms of proof of loss for completion by the person, but the insurer is not, by reason of the requirement to furnish forms, responsible for or with reference to the completion of the proof or the manner of the completion or attempted completion.
Without limitation of a right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer constitute a waiver of a provision of a policy or of a defense of the insurer thereunder: (1) acknowledgment of the receipt of notice of loss or claim under the policy; (2) furnishing forms for reporting a loss or claim, for giving information relative to it, or for making proof of loss, or receiving or acknowledging receipt of forms or proofs completed or uncompleted; (3) investigating a loss or claim under a policy or engaging in negotiations for a possible settlement of the loss or claim.
(a) A domestic life insurance company may establish one or more separate accounts, and may allocate to an account amounts, including proceeds applied under optional methods of settlement or under divided options, to provide for life insurance or annuities and benefits incidental to the account, payable in fixed or variable amounts or both. (b) The income, gains, and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account, without regard to other income, gains, or losses of the company. (c) Except as may be provided for reserves for guaranteed benefits and funds referred to in (d) of this section, amounts allocated to a separate account and accumulations to it may be invested and reinvested in securities eligible for investment for life insurance companies without regard to quantitative investment limitations prescribed by law for life insurance companies. The investments from separate accounts may not be considered in applying the investment limitations otherwise applicable to the investments of the company. (d) Reserves for benefits guaranteed as to dollar amount and duration and for funds guaranteed as to principal amount or stated rate of interest may not be maintained in a separate account, unless approved by the director and in accordance with conditions as to investments and other matters prescribed by the director. In imposing conditions, the director shall take into consideration the guaranteed nature of the benefits provided. (e) Unless otherwise approved by the director, (1) assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to a separate account; and (2) the portion of the assets of a separate account equal to the company's reserve liability for the guaranteed benefits and funds referred to in (d) of this section shall be valued under the rules applicable to the valuation of the company's other assets. (f) Amounts allocated to a separate account as provided in this section shall be owned by the company, and the company may not be, nor hold itself out to be, a trustee for those amounts. If the applicable contracts so provide, that portion of the assets of a separate account equal to the reserves and other contract liabilities of that account may not be chargeable with liabilities arising out of any other business the company may conduct. (g) A sale, exchange, or other transfer of assets may not be made by a company among its separate accounts or between other investment accounts and one or more of its separate accounts, unless, in the case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts of the separate account to which the transfer is made, and unless the transfer, whether into or from a separate account, is made (1) by a transfer of cash, or (2) by a transfer of securities having a readily determinable market value, unless the transfer of securities is approved by the director. The director may approve other transfers among these accounts if the transfers would be equitable. (h) To the extent the company considers it necessary in order to comply with applicable federal or state laws, the company may give persons having an interest in a separate account, including a separate account that is a management investment company or a unit investment trust, appropriate voting and other rights and may adopt special procedures for the conduct of the business of the account which include special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with the company, to manage the business of the account. (i) A contract providing benefits payable in variable amounts delivered or issued for delivery in this state must contain a statement of the essential features of the procedures to be followed by the insurance company in determining the dollar amount of the variable benefits. A contract under which the benefits vary to reflect investment experience, including a group contract and certificate in evidence of variable benefits issued under it, must state that the dollar benefit amount will vary and must contain on its first page a statement that the benefits under it are on a variable basis. (j) A company may not deliver or issue for delivery in this state variable contracts unless it is licensed or organized to undertake a life insurance or annuity business in this state. The director may review the company's financial condition or method of operation for the issuance of contracts payable in variable amounts to determine whether the company's operation is hazardous to the public or its policyholders in this state. During the review the director shall consider (1) the history and financial condition of the company; (2) the character, responsibility, and fitness of the officers and directors of the company; and (3) the laws and regulations under which the company is authorized in the state of domicile to issue variable contracts. If the company is a subsidiary of an admitted life insurance company, or affiliated with an admitted company through common management or ownership, the director may consider that the company meets the provisions of this subsection if either it or the parent or the affiliated company meets the requirements of this subsection. If the company fails to meet the requirements contained in this subsection, the director may suspend the certificate of authority of the company until the requirements are met or may prohibit the further issuance of variable contracts. (k) The director has sole authority to regulate the issuance and sale of variable contracts, to examine and license agents to sell variable contracts, and to adopt regulations considered appropriate to carry out the purposes and provisions of this section. (l) Except for AS 21.45.030, 21.45.080, 21.45.110, 21.45.180, 21.45.230, 21.45.240, 21.45.290, 21.45.300, and AS 21.48.110, and except as otherwise provided in this section, the provisions of this title apply to separate accounts and contracts relating to them. An individual variable life insurance contract delivered or issued for delivery in the state must contain grace reinstatement and nonforfeiture provisions appropriate to that contract. An individual variable annuity contract delivered or issued for delivery in the state must contain grace and reinstatement provisions appropriate for that contract. A group variable life insurance contract delivered or issued for delivery in the state must contain a grace provision appropriate for that contract. The reserve liability for variable contracts shall be established in accordance with actuarial procedures, acceptable to the director, that recognize the variable nature of the benefits provided and any mortality guarantees.
(a) A health care insurance plan providing coverage for a dependent of a covered individual shall, as to the dependent's coverage, also provide that the health care insurance benefits applicable for dependents shall be payable with respect to (1) a newly born child of a covered individual from the moment of birth; (2) a child adopted by a covered individual from the date of adoption; (3) a child placed with a covered individual for adoption from the date of placement for adoption; and (4) a spouse from not later than the first day of the first month beginning after the date the request for enrollment is received, but the insurer may require that a request for enrollment be received within 31 days of the date of marriage. (b) The coverage for a newly born child under this section shall consist of coverage of injury or sickness, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. (c) If payment of a specific charge is required to provide coverage for a child under this section, the policy or contract may require that notification of birth of a newly born child, adopted child, or child placed for adoption and payment of the required premium or fees may be required to be furnished to the health care insurer within 31 days after the date of birth, adoption, or placement for adoption in order to have the coverage continue beyond the 31-day period. (d) Under (a) - (c) of this section, a health care insurer shall offer coverage for a family member, including a newly born child, adopted child, or child placed for adoption, regardless of the marital status of the covered individual.
(a) A health care insurer who provides coverage for the costs of childbirth shall also provide coverage for the costs of hospitalization or medical care following childbirth for a period of not less than (1) 48 hours after a vaginal birth; and (2) 96 hours after a caesarean birth. (b) Except as otherwise required to provide coverage specified under (a) of this section, this section does not affect a payment arrangement entered into between a hospital or health care provider and a health care insurer. (c) This section may not be construed to require hospitalization or medical care as described under (a)(1) or (2) of this section if the mother giving birth and the mother's health care provider agree that the mother and any newborn child of the mother should be discharged earlier than required under (a)(1) or (2) of this section. (d) In this section, (1) health care insurer has the meaning given in AS 21.54.500; health care insurer includes the Comprehensive Health Insurance Association as described in AS 21.55.010; (2) health care provider means a person licensed in this state to provide health care services.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan shall provide coverage for newborn and infant hearing screening under the schedule described in (b) of this section if the plan covers services provided to women during pregnancy and childbirth and the dependents of a covered individual. (b) The minimum coverage required under (a) of this section includes (1) a newborn or infant hearing screening to be performed within 30 days after the child's birth; and (2) if the initial screening under (1) of this subsection determines that the child may have a hearing impairment, a confirmatory hearing diagnostic evaluation. (c) The coverage required by this section may be subject to standard policy provisions that are applicable to other benefits, such as deductible or copayment provisions.
(a) A health care insurer that offers health care insurance that covers a dependent of a covered individual shall, initially and at each renewal, offer coverage for the cost of well-baby exams. The coverage required to be offered by this section is subject to standard policy provisions applicable to other benefits, including deductible or copayment provisions. (b) In this section, (1) health care insurer has the meaning given in AS 21.54.500; (2) health care professional means a health aide, physician, nurse, and physician assistant, but does not include a practitioner of religious healing; (3) well-baby exam means (A) a periodic physical examination by a qualified health care professional of a baby during the first 24 months of life in which information is collected on matters including normal development, growth rate, hearing, vision, language skills, motor development, diet, general care, preventative health care, immunizations, and infectious diseases; and (B) consultation between the health care professional and a parent.
Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan may offer coverage for services of an acupuncturist licensed under AS 08.06 if the plan covers acupuncture treatment by a health care provider who is subject to other provisions of AS 08.
(a) If a health care insurance plan or an excepted benefits policy or contract provides indemnity for the cost of services of a physician provided to women during pregnancy, childbirth, and the period after childbirth, indemnity in a reasonable amount shall also be provided for the cost of an advanced practice registered nurse who provides the same services. Indemnity may be provided under this subsection only if the advanced practice registered nurse is practicing as a certified nurse midwife in accordance with regulations adopted under AS 08.68.100(a), and the services provided are within the scope of practice of that certification. (b) If a health care insurance plan or an excepted benefits policy or contract provides for furnishing those services required of a physician in the care of women during pregnancy, childbirth, and the period after childbirth, the contract shall also provide that an advanced practice registered nurse may furnish those same services instead of a physician. Services may be provided under this subsection only if the advanced practice registered nurse is practicing as a certified nurse midwife in accordance with regulations adopted under AS 08.68.100(a), and the services provided are within the scope of practice of that certification.
A policy, contract, or prepaid plan for individual or group health insurance issued or delivered in the state that provides reimbursement for a service within the lawful scope of practice of an optometrist licensed under AS 08.72 must provide for reimbursement to a person covered under the policy, contract, or plan who had the service performed by an optometrist.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan providing coverage for five or more employees of an employer in the group market shall offer a covered employee or the employee's dependent coverage for the treatment of alcoholism or drug abuse. (b) In this section, alcoholism or drug abuse means an illness characterized by (1) a physiological or psychological dependency, or both, on alcoholic beverages or controlled substances as defined in AS 11.71.900; or (2) habitual lack of self-control in using alcoholic beverages or controlled substances to the extent that the person's health is substantially impaired or the person's social or economic function is substantially disrupted.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan shall provide coverage for low-dose mammography screening under the schedule described in (b) of this section if the plan covers mastectomies and prosthetic devices and reconstructive surgery incident to mastectomies. (b) The minimum coverage required under (a) of this section includes (1) a baseline mammogram for a covered individual who is at least 35 years of age but less than 40 years of age; (2) one mammogram every two years for a covered individual who is at least 40 years of age but less than 50 years of age; (3) an annual mammogram for a covered individual who is at least 50 years of age; (4) a mammogram at any age for a covered individual with a history of breast cancer or whose parent or sibling has a history of breast cancer, upon referral by a physician. (c) The coverage required by this section (1) must be included in the health care insurance plan on a basis that is not less favorable than for other radiological examinations; (2) may be subject to standard policy provisions applicable to other benefits, such as deductible or copayment provisions. (d) [Repealed,  115 ch 81 SLA 1997.]  (e) In this section, low-dose mammography screening and mammogram mean the X-ray examination of the breast using equipment dedicated specifically for mammography, including the X-ray tube, filter, compression device, screens, films, and cassettes, with an average radiation exposure delivery of less than one rad mid-breast, with two views for each breast.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan shall provide coverage for the costs of colorectal cancer screening examinations and laboratory tests under the schedule described in (b) of this section. The coverage required by this section is subject to standard policy provisions applicable to other benefits, including deductible or copayment provisions. (b) The minimum coverage required under (a) of this section for colorectal cancer screening includes coverage for colorectal cancer examinations and laboratory tests specified in American Cancer Society guidelines for colorectal cancer screening of asymptomatic individuals. Coverage shall be provided for all colorectal screening examinations and tests that are administered at a frequency identified in the American Cancer Society guidelines for colorectal cancer. (c) Coverage provided under this section applies to a covered individual who is (1) at least 50 years of age; or (2) less than 50 years of age and at high risk for colorectal cancer. (d) All screening options identified in (b) of this section shall be covered by the insurer, with the choice of option determined by the covered individual in consultation with a health care provider. (e) For individuals considered at average risk for colorectal cancer, coverage or benefits shall be provided for the choice of screening, so long as it is conducted in accordance with the specified frequency. For individuals considered at high risk for colorectal cancer, screening shall be provided at a frequency determined necessary by a health care provider. (f) An employer that provides a health care insurance plan under this section shall notify each covered individual of the coverage for colorectal cancer screenings unless coverage for colorectal cancer screening previously exists. The notice shall be included in the health benefit handbook or be provided by written or electronic communication between an employer or health plan administrator and a covered individual. However, if the covered individual purchases the health care insurance plan from the insurer issuing the policy, the insurer is responsible for notifying the covered individual of the coverage for colorectal cancer screening under this section. (g) In this section, individual considered at high risk for colorectal cancer means an individual who faces a high risk for colorectal cancer because of (1) family history; (2) prior experience of cancer or precursor neoplastic polyps; (3) a history of a chronic digestive disease condition, including inflammatory bowel disease, Crohn's Disease, or ulcerative colitis; (4) the presence of any appropriate recognized gene markers for colorectal cancer; or (5) other predisposing factors.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan shall provide coverage under the plan for the formulas necessary for the treatment of phenylketonuria. This subsection does not apply to a health care insurance plan that the director has determined by order should be excluded from this subsection. (b) A health care insurer providing coverage under this section may impose reasonable contract limitations but may not refuse coverage based on a preexisting condition of phenylketonuria or require that an individual covered under the plan pay a higher deductible or copayment for the cost of treating phenylketonuria than for the cost of treating another condition or illness. (c) In this section, cost means the lowest of the following: (1) the actual charge for the treatment received for phenylketonuria; (2) the usual, customary, and reasonable charge for the treatment as determined by the contract of coverage; or (3) the charge agreed to by contract between the treatment provider and the health care insurer.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan, including a Medicare supplement policy to the extent not prohibited by 42 U.S.C. 1395 (Social Security Act), shall offer to each plan sponsor or individual minimum dental, vision, and hearing coverage described in (b) of this section. Coverage required under this subsection may be offered as a rider or in a separate policy. (b) The minimum coverage required under (a) of this section (1) may be provided under contract with another health care insurer; (2) may not be less than the dental, vision, and hearing coverage provided on July 1, 2009, to an individual entitled to medical benefits under AS 39.35.535 (public employees' retirement system of Alaska); and (3) shall be adjusted by the director on July 1, 2012, and every three years thereafter to correspond to changes in coverage provided to individuals entitled to medical benefits under AS 39.35.535. (c) This section does not apply to a health care insurer that has written less than $300,000 in premiums in the previous calendar year. A health care insurer exempt under this subsection shall disclose the exemption when offering, issuing for delivery, delivering, or renewing a health care insurance plan or an excepted benefits contract, and shall advise the individual covered under the plan that health care insurers that have written more than $300,000 in premiums in the previous calendar year are required to offer coverage under (a) and (b) of this section. (d) This section does not require an insurer who offers only group insurance coverage under AS 21.54 to offer dental, vision, and hearing coverage to an individual.
(a) A health care insurer that offers in this state a health care insurance plan that includes coverage for pharmacy services shall initially and at each renewal provide coverage for the cost of treating diabetes, including medication, equipment, and supplies. All health care insurance plans must include coverage for outpatient self-management training or education, and medical nutrition therapy, if diabetes treatment is prescribed by a health care provider. The coverage required by this section is subject to standard policy provisions applicable to other benefits, including deductible or copayment provisions. Coverage for the cost of diabetes outpatient self-management training or education and for the cost of medical nutrition therapy is only required if provided by a health care provider with training in the treatment of diabetes. (b) [Repealed,  2 ch 23 SLA 2000.]  (c) In this section, (1) diabetes includes insulin-dependent diabetes, insulin-using diabetes, gestational diabetes, and non-insulin-using diabetes; (2) health care provider means a person licensed to provide health care services as required by the state.
(a) A health care insurer who provides coverage for dental care may not include in the health care insurance plan or contract a provision that (1) prohibits a covered person from obtaining dental care services from a dentist of the person's choice, including a specialist; (2) restricts a covered person's right to receive full information from the person's dentist regarding the care or treatment options that the dentist believes are in the best interests of the person. (b) A health care insurance plan or contract that provides coverage for dental services that allows the health care insurer to review a treatment plan or conduct a utilization review must contain a provision that a treatment plan review or utilization review relating to dental care for a covered person receiving treatment in this state must be conducted by a dentist if the claim for reimbursement or payment is denied. (c) A health care insurer that provides coverage for dental care (1) may reimburse a covered person at a different rate because of the person's choice of a dentist if the dentist is not a part of the covered person's dental network or preferred provider organization agreement; the covered expense for non-network providers may not be less than that allowed to a network provider, although the covered expense may be reimbursed at a lower percentage or with higher deductibles than if the service had been provided within the network; (2) may not limit a fee set by a dentist for a service unless the service is covered under the insurer's plan or contract; and (3) may offer a dentist the option of entering into a preferred provider contract with the insurer that provides a fee schedule for covered services only or a fee schedule for both covered and uncovered services; under this paragraph, (A) the health care insurer may not (i) take an action against the dentist based on the dentist's refusal to enter into a contract with an insurer; (ii) fail to list a dentist who does not enter into a contract with an insurer in the insurer's marketing materials; or (iii) take action against the dentist during the management or administration of a contract based on the dentist's choice of contract; (B) the terms or provisions of the contract (i) may not violate AS 45.50.562 - 45.50.566; and (ii) may authorize the insurer to provide information to the insured describing the dentist's choice of contract and fee schedules; (C) covered service means a health care service for which a health care insurer pays a benefit for all or part of the service, including a benefit that is available but limited by deductible, coinsurance, or frequency terms under the contract between the insurer and the insured. (d) A health care insurer may not deny (1) dental coverage, cancel a health care insurance plan or contract, or otherwise take action against a covered person or a dentist because the person has asserted a right described in this section; (2) dental coverage or eligibility for dental coverage because the covered person chooses a dentist outside of a preferred provider organization agreement. (e) A covered person may bring a civil action against a health care insurer to enforce the person's rights under this section if the covered person has exhausted the administrative appeal process. (f) A dentist who treats a covered person may not waive uncovered dental expenses for which the covered person has liability because a covered person chose the dentist outside of a dental network or a preferred provider organization agreement. (g) In this section, (1) covered expense means charges that are payable under plan provisions; (2) dentist means a person licensed to practice dentistry; (3) preferred provider means a dental provider who has signed an agreement with a dental care plan to provide services to plan participants at a specific rate.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan shall provide coverage for the costs of prostate cancer screening tests as required under the schedule described in (b) of this section and shall provide coverage for the costs of cervical cancer screening tests as required under (c) of this section. The coverage required by this section is subject to standard policy provisions applicable to other benefits, including deductible or copayment provisions. If a physician recommends that a covered individual undergo prostate cancer screening by taking a prostate antigen blood test, coverage may not be denied because the covered individual has already had a digital rectal examination and the examination results were negative. (b) The minimum coverage required under (a) of this section includes an annual prostate cancer screening test for a person who is (1) at least 35 years of age but less than 40 years of age and the person is in a high risk group; in this paragraph, high risk means a person who is an African-American or who has a family history of prostate cancer; or (2) 40 or more years of age. (c) The minimum coverage required under (a) of this section for cervical cancer screening is an annual pap smear cancer screening test for a person who is 18 or more years of age. (d) [Repealed,  115 ch 81 SLA 1997.]  (e) In this section, prostate cancer screening tests includes a prostate antigen blood test or another test that is equivalent or better in cancer detection.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews a health care insurance plan in this state shall provide coverage for the costs of the diagnosis and treatment of autism spectrum disorders. Coverage required by this subsection must include treatment prescribed by a licensed physician, psychologist, or advanced practice registered nurse, provided by or supervised by an autism service provider, and as identified in a treatment plan developed following a comprehensive evaluation. Covered treatment includes medically necessary pharmacy care, psychiatric care, psychological care, habilitative or rehabilitative care, and therapeutic care. In this subsection, (1) habilitative or rehabilitative care means professional counseling, guidance services, and treatment programs necessary to develop, restore, or maintain the functioning of an individual to the maximum extent practicable, including applied behavior analysis or other structured behavioral therapies; in this paragraph, applied behavior analysis means the design, implementation, and evaluation of environmental modifications, using behavioral stimuli and consequences, including direct observation, measurement, and functional analysis of the relationship between environment and behavior, to produce socially significant improvement in human behavior or to prevent the loss of an attained skill or function; (2) therapeutic care means services provided by or under the supervision of a speech-language pathologist licensed under AS 08.11 or an occupational therapist or physical therapist licensed under AS 08.84. (b) Coverage under this section (1) is required to be provided only to individuals under 21 years of age; (2) may not limit the number of visits to an autism service provider for treatment; (3) is subject to copayment, deductible, and coinsurance provisions, and other general exclusions or limitations included in a health insurance policy to the same extent as other health care services covered by the policy; and (4) must cover medically necessary treatment that is coordinated with an education program, but may not be contingent on the coordination of treatment with an education program. (c) An insurer providing health care insurance to a small employer in the group market with 20 or fewer employees is not required to provide insurance coverage to the small employer that includes the coverage required under (a) of this section. (d) The director may waive the coverage required in this section for an insurer providing health care insurance to a small employer in the group market with 21 - 25 employees if the small employer demonstrates to the director by actual claims experience over any consecutive 12-month period that compliance with this section has increased the premium cost of the small employer's health insurance policy by three percent or more during the consecutive 12-month period. (e) This section does not limit benefits that are otherwise available to an individual under a health care insurance plan. (f) A health care insurer may not refuse to deliver, execute, issue, amend, or renew coverage to an individual or terminate coverage because the individual is diagnosed with or has received treatment for autism spectrum disorders. (g) In this section, (1) autism service provider means an individual who is licensed, certified, or registered by the applicable state licensing board or by a nationally recognized certifying organization and who provides direct services to an individual with an autism spectrum disorder; (2) autism spectrum disorders means pervasive developmental disorders, or a group of conditions having substantially the same characteristics as pervasive developmental disorders, as defined in the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders-IV-TR, as amended or reissued from time to time; (3) health care insurance plan has the meaning given in AS 21.54.500; (4) health care insurer has the meaning given in AS 21.54.500; (5) medically necessary means any care, treatment, intervention, service, or item prescribed by a licensed physician, psychologist, or advanced practice registered nurse in accordance with accepted standards of practice that will, or is reasonably expected to, (A) prevent the onset of an illness, condition, injury, or disability; (B) reduce or ameliorate the physical, mental, or developmental effects of an illness, condition, injury, or disability; (C) assist to achieve or maintain maximum functional capacity in performing daily activities, taking into account both the functional capacity of the individual and the functional capacity of other persons of the individual's age.
A health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan providing medical and surgical benefits for mastectomies shall comply with 42 U.S.C. 300gg-6 and 42 U.S.C. 300gg-52 regarding coverage for reconstructive surgery following mastectomies.
(a) A health care insurer that offers, issues, delivers, or renews a health care insurance plan in this state may apply deductible or copayment requirements to health care benefits and services that qualify the health care insurance plan as a high deductible health plan. (b) In this section, high deductible health plan has the meaning given in 26 U.S.C. 223 (Internal Revenue Code).
A health care insurer that offers a health care insurance plan in the individual or group market shall comply with the coverage requirements for dependent students on medically necessary leaves of absence under 42 U.S.C. 300gg-54.
(a) A health care insurer that offers, issues for delivery, delivers, or renews a health care insurance plan in the state shall cover routine patient care costs incurred by a patient enrolled in an approved clinical trial related to cancer, including leukemia, lymphoma, and bone marrow stem cell disorders. (b) The health care insurer is required to provide coverage under this section only if the patient's treating physician determines that (1) there is no clearly superior noninvestigational treatment alternative; and (2) available clinical or preclinical data provide a reasonable expectation that the treatment provided in the clinical trial will be at least as efficacious as any noninvestigational alternative. (c) The coverage to be provided under (a) of this section must include payment for the costs of (1) prevention, diagnosis, treatment, and palliative care of cancer; (2) medical care for an approved clinical trial related to cancer that would otherwise be covered under a health care insurance plan if the medical care were not in connection with an approved clinical trial related to cancer; (3) items or services necessary to provide an investigational item or service; (4) the diagnosis or treatment of complications; (5) a drug or device approved by the United States Food and Drug Administration without regard to whether the United States Food and Drug Administration approved the drug or device for use in treating a patient's particular condition, but only to the extent that the drug or device is not paid for by the manufacturer, distributor, or provider of the drug or device; (6) services necessary to administer a drug or device under evaluation in the clinical trial; and (7) transportation for the patient that is primarily for and essential to the medical care. (d) The coverage to be provided under (a) of this section may not include the cost of (1) a drug or device that is associated with the clinical trial that has not been approved by the United States Food and Drug Administration; (2) housing, companion expenses, or other nonclinical expenses associated with the clinical trial; (3) an item or service provided solely to satisfy data collection and analysis and not used in the clinical management of the patient; (4) an item or service excluded from coverage under the patient's health care insurance plan; and (5) an item or service paid for or customarily paid for through grants or other funding. (e) The coverage required by this section is subject to the standard policy provisions applicable to other benefits, including deductible, coinsurance, or copayment provisions. (f) This section does not apply to a fraternal benefit society. (g) In this section, approved clinical trial means a scientific study using human subjects designed to test and improve prevention, diagnosis, treatment, or palliative care of cancer, or the safety and effectiveness of a drug, device, or procedure used in the prevention, diagnosis, treatment, or palliative care of a subject, if the study is approved by (1) an institutional review board that complies with 45 C.F.R. Part 46; and (2) one or more of the following: (A) the United States Department of Health and Human Services, National Institutes of Health, or its institutes or centers; (B) the United States Department of Health and Human Services, United States Food and Drug Administration; (C) the United States Department of Defense; (D) the United States Department of Veterans Affairs; or (E) a nongovernmental research entity abiding by current National Institutes of Health guidelines.
A health care insurer that offers, issues, delivers, or renews a health care insurance plan in the individual or group market in the state that provides coverage for prescription drugs for which cost sharing, deductibles, or copayment obligations are determined by unique categories or specialty tiers may impose cost sharing, deductibles, or copayment obligations for a unique category or specialty tier prescription drug that exceed the dollar amount of cost sharing, deductibles, or copayment obligations, as applicable, for a nonpreferred brand drug or the drug's equivalent, but only if the insurer notifies the insured of the cost sharing, deductible, or copayment terms applicable to unique categories or specialty tiers at least 90 days before the terms apply.
(a) A health care insurer that offers, issues for delivery, or renews in the state a health care insurance plan in the group or individual market shall provide coverage for benefits provided through telehealth by a health care provider licensed in this state and may not require that prior in-person contact occur between a health care provider and a patient before payment is made for covered services. (b) In this section, (1) health care insurer means a person transacting the business of health care insurance, including an insurance company licensed under AS 21.09, a hospital or medical service corporation licensed under AS 21.87, a fraternal benefit society licensed under AS 21.84, a health maintenance organization licensed under AS 21.86, the Comprehensive Health Insurance Association described in AS 21.55.010, a multiple employer welfare arrangement, a church plan, and a governmental plan, except for a nonfederal governmental plan that elects to be excluded under 42 U.S.C. 300gg-21(a)(2) (Health Insurance Portability and Accountability Act of 1996); (2) telehealth has the meaning given in AS 47.05.270(e).
(a) A health care insurer that offers, issues for delivery, delivers, or renews a health care insurance plan in the group or individual market in the state that provides coverage for prescription topical eye medication shall allow the early refill of a prescription for a topical eye medication to treat a chronic condition before the last day of the prescribed dosage period, without regard to a coverage restriction. (b) A covered person may request an early refill under this section (1) not earlier than 23 days after a prescription for a 30-day supply is dispensed; (2) not earlier than 45 days after a prescription for a 60-day supply is dispensed; (3) not earlier than 68 days after a prescription for a 90-day supply is dispensed; (4) if the prescriber has indicated the number of refills needed; and (5) if the prescription topical eye medication being refilled is covered under the covered person's policy. (c) A covered person may receive an early refill under this section not more than once during the approved dosage period. (d) A covered person may only receive an early refill under this section if the refill does not exceed the number of refills prescribed.
(a) Except for a fraternal benefit society, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan that provides coverage for anti- cancer medications that are injected or intravenously administered by a health care provider and patient-administered anti-cancer medications, including those orally administered or self-injected, may not require a higher copayment, deductible, or coinsurance amount for a patient-administered medication than it requires for an anti- cancer medication injected or intravenously administered by a health care provider, regardless of the formulation or benefit category determination by the policy or plan. (b) A health care insurer may not offset the costs of compliance with (a) of this section by (1) increasing the copayment, deductible, or coinsurance amount required for anti-cancer medications injected or intravenously administered by a health care provider that are covered under the health insurance plan; or (2) reclassifying benefits with respect to anti-cancer medications. (c) Nothing in this section prohibits a health care insurance plan from requiring different cost-sharing rates for in-network and out-of-network providers or pharmacies. (d) In this section, anti-cancer medication means a drug or biologic used to kill cancerous cells, to slow or prevent the growth of cancerous cells, or to treat related side effects.
A policy, contract, or prepaid plan for individual or group health insurance issued or delivered in the state that provides coverage for services within the scope of practice of a pharmacist licensed under AS 08.80 must provide for coverage of and reimbursement for the services if performed by a pharmacist for a person covered under the policy, contract, or plan.
In AS 21.42.345 - 21.42.599, (1) copayment means the portion of medical care expenses in excess of the deductible to be paid by a covered individual; (2) deductible means the portion of medical care expenses for which a covered individual must pay before benefits become payable; (3) excepted benefits has the meaning given in AS 21.54.160; (4) fraternal benefit society has the meaning given in AS 21.84.900; (5) health care insurance plan has the meaning given in AS 21.54.500; health care insurance plan does not include short-term limited-duration insurance offered to individuals in the individual market; (6) health care insurer has the meaning given in AS 21.54.500; (7) individual market has the meaning given in AS 21.51.500; (8) placed for adoption has the meaning given in AS 21.54.500.
The Interstate Insurance Product Regulation Compact contained in this section is enacted into law and entered into on behalf of the state with other states joining in it in a form substantially as set out in this section. The director of the division of insurance is designated as the representative of this state to the commission created by the compact.The purposes of this Compact are, through means of joint and cooperative action among the Compacting States: (1) To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products; (2) To develop uniform standards for insurance products covered under the Compact; (3) To establish a central clearinghouse to receive and provide prompt review of insurance products covered under the Compact and, in certain cases, advertisements related thereto, submitted by insurers authorized to do business in one or more Compacting States; (4) To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard; (5) To improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the Compact; (6) To create the Interstate Insurance Product Regulation Commission; and (7) To perform these and such other related functions as may be consistent with the state regulation of the business of insurance.For purposes of this Compact: (1) Advertisement means any material designed to create public interest in a Product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy, as more specifically defined in the Rules and Operating Procedures of the Commission. (2) Bylaws mean those bylaws established by the Commission for its governance, or for directing or controlling the Commission's actions or conduct. (3) Compacting State means any State which has enacted this Compact legislation and which has not withdrawn pursuant to Article XIV, Section 1, or been terminated pursuant to Article XIV, Section 2. (4) Commission means the Interstate Insurance Product Regulation Commission established by this Compact. (5) Commissioner means the chief insurance regulatory official of a State including, but not limited to commissioner, superintendent, director or administrator. (6) Domiciliary State means the state in which an Insurer is incorporated or organized; or, in the case of an alien Insurer, its state of entry. (7) Insurer means any entity licensed by a State to issue contracts of insurance for any of the lines of insurance covered by this Act. (8) Member means the person chosen by a Compacting State as its representative to the Commission, or his or her designee. (9) Non-compacting State means any State which is not at the time a Compacting State. (10) Operating Procedures mean procedures promulgated by the Commission implementing a Rule, Uniform Standard or a provision of this Compact. (11) Product means the form of a policy or contract, including any application, endorsement, or related form which is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income or long-term care insurance product that an Insurer is authorized to issue. (12) Rule means a statement of general or particular applicability and future effect promulgated by the Commission, including a Uniform Standard developed pursuant to Article VII of this Compact, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the Commission, which shall have the force and effect of law in the Compacting States. (13) State means any state, district or territory of the United States of America. (14) Third-Party Filer means an entity that submits a Product filing to the Commission on behalf of an Insurer. (15) Uniform Standard means a standard adopted by the Commission for a Product line, pursuant to Article VII of this Compact, and shall include all of the Product requirements in aggregate; provided, that each Uniform Standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading or ambiguous provisions in a Product and the form of the Product made available to the public shall not be unfair, inequitable or against public policy as determined by the Commission. (1) The Compacting States hereby create and establish a joint public agency known as the Interstate Insurance Product Regulation Commission. Pursuant to Article IV, the Commission will have the power to develop Uniform Standards for Product lines, receive and provide prompt review of Products filed therewith, and give approval to those Product filings satisfying applicable Uniform Standards; provided, it is not intended for the Commission to be the exclusive entity for receipt and review of insurance product filings. Nothing herein shall prohibit any Insurer from filing its product in any State wherein the Insurer is licensed to conduct the business of insurance; and any such filing shall be subject to the laws of the State where filed. (2) The Commission is a body corporate and politic, and an instrumentality of the Compacting States. (3) The Commission is solely responsible for its liabilities except as otherwise specifically provided in this Compact. (4) Venue is proper and judicial proceedings by or against the Commission shall be brought solely and exclusively in a Court of competent jurisdiction where the principal office of the Commission is located.The Commission shall have the following powers: (1) To promulgate Rules, pursuant to Article VII of this Compact, which shall have the force and effect of law and shall be binding in the Compacting States to the extent and in the manner provided in this Compact; (2) To exercise its rule-making authority and establish reasonable Uniform Standards for Products covered under the Compact, and Advertisement related thereto, which shall have the force and effect of law and shall be binding in the Compacting States, but only for those Products filed with the Commission, provided, that a Compacting State shall have the right to opt out of such Uniform Standard pursuant to Article VII, to the extent and in the manner provided in this Compact, and, provided further, that any Uniform Standard established by the Commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the National Association of Insurance Commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The Commission shall consider whether any subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending of the Uniform Standards established by the Commission for long-term care insurance products; (3) To receive and review in an expeditious manner Products filed with the Commission, and rate filings for disability income and long-term care insurance Products, and give approval of those Products and rate filings that satisfy the applicable Uniform Standard, where such approval shall have the force and effect of law and be binding on the Compacting States to the extent and in the manner provided in the Compact; (4) To receive and review in an expeditious manner Advertisement relating to long-term care insurance products for which Uniform Standards have been adopted by the Commission, and give approval to all Advertisement that satisfies the applicable Uniform Standard. For any product covered under this Compact, other than longterm care insurance products, the Commission shall have the authority to require an insurer to submit all or any part of its Advertisement with respect to that product for review or approval prior to use, if the Commission determines that the nature of the product is such that an Advertisement of the product could have the capacity or tendency to mislead the public. The actions of the Commission as provided in this section shall have the force and effect of law and shall be binding in the Compacting States to the extent and in the manner provided in the Compact; (5) To exercise its rule-making authority and designate Products and Advertisement that may be subject to a self-certification process without the need for prior approval by the Commission. (6) To promulgate Operating Procedures, pursuant to Article VII of this Compact, which shall be binding in the Compacting States to the extent and in the manner provided in this Compact; (7) To bring and prosecute legal proceedings or actions in its name as the Commission; provided, that the standing of any state insurance department to sue or be sued under applicable law shall not be affected; (8) To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence; (9) To establish and maintain offices; (10) To purchase and maintain insurance and bonds; (11) To borrow, accept or contract for services of personnel, including, but not limited to, employees of a Compacting State; (12) To hire employees, professionals or specialists, and elect or appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of the Compact, and determine their qualifications; and to establish the Commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation and qualifications of personnel; (13) To accept any and all appropriate donations and grants of money, equipment, supplies, materials and services, and to receive, utilize and dispose of the same; provided that at all times the Commission shall strive to avoid any appearance of impropriety; (14) To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve or use, any property, real, personal or mixed; provided that at all times the Commission shall strive to avoid any appearance of impropriety; (15) To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed; (16) To remit filing fees to Compacting States as may be set forth in the Bylaws, Rules or Operating Procedures; (17) To enforce compliance by Compacting States with Rules, Uniform Standards, Operating Procedures and Bylaws; (18) To provide for dispute resolution among Compacting States; (19) To advise Compacting States on issues relating to Insurers domiciled or doing business in Non-compacting jurisdictions, consistent with the purposes of this Compact; (20) To provide advice and training to those personnel in state insurance departments responsible for product review, and to be a resource for state insurance departments; (21) To establish a budget and make expenditures; (22) To borrow money; (23) To appoint committees, including advisory committees comprising Members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in the Bylaws; (24) To provide and receive information from, and to cooperate with law enforcement agencies; (25) To adopt and use a corporate seal; and (26) To perform such other functions as may be necessary or appropriate to achieve the purposes of this Compact consistent with the state regulation of the business of insurance. (1) Membership, Voting and Bylaws (a) Each Compacting State shall have and be limited to one Member. Each Member shall be qualified to serve in that capacity pursuant to applicable law of the Compacting State. Any Member may be removed or suspended from office as provided by the law of the State from which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in accordance with the laws of the Compacting State wherein the vacancy exists. Nothing herein shall be construed to affect the manner in which a Compacting State determines the election or appointment and qualification of its own Commissioner. (b) Each Member shall be entitled to one vote and shall have an opportunity to participate in the governance of the Commission in accordance with the Bylaws. Notwithstanding any provision herein to the contrary, no action of the Commission with respect to the promulgation of a Uniform Standard shall be effective unless two-thirds (2/3) of the Members vote in favor thereof. (c) The Commission shall, by a majority of the Members, prescribe Bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of the Compact, including, but not limited to: (i) Establishing the fiscal year of the Commission; (ii) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the Management Committee; (iii) Providing reasonable standards and procedures: (i) for the establishment and meetings of other committees, and (ii) governing any general or specific delegation of any authority or function of the Commission; (iv) Providing reasonable procedures for calling and conducting meetings of the Commission that consists of a majority of Commission members, ensuring reasonable advance notice of each such meeting and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals, and insurers' proprietary information, including trade secrets. The Commission may meet in camera only after a majority of the entire membership votes to close a meeting en toto or in part. As soon as practicable, the Commission must make public (i) a copy of the vote to close the meeting revealing the vote of each Member with no proxy votes allowed, and (ii) votes taken during such meeting; (v) Establishing the titles, duties and authority and reasonable procedures for the election of the officers of the Commission; (vi) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the Commission. Notwithstanding any civil service or other similar laws of any Compacting State, the Bylaws shall exclusively govern the personnel policies and programs of the Commission; (vii) Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees; and (viii) Providing a mechanism for winding up the operations of the Commission and the equitable disposition of any surplus funds that may exist after the termination of the Compact after the payment and/or reserving of all of its debts and obligations. (d) The Commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the Compacting States. (2) Management Committee, Officers and Personnel (a) A Management Committee comprising no more than fourteen (14) members shall be established as follows: (i) One (1) member from each of the six (6) Compacting States with the largest premium volume for individual and group annuities, life, disability income and long-term care insurance products, determined from the records of the NAIC for the prior year; (ii) Four (4) members from those Compacting States with at least two percent (2%) of the market based on the premium volume described above, other than the six (6) Compacting States with the largest premium volume, selected on a rotating basis as provided in the Bylaws; and (iii) Four (4) members from those Compacting States with less than two percent (2%) of the market, based on the premium volume described above, with one (1) selected from each of the four (4) zone regions of the NAIC as provided in the Bylaws. (b) The Management Committee shall have such authority and duties as may be set forth in the Bylaws, including but not limited to: (i) managing the affairs of the Commission in a manner consistent with the Bylaws and purposes of the Commission; (ii) establishing and overseeing an organizational structure within, and appropriate procedures for, the Commission to provide for the creation of Uniform Standards and other Rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a Compacting State to opt out of a Uniform Standard; provided that a Uniform Standard shall not be submitted to the Compacting States for adoption unless approved by two-thirds (2/3) of the members of the Management Committee; (iii) overseeing the offices of the Commission; and (iv) planning, implementing, and coordinating communications and activities with other state, federal and local government organizations in order to advance the goals of the Commission. (c) The Commission shall elect annually officers from the Management Committee, with each having such authority and duties, as may be specified in the Bylaws. (d) The Management Committee may, subject to the approval of the Commission, appoint or retain an executive director for such period, upon such terms and conditions and for such compensation as the Commission may deem appropriate. The executive director shall serve as secretary to the Commission, but shall not be a Member of the Commission. The executive director shall hire and supervise such other staff as may be authorized by the Commission. (3) Legislative and Advisory Committees (a) A legislative committee comprising state legislators or their designees shall be established to monitor the operations of, and make recommendations to, the Commission, including the Management Committee; provided that the manner of selection and term of any legislative committee member shall be as set forth in the Bylaws. Prior to the adoption by the Commission of any Uniform Standard, revision to the Bylaws, annual budget or other significant matter as may be provided in the Bylaws, the Management Committee shall consult with and report to the legislative committee. (b) The Commission shall establish two (2) advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives. (c) The Commission may establish additional advisory committees as its Bylaws may provide for the carrying out of its functions. (4) Corporate Records of the Commission. The Commission shall maintain its corporate books and records in accordance with the Bylaws. (5) Qualified Immunity, Defense and Indemnification (a) The Members, officers, executive director, employees and representatives of the Commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties or responsibilities; provided, that nothing in this paragraph shall be construed to protect any such person from suit and/or liability for any damage, loss, injury or liability caused by the intentional or willful and wanton misconduct of that person. (b) The Commission shall defend any Member, officer, executive director, employee or representative of the Commission in any civil action seeking to impose liability arising out of any actual or alleged act, error or omission that occurred within the scope of Commission employment, duties or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties or responsibilities; provided, that nothing herein shall be construed to prohibit that person from retaining his or her own counsel; and provided further, that the actual or alleged act, error or omission did not result from that person's intentional or willful and wanton misconduct. (c) The Commission shall indemnify and hold harmless any Member, officer, executive director, employee or representative of the Commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error or omission that occurred within the scope of Commission employment, duties or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of Commission employment, duties or responsibilities, provided, that the actual or alleged act, error or omission did not result from the intentional or willful and wanton misconduct of that person. (1) The Commission shall meet and take such actions as are consistent with the provisions of this Compact and the Bylaws. (2) Each Member of the Commission shall have the right and power to cast a vote to which that Compacting State is entitled and to participate in the business and affairs of the Commission. A Member shall vote in person or by such other means as provided in the Bylaws. The Bylaws may provide for Members' participation in meetings by telephone or other means of communication. (3) The Commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the Bylaws. (1) Rulemaking Authority. The Commission shall promulgate reasonable Rules, including Uniform Standards, and Operating Procedures in order to effectively and efficiently achieve the purposes of this Compact. Notwithstanding the foregoing, in the event the Commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this Act, or the powers granted hereunder, then such an action by the Commission shall be invalid and have no force and effect. (2) Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as amended, as may be appropriate to the operations of the Commission. Before the Commission adopts a Uniform Standard, the Commission shall give written notice to the relevant state legislative committee(s) in each Compacting State responsible for insurance issues of its intention to adopt the Uniform Standard. The Commission in adopting a Uniform Standard shall consider fully all submitted materials and issue a concise explanation of its decision. (3) Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall become effective ninety (90) days after its promulgation by the Commission or such later date as the Commission may determine; provided, however, that a Compacting State may opt out of a Uniform Standard as provided in this Article. Opt out shall be defined as any action by a Compacting State to decline to adopt or participate in a promulgated Uniform Standard. All other Rules and Operating Procedures, and amendments thereto, shall become effective as of the date specified in each Rule, Operating Procedure or amendment. (4) Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, either by legislation or regulation duly promulgated by the Insurance Department under the Compacting State's Administrative Procedure Act. If a Compacting State elects to opt out of a Uniform Standard by regulation, it must (a) give written notice to the Commission no later than ten (10) business days after the Uniform Standard is promulgated, or at the time the State becomes a Compacting State and (b) find that the Uniform Standard does not provide reasonable protections to the citizens of the State, given the conditions in the State. The Commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the State which warrant a departure from the Uniform Standard and determining that the Uniform Standard would not reasonably protect the citizens of the State. The Commissioner must consider and balance the following factors and find that the conditions in the State and needs of the citizens of the State outweigh: (i) the intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted by the Commission provides reasonable protections to consumers of the relevant Product. Notwithstanding the foregoing, a Compacting State may, at the time of its enactment of this Compact, prospectively opt out of all Uniform Standards involving long-term care insurance products by expressly providing for such opt out in the enacted Compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any State to participate in this Compact. Such an opt out shall be effective at the time of enactment of this Compact by the Compacting State and shall apply to all existing Uniform Standards involving long-term care insurance products and those subsequently promulgated. (5) Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, the Uniform Standard shall remain applicable in the Compacting State electing to opt out until such time the opt out legislation is enacted into law or the regulation opting out becomes effective. Once the opt out of a Uniform Standard by a Compacting State becomes effective as provided under the laws of that State, the Uniform Standard shall have no further force and effect in that State unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the State. If a Compacting State opts out of a Uniform Standard after the Uniform Standard has been made effective in that State, the opt out shall have the same prospective effect as provided under Article XIV for withdrawals. (6) Stay of Uniform Standard. If a Compacting State has formally initiated the process of opting out of a Uniform Standard by regulation, and while the regulatory opt out is pending, the Compacting State may petition the Commission, at least fifteen (15) days before the effective date of the Uniform Standard, to stay the effectiveness of the Uniform Standard in that State. The Commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the Commission, the stay or extension thereof may postpone the effective date by up to ninety (90) days, unless affirmatively extended by the Commission; provided, a stay may not be permitted to remain in effect for more than one (1) year unless the Compacting State can show extraordinary circumstances which warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge which prevents the Compacting State from opting out. A stay may be terminated by the Commission upon notice that the rulemaking process has been terminated. (7) Not later than thirty (30) days after a Rule or Operating Procedure is promulgated, any person may file a petition for judicial review of the Rule or Operating Procedure; provided, that the filing of such a petition shall not stay or otherwise prevent the Rule or Operating Procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the Commission consistent with applicable law and shall not find the Rule or Operating Procedure to be unlawful if the Rule or Operating Procedure represents a reasonable exercise of the Commission's authority. (1) The Commission shall promulgate Rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and insurers' trade secrets. The Commission may promulgate additional Rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions. (2) Except as to privileged records, data and information, the laws of any Compacting State pertaining to confidentiality or nondisclosure shall not relieve any Compacting State Commissioner of the duty to disclose any relevant records, data or information to the Commission; provided, that disclosure to the Commission shall not be deemed to waive or otherwise affect any confidentiality requirement; and further provided, that, except as otherwise expressly provided in this Act, the Commission shall not be subject to the Compacting State's laws pertaining to confidentiality and nondisclosure with respect to records, data and information in its possession. Confidential information of the Commission shall remain confidential after such information is provided to any Commissioner. (3) The Commission shall monitor Compacting States for compliance with duly adopted Bylaws, Rules, including Uniform Standards, and Operating Procedures. The Commission shall notify any non-complying Compacting State in writing of its noncompliance with Commission Bylaws, Rules or Operating Procedures. If a noncomplying Compacting State fails to remedy its noncompliance within the time specified in the notice of noncompliance, the Compacting State shall be deemed to be in default as set forth in Article XIV. (4) The Commissioner of any State in which an Insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise his or her authority to oversee the market regulation of the activities of the Insurer in accordance with the provisions of the State's law. The Commissioner's enforcement of compliance with the Compact is governed by the following provisions: (a) With respect to the Commissioner's market regulation of a Product or Advertisement that is approved or certified to the Commission, the content of the Product or Advertisement shall not constitute a violation of the provisions, standards or requirements of the Compact except upon a final order of the Commission, issued at the request of a Commissioner after prior notice to the Insurer and an opportunity for hearing before the Commission. (b) Before a Commissioner may bring an action for violation of any provision, standard or requirement of the Compact relating to the content of an Advertisement not approved or certified to the Commission, the Commission, or an authorized Commission officer or employee, must authorize the action. However, authorization pursuant to this paragraph does not require notice to the Insurer, opportunity for hearing or disclosure of requests for authorization or records of the Commission's action on such requests.The Commission shall attempt, upon the request of a Member, to resolve any disputes or other issues that are subject to this Compact and which may arise between two or more Compacting States, or between Compacting States and Non-compacting States, and the Commission shall promulgate an Operating Procedure providing for resolution of such disputes. (1) Insurers and Third-Party Filers seeking to have a Product approved by the Commission shall file the Product with, and pay applicable filing fees to, the Commission. Nothing in this Act shall be construed to restrict or otherwise prevent an insurer from filing its Product with the insurance department in any State wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the States where filed. (2) The Commission shall establish appropriate filing and review processes and procedures pursuant to Commission Rules and Operating Procedures. Notwithstanding any provision herein to the contrary, the Commission shall promulgate Rules to establish conditions and procedures under which the Commission will provide public access to Product filing information. In establishing such Rules, the Commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a Product filing or supporting information. (3) Any Product approved by the Commission may be sold or otherwise issued in those Compacting States for which the Insurer is legally authorized to do business. (1) Not later than thirty (30) days after the Commission has given notice of a disapproved Product or Advertisement filed with the Commission, the Insurer or Third Party Filer whose filing was disapproved may appeal the determination to a review panel appointed by the Commission. The Commission shall promulgate Rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the Commission, in disapproving a Product or Advertisement filed with the Commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with Article III, Section 4. (2) The Commission shall have authority to monitor, review and reconsider Products and Advertisement subsequent to their filing or approval upon a finding that the product does not meet the relevant Uniform Standard. Where appropriate, the Commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in Section 1 above. (1) The Commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the Commission may accept contributions and other forms of funding from the National Association of Insurance Commissioners, Compacting States and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the Commission concerning the performance of its duties shall not be compromised. (2) The Commission shall collect a filing fee from each Insurer and Third Party Filer filing a product with the Commission to cover the cost of the operations and activities of the Commission and its staff in a total amount sufficient to cover the Commission's annual budget. (3) The Commission's budget for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in Article VII of this Compact. (4) The Commission shall be exempt from all taxation in and by the Compacting States. (5) The Commission shall not pledge the credit of any Compacting State, except by and with the appropriate legal authority of that Compacting State. (6) The Commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the Commission shall be subject to the accounting procedures established under its Bylaws. The financial accounts and reports including the system of internal controls and procedures of the Commission shall be audited annually by an independent certified public accountant. Upon the determination of the Commission, but no less frequently than every three (3) years, the review of the independent auditor shall include a management and performance audit of the Commission. The Commission shall make an Annual Report to the Governor and legislature of the Compacting States, which shall include a report of the independent audit. The Commission's internal accounts shall not be confidential and such materials may be shared with the Commissioner of any Compacting State upon request provided, however, that any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers' proprietary information, including trade secrets, shall remain confidential. (7) No Compacting State shall have any claim to or ownership of any property held by or vested in the Commission or to any Commission funds held pursuant to the provisions of this Compact. (1) Any State is eligible to become a Compacting State. (2) The Compact shall become effective and binding upon legislative enactment of the Compact into law by two Compacting States; provided, the Commission shall become effective for purposes of adopting Uniform Standards for, reviewing, and giving approval or disapproval of, Products filed with the Commission that satisfy applicable Uniform Standards only after twenty-six (26) States are Compacting States or, alternatively, by States representing greater than forty percent (40%) of the premium volume for life insurance, annuity, disability income and long-term care insurance products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and binding as to any other Compacting State upon enactment of the Compact into law by that State. (3) Amendments to the Compact may be proposed by the Commission for enactment by the Compacting States. No amendment shall become effective and binding upon the Commission and the Compacting States unless and until all Compacting States enact the amendment into law. (1) Withdrawal (a) Once effective, the Compact shall continue in force and remain binding upon each and every Compacting State; provided, that a Compacting State may withdraw from the Compact (Withdrawing State) by enacting a statute specifically repealing the statute which enacted the Compact into law. (b) The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any product filings approved or self-certified, or any Advertisement of such products, on the date the repealing statute becomes effective, except by mutual agreement of the Commission and the Withdrawing State unless the approval is rescinded by the Withdrawing State as provided in Paragraph (e) of this section. (c) The Commissioner of the Withdrawing State shall immediately notify the Management Committee in writing upon the introduction of legislation repealing this Compact in the Withdrawing State. (d) The Commission shall notify the other Compacting States of the introduction of such legislation within ten (10) days after its receipt of notice thereof. (e) The Withdrawing State is responsible for all obligations, duties and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the Commission and the Withdrawing State. The Commission's approval of Products and Advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the Withdrawing State, unless formally rescinded by the Withdrawing State in the same manner as provided by the laws of the Withdrawing State for the prospective disapproval of products or advertisement previously approved under state law. (f) Reinstatement following withdrawal of any Compacting State shall occur upon the effective date of the Withdrawing State reenacting the Compact. (2) Default (a) If the Commission determines that any Compacting State has at any time defaulted (Defaulting State) in the performance of any of its obligations or responsibilities under this Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after notice and hearing as set forth in the Bylaws, all rights, privileges and benefits conferred by this Compact on the Defaulting State shall be suspended from the effective date of default as fixed by the Commission. The grounds for default include, but are not limited to, failure of a Compacting State to perform its obligations or responsibilities, and any other grounds designated in Commission Rules. The Commission shall immediately notify the Defaulting State in writing of the Defaulting State's suspension pending a cure of the default. The Commission shall stipulate the conditions and the time period within which the Defaulting State must cure its default. If the Defaulting State fails to cure the default within the time period specified by the Commission, the Defaulting State shall be terminated from the Compact and all rights, privileges and benefits conferred by this Compact shall be terminated from the effective date of termination. (b) Product approvals by the Commission or product self-certifications, or any Advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the Defaulting State in the same manner as if the Defaulting State had withdrawn voluntarily pursuant to Section 1 of this article. (c) Reinstatement following termination of any Compacting State requires a reenactment of the Compact. (3) Dissolution of Compact (a) The Compact dissolves effective upon the date of the withdrawal or default of the Compacting State which reduces membership in the Compact to one Compacting State. (b) Upon the dissolution of this Compact, the Compact becomes null and void and shall be of no further force or effect, and the business and affairs of the Commission shall be wound up and any surplus funds shall be distributed in accordance with the Bylaws. (1) The provisions of this Compact shall be severable; and if any phrase, clause, sentence or provision is deemed unenforceable, the remaining provisions of the Compact shall be enforceable. (2) The provisions of this Compact shall be liberally construed to effectuate its purposes. (1) Other Laws (a) Nothing herein prevents the enforcement of any other law of a Compacting State, except as provided in Paragraph (b) of this section. (b) For any Product approved or certified to the Commission, the Rules, Uniform Standards and any other requirements of the Commission shall constitute the exclusive provisions applicable to the content, approval and certification of such Products. For Advertisement that is subject to the Commission's authority, any Rule, Uniform Standard or other requirement of the Commission which governs the content of the Advertisement shall constitute the exclusive provision that a Commissioner may apply to the content of the Advertisement. Notwithstanding the foregoing, no action taken by the Commission shall abrogate or restrict: (i) the access of any person to state courts; (ii) remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the Product; (iii) state law relating to the construction of insurance contracts; or (iv) the authority of the attorney general of the state, including but not limited to maintaining any actions or proceedings, as authorized by law. (c) All insurance products filed with individual States shall be subject to the laws of those States. (2) Binding Effect of this Compact (a) All lawful actions of the Commission, including all Rules and Operating Procedures promulgated by the Commission, are binding upon the Compacting States. (b) All agreements between the Commission and the Compacting States are binding in accordance with their terms. (c) Upon the request of a party to a conflict over the meaning or interpretation of Commission actions, and upon a majority vote of the Compacting States, the Commission may issue advisory opinions regarding the meaning or interpretation in dispute. (d) In the event any provision of this Compact exceeds the constitutional limits imposed on the legislature of any Compacting State, the obligations, duties, powers or jurisdiction sought to be conferred by that provision upon the Commission shall be ineffective as to that Compacting State, and those obligations, duties, powers or jurisdiction shall remain in the Compacting State and shall be exercised by the agency thereof to which those obligations, duties, powers or jurisdiction are delegated by law in effect at the time this Compact becomes effective.
(a) As a participant in the Interstate Insurance Product Regulation Compact, it is the policy of the state to opt out, and the director shall opt out, of any Uniform Standard that provides a materially lower level of protection for or materially diminishes the rights of Alaska policyholders or policy applicants under Alaska law. (b) If the director or a court of competent jurisdiction finds that the policy set out in (a) of this section has been violated, notice of the violation shall be given to the legislature, and reasonable and prompt measures shall be taken to opt out of the Uniform Standard that does not comply with the policy statement set out in (a) of this section to the extent that such action is permissible under the Interstate Insurance Product Regulation Compact.
This chapter applies only to contracts of life insurance and annuities, other than reinsurance, group life insurance, and group annuities.
(a) A policy of life insurance, other than group and pure endowments with or without return of premiums or of premiums and interest, may not be delivered or issued for delivery in this state unless it contains in substance all of the applicable provisions required by AS 21.45.030 - 21.45.150. This section does not apply to annuity contracts or to a provision of a life insurance policy, or contract supplemental to it, relating to health insurance benefits or to additional benefits in the event of death by accident or accidental means. (b) The provisions or portions of provisions not applicable to single premium or term policies may not to that extent be incorporated in the policy. (c) A life insurance policy or annuity contract delivered or issued for delivery in this state and each life insurance policy or annuity contract application must contain a notice prominently printed on or attached to the first page stating (1) on written request, an insurer is required to provide, within a reasonable time, reasonable factual information regarding the benefits and provisions of the policy or contract to the policy or contract holder; and (2) if, for any reason, the policy or contract holder is not satisfied with the policy or contract, the policy or contract holder may return the policy or contract within 10 days after the policy or contract is delivered and, except as provided in (d) of this section, receive a refund of all money paid. (d) For a variable life insurance policy or variable annuity contract, the refund under (c) of this section must equal the sum of (1) the difference between the premiums paid, including any policy or contract fees or other charges and the amounts allocated to any separate accounts under the policy or contract; and (2) the value of amounts allocated to any separate accounts on the date the returned policy is received by the insurer or its insurance producer.
There shall be a provision that a grace period of 30 days, or, at the option of the insurer, of one month of not less than 30 days, or of four weeks in the case of industrial life insurance policies the premiums for which are payable more frequently than monthly, is allowed within which the payment of each premium after the first premium may be made, during which period of grace the policy shall continue in full force. If a claim arises under the policy during the period of grace the amount of the premium due or overdue may be deducted from the policy proceeds.
There shall be a provision that the policy, exclusive of provisions relating to health insurance benefits or to additional benefits in the event of death by accident or accidental means and except for nonpayment of premiums, is uncontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue.
There shall be a provision that the policy, or the policy and the policy application if a copy of the application is endorsed upon or attached to the policy when issued, constitute the entire contract between the parties, and if the application is made a part of the policy, that all statements contained in the application shall, in the absence of fraud, be considered representations and not warranties.
Except as provided in AS 21.45.210, there shall be a provision that if the age of the insured or of another person whose age is considered in determining the premium or benefit has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.
(a) Except as provided in AS 21.45.220, there shall be a provision in participating policies that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy if the policy is in force and all premiums to that date are paid. Except as hereinafter provided, any dividend becoming payable shall, at the option of the party entitled to elect the option, be either (1) payable in cash; or (2) applied to one of the other dividend options that may be provided by the policy; if any other dividend option is provided, the policy must further state which options shall be automatically effective when the party does not elect another option; if the policy specifies a period within which the other dividend option may be elected, the period may not be less than 30 days following the date on which the dividend is due and payable; the annually apportioned dividend shall be payable in cash even though the policy provides that payment of the dividend is to be deferred for a specified period if the period does not exceed six years from the date of apportionment and that interest will be added to the dividend at a specified rate; if a participating policy provides that the benefit under a paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus becoming payable or apportioned while the insurance is in force under the nonforfeiture provision shall be applied in the manner set out in the policy. (b) In participating industrial life insurance policies, in lieu of the provision required in (a) of this section, there shall be a provision that, beginning not later than the end of the fifth policy year, the policy shall participate annually in the divisible surplus, if any, in the manner set out in the policy.
(a) There shall be a provision that after three full years' premiums have been paid and after the policy has a cash surrender value and while no premium is in default beyond the grace period for payment, the insurer will advance, on proper assignment or pledge of the policy and on the sole security of the policy, at a specified rate of interest not exceeding eight percent a year, an amount equal to or, at the option of the party entitled to it, less than the loan value of the policy. The director may authorize rates of interest in excess of six percent only on a finding that the holders of policies will benefit from the increased earnings of the insurer resulting from the higher rates, through the use of higher dividends or lower premiums, or both. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then current policy year, except that the insurer may deduct, either from the loan value or from the proceeds of the loan, an existing indebtedness not already deducted in determining the cash surrender value including interest then accrued but not due, the unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year. The policy may also provide that if interest on an indebtedness is not paid when due it shall then be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value of the policy, the policy shall terminate and become void. The policy must reserve to the insurer the right to defer the granting of a loan, other than for the payment of a premium to the insurer, for six months after the date of the loan application. The policy, at the insurer's option, may provide for automatic premium loan, subject to an election of the party entitled to elect. Except as provided in (e) of this section, the required interest rates on policy loans set out in this section apply only to policies issued before July 1, 1982. (b) This section does not apply to term policies or to term insurance benefits provided by rider or supplemental policy provisions, or to industrial life insurance policies. (c) A policy issued on or after July 1, 1982, must have a provision specifying an interest rate on a policy loan not to exceed eight percent a year, or a provision permitting an adjustable maximum interest rate established under this subsection. An adjustable maximum rate of interest on a policy loan determined under this subsection may not exceed the higher of the published monthly average for the calendar month ending two months before the date on which the rate is determined, or the rate used to compute cash surrender values under the policy during the applicable period plus one-twelfth of a percentage point multiplied by the number of months in the applicable period. If an adjustable maximum rate of interest is used in a policy under this subsection, the policy must contain a provision that states times for the adjustment of the interest rate for that policy. Adjustment shall occur at least once every 12 months, but not more often than once every three months. The interest rate being charged may be increased if the published monthly average increases by one-half percent or more and the interest rate being charged must be reduced if the published monthly average decreases by one-half percent or more. A life insurer shall (1) notify the policyholder of the initial rate of interest on the loan at the time a cash loan is made; (2) notify a policyholder who obtains a premium loan of the initial rate of interest on the loan as soon as it is reasonably possible to do so after making an initial premium loan; except as provided in (3) of this subsection, notice does not have to be given to the policyholder when a second or subsequent premium loan is added; (3) send reasonable advance notice of any increase in the rate to a policyholder who has a policy loan; and (4) include other relevant information on adjustment of interest rates in a notice required under this subsection. The loan value of the policy shall be determined in accordance with (a) of this section. A policy may not be terminated in a policy year as the sole result of a change in the interest rate during that policy year. If an interest rate changes, the insurer shall maintain coverage during the policy year until the date on which the policy would have terminated if the interest rate had not changed. (d) In (c) of this section (1) interest rate includes a rate of interest charged for reinstatement of policy loans for the period during and after the lapse of a policy; (2) policy includes certificates issued by a fraternal benefit society and annuity contracts that provide for policy loans; (3) policy loan includes a premium loan made under a policy to pay a premium that was not paid to the life insurer as it became due; (4) policyholder includes an owner of a policy or a person designated to pay policy premiums according to the records of the life insurer; (5) published monthly average means the monthly average of corporate bond yields as published by Moody's Investor Service, Inc., or its successor, or if Moody's corporate bond yield average-monthly average corporates is not published, a substantially similar average, established by regulation adopted by the director. (e) The provisions of (c) of this section on interest rates apply only to policy loans made on policies issued on or after July 1, 1982, except that if a policyholder agrees in writing to the applicability of (c) of this section to a policy issued before July 1, 1982, that subsection applies to policy loans made on that policy.
There shall be a table showing in figures the loan value, if required under AS 21.45.080, and the cash surrender values and nonforfeiture benefits in accordance with AS 21.45.300(b)(5), either during the first 20 policy years or during the term of the policy, whichever is shorter.
In case the policy provides that the proceeds may be payable in installments which are determinable at issue of the policy, there shall be a table showing the amounts of the guaranteed installments.
Except as provided in AS 21.45.230, there shall be a provision that unless (1) the policy has been surrendered for its cash surrender value, (2) its cash surrender value has been exhausted, or (3) the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three years, or two years in the case of industrial life insurance policies, from the date of premium default upon written application, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears with interest at a rate not exceeding six percent a year compounded annually, and the payment or reinstatement of interest due to the insurer on a loan on the policy with interest as provided in AS 21.45.080(c).
There shall be a provision relative to the payment of premiums.
There shall be a provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and, at the insurer's option, surrender of the policy, proof of the interest of the claimant, or both. If an insurer specifies a particular period before the expiration of which settlement shall be made, the period may not exceed two months from the receipt of the proofs.
An industrial life insurance policy must have the name of the beneficiary designated on it with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. The policy may also provide that if the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with due proof of death within the period stated in the policy, which may not be less than 30 days after the death of the insured, or if the beneficiary is the estate of the insured, or is a minor, or dies before the insured, or is not legally competent to give a valid release, the insurer may pay the proceeds to the executor or administrator of the insured, or to any relative of the insured by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled to the proceeds by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention, or burial of the insured. The policy may also include a similar provision applicable to other payments due under the policy.
There shall be a title on the policy, briefly describing it.
A clause in a policy of life insurance stating that the policy shall be incontestable after a specified period precludes only a contest of the validity of the policy and does not preclude the assertion at any time of defenses based upon provisions in the policy that exclude or restrict coverage, whether or not the restrictions or exclusions are excepted in such clause.
(a) An annuity or pure endowment contract, other than a reversionary annuity, survivorship annuity, or group annuity, may not be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in AS 21.45.180 - 21.45.230, except that if a provision is not applicable to single premium annuities or single premium pure endowment contracts it may not be incorporated into the contract. (b) This section does not apply to contracts for deferred annuities included in or upon the lives of beneficiaries under, life insurance policies.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision for a grace period of one month, but not less than 30 days, within which a stipulated payment other than the first one may be made, subject at the option of the insurer to make an interest charge on the late payment at a rate to be specified in the contract, but not exceeding six percent a year, for the number of days of grace elapsing before the payment, during which period of grace the contract shall continue in full force, but in case a claim arises under the contract on account of death before expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are made, the amount of the payments, with interest on any overdue payments, may be deducted from the amount payable under the contract in settlement.
Except as provided in AS 21.45.210, if any statements, other than those relating to age, sex, and identity are required as a condition to issuing an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract is incontestable after it has been in force during the lifetime of the person or of each of the persons as to whom the statements are required, for a period of two years from its date of issue, except for nonpayment of stipulated payments to the insurer; and at the option of the insurer the contract may also except provisions relative to benefits in the event of disability and provisions that grant insurance specifically against death by accident or accidental means.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract constitutes the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, there shall be a provision that the contract and the application constitute the entire contract between the parties.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex and that if the insurer makes or has made an overpayment or overpayments on account of a misstatement, the amount of the overpayment, with interest at the rate to be specified in the contract but not exceeding six percent a year, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
If an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, is participating, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract may be reinstated at any time within one year from the default in making stipulated payments to the insurer, unless the cash surrender value had been paid, if all overdue stipulated payments and any indebtedness to the insurer on the contract are paid or reinstated with interest at a rate to be specified in the contract, not exceeding six percent a year payable annually. Where applicable the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.
(a) Except as stated herein, a contract for a reversionary annuity may not be delivered or issued for delivery in this state unless it contains in substance each of the following provisions: (1) those provisions specified in AS 21.45.180 - 21.45.220, except that under AS 21.45.180 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue payment in lieu of providing for deduction of the payments from an amount payable upon settlement under the contract; (2) a provision that the contract may be reinstated at any time within three years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid, or, within the limits permitted by the then cash values of the contract, reinstated, with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding six percent a year compounded annually. (b) This section does not apply to group annuities or to annuities included in life insurance policies, and any of the provisions not applicable to single premium annuities shall not to that extent be incorporated into the policy or contract.
(a) A policy of life insurance may not be delivered or issued for delivery in this state if it contains a provision (1) for a period shorter than that provided by statute within which an action at law or in equity may be commenced on the policy; or (2) that excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified therein in the event of death (A) as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces, or of any act or hazard of the war or action, or of service in the military, naval, or air forces or in civilian forces auxiliary thereto, or from any cause while a member of the military, naval, or air forces of any country at war, declared or undeclared, or of any country engaged in military action; (B) as a result of aviation or any air travel or flight; (C) as a result of a specified hazardous occupation or occupations; (D) while the insured is a resident outside the United States and Canada; or (E) within two years from the date of issue of the policy as a result of suicide, while sane or insane. (b) A policy that contains an exclusion or restriction under (a) of this section must also provide that in the event of death under the circumstances to which an exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the commissioner's Reserve Valuation Method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits (or if the policy provides for no such benefits, computed according to a mortality table and interest rate determined by the insurer and either specified in the policy or filed with the director) with adjustment for indebtedness or dividend credit. (c) This section does not apply to industrial life insurance, group life insurance, health insurance, reinsurance, or annuities, or to a provision in a life insurance policy relating to health benefits or to additional benefits in the event of death by accident or accidental means. (d) Nothing contained in this section prohibits a provision that in the opinion of the director is more favorable to the policyholder than a provision permitted by this section.
A policy of industrial life insurance may not contain a provision (1) by which the insurer may deny liability under the policy for the reason that the insured has previously obtained other insurance from the same insurer; (2) giving the insurer the right to declare the policy void on the grounds that the insured has had a disease or ailment, whether specified or not, or that the insured has received institutional, hospital, medical, or surgical treatment or attention, except the policy may contain a provision that gives the insurer the right to declare the policy void if the insured has, within two years before the issuance of the policy, received institutional, hospital, medical, or surgical treatment or attention and the insured or claimant under the policy fails to show that the condition occasioning the treatment or attention was not of a serious nature or was not material to the risk; (3) giving the insurer the right to declare the policy void because the insured has been rejected for insurance by another insurer, unless the right is conditioned upon a showing by the insurer that knowledge of the rejection would have led to a refusal by the insurer to make the contract.
(a) A reinstated policy of life insurance or annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance. (b) When a life insurance policy or annuity contract is reinstated, the reinstated policy or contract may exclude or restrict liability to the same extent that the liability might have been or was excluded or restricted when the policy or contract was originally issued, and the exclusion or restriction shall be effective from the date of reinstatement.
A life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon the terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with the exemptions from the claims of creditors of beneficiaries other than the policyholder as set out in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.
In determining the amount due under a life insurance policy, whether issued before or after July 1, 1966, deduction may be made of (1) unpaid premiums or installments for the current policy year due under the terms of the policy; and of (2) the amount of principal and accrued interest of a policy loan or other indebtedness against the policy then remaining unpaid.
(a) This section shall be known as the standard nonforfeiture law for life insurance. (b) In the case of policies issued on and after the operative date of this section as defined in (cc) of this section a policy of life insurance, except as stated in (aa) of this section, may not be delivered or issued for delivery in this state unless it contains the following provisions, or corresponding provisions that in the opinion of the director are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this section and are essentially in compliance with (z) of this section: (1) that, in the event of default in a premium payment, after premiums have been paid for at least one full year, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of the amount as may be specified in this section; (2) that, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance and five full years in the case of industrial insurance, the insurer will pay, instead of a paid-up nonforfeiture benefit, a cash surrender value of the amount specified; (3) that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make the election elects another available option not later than 60 days after the due date of the premium in default; (4) that if the policy shall have become paid up by completion of premium payments, or if it is continued under a paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance, or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of the amount specified; (5) in the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy; (6) a statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or under the insurance law of this state; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; or if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated in the policy, a statement that the method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which the values and benefits are consecutively shown in the policy; (7) that instead of a stipulated paid-up nonforfeiture benefit as described in (1) of this subsection, the insurer may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit that provides a greater amount or longer period of death benefits or, if applicable, a greater amount of earlier payment of endowment benefits; (8) in the case of a policy which causes on a basis guaranteed in the policy an unscheduled change in benefits or premiums or which provides an option for a change in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. (c) Any of the provisions or portions of provisions set out in (b) of this section that are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of a cash surrender value for a period of six months after demand has been made on the policy surrendered. (d) A cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by (b) of this section, shall be an amount not less than the excess, if any, of the present value on the anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there has been no default, over the sum of (1) the then present value of the adjusted premiums as defined in (h) - (w) of this section, corresponding to premiums that would have fallen on and after the anniversary; and (2) the amount of any indebtedness to the insurer on account of or secured by the policy. (e) Notwithstanding (d) of this section, if a policy issued on or after the operative date of (w) of this section provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider supplemental policy provision, the cash surrender value referred to in (d) of this section shall be an amount not less than the sum of the cash surrender value as defined in (d) of this section for an otherwise similar policy issued at the same age without the same rider or supplemental policy provision and the cash surrender value as defined in (d) of this section for a policy which provides only the benefits otherwise provided by the rider or supplemental policy provision. (f) Notwithstanding (d) of this section, if a family policy issued on or after April 7, 1984, defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse is age 71, the cash surrender value referred to in (d) of this section shall be an amount not less than the cash surrender value as defined in (d) of this section for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value as defined in (d) for a policy which provides only the benefits otherwise provided by the term insurance on the life of the spouse. A cash surrender value available within 30 days after any anniversary under a policy paid-up by completion of all premium payments, or a policy continued under any paid-up nonforfeiture benefits whether or not required by (b) of this section, shall be an amount not less than the present value, on the anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy. (g) A paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary shall be such that its present value as of the anniversary shall be at least equal to the cash surrender value provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the conditions that premiums shall have been paid for at least a specified period. (h) Except as provided in (j) of this section, the adjusted premiums for a policy shall be calculated on an annual basis and shall be the uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy that the present value, at the date of issue of the policy, of all the adjusted premiums shall be equal to the sum of (1) the then present value of the future guaranteed benefits provided for by the policy; (2) two percent of the amount of the insurance, if the insurance is uniform in amount, or of the equivalent uniform amount, as defined, if the amount of insurance varies with the duration of the policy; (3) 40 percent of the adjusted premiums for the first policy year; (4) 25 percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less, except that in applying the percentage specified in (3) and (4) of this subsection no adjusted premiums shall be considered to exceed four percent of the amount of insurance or uniform amount equivalent thereto. Whenever the plan or term of a policy has been changed, either by request of the insured or automatically in accordance with the provisions of the policy, the date of inception of the changed policy for the purposes of determining a nonforfeiture benefit or cash surrender value shall be the date as of which the age of the insured is determined for the purposes of the changed policy. The date of issue of a policy for the purposes of this section shall be the date on which the rated age of the insured is determined. This subsection does not apply to policies issued on or after the operative date of (w) of this section. (i) If a policy provides an amount of insurance that varies with the duration of the policy, the equivalent uniform amount of insurance for the purpose of (h) of this section shall be considered to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term the amount of which does not vary with the duration and the benefit under which have the same present value at the date of issue as the benefits under the policy, except that in the case of a policy a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy before the attainment of age 10 were the amount provided by the policy at age 10. (j) The adjusted premiums for a policy which provides term insurance benefits by rider or supplemental policy provision shall be equal to (1) the adjusted premiums for an otherwise similar policy issued at the same age without the term insurance benefits, increased during the period for which premiums for the term insurance benefits are payable, by (2) the adjusted premiums for the term insurance, the foregoing items (1) and (2) being calculated separately in accordance with (h) and (i) of this section, except that, for the purposes of (h)(2), (3) and (4) of this section, the amount of insurance of equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (2) of this subsection shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in (1) of this subsection. (k) All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioner's 1958 Standard Ordinary Mortality Table, except that for any category or ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured. Except as provided in (l) of this section, the calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. The rate of interest specified in the policy may not exceed three and one-half percent a year except that (1) a rate of interest not exceeding five and one-half percent a year may be used for policies issued on or after July 1, 1978, and (2) a rate of interest not exceeding six and one-half percent a year may be used for a single premium whole life or endowment insurance policy. In calculating the present value of paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed in the case of a policy of ordinary insurance, may be not more than those shown in the Commissioner's 1958 Extended Term Insurance Table. In the case of a policy of industrial insurance, the rates of mortality may be not more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table. The calculation of the adjusted premiums and present values for insurance issued on a substandard basis may be based on another table of mortality as may be specified by the insurer and approved by the director. This subsection does not apply to policies issued on or after the operative date of (w) of this section. (l) In case of industrial policies issued on or after January 1, 1970, the adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioner's 1961 Standard Industrial Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, however, that specified the rate of interest specified in the policy may not exceed three and one-half percent a year except that (1) a rate of interest not exceeding five and one-half percent a year may be used for policies issued on or after July 1, 1978; and (2) a rate of interest not exceeding six and one-half percent a year may be used for a single premium whole life or endowment insurance policy. In calculating the present value of paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioner's 1961 Industrial Extended Term Insurance Table. The calculation of the adjusted premiums and present values for insurance issued on a substandard basis may be based on a table of mortality specified by the insurer and approved by the director. This subsection does not apply to policies issued on or after the operative date of (w) of this section. (m) Except as provided in (s) of this section, the adjusted premiums for a policy shall be calculated on an annual basis and shall be a uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding a uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of (1) the then present value of the future guaranteed benefits provided for by the policy; (2) one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and (3) 125 percent of the nonforfeiture net level premium as defined in (n) - (t) of this section. In applying the percentage specified in (3) of this subsection a nonforfeiture net level premium may not exceed four percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined. This subsection applies to all policies issued after the operative date of (w) of this section. (n) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one a year payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due. This subsection applies to all policies issued after the operative date of (w) of this section. (o) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of a change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change. This subsection applies to all policies issued after the operative date of (w) of this section. (p) Except as provided in (s) of this section, the recalculated future adjusted premiums for a policy shall be a uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all future adjusted premiums shall be equal to the excess of (1) the sum of (A) the then present value of the then future guaranteed benefits provided for by the policy; and (B) the additional expense allowance, if any; over (2) the then cash surrender value if any, or present value of any paid-up nonforfeiture benefit under the policy. This subsection applies to all policies issued after the operative date of (w) of this section. (q) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (1) one percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years after the change over the average amount of insurance before the change at the beginning of each of the first 10 policy years after the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (2) 125 percent of the increase, if positive, in the nonforfeiture net level premium. This subsection applies to all policies issued after the operative date of (w) of this section. (r) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (1) by (2) where (1) equals the sum of (A) the nonforfeiture net level premium applicable before the change times the present value of an annuity of one a year payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred; and (B) the present value of the increase in future guaranteed benefits provided for by the policy; and (2) equals the present value of an annuity of one a year payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due. This subsection applies to all policies issued after the operative date of (w) of this section. (s) Notwithstanding (m) - (q) of this section, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, the adjusted premiums and present values may be calculated as if it were issued to provide those higher uniform amounts of insurance on the standard basis. This subsection applies to all policies issued after the operative date of (w) of this section. (t) The adjusted premiums and present values for a policy of ordinary insurance referred to in this section shall be calculated on the basis of the Commissioners 1980 Standard Ordinary Mortality Table or, at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors. The adjusted premiums and present values for a policy of industrial insurance shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table. The adjusted premiums and present values for a policy issued in a particular calendar year shall be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. However, (1) at the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year; (2) under a paid-up nonforfeiture benefit, including a paid-up dividend addition, a cash surrender value available, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any; (3) an insurer may calculate the amount of a guaranteed paid-up nonforfeiture benefit, including any paid-up addition under the policy, on the basis of an interest rate not less than that specified in the policy for calculating cash surrender values; (4) in calculating the present value of paid-up term insurance with accompanying pure endowment, if any, offered as nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance; (5) for insurance issued on a substandard basis, the calculations of adjusted premiums and present values may be based on appropriate modifications mentioned above; (6) for policies issued before the operative date of the valuation manual, a Commissioners Standard Ordinary Mortality Table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table; for policies issued on or after the operative date of the valuation manual, the valuation manual must provide the Commissioners Standard Ordinary Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without the Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table; if the director approves by regulation a Commissioners Standard Ordinary Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, that minimum nonforfeiture standard supersedes the minimum nonforfeiture provided by the valuation manual; (7) for policies issued before the operative date of the valuation manual, a Commissioners Standard Industrial Mortality Table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table; for policies issued on or after the operative date of the valuation manual, the valuation manual must provide the Commissioners Standard Ordinary Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Extended Term Insurance Table; if the director approves by regulation a Commissioners Standard Industrial Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, that minimum nonforfeiture standard supersedes the minimum nonforfeiture provided by the valuation manual. (u) For a policy issued before the operative date of the valuation manual, the nonforfeiture annual interest rate for a policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for the policy as defined in the Standard Valuation Law, rounded to the nearer one quarter of one percent, if the nonforfeiture interest rate is not less than four percent; for a policy issued on or after the operative date of the valuation manual, the nonforfeiture annual interest rate for a policy issued in a particular calendar year is provided by the valuation manual. (v) Notwithstanding any other provision in this title, a refiling of nonforfeiture values or their methods of computation for a previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provision of that policy form. This subsection applies to all policies issued after the operative date of (w) of this section. (w) An insurer may file with the director a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1989. That date shall be the operative date of this subsection for the insurer. If an insurer makes no election, the operative date of this subsection for the insurer shall be January 1, 1989. (x) In the case of a plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature than minimum values cannot be determined by the methods described in subsections (b) - (k) or (m) of this section, (1) the director must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insured as the minimum benefits otherwise required by subsections (b) - (w) of this section; (2) the director must be satisfied that the benefits and pattern of premiums of the plan do not mislead prospective policyholders or insureds; (3) the cash surrender values and paid-up nonforfeiture benefits provided by the plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by regulations adopted by the director. (y) A cash surrender value and a paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in (b) - (w) of this section may be calculated upon the assumption that a death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide the additions. Notwithstanding the provisions of (d) of this section, certain additional benefits and premiums for those additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no additional benefits shall be required to be included in any paid-up nonforfeiture benefits. The benefits to be disregarded are those paid (1) in the event of death or dismemberment by accident or accidental means; (2) in the event of total and permanent disability; (3) as a reversionary annuity or deferred reversionary annuity benefits; (4) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply; (5) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if the term insurance expires before the child's age is 26, is uniform in amount after the child's age is one, and has not become paid-up by reason of the death of a parent of the child; and (6) as other policy benefits additional to life insurance and endowment benefits. (z) This subsection, in addition to all other applicable subsections of this section, shall apply to all policies issued on or after January 1, 1987. The cash surrender value available under the policy in the event of default in a premium payment due on a policy anniversary shall be in an amount which does not differ by more than two-tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness of the insurer under the policy. The basic cash value shall be equal to the present value on the policy anniversary of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer if there had been no default, less the then present value of the nonforfeiture factors as defined in this subsection, corresponding to the premiums which would have fallen due on and after the policy anniversary. Provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage as described in subsection (d) or (j), whichever is applicable, be the same as are the effects specified in (d) or (j) of this section, whichever is applicable, on the cash surrender values as defined in that subsection. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in (h), (i), (j) and (m) of this section, whichever is applicable. Except as is required by the next succeeding sentence of this subsection, the percentage (1) must be the same percentage for each policy year between the second policy anniversary and the later of (A) the fifth policy anniversary and (B) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness of at least two-tenths of one percent of either the amount, of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and (2) must be such that no percentage after the later of the two policy anniversaries specified in (1) of this subsection may apply to fewer than five consecutive policy years. Provided, that no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, defined in (h), (i), and (j) of this section or in (m) of this section, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this subsection shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy compliance with the other subsections of this section. The cash surrender values referred to in this subsection shall include all endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manner specified for determining the analogous minimum amounts in (b) - (g), (m), and (y) of this section. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as items (1) through (6) in (y) of this section shall conform with the principles of this subsection. (aa) This section does not apply to any of the following: (1) reinsurance; (2) group insurance; (3) pure endowment; (4) annuity or reversionary annuity contract; (5) term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; (6) term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in (h) - (w) of this section is less than the adjusted premiums calculated, on a policy of uniform amount or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance for a term defined as follows: for ages at issue 50 and under, the term shall be 15 years; thereafter, the term decrease one year for each year of age beyond 50, and for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; (7) policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in (d) - (w) of this section, exceeds two and one-half percent of the amount of insurance at the beginning of the same policy year; (8) policy which shall be delivered outside this state through an agent or other representative of the insurer issuing the policy. (bb) For purposes of determining the applicability of subsection (aa), the at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life. (cc) The operative date of this section is January 1, 1968 except that an insurer may elect to comply with this section before that date by filing a written notice of election with the director. A written notice of election is not effective unless the insurer specifies in the notice (1) the date upon which this section is to be operative, which date must be later than the date on which the notice is filed; (2) the policies to which this section applies. (dd) In this section, operative date of the valuation manual means January 1 of the first calendar year that the valuation manual described in AS 21.18.112 is effective.
(a) This section does not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under 26 U.S.C. 408 (Internal Revenue Code), as amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract that shall be delivered outside this state through an agent or other representative of the company issuing the contract.  (b) In the case of contracts issued on or after the operative date of this section as defined in (k) of this section, no contract of annuity, except as stated in (a) of this section, may be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions that, in the opinion of the director, are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract: (1) that, upon cessation of payment of considerations under a contract or upon the written request of the contract holder, the company will grant a paid-up annuity benefit on a plan stipulated in the contract of the value specified in (d) - (g) and (i) of this section; (2) if a contract provides for a lump sum settlement at maturity, or at any other time, that, upon surrender of the contract at or before the commencement of any annuity payments, the company will pay, in lieu of any paid-up annuity benefit, a cash surrender benefit of the amount specified in (d), (e), (g) and (i) of this section; the company may reserve the right to defer the payment of that cash surrender benefit for a period not to exceed six months after demand for the payment with surrender of the contract after making a written request that addresses the necessity and equitableness to all contract holders of the deferral and after receiving written approval by the director; (3) a statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of those benefits; (4) a statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which those benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract, or any prior withdrawals from or partial surrenders of the contract. Notwithstanding the requirements of this subsection, any deferred annuity contract may provide that, if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid before that period would be less than $20 monthly, the company may, at its option, terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by that payment shall be relieved of any further obligation under the contract. (c) The minimum values as specified in (d) - (g) and (i) of this section of any paid-up annuity, cash surrender, or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this section: (1) The minimum nonforfeiture amount at any time at or before the commencement of any annuity payments shall be equal to an accumulation up to that time at a rate of interest established under (2) of this subsection of the net considerations as defined in this paragraph paid before that time, decreased by the sum of (A) any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest established under (2) of this subsection; (B) the amount of any indebtedness to the company on the contract, including interest due and accrued; (C) an annual contract charge of $50, accumulated at a rate of interest established under (2) of this subsection; and (D) any premium tax paid by the company for the contract, accumulated at a rate of interest established under (2) of this subsection. The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to 871/2 percent of the corresponding gross considerations credited to the contract during that contract year. (2) The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as the lesser of three percent a year or the following, which shall be specified in the contract if the interest rate will be reset: (A) the five-year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest 1/ 20 of one percent, specified in the contract not more than 15 months before the contract issue date or redetermination date under (D) of this paragraph; (B) reduced by 125 basis points; (C) where the resulting interest rate is not less than one percent; and (D) the interest rate must apply for an initial period and may be redetermined for additional periods; the redetermination date, basis, and period, if any, must be stated in the contract; the basis is the date or average over a specified period that produces the value of the five-year constant maturity treasury rate to be used at each redetermination date.  (3) During the period or term that a contract provides substantive participation in an equity indexed benefit, the contract may increase the reduction described in (2)(B) of this subsection by up to an additional 100 basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each following redetermination date, of the additional reduction may not exceed the market value of the benefit. The director may require a demonstration of the present value of the additional reduction and may disallow or limit the additional reduction if the demonstration does not prove that the present value of the additional reduction does not exceed the market value of the benefit. (4) The director may by regulation provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit or for other contracts that the director determines require adjustment. An adjustment to the calculation of minimum nonforfeiture amounts authorized under this subsection may not result in an interest rate of less than one percent. (d) Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Such present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract. (e) For contracts that provide cash surrender benefits, the cash surrender benefits available before maturity may not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit that would be provided under the contract at maturity arising from considerations paid before the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract. The present value shall be calculated on the basis of an interest rate not more than one percent higher than the interest rate specified in the contract for accumulating considerations to determine the maturity value, unless a higher rate is approved by the director under AS 21.42.120, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event may any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under those contracts shall be at least equal to the cash surrender benefit.  (f) For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time before maturity may not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid before the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity. The present value shall be calculated for the period before the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine the maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits before the commencement of any annuity payments, the present values shall be calculated on the basis of the interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event may the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time. (g) For the purpose of determining the benefits calculated under (e) and (f) of this section, (1) the maturity date shall be the latest date for which election is permitted by the contract, but not later than the anniversary of the contract next following the annuitant's 70th birthday or the 10th anniversary of the contract, whichever is later; (2) a surrender charge may not be imposed on or past the maturity date of the contract, except that, for annuity contracts with one or more renewable guaranteed periods, a new surrender charge schedule may be imposed for each new guaranteed period if (A) the surrender charge is zero at the end of each guaranteed period and remains zero for at least 30 days; (B) the contract provides for continuation of the contract without surrender charges, unless the contract holder specifically elects a new guaranteed period with a new surrender charge schedule; and (C) the renewal period does not exceed 10 years and the maturity date complies with (1) of this subsection; (3) a contract that provides for flexible considerations may have separate surrender charge schedules associated with each consideration; for purposes of determining the maturity date, the 10th anniversary of the contract is determined separately for each consideration. (h) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount before the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided. (i) Any paid-up annuity, cash surrender, or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs. (j) For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of (d) - (g) and (i) of this section, additional benefits payable (1) in the event of total and permanent disability, (2) as reversionary annuity or deferred reversionary annuity benefits, or (3) as other policy benefits additional to life insurance, endowment, and annuity benefits, and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits that may be required by this section. The inclusion of such additional benefits is not required in any paid-up benefits, unless those additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits. (k) After July 6, 1978, any company may file with the director a written notice of its election to comply with the provisions of this section after a specified date before July 6, 1980. After the filing of the notice, then upon the specified date, which shall be the operative date of this section for the company, this section shall become operative with respect to annuity contracts thereafter issued by the company. If a company makes no such election, the operative date of this section for the company shall be July 6, 1980.
(a) An insurer may not issue for delivery or deliver in this state a life insurance policy or annuity contract issued under any plan for the segregation of policyholders into mathematical groups and providing benefits for a surviving policyholder of a group arising out of the death of another policyholder of that group or under another similar plan. (b) An insurer may not issue for delivery or deliver in this state a life insurance policy or annuity contract providing benefits or values for surviving or continuing policyholders contingent upon the lapse or termination of the policies of other policyholders, whether by death or otherwise. This provision does not prohibit the payment or allowance of regular annual dividends or savings under participating forms of policies or contracts, or prohibit the annual distribution to policyholders or beneficiaries of sums representing in part gains to the insurer from lapses, surrenders, or mortality either in general or as resulting from particular classifications of policies.
(a) A group life insurance policy may not be issued for delivery in this state unless the group is a bona fide association or the group was formed for purposes other than obtaining insurance or is a trust established, adopted, or participated in by one or more employers or labor unions or by one or more employers and labor unions, and (1) the policy covers at least two individuals at the date of issue; (2) an individual eligible for coverage is subject to uniformly applied standards of insurability as may be imposed by the insurer; (3) amounts of group life insurance are determined based on some plan that will preclude individual selection;  (4) the group life insurance policy is in compliance with the other applicable provisions of this chapter; and (5) the group meets other requirements established by the director in regulation. (b) This section does not apply to life insurance policies (1) insuring only individuals related by blood, marriage, or legal adoption; (2) insuring only individuals having a common interest through ownership of a business enterprise, or a substantial legal interest or equity in a business enterprise, and who are actively engaged in its management; or (3) insuring only individuals otherwise having an insurable interest in each other's lives. (c) Insurance under a group life insurance policy may be extended to insure dependents. Notwithstanding AS 21.48.170, only one certificate need be issued for delivery to an insured person if a statement concerning a dependent's coverage is included in the certificate. (d) In this section, dependents means the spouse and dependent children of an employee or member of the group. (e) A group life insurance policy may be issued to a group that does not meet one or more of the requirements under (a) of this section only if the director finds that issuance  (1) is in the best interests of the public; (2) results in economies of acquisition or administration; and (3) meets other requirements established by the director in regulation. (f) An insurer shall submit to the director information satisfactory to the director that the group meets the requirements of (a) or (e) of this section, and the director must affirmatively approve of the group before an insurer may issue a group life policy to a group under (a) or (e) of this section.
The lives of a group of individuals may be insured under a policy issued to a creditor, who shall be considered the policyholder, to insure the debtors of the creditor, subject to the following requirements: (1) the debtors eligible for insurance under the policy shall be all of the debtors of the creditor whose indebtedness is repayable either (A) in installments, or (B) in one sum at the end of a period not in excess of 18 months from the initial date of the debt, or all of any class or classes of them determined by conditions pertaining to the indebtedness or the purchase giving rise to the indebtedness; the policy may provide that the term debtors includes the debtors of one or more subsidiary corporations, and the debtors of one or more affiliated corporations, proprietors, or partnerships if the business of the policyholder and of the affiliated corporations, proprietors, or partnerships is under common control; (2) the premium for the policy shall be paid by the policyholder, either from the creditor's funds or from charges collected from the insured debtors or from both; a policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors may not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least 75 percent of the then eligible debtors elect to pay the required charges; a policy on which no part of the premium is to be derived from the collection of the identifiable charges must insure all eligible debtors, or all except those whose evidence of individual insurability is not satisfactory to the insurer; (3) the policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least 100 persons yearly, or may reasonably be expected to receive at least 100 new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than 75 percent of the new entrants become insured; the policy may exclude from the classes eligible for insurance classes of debtors determined by age; (4) the amount of insurance on the life of a debtor may at no time exceed the amount owed by the debtor to the creditor; if the insurance is in connection with an educational credit transaction commitment, the amount owed by the debtor to the creditor may be considered to include the portion of the educational loan commitment that has not been advanced by the creditor; if the indebtedness is repayable in one sum to the creditor, the insurance on the life of a debtor may in no instance be in effect for a period in excess of 18 months, except that the insurance may be continued for an additional period not exceeding six months in the case of default, extension, or recasting of the loan; (5) the insurance shall be payable to the policyholder; each payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of the payment.
The lives of a group of individuals may be insured under a policy issued to a credit union organized under the laws of the state or the Federal Credit Union Act, which shall be considered the policyholder, to insure eligible members for amounts of insurance not in excess of the share balance of each member, based upon some plan that will preclude individual selection, for the benefit of someone other than the credit union or its officials and subject to the following requirements: (1) the members eligible for insurance under the policy shall be all the members of the credit union who meet standard physical requirement conditions of the insurer, or all of any class or classes of them determined by conditions pertaining to their age, or to membership in the credit union, or both; (2) the premiums for the policy shall be paid by the policyholder, either wholly from the credit union's funds, or partly from these funds and partly from funds contributed by the insured members specifically for their insurance; a policy may not be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance; a policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed only if at least 75 percent of the then eligible members, excluding those whose evidence of individual insurability is not satisfactory to the insured, elect to make the required contribution; a policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members or all except those whose evidence of individual insurability is not satisfactory to the insurer; (3) the policy must cover at least 25 members at the date of issue.
A policy of group life insurance may not be delivered in this state unless it contains in substance the provisions set out in AS 21.48.110 - 21.48.200 or provisions that in the opinion of the director are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder; except that (1) AS 21.48.160 - 21.48.200 do not apply to policies issued to a creditor to insure debtors of the creditor; (2) the standard provisions required for individual life insurance policies do not apply to group life insurance policies; (3) if the group life insurance policy is on a plan of insurance other than the term plan, it must contain a nonforfeiture provision or provisions that in the opinion of the director is or are equitable to the insured persons and to the policyholder, but nothing in this paragraph may be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.
The group life insurance policy must contain a provision that the policyholder is entitled to a grace period of 31 days for the payment of a premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder gave the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for payment of a pro rata premium for the time the policy was in force during the grace period.
The group life insurance policy must contain a provision that the validity of the policy may not be contested, except for nonpayment of premium, after it has been in force for two years from its date of issue; and that a statement made by a person insured under the policy relating to that person's insurability may not be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force for a period of two years during the person's lifetime or unless it is contained in a written instrument signed by the person.
The group life insurance policy must contain a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be considered representations and not warranties, and that a statement made by a person insured may not be used in a contest unless a copy of the instrument containing the statement is or has been furnished to the person or the beneficiary of the person.
The group life insurance policy must contain a provision setting out the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the coverage.
The group life insurance policy must contain a provision specifying an equitable adjustment of premiums or of benefits or of both to be made if the age of a person insured has been misstated, the provision to contain a clear statement of the method of adjustment to be used.
The group life insurance policy must contain a provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy if there is no designated beneficiary as to all or a part of the sum living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set out in the certificate to pay at its option a part of the sum not exceeding $4,000 to any person appearing to the insurer to be equitably entitled to it by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured.
The group life insurance policy must contain a provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate listing the insurance protection to which the insured is entitled, to whom the insurance benefits are payable, and the rights and conditions set out in AS 21.48.180 - 21.48.200.
The group life insurance policy must contain a provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, the person shall be entitled to have issued to the person by the insurer, without evidence of insurability, an individual policy of life insurance without health insurance or other supplementary benefits, provided application for the individual policy is made, and the first premium paid to the insurer, within 31 days after the termination, and provided further that (1) the individual policy shall, at the option of the person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for; (2) the amount of the individual policy may not be in excess of the amount of life insurance that ceases because of the termination, less the amount of any life insurance for which the person is or becomes eligible under the same or any other group policy within 31 days after the termination, provided that any amount of insurance that matured on or before the date of the termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of annuity, may not, for the purpose of this provision, be included in the amount that is considered to cease because of the termination; (3) the premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which the person then belongs, and to the person's age attained on the effective date of the individual policy.
The group life insurance policy must contain a provision that if the group policy terminates or is amended to terminate the insurance of any class of insured persons, every person insured under the policy at the date of the termination whose insurance terminates and who has been so insured for at least five years before the termination date shall be entitled to have issued to the person by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided in AS 21.48.180, except that the group policy may provide that the amount of the individual policy may not exceed the smaller of (1) the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which the person is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after the termination; and (2) $2,000.
The group life insurance policy must contain a provision that if a person insured under the policy dies during the period within which the person would have been entitled to have an individual policy issued in accordance with AS 21.48.180 or 21.48.190 and before the individual policy becomes effective, the amount of life insurance that the person would have been entitled to have issued under the individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium has been made.
If an individual insured under a group life insurance policy hereafter delivered in this state becomes entitled under the terms of the policy to have an individual policy of life insurance issued without evidence of insurability, subject to making application and paying the first premium within the period specified in the policy, and if the individual is not given notice of the existence of the right at least 15 days before the expiration date of the period, the individual shall have an additional period within which to exercise the right, but nothing in this section may be construed to continue an insurance beyond the period provided in the policy. This additional period shall expire 15 days after the individual is given notice, but in no event may the additional period extend beyond 60 days after the expiration date of the period provided in the policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder constitutes notice for the purpose of this section.
Employee life insurance is that plan of life insurance, other than salary savings life insurance or pension trust insurance and annuities, under which individual policies are issued to the employees of an employer and where the policies are issued on the lives of not less than five nor more than 10 employees at the date of issue. Premiums for the policies shall be paid by the employer or the trustee of a fund established by the employer either wholly from the employer's funds, or funds contributed by the employer, or partly from these funds and partly from funds contributed by the insured employees.
Violations of this chapter are subject to the penalties provided by AS 21.97.020.
Nothing in this chapter applies to or affects (1) a policy of liability or workers' compensation insurance with or without supplementary expense coverage; (2) a group or blanket policy; (3) life insurance, endowment or annuity contracts, or supplemental contracts that contain only those provisions relating to health insurance that (A) provide additional benefits in case of death or dismemberment or loss of sight by accident or accidental means; or (B) operate to safeguard the contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract; (4) reinsurance.
A policy of health insurance may not be delivered or issued for delivery to a person in this state unless it otherwise complies with this title, and complies with the following: (1) the entire money and other considerations must be expressed in the policy; (2) the time the insurance takes effect and terminates must be expressed in the policy; (3) it must insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family, who shall be considered the policyholder, any two or more eligible members of that family, including husband, wife, dependent children, or any children under a specified age, which may not exceed 25 years, and any other person dependent on the policyholder; (4) the style, arrangement, and over-all appearance of the policy must give no undue prominence to any portion of the text, and every printed portion of the text of the policy and of endorsements or attached papers must be plainly printed in light-faced type of a style in general use, the size of which must be uniform and not less than 10 point with a lower case unspaced alphabet length not less than 120 point; in this paragraph, text includes all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions; (5) the exceptions and reductions of indemnity must be set out in the policy and, other than those contained in AS 21.51.040 - 21.51.260, must be printed, at the insurer's option, either included with the benefit provision to which they apply, or under an appropriate caption such as Exceptions, or Exceptions and Reductions, except that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of the exception or reduction must be included with the benefit provision to which it applies; (6) each form, including riders and endorsements, must be identified by a form number in the lower left-hand corner of the first page; (7) the policy may not contain a provision making a portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless the portion is set out in full in the policy; this paragraph does not apply to the incorporation of, or reference to, a statement of rates or classification of risks, or short- rate table filed with the director.
(a) Except as provided in (b) of this section, each policy delivered or issued for delivery to a person in this state must contain the provisions specified in AS 21.51.040 - 21.51.150, in the words in which the same appear; except, that the insurer may, at its option, substitute for one or more of the provisions corresponding provisions of different wording approved by the director that are in each instance not less favorable in any respect to the insured or the beneficiary. Each provision shall be preceded individually by the applicable caption shown, or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the director may approve. (b) If the provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the director shall omit from the policy any inapplicable provision or part of a provision and shall modify the inconsistent provision or part of a provision in a manner that makes the provision as contained in the policy consistent with the coverage provided by the policy.
There shall be a provision as follows:Entire Contract; Changes: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless the approval is endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.
There shall be a provision as follows:Time Limit on Certain Defenses: (1) After three years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for the policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of the three-year period. (A) The foregoing policy provision shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial three-year period, or to limit the application of AS 21.51.170 - 21.51.210 in the event of misstatement with respect to age or occupation or other insurance. (B) A policy that the insured has the right to continue in force subject to its terms by the timely payment of premium (i) until at least age 50 or (ii) in the case of a policy issued after age 44, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision (from which the clause in parentheses may be omitted at the insurer's option) under the caption Incontestable:After this policy has been in force for a period of three years during the lifetime of the insured (excluding any period which the insured is disabled), it shall become incontestable as to the statements contained in the application.(2) No claim for loss incurred or disability (as defined in the policy) commencing after three years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed before the effective date of coverage of this policy.
(a) There shall be a provision as follows:Grace Period: A grace period of (insert a number not less than '7' for weekly premium policies, '10' for monthly premium policies and '31' for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. (b) A policy in which the insurer reserves the right to refuse renewal shall have, at the beginning of the provision in (a) of this section,Unless not less than 30 days before the premium due date the insurer has delivered to the insured or has mailed to the last address of the insured as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted.
(a) Except for a policy offered or renewed in this state on a health care exchange and subject to federal regulations on reinstatement, there shall be a provision as follows:Reinstatement: If (1) a renewal premium is not paid within the time granted the insured for payment, (2) a subsequent acceptance of premium by the insurer or by an agent authorized by the insurer to accept the premium occurs, without requiring in connection therewith an application for reinstatement, and (3) the insurer issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of the application by the insurer or, lacking approval, upon the 45th day following the date of the conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of the application. The reinstated policy shall cover only loss resulting from the accidental injury that may be sustained after the date of reinstatement and loss due to the sickness that may begin more than 10 days after that date. In all other respects, the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. A premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to a period more than 60 days before the date of reinstatement. (b) The last sentence of the provision in (a) of this section may be omitted from a policy that the insured has the right to continue in force subject to its terms by the timely payment of premiums (1) until at least age 50; or (2) in the case of a policy issued after age 44, for at least five years from its date of issue.
(a) There shall be a provision as follows:Notice of Claim: Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of a loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at (insert the location of the office which the insurer designates for the purpose), or to an authorized agent of the insurer, with information sufficient to identify the insured, shall be considered notice to the insurer. (b) In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the provision in (a) of this section:Subject to the qualifications set out below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, the insured shall, at least once in every six months after having given notice of the claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six months following a filing of proof by the insured or a payment by the insurer on account of the claim or a denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of notice shall not impair the insured's right to indemnity which would otherwise have accrued during the period of six months preceding the date on which the notice is actually given.
There shall be a provision as follows:Claim Forms: The insurer, within 10 working days after receipt of a notice of claim, will furnish to the claimant forms that are usually furnished by it for filing proofs of loss. If the forms are not furnished within 10 days after the giving of notice, the claimant shall be considered to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character, and the extent of the loss for which claim is made.
There shall be a provision as follows:Proofs of Loss: Written proof of loss must be furnished to the insurer at its office in case of claim for loss for which this policy provides periodic payment contingent upon continuing loss within 90 days after the termination of the period for which the insurer is liable and in case of claim for any other loss within 90 days after the date of that loss. Failure to furnish proof within the time required shall not invalidate or reduce a claim if it was not reasonably possible to give proof within that time, provided that the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.
(a) A health insurance policy delivered or issued for delivery must contain the following provisions: (1) indemnity for loss of life shall be paid according to the beneficiary designation and payment provisions contained in the policy that are effective at the time of payment; if a beneficiary has not been designated, indemnity shall be paid to the estate of the insured; accrued indemnities unpaid at the insured's death shall be paid to either the beneficiary or the estate, at the option of the insurer; all other indemnities shall be paid to the insured; (2) the insurer may, and upon written request of the insured shall, pay indemnities for hospital, nursing, medical, dental, or surgical services directly to the provider of the services; an insurer who pays indemnities to an insured, after the insured has given the insurer written notice in the proof of loss statement of an election of direct payment of indemnities to the provider of the services, shall also pay indemnities to the provider of the services; this paragraph does not require that services be provided by a particular hospital or person; (3) a covered person may revoke an election of direct payment of indemnities made under this subsection by giving written notice of the revocation to the insurer and to the provider of the services; the written notice of revocation given to the insurer must certify that the covered person has given written notice of revocation to the provider of the services; revocation of an election of direct payment is not effective until the notice of revocation is received by the insurer and the provider of the services; (4) the right of the insured to request payment of indemnities for hospital, nursing, medical, dental, or surgical services directly to the provider of the services or to another person may be transferred to a person who is not the insured by a qualified domestic relations order; rights under the qualified domestic relations order do not take effect until the order is received by the insurer; in this paragraph, qualified domestic relations order means an order or judgment in a divorce or dissolution action under AS 25.24 that designates a person to determine to whom indemnities for a named beneficiary should be paid under a health insurance policy. (b) A health insurance policy delivered or issued for delivery may, at the option of the insurer, require that an indemnity in an amount not to exceed $1,000 that is payable to the estate of the insured, an insured or beneficiary who is a minor, or an insured who is not competent to give a valid release, be paid to a relative by blood or marriage, or a beneficiary that the insured determines is equitably entitled to the payment. A good faith payment by the insurer under this subsection fully discharges the insurer to the extent of the payment. (c) This section does not apply to payments made under a provider contract that holds the covered person harmless from charges for services except copayments, coinsurance, and deductibles.
There shall be a provision as follows:Physical Examinations and Autopsy: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law.
There shall be a provision as follows:Legal Actions: No action at law or in equity shall be brought to recover on this policy before the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No action shall be brought after the expiration of three years after the written proof of loss is required to be furnished.
There shall be a provision as follows:Change of Beneficiary: Unless the insured makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to a change of beneficiary or beneficiaries, or to any other changes in this policy. (The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.)
Except as provided in AS 21.51.030(b), a policy delivered or issued for delivery to a person in this state may not contain provisions respecting the matters set out in AS 21.51.170 - 21.51.260 unless the provisions are in the words in which the same appear in the applicable section, except that the insurer may, at its option, use in lieu of the provision a corresponding provision of different wording approved by the director that is not less favorable in any respect to the insured or the beneficiary. The provision contained in the policy shall be preceded individually by the appropriate caption or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the director may approve.
There may be a provision as follows:Change of Occupation: If the insured is injured or contracts sickness after changing occupations to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only the portion of the indemnities provided in this policy which the premium paid would have purchased at the rates and within the limits fixed by the insurer for the more hazardous occupation. If the insured changes occupations to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of the change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of the proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be those which have been last filed by the insurer before the occurrence of the loss for which the insurer is liable or before the date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if the filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in the state before the occurrence of the loss or before the date of proof of change in occupation.
There may be a provision as follows:Misstatement of Age: If the age of the insured has been misstated, all amounts payable under this policy shall be that which the premium paid would have purchased at the correct age.
(a) There may be a provision as follows:Other Insurance in this Insurer: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured is in force concurrently herewith, making the aggregate indemnity for ........ (insert type of coverage or coverages) in excess of $....... (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for the excess shall be returned to the insured or to the estate of the insured. (b) In lieu of the provision in (a) of this section, there may be a provision as follows:Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one policy elected by the insured, the beneficiary or the estate of the insured, as the case may be, and the insurer will return all premiums paid for all other such policies.
(a) There may be a provision as follows:Insurance With Other Insurers: If there is other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice before the occurrence or commencement of loss, the only liability under an expense incurred coverage of this policy shall be for the proportion of the loss that the amount that would otherwise have been payable hereunder plus the total of the like amounts under all the other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for the loss and for the return of the portion of the premiums paid that exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the 'like amount' of the other coverage shall be taken as the amount which the services rendered would have cost in the absence of the coverage. (b) If the policy provision in (a) of this section is included in a policy that also contains the policy provision set out in AS 21.51.210 there shall be added to the caption of the foregoing provision the phrase  - Expense Incurred Benefits. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the director, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or a province of Canada, and by hospital or medical service organizations, and to any other coverage the inclusion of which may be approved by the director. In the absence of this definition the term may not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to an insured, an amount of benefit provided for the insured under a compulsory benefit statute (including a workers' compensation or employer's liability statute), whether provided by a governmental agency or otherwise, shall in all cases be considered to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as other valid coverage.
(a) There may be a provision as follows:Insurance With Other Insurers: If there is other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice before the occurrence or commencement of loss, the only liability for the benefits under this policy shall be for the proportion of the indemnities otherwise provided hereunder for the loss that the like indemnities of which the insurer has notice (including the indemnities under this policy) bear to the total amount of all like indemnities for the loss, and for the return of the portion of the premium paid which exceeds the pro rata portion for the indemnities thus determined. (b) If the policy provision in (a) of this section is included in a policy that also contains the policy provision set out in AS 21.51.200, there shall be added to the caption of the foregoing provision the phrase  - Other Benefits. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the director, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or a province of Canada, and to any other coverage the inclusion of which may be approved by the director. In the absence of this definition the term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to an insured, an amount of benefit provided for such insured under any compulsory benefit statute (including any workers' compensation or employer's liability statute), whether provided by a governmental agency or otherwise, shall in all cases be considered to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as other valid coverage.
(a) There may be a provision as follows:Relation of Earnings to Insurance: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or the average monthly earnings of the insured for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for the proportionate amount of the benefits under this policy that the amount of the monthly earnings or the average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all the coverage upon the insured at the time disability commences and for the return of the part of the premiums paid during the two years which exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all the coverage upon the insured below the sum of $200 or the sum of the monthly benefits specified in the coverages, whichever is the lesser, or operate to reduce benefits other than those payable for loss of time. (b) The policy provision in (a) of this section may be inserted only in a policy that the insured has the right to continue in force subject to its terms by the timely payment of premiums (1) until at least age 50, or (2) in the case of a policy issued after age 44, for at least five years from its date of issue. The insurer may, at its option, include in this provision a definition of valid loss of time coverage, approved as to form by the director, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or another state of the United States or a province of Canada, or to any other coverage that may be approved for inclusion by the director or a combination of these coverages. In the absence of this definition the term may not include coverage provided for the insured under a compulsory benefit statute, including a workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organizations.
There may be a provision as follows:Unpaid Premiums: Upon the payment of a claim under this policy, a premium then due and unpaid or covered by a note or written order may be deducted from it.
There may be a provision as follows:Conformity with State Statutes: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on that date is amended to conform to the minimum requirements of the statutes.
There may be a provision as follows:Illegal Occupation: The insurer shall not be liable for a loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation.
There may be a provision as follows:Intoxicants and Narcotics: The insurer shall not be liable for a loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of a narcotic unless administered on the advice of a physician.
Health insurance policies, other than accident insurance only policies, in which the insurer reserves the right to refuse renewal on an individual basis, must provide in substance in a provision or in an endorsement or rider attached to it that, subject to the right to terminate the policy upon nonpayment of premium when due, the right to refuse renewal may not be exercised to take effect before the renewal date occurring on or after and nearest each policy anniversary, or in the case of lapse and reinstatement, at the renewal date occurring on or after and nearest each anniversary of the last reinstatement, and a refusal of renewal shall be without prejudice to any claim originating while the policy is in force. The parenthetic reference to lapse and reinstatement may be omitted at the insurer's option.
The provisions that are the subject of AS 21.51.040 - 21.51.260, or any corresponding provisions that are used in lieu thereof in accordance with these sections, shall be printed in the consecutive order of the provisions in the sections or, at the option of the insurer, the provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided that the resulting policy may not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued.
The word insured, as used in this chapter, may not prevent a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under a policy to any indemnities, benefits, and rights provided in the policy.
(a) A policy of a foreign or alien insurer, when delivered or issued for delivery to a person in this state, may contain any provision that is not less favorable to the insured or the beneficiary than the provisions of this chapter and that is prescribed or required by the law of the state or country under which the insurer is organized. (b) A policy of a domestic insurer may, when issued for delivery in another state or country, contain any provision permitted or required by the laws of the other state or country.
(a) A policy provision that is not subject to this chapter may not make a policy, or any portion of a policy, less favorable to the insured or the beneficiary than the provisions of the policy that are subject to this chapter. (b) A policy delivered or issued for delivery to a person in this state in violation of this chapter shall be held valid but shall be construed as provided in this chapter. When a provision in a policy subject to this chapter is in conflict with a provision of this chapter, the rights, duties, and obligations of the insurer, the insured and the beneficiary shall be governed by the provisions of this chapter.
If the policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if the date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after that date, the coverage provided by the policy will continue in force until the end of the period for which premium has been accepted. If the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased before the acceptance of the premium or premiums, the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.
(a) Health insurance on a franchise plan is that form of health insurance issued to (1) five or more employees of a corporation, copartnership, or individual employer or a governmental corporation, agency, or department of them; or (2) 10 or more members, employees, or employees of members of a trade or professional association or of a labor union or of any other association having had an active existence for at least two years if the association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance. (b) If these persons, with or without their dependents, are issued the same form of an individual policy varying only in amounts and kinds of coverage applied for by the persons under an arrangement whereby the premiums on the policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association for its members, or by some designated person acting on behalf of the employer, association, or union, the term employees as used herein may be considered to include the officers, managers, and employees and retired employees of the employer and the individual proprietor or partners if the employer is an individual proprietor or partnership.
A health care insurer that offers a health care insurance plan in the individual market shall comply with the guaranteed renewability requirements established under 42 U.S.C. 300gg-42 and shall comply with the certification of coverage requirements established under 42 U.S.C. 300gg-43.
(a) Rates charged for a health insurance policy may not be excessive, inadequate, or unfairly discriminatory. (b) An insurer shall file with the director the premium rates charged for an individual health care insurance plan before using them. A premium rate or premium rate change must be on file with the director for a waiting period of at least 45 days before the effective date of the premium rate. That period may be extended by the director or the insurer for an additional 15 days if, during the initial 45-day waiting period, notice is given stating that additional time for consideration of the filing is needed. A filing may become effective at the end of the waiting period unless disapproved by the director during the waiting period. If an insurer fails to provide information requested by the director during the waiting period, the filing is considered withdrawn by the insurer, and the premium rate does not become effective. (c) The director shall adopt regulations (1) establishing procedures for filing and use of rates; and (2) specifying information that must be submitted in a filing required under (b) of this section.
In this chapter, (1) health care exchange means an American Health Benefit Exchange established under 42 U.S.C. 18031. (2) health care insurance plan has the meaning given in AS 21.54.500; (3) health care insurer has the meaning given in AS 21.54.500; (4) individual market means the market for health care insurance offered to individuals other than in connection with a health benefit plan as defined in AS 21.54.500.
An insurer, hospital or medical service corporation, or fraternal benefit society may not advertise, market, sell, deliver, or offer for delivery a long-term care insurance policy unless the policy complies with this chapter, AS 21.18, AS 21.45, the health insurance requirements imposed under AS 21.51, and, if a group policy, the group health insurance requirements imposed under AS 21.54, or unless it has been approved by and complies with the Interstate Insurance Product Regulation Compact under AS 21.42.700.
An insurer, hospital or medical service corporation, or fraternal benefit society that delivers or issues for delivery a long-term care insurance policy may not (1) cancel, fail to renew, or otherwise terminate the policy on the grounds of age or deterioration of the mental or physical health of the insured; (2) include a provision requiring a new waiting period in the event existing coverage is converted to or replaced by a new or another form of health insurance within the same company, unless there is an increase in benefits voluntarily selected by the insured or group policyholder; or (3) provide coverage only for skilled nursing care or provide significantly more coverage for skilled care in a facility than is provided for coverage for lower levels of care.
(a) An insurer, hospital or medical service corporation, or fraternal benefit society may not include, in a long-term care insurance policy or certificate, a definition of preexisting condition that is more restrictive than the following: preexisting condition means a condition for which medical advice or treatment was recommended by, or received from, a provider of health care services within six months preceding the effective date of coverage of an insured person. (b) In a long-term care insurance policy, an insurer, hospital or medical service corporation, or fraternal benefit society may not exclude coverage for a loss or confinement that is the result of a preexisting condition, unless the loss or confinement begins within six months following the effective date of coverage of an insured person. (c) The director may extend the limitation periods established under (a) and (b) of this section for specific age group categories or specific policy forms, if the director finds that the extension is in the best interest of the public. (d) This section does not prohibit an insurer, hospital or medical service corporation, or fraternal benefit society from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on the application, from applying that insurer's, hospital or medical service corporation's, or fraternal benefit society's established underwriting standards. Unless otherwise provided in the policy, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in (b) of this section expires. A long-term care insurance policy may not exclude, limit, or reduce, or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions after the waiting period described in (b) of this section, unless the waiver or rider has been specifically approved by the director.
(a) A long-term care insurance policy may not be delivered or issued for delivery in this state if the policy conditions eligibility (1) on a prior hospitalization requirement; (2) on the receipt of a higher level of institutional care, when care is provided in an institutional setting; (3) for noninstitutional benefits on a prior institutional stay of more than 30 days for which benefits are paid; (4) on admission to an institutional care facility for the same or a related condition within a period of less than 30 days after discharge from the institution, if the policy provides benefits only following institutionalization; or (5) for a benefit, other than a waiver of premium, postconfinement, postacute care, or recuperative benefit, on a prior institutionalization. (b) A long-term care insurance policy containing a postconfinement, postacute care, or recuperative benefit must clearly label the limitations or conditions, including any required number of days of confinement, Limitations or Conditions on Eligibility for Benefits in a separate paragraph of the policy.
(a) A long-term care insurance applicant may return a policy within 30 days after delivery and have the premium refunded if, after examination of the policy, the applicant is not satisfied with the policy. A long-term care insurance policy must have a notice prominently printed on the first page of the policy or separately attached stating that the applicant has the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the applicant is not satisfied with the policy for any reason. This subsection also applies to application denials, and any refund must be made within 30 days after return or denial. (b) An insurer, hospital or medical service corporation, or fraternal benefit society shall deliver an outline of coverage to a prospective applicant for long-term care insurance at the time of initial solicitation by a means that prominently directs the attention of the recipient to the document and its purpose. In the case of agent solicitations, an agent shall deliver the outline of coverage before the presentation of an application or enrollment form. In the case of direct response solicitations, the outline of coverage must be presented in conjunction with an application or enrollment form. The outline of coverage must include (1) a description of the principal benefits and coverage provided in the policy; (2) a statement of the principal exclusions, reductions, and limitations contained in the policy; (3) a statement of the terms under which the policy may be continued in force or discontinued, including a reservation in the policy of a right to change the premium; continuation or conversion provisions of group coverage must be specifically described; (4) a statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions; (5) a description of the terms under which the policy may be returned and premium refunded; (6) a brief description of the relationship between the cost of care and benefits; and (7) a statement that discloses to the policyholder whether the policy is intended to be a federal qualified long-term care insurance contract under 26 U.S.C. 7702B(b) (Internal Revenue Code). (c) A certificate issued under a group long-term care insurance policy that is delivered or issued for delivery in this state must include (1) a description of the principal benefits and coverage provided in the policy; (2) a statement of the principal exclusions, reductions, and limitations contained in the policy; and (3) a statement that the group master policy establishes the governing contractual provisions. (d) For a policy issued to a group defined in AS 21.53.200(3)(A), an insurer, hospital or medical service corporation, or fraternal benefit society is not required to provide an outline of coverage if the information required on the outline of coverage under (b) of this section is contained in other enrollment materials. An insurer, hospital or medical service corporation, and fraternal benefit society shall provide the enrollment materials to the director on request. (e) If an application for a long-term care insurance policy is approved, the insurer shall deliver the policy to the applicant not later than 30 days after the date of approval.
(a) In addition to the requirements of AS 21.45, at the time of policy delivery, a policy summary shall be included with an individual life insurance policy if the policy or policy rider provides long-term care benefits. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request but, regardless of request, shall deliver a policy summary not later than the time of policy delivery. The summary must include (1) an explanation of how the long-term care benefits interact with other components of the policy, including deductions from death benefits; (2) an illustration of the amount and length of benefits, and guaranteed lifetime benefits, if any, for each covered person; (3) an explanation of each exclusion, reduction, and limitation on long-term care benefits; (4) if applicable to the policy type, (A) disclosure of the effects of exercising other rights under the policy; (B) disclosure of guarantees related to the long-term care costs of insurance charges; and (C) current and projected maximum lifetime benefits; and (5) if the director adopts a regulation that permits but does not require inflation protection, and the policy does not provide for inflation protection, a statement that inflation protection is not available under the policy. (b) If a long-term care benefit is paid under a life insurance policy by the acceleration of the policy death benefit, and is in benefit payment status, a monthly report shall be provided to the policyholder. The report must include (1) long-term care benefits paid out during the month; (2) an explanation of changes in the policy, including changes in death benefits or cash values, due to long-term care benefits being paid out; and (3) the amount of long-term care benefits remaining. (c) If a claim under a long-term care insurance policy is denied by an insurer, the insurer shall, within 60 days after the date of a written request by a policyholder or a representative of a policyholder, (1) provide a written explanation of the reasons for the denial; and (2) make available all information directly related to the denial.
(a) If a long-term care insurance policy has been in force for less than six months, an insurer may rescind the policy or deny an otherwise valid long-term care claim under the policy on a showing of misrepresentation that is material to the acceptance for coverage. (b) If a long-term care insurance policy has been in force for at least six months but less than two years, an insurer may rescind the policy or deny an otherwise valid long-term care claim under the policy on a showing of misrepresentation that is both material to the acceptance for coverage and pertains to the condition for which benefits are sought. (c) If a long-term care insurance policy has been in force for two years or more, the policy is not contestable on the grounds of misrepresentation alone and may only be contested on a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health. (d) If an insurer has paid benefits under a long-term care insurance policy, the insurer may not recover the benefit payments if the policy is rescinded. (e) This section applies to a life insurance policy that accelerates benefits for long-term care. However, if an insured dies, this section does not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care, and the remaining death benefit under the policy is subject to AS 21.45.040.
(a) Except as provided in (b) of this section, a long-term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder has been offered the option of purchasing a policy including a nonforfeiture benefit. The insurer may offer a nonforfeiture benefit in the form of a rider to the policy. If a policyholder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that is available for a specified period of time following a substantial increase in premium rates. (b) With respect to group long-term care insurance, an insurer shall make the offer required in (a) of this section to the group policyholder. For a policy issued as group long-term care insurance, other than a continuing care retirement community or other similar entity, the insurer shall make the offer required in (a) of this section to each proposed certificate holder.
(a) A person may not sell, solicit, or negotiate long-term care insurance unless the person is licensed as an insurance producer for health or life insurance lines of authority and has completed a one-time training course that meets the requirements in (d) of this section. (b) A person currently licensed and selling, soliciting, or negotiating long-term care insurance may not continue to sell, solicit, or negotiate long-term care insurance unless the person has completed a one-time training course that meets the requirements in (d) of this section. (c) A person who sells, solicits, or negotiates long-term care insurance shall complete ongoing training that meets the requirements in (e) of this section. (d) The one-time training course required under this section (1) must be at least eight credit hours; (2) may not include training that is insurer or company product specific or that includes any sales or marketing information, materials, or training, other than those required by state or federal law; (3) must consist of topics related to long-term care insurance, long-term care services, and, if applicable, qualified long-term care insurance partnership programs, including (A) state and federal requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services; (B) available long-term care services and providers; (C) changes or improvements in long-term care services or providers; (D) alternatives to the purchase of private long-term care insurance; (E) the effect of inflation on benefits and the importance of inflation protections; and (F) consumer suitability standards and guidelines. (e) The ongoing training course required under (c) of this section must be at least four credit hours every 24 months and must comply with the requirements in (d)(2) and (3) of this section. (f) The director may approve the training requirements in (d) and (e) of this section as continuing education courses under AS 21.27.020. (g) An insurer shall (1) obtain verification that a producer received the training required under this section before a producer is permitted to sell, solicit, or negotiate the insurer's long-term care insurance products; (2) maintain records of required training subject to the state's record retention requirements; (3) make the verification required under (1) of this subsection available to the director on request. (h) An insurer shall maintain (1) records with respect to the training of its producers concerning the distribution of its partnership policies that allow the director to provide assurance to the medical assistance program under AS 47.07 that producers have received the training described in (d)(3) of this section and that producers have demonstrated an understanding of the partnership policies and their relationship to public and private coverage of long-term care in this state; and (2) the records described under (1) of this subsection in accordance with the record requirements under AS 21.09.320 and shall make the records available to the director on request.
An insurer that authorizes issuance of a long-term care insurance policy by a producer or a third-party administrator under the underwriting authority of the insurer granted to the producer or third-party administrator using the insurer's underwriting guidelines may issue a long-term care insurance policy through the producer or third-party administrator only if the insurer does not compensate the issuer based on the number of policies issued.
Group long-term care insurance coverage may not be offered to a resident of this state under a group policy issued in another state, unless the state in which the policy is issued has statutory or regulatory provisions applicable to group long-term care insurance that are substantially similar to this chapter and the director determines that the issuance of the group policy is not contrary to the best interest of the public, results in economies of acquisition or administration, and the benefits are reasonable in relation to the premiums charged.
An insurer, hospital or medical service corporation, or a fraternal benefit society may not issue group long-term care insurance to an association or a trust or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations, unless the association or the insurer of the association files evidence with the director that the association has (1) a minimum of 100 members; (2) been organized and maintained in good faith for purposes other than that of obtaining insurance; (3) been in active existence for at least one year; and (4) a constitution and by-laws that require (A) the association to hold regular meetings not less than annually to further purposes of the members; (B) except for credit unions, the association to collect dues or solicit contributions from members; and (C) the members to have voting privileges and representation on the governing board and committees.
The director shall adopt regulations regarding (1) the sale of long-term care insurance that provide minimum standards for (A) terms of renewability; (B) initial and subsequent conditions of eligibility; (C) nonduplication of coverage provisions; (D) coverage of dependents; (E) benefit triggers; (F) preexisting conditions and recurrent conditions; (G) termination of insurance, including incontestability periods; (H) continuation or conversion; (I) probationary periods, limitations, exceptions, reductions, and elimination periods; (J) requirements for replacement; (K) producer training, education, compensation, and testing; (L) marketing practices; (M) independent review of benefit determinations; (N) penalties and reporting practices; and (O) premium rates, including rate filing requirements; (2) standard definitions of long-term care insurance terms; (3) nonforfeiture or minimum value requirements; (4) consumer protection standards, including standards for full and fair disclosure setting out the manner and content of required disclosures; and (5) the standard format and content of the outline of coverage required under AS 21.53.050.
In this chapter, (1) applicant means in the case of an individual long-term care insurance policy, the person who seeks to contract for benefits, and in the case of a group long-term care insurance policy, the proposed certificate holder; (2) certificate means a certificate issued under a group long-term care insurance policy that has been delivered or issued for delivery in this state; (3) group long-term care insurance means a long-term care insurance policy, subscriber's contract, or fraternal benefit society certificate that is delivered or issued for delivery in this state and issued to (A) one or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination of them, for employees or former employees or a combination of them, or for members or former members or a combination of them, of the labor organization; (B) a professional, trade, or occupational association for its members or former or retired members, or combination of them, if the association is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation, and has been maintained in good faith for purposes other than obtaining insurance; (C) an association or a trust or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations that meets the requirements in AS 21.53.080; (D) a group other than described in this paragraph if the director determines that the issuance of the group policy is not contrary to the best interest of the public, would result in economies of acquisition or administration, and the benefits are reasonable in relation to the premiums charged; (4) long-term care insurance (A) means an individual or group insurance policy, including group and individual life insurance or annuities, a subscriber's contract, fraternal benefit society certificate, or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital, and includes a policy or rider that provides for payment of benefits based on cognitive impairment or loss of functional capacity; (B) does not include (i) an insurance policy, subscriber's contract, or fraternal benefit society certificate that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability insurance and related asset protection coverage, catastrophic coverage, comprehensive coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage; or (ii) a life insurance policy that accelerates the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention, or permanent institutional confinement and that provides the option of a lump-sum payment for that benefit if the benefit and the eligibility for the benefit under the life insurance policy are not conditioned on the receipt of long-term care.
Each group health insurance policy must contain in substance the following provisions: (1) a provision that, in the absence of fraud, all statements made by applicants or the policyholder or by an insured person shall be considered representations and not warranties, and that a statement made for the purpose of effecting insurance may not void the insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to the policyholder or to the insured person or the beneficiary of the insured person; (2) a provision that the insurer will furnish to the policyholder for delivery to each employee or member of the insured group, a statement in summary form of the essential features of the insurance coverage of the employee or member and to whom benefits are payable; if dependents are included in the coverage, only one certificate need be issued for each family unit; (3) a provision that to the group originally insured may be added from time to time eligible new employees or members or dependents, as the case may be, in accordance with the terms of the policy.
(a) Rates charged for a group health insurance policy may not be excessive, inadequate, or unfairly discriminatory. (b) A health care insurer may decline to cover or may restrict the coverage offered to a self-employed individual under an association plan authorized under AS 21.54.060(a)(6). (c) Except for large employer health care insurance plan premium rates exempted by the director by regulation under (d) of this section, an insurer shall file with the director the premium rates charged for each health care insurance plan before using them. A premium rate or premium rate change must be on file with the director for a waiting period of at least 45 days before the effective date of the premium rate. That period may be extended by the director or the insurer for an additional 15 days if, during the initial 45-day waiting period, notice is given stating that additional time for consideration of the filing is needed. A filing may become effective at the end of the waiting period unless disapproved by the director during the waiting period. If an insurer fails to provide information requested by the director during the waiting period, the filing is considered withdrawn by the insurer, and the premium rate does not become effective. (d) The director shall adopt regulations (1) establishing procedures for the filing and use of rates; and (2) specifying information that must be submitted in a filing required under (c) of this section.
(a) On the written request of a covered person, a health care insurer shall pay amounts due under a health insurance policy directly to the provider of medical care services. A health insurance policy may not contain a provision that requires services be provided by a particular hospital or person, except as applicable to a health maintenance organization under AS 21.86. If a health care insurer makes a claim payment to the covered person after the covered person has given written notice electing direct payment to the provider of the service, the health care insurer shall also pay that amount to the provider of the service. (b) A covered person may revoke an election of direct claim payment made under (a) of this section by giving written notice of the revocation to the health care insurer and to the provider of the service. The written notice of revocation to the health care insurer must certify that the covered person has given written notice of revocation to the provider of the service. Revocation of direct claim payment is not effective until the later of the date the health care insurer received the notice of revocation or the date the provider of the service received the revocation. (c) The right of the covered person to request payment of indemnities under a blanket health insurance policy directly to the provider of the services or to another person may be transferred by a qualified domestic relations order to a person who is not the covered person. Rights under the qualified domestic relations order do not take effect until the order is received by the health care insurer. In this subsection, qualified domestic relations order means an order or judgment in a divorce or dissolution action under AS 25.24 that designates a person to determine to whom indemnities for a covered person should be paid under a health insurance policy. (d) This section does not prohibit a health care insurer from recovering an amount mistakenly paid to a provider or a covered person.
An insurer authorized to write health insurance in this state shall have the power to issue blanket health insurance. A blanket policy may not be issued or delivered in this state unless a copy of the form of the policy has been filed in accordance with AS 21.42.120. Each blanket policy must contain provisions that in the opinion of the director are at least as favorable to the policyholder and the individual insured as the following: (1) a provision that the policy, including endorsements and a copy of the application, if any, of the policyholder and the persons insured shall constitute the entire contract between the parties, and that any statement made by the policyholder or by a person insured shall in the absence of fraud be considered a representation and not a warranty, and that a statement may not be used in defense to a claim under the policy, unless contained in a written application; the person, a beneficiary, or assignee, shall have the right to make written request to the insurer for a copy of the application and the insurer shall, within 15 days after the receipt of the request at its home office or a branch office of the insurer, deliver or mail to the person making the request a copy of the application; (2) a provision that written notice of sickness or of injury must be given to the insurer within 20 days after the date when the sickness or injury occurred; failure to give notice within that time may not invalidate or reduce a claim if it is shown that it was not reasonably possible to give the notice and that notice was given as soon as was reasonably possible; (3) a provision that the insurer will furnish to the policyholder the forms that are usually furnished by it for filing proof of loss; if the forms are not furnished before the expiration of 15 days after the giving of the notice, the claimant shall be considered to have complied with the requirements of the policy as to proof of loss upon submitting, within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made; (4) a provision that in the case of claim for loss of time for disability, written proof of the loss must be furnished to the insurer within 90 days after the beginning of the period for which the insurer is liable, and that subsequent written proofs of the continuance of the disability must be furnished to the insurer at the intervals that the insurer may reasonably require, and that in the case of claim for any other loss, written proof of the loss must be furnished to the insurer within 90 days after the date of the loss; failure to furnish the proof within that time does not invalidate or reduce a claim if it is shown that it was not reasonably possible to furnish the proof and that the proof was furnished as soon as was reasonably possible; (5) a provision that all benefits payable under the policy other than benefits for loss of time will be payable immediately upon receipt of written proof of the loss, and that, subject to proof of loss, all accrued benefits payable under the policy for loss of time will be paid not later than at the expiration of each period of 30 days during the continuance of the period for which the insurer is liable, and that any balance remaining unpaid at the termination of the period will be paid immediately upon receipt of the proof; (6) a provision that the insurer at its own expense shall have the right and opportunity to examine the person of the insured when and so often as it may reasonably require during the pendency of claim under the policy and also the right and opportunity to make an autopsy in case of death if it is not prohibited by law; (7) a provision that a civil action may not be brought to recover under the policy before the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of the policy and that an action may not be brought after the expiration of three years after the time written proof of loss is required to be furnished.
An individual application may not be required from a person covered under a blanket health insurance policy or contract, nor is it necessary for the insurer to furnish each person a certificate.
(a) All benefits under a blanket health insurance policy shall be paid to (1) the person insured; (2) the designated beneficiary or beneficiaries of the person insured; (3) the estate of the person insured; (4) the parent, guardian, or other person actually supporting the person insured, if the person insured is a minor or otherwise not competent to give a valid release; or (5) the employer, if the entire cost of the insurance has been paid by the employer. An insurer may, and upon written request of the covered person shall, within 30 working days after receiving a proof of loss statement, pay benefits directly to the provider of the hospital, nursing, medical, dental, or surgical services. The policy may not contain a provision requiring that services be provided by a particular hospital or person, except as applicable to a health maintenance organization under AS 21.86. If the insurer pays indemnities to the insured after the covered person has given the insurer written notice in the proof of loss statement of an election of direct payment of indemnities to the provider of the service, the insurer shall also pay those indemnities to the provider of the service. (b) A covered person may revoke an election of direct payment of benefits made under (a) of this section by giving written notice of the revocation to the insurer and to the provider of the services. The written notice of revocation given to the insurer must certify that the covered person has given written notice of revocation to the provider of the services. Revocation of an election of direct payment is not effective until the notice of revocation is received by the insurer and the provider of the services. (c) The right of the covered person to request payment of indemnities under a group health insurance policy directly to the provider of the services or to another person may be transferred to a person who is not the covered person by a qualified domestic relations order. Rights under the qualified domestic relations order do not take effect until the order is received by the insurer. In this subsection, qualified domestic relations order means an order or judgment in a divorce or dissolution action under AS 25.24 that designates a person to determine to whom indemnities for a covered person should be paid under a health insurance policy. (d) This section does not prohibit an insurer from recovering an indemnity mistakenly paid to a provider or a covered person.
(a) Group health insurance is that form of health insurance covering groups of persons as defined below, with or without one or more members of their families or one or more of their dependents, or covering one or more members of the families or one or more dependents of the groups of persons and issued on the following basis: (1) under a policy issued to an employer or trustees of a fund established by an employer, who shall be considered the policyholder, insuring employees of the employer for the benefit of persons other than the employer; in this paragraph the term employees includes the officers, managers, and employees of the employer, the individual proprietor or partner if the employer is an individual proprietor or partnership, the officers, managers, and employees of subsidiary or affiliated corporations, the individual proprietors, partners, and employees of individuals and firms if the business of the employer and the individual or firm is under common control through stock ownership, contract, or otherwise; in this paragraph, employees may include retired employees; a policy issued to insure employees of a public body may provide that the term employees includes elected or appointed officials; the policy may provide that the term employees includes the trustees or their employees, or both, if their duties are principally connected with the trusteeship; a policy issued to insure employees of a corporation may provide that the term employees includes directors of the corporation, whether or not the directors receive compensation; (2) under a policy issued to an association, including a labor union, that is a bona fide association that has a constitution and bylaws and that insures members, employees, or employees of members of the association for the benefit of persons other than the association or its officers or trustees; in this paragraph, the term employees may include retired employees; (3) under a policy issued to the trustees of a fund established, adopted, or participated in by two or more employers or by one or more labor unions or by one or more employers and one or more labor unions or by an association as defined in (2) of this section, which trustees shall be considered the policyholder, to insure employees of the employers or members of the unions or of the association, or employees of members of the association, for the benefit of persons other than the employers or the unions or the association; in this paragraph, the term employees may include the officers, managers, and employees of the employer, and the individual proprietor or partners if the employer is an individual proprietor or partnership; in this paragraph, the term employees may include retired employees; the policy may provide that the term employees includes the trustees or their employees, or both, if their duties are principally connected with the trusteeship; (4) under a policy issued to a person or organization to which a policy of group life insurance may be issued or delivered in this state to insure a class or classes of individuals that could be insured under the group life policy; (5) a group health insurance policy that contains provisions for the payment by the insurer of benefits for expenses incurred on account of hospital, nursing, medical, or surgical services for members of the family or dependents of a person in the insured group may provide for the continuation of the benefit provisions, or a part or parts of them, after the death of the person in the insured group; (6) under a policy issued to an association of employers covering the employees and dependents of the employees, or issued to an association of self- employed individuals covering self-employed individuals and dependents of the self- employed individuals, or issued to an association that includes a combination of employers and self-employed individuals; for purposes of this paragraph, (A) an association described under this paragraph shall comply with the following requirements: (i) the association shall have a constitution and bylaws; (ii) the association shall be maintained in good faith for the benefit of persons other than the association or its officers or trustees; (iii) membership in the association shall be restricted to large or small employers, or self-employed individuals, who are residents of the state; however, an employer domiciled in another state may become a member of the association for purposes of obtaining coverage through the association only for the employees and dependents of the employees of that employer who are residents of this state; (iv) except as provided under AS 21.54.015, the association may not condition membership in the association or coverage under a health insurance policy issued to the association on any of the factors listed under AS 21.54.100(a); (B) self-employed individual means an individual who derives a substantial portion of the individual's income from a trade or business through which the individual has attempted to earn taxable income and for which the individual has filed the appropriate Internal Revenue Service form and schedule for the previous taxable year. (b) An insurer may issue a group health insurance policy to a group that does not meet one or more of the requirements under (a)(1) - (4) and (6) of this section on a finding by the director that issuance of a group policy to the group (1) is in the best interests of the public;  (2) results in economies of acquisition or administration; and (3) meets other requirements adopted by the director by regulation. (c) An insurer must submit to the director information satisfactory to the director that the group meets the requirements of (b) of this section and the director must affirmatively approve of the group before an insurer may issue a group health insurance policy under (b) of this section.
Blanket health insurance is declared to be that form of health insurance covering groups of persons as enumerated in one of the following subdivisions: (1) under a policy or contract issued to a common carrier or to an operator, owner, or lessee of a means of transportation, who or which shall be considered the policyholder, covering a group of persons who may become passengers defined by reference to their travel status on the common carrier or the means of transportation; (2) under a policy or contract issued to an employer, who shall be considered the policyholder, covering a group of employees, dependents, or guests, defined by reference to specified hazards incident to an activity or activities or operations of the policyholder; (3) under a policy or contract issued to a college, school, or other institution of learning, a school district or districts, or school jurisdictional unit, or to the head, principal, or governing board of an educational unit, who or which shall be considered the policyholder covering students, teachers, or employees; (4) under a policy or contract issued to a religious, charitable, recreational, educational, or civic organization, or branch of them, which shall be considered the policyholder, covering a group of members or participants defined by reference to specified hazards incident to an activity or activities or operations sponsored or supervised by the policyholder; (5) under a policy or contract issued to a sports team, camp, or sponsor of them, which shall be considered the policyholder, covering members, campers, employees, officials, or supervisors; (6) under a policy or contract issued to a volunteer fire department, first aid, civil defense, or other volunteer organization, which shall be considered the policyholder, covering a group of members or participants defined by reference to specified hazards incident to an activity or activities or operations sponsored or supervised by the policyholder; (7) under a policy or contract issued to a newspaper or other publisher, which shall be considered the policyholder, covering its carriers; (8) under a policy or contract issued to an association, including a labor union, that has a constitution and bylaws and that has been organized and is maintained in good faith for purposes other than that of obtaining insurance, which shall be considered the policyholder, covering a group of members or participants defined by reference to specified hazards incident to an activity or activities or operations sponsored or supervised by the policyholder; (9) under a policy or contract issued to cover any other risk or class of risks that, in the discretion of the director, may be properly eligible for blanket accident and sickness insurance; the discretion of the director may be exercised on an individual risk basis or class of risks, or both.
(a) A health care insurer that offers, issues for delivery, delivers, or renews a health care insurance plan in the group market may not establish rules for eligibility, including continued eligibility and waiting periods under the plan, for an individual or dependent of an individual based on (1) health status; (2) medical condition, including physical and mental illnesses; (3) claims experience; (4) receipt of health care; (5) medical history; (6) genetic information; (7) evidence of insurability, including conditions arising from acts of domestic violence; or (8) disability. (b) A health care insurer may not require an individual, as a condition of enrollment or continued enrollment under a health care insurance plan offered in the group market, to pay a premium, contribution, or policy fee greater than a premium, contribution, or policy fee for a similarly situated individual already enrolled in the plan on the basis of a health status factor for the individual or a dependent of the individual.
A health care insurer that offers, issues, delivers, or renews a health care insurance plan in the group market shall allow an eligible employee or dependent of an employee to enroll for coverage under the terms of the plan if the employee or dependent (1) is covered by Medicaid under 42 U.S.C. 1396 - 1396u (Title XIX of the Social Security Act) or under a state child health plan under 42 U.S.C. 1397aa - 1397mm (Title XXI of the Social Security Act), coverage is terminated because of loss of eligibility, and the employee requests coverage under the health care insurance plan not later than 60 days after the date of termination; or (2) becomes eligible for assistance under Medicaid under 42 U.S.C. 1396 - 1396u (Title XIX of the Social Security Act) or under a state child health plan under 42 U.S.C. 1397aa - 1397mm (Title XXI of the Social Security Act), with respect to coverage under a health care insurance plan, including under any waiver or demonstration project conducted under or in relation to the Medicaid or state child health plan, and the employee requests coverage under the health care insurance plan not later than 60 days after the date the employee or dependent is determined to be eligible for assistance.
(a) A health care insurance plan offered, issued for delivery, delivered, or renewed in the group market may not contain a preexisting condition exclusion that (1) relates to a condition, regardless of cause, for which medical advice, diagnosis, care, or treatment was recommended or received more than six months before the enrollment date; (2) considers genetic information as a condition for which a preexisting condition exclusion may be imposed in absence of a diagnosis of the condition related to the information; (3) extends for more than 12 months after the enrollment date of a covered individual; or (4) excludes a condition relating to pregnancy. (b) A period of a preexisting condition exclusion permissible under (a) of this section must be reduced by the aggregate of periods of creditable coverage, if any, as determined in AS 21.54.120, applicable to the participant or beneficiary as of the enrollment date. The aggregate of periods of creditable coverage is determined by adding together all periods of creditable coverage before the enrollment date, excluding periods of creditable coverage before a continuous break in coverage of more than 90 days. A waiting period or affiliation period may not be considered in determining the 90-day period. This subsection does not apply if an individual's most recent period of creditable coverage ended on a date more than 90 days before the enrollment date. This subsection does not preclude application of a waiting period to all new enrollees under a health care insurance plan. (c) A health care insurance plan offered, issued for delivery, delivered, or renewed in this state in the group market may not apply a preexisting condition exclusion to an individual who is (1) a newborn covered under creditable coverage as of the last day of the 30-day period beginning with the date of birth; or (2) adopted or placed for adoption before attaining 18 years of age and who is covered under creditable coverage as of the last day of the 30-day period beginning with the date of adoption or placement for adoption. This subsection does not apply to an individual after the end of the first continuous 90-day period during all of which the individual was not covered under creditable coverage. (d) A health care insurance plan offered, issued for delivery, delivered, or renewed in this state in the group market may exclude coverage for late enrollees for the greater of 18 months or an 18-month preexisting condition exclusion. If both a waiting period and a preexisting condition exclusion under (a) of this section are applicable to a late enrollee, the combined period may not exceed 18 months from the date the individual enrolls for coverage under a health care insurance plan.
(a) A health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan in the group market shall count a period of creditable coverage based on (1) the standard method authorized by 42 U.S.C. 300gg (Health Insurance Portability and Accountability Act of 1996) for determining creditable coverage without regard to the specific benefits covered during the period; or (2) an alternative method based on coverage of benefits within each of several classes or categories of benefits specified in federal regulation if (A) made on a uniform basis for all participants and beneficiaries; and (B) the insurer counts a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category. (b) A health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan in the group market shall provide a certification of coverage (1) at the time an individual ceases to be covered under a health care insurance plan or becomes covered under a federal continuation provision; (2) at the time an individual ceases to be covered under a federal continuation provision; and (3) upon request by an individual or on behalf of an individual within 24 months after the date coverage under the health care insurance plan or a federal continuation provision ceases. (c) A health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan in the group market shall establish periods of creditable coverage with respect to an individual through certification under (b) of this section or as specified in federal regulation. (d) A health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan in the group market shall prominently state and describe the effect of the health care insurer's election to count a period of creditable coverage using a permissible alternative method (1) in any disclosure statement concerning the health care insurance plan or coverage; (2) to each enrollee at the time of enrollment; and (3) to each employer at the time of offer or sale of coverage. (e) A health care insurer issuing a certification under (b) of this section shall disclose information regarding coverage of classes and categories of health benefits available under the health care insurer's plan at the request of an entity that (1) enrolls an individual who has provided the certification of coverage; (2) elects to count a period of creditable coverage according to a permissible alternative method under (a)(2) of this section; and (3) pays the health care insurer for the reasonable cost, if any, of disclosing the information described in this subsection.
(a) Except for a multiple employer welfare arrangement, a health care insurer that offers, issues for delivery, delivers, or renews in this state a health care insurance plan in the group market shall renew or continue in force the coverage under the plan at the option of the plan sponsor unless (1) the plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health care insurance plan or the health care insurer has not received timely premium payments; (2) the plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage; (3) the plan sponsor has failed to comply with a material plan provision relating to minimum participation or employer contribution requirements; (4) the health care insurer ceases to offer coverage in accordance with (b) and (c) of this section; (5) the health care insurer offers the plan only through a network plan and there is no longer an enrollee in connection with the plan who lives, resides, or works in the service area of the insurer or in the area for which the insurer is authorized to transact business; or (6) in the case of a plan that is made available only through a bona fide association, the employer's membership in the association ceases and coverage is terminated uniformly without regard to a health status factor of a covered individual. (b) A health care insurer may discontinue offering a particular type of health care insurance plan in the group market as permitted by this title if the insurer (1) provides written notice of the decision to discontinue coverage to all affected plan sponsors, participants, and beneficiaries and to the insurance regulatory official in each state in which an affected covered employee or dependent is known to reside; notice required under this paragraph must be given at least 180 days before the insurer fails to renew the health care insurance plan; (2) provides written notice of the decision to discontinue coverage to the director and to the insurance regulatory official in each state in which the insurer is licensed at least 30 days before notice is given to the affected plan sponsors, participants, and beneficiaries as described under (1) of this subsection; (3) offers to each plan sponsor who is provided the particular type of health care insurance plan the option to purchase another health care insurance plan currently being offered by the insurer to plan sponsors in the same market in the state; and (4) acts uniformly without regard to the claims experience of those plan sponsors or to any health status factor of a covered participant or beneficiary or a new participant or beneficiary who may become eligible for coverage. (c) A health care insurer may discontinue offering and renewing all health care insurance plans in the small group market, large group market, or both, as permitted by this title if the insurer (1) provides written notice of the decision to discontinue coverage to all affected plan sponsors, participants, and beneficiaries and to the insurance regulatory official in each state in which an affected covered employee or dependent is known to reside; notice required under this paragraph must be given at least 180 days before discontinuation of the plans; (2) provides written notice of the decision to discontinue coverage to the director and to the insurance regulatory official in each state in which the insurer is licensed at least 30 days before the notice is given to the affected plan sponsors, participants, and beneficiaries as described under (1) of this subsection; and (3) does not issue a health care insurance plan in the group market in this state for five years from the date the last group health care insurance plan was discontinued. (d) A health care insurer may modify a large employer's health care insurance plan at the time of plan renewal. (e) Except for coverage available only through a bona fide association, a health care insurer may modify a small employer's health care insurance plan consistent with this title at the time of plan renewal only if the modification is uniform for all small employers with the same health care insurance plan. (f) If a covered employee or dependent has committed a fraudulent act or made an intentional misrepresentation of a material fact in regard to a health care insurance plan, a health care insurer may terminate the coverage of the employee or the dependent under the plan. (g) For purposes of this section, a plan sponsor includes an employer member of a bona fide association for a health care insurance plan made available by the health care insurer only through a bona fide association.
A health benefit plan that is a multiple employer welfare arrangement subject to this title may not deny an employer whose employees are covered under the plan continued access to the same or a different plan according to the terms of the plan, except (1) for nonpayment of contributions; (2) for fraud or other intentional misrepresentation of material fact by the employer; (3) for noncompliance with material plan provisions; (4) where the plan is ceasing to offer any coverage in a geographic area; (5) for a health benefit plan that offers benefits through a network plan if (A) there is no longer an individual enrolled through the employer who lives, resides, or works in the service area of the network plan; and (B) the multiple employer welfare arrangement applies this paragraph without regard to the claims experience of the employer or a health status factor in relation to an individual or an individual's dependent; and (6) for failure to meet the terms of an applicable collective bargaining agreement to renew a collective bargaining or other agreement requiring or authorizing contributions to the plan or to employ employees covered by a collective bargaining agreement.
A health care insurer that offers a health care insurance plan in the group market shall comply with the mental health or substance use disorder benefit requirements established under 42 U.S.C. 300gg-26.
Excepted benefits means benefits under one or more or any combination of the following: (1) benefits under (A) coverage only for accident, disability income insurance, or both; (B) coverage issued as a supplement to liability insurance; (C) liability insurance, including general liability insurance and automobile liability insurance; (D) workers' compensation or substantially similar insurance; (E) automobile medical payment insurance; (F) credit-only insurance; (G) coverage for on-site medical clinics; or (H) other similar insurance coverage, as specified in federal law, under which benefits for medical care are secondary or incidental to other insurance benefits; (2) if offered as a separate insurance policy and otherwise not an integral part of a health care insurance plan, benefits under (A) limited scope dental or vision coverage; (B) coverage for long-term care, nursing home care, home health care, community-based care, or any combination; or (C) other similar limited benefits as specified in federal law; (3) if offered as independent noncoordinated benefits, benefits under coverage only for a specified disease or illness, or hospital indemnity or other fixed indemnity insurance; as used in this paragraph, independent, noncoordinated benefits means benefits that are provided under a separate policy if (A) there is no coordination between the provision of the benefits and an exclusion of benefits under a health care insurance plan maintained by the same plan sponsor; and (B) the benefits are paid with respect to an event without regard to whether benefits are provided for the event under a health care insurance plan maintained by the same plan sponsor; (4) if offered as a separate insurance policy, benefits under (A) Medicare supplemental policy as defined in 42 U.S.C. 1395ss(g)(1) (Social Security Act); (B) coverage supplemental to the coverage provided under 10 U.S.C. 1071 - 1090; or (C) similar supplemental coverage provided to coverage under a health benefit plan.
The determination of whether an employer is a large or small employer is subject to the following: (1) the size of an employer that was not in existence throughout the preceding calendar year must be based on the average number of employees that the employer is reasonably expected to employ on the business days in the current calendar year; (2) all persons treated as a single employer under 26 U.S.C. 414(b), (c), (m), or (o) must be treated as one employer; and (3) a reference to a large or small employer includes by reference any predecessor of that employer.
In this chapter, (1) aggregate lifetime limit means a dollar limit on the total amount that may be paid for benefits under a health care insurance plan offered in the group market with respect to an individual or unit of coverage; (2) annual limit means a dollar limit on the total amount that may be paid for benefits in a 12-month period under the plan with respect to an individual or unit of coverage; (3) beneficiary has the meaning given under 29 U.S.C. 1002(8) (Employee Retirement Income Security Act of 1974); (4) certification of coverage means a written certification of (A) the period of creditable coverage of an individual under a health benefit plan or health care insurance plan offered in the group market, including coverage under a federal continuation provision; and (B) the waiting period imposed with respect to the individual for coverage under the health benefit plan or health care insurance plan offered in the group market; (5) church plan has the meaning given under 29 U.S.C. 1002(33) (Employee Retirement Income Security Act of 1974); (6) creditable coverage means, with respect to an individual, coverage, excluding excepted benefits, calculated as required under AS 21.54.120 and applicable under (A) a health care insurance plan; (B) a health benefit plan; (C) 42 U.S.C. 1395c or 1395j (Part A or Part B of Title XVIII of the Social Security Act); (D) 42 U.S.C. 1396 (Title XIX of the Social Security Act), other than coverage consisting solely of benefits under 42 U.S.C. 1396s; (E) 10 U.S.C. 1071 - 1090; (F) a medical care program of the Indian Health Service or of a tribal organization; (G) AS 21.55 or other state high risk pool; (H) 5 U.S.C. 8901 - 8914; (I) a public health plan as defined under federal law; or (J) a health benefit plan under 22 U.S.C. 2504(e) (Peace Corps Act); (7) employee has the meaning given under 29 U.S.C. 1002(6) (Employee Retirement Income Security Act of 1974); (8) employer has the meaning given under 29 U.S.C. 1002(5) (Employee Retirement Income Security Act of 1974); for purposes of this chapter, employer includes a large or small employer, including a person, firm, corporation, partnership, association, or political subdivision, that is actively engaged in business; (9) enrollment date means the date of enrollment of an individual in a health benefit plan or health care insurance plan offered in the group market or the first day of the waiting period for enrollment, whichever occurs first; (10) federal continuation provision means a COBRA continuation provision as defined in 42 U.S.C. 300gg-91(d) (Health Insurance Portability and Accountability Act of 1996); (11) federal governmental plan means a governmental plan established or maintained for employees of the United States government or by an agency or instrumentality of the United States government; (12) governmental plan has the meaning given under 29 U.S.C. 1002(32) (Employee Retirement Income Security Act of 1974); (13) group market means the health care insurance market in which individuals obtain health care insurance coverage on behalf of themselves and their dependents through a health benefit plan maintained by a large or small employer; group market includes a health benefit plan for a small employer in the group market that includes an arrangement under which (A) a portion of the premium or benefits is paid by a small employer; (B) a covered individual or dependent is reimbursed, through wage adjustments or otherwise, by or on behalf of a small employer for all or a portion of the premium; or (C) the health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of 26 U.S.C. 106 or 26 U.S.C. 162 (Internal Revenue Code); (14) health benefit plan means an employee welfare benefit plan as defined in 29 U.S.C. 1002(1) (Employee Retirement Income Security Act of 1974), and includes a plan, fund, or program established or maintained by a partnership, to the extent that the plan, fund, or program provides medical care, including items and services paid for as medical care to employees, present or former partners, or their dependents, as defined under the terms of the plan, fund, or program, directly or through insurance, reimbursement, or other method; (15) health care insurance plan means a health care insurance policy or contract but does not include an excepted benefits policy or contract; (16) health care insurer means a person transacting the business of health care insurance, including an insurance company licensed under AS 21.09, a hospital or medical service corporation licensed under AS 21.87, a fraternal benefit society licensed under AS 21.84, a health maintenance organization licensed under AS 21.86, a multiple employer welfare arrangement, a church plan, and a governmental plan, except for a nonfederal governmental plan that elects to be excluded under 42 U.S.C. 300gg-21(a)(2) (Health Insurance Portability and Accountability Act); (17) health status factor means any of the factors described in AS 21.54.100(a); (18) large employer means an employer that employed an average of at least 51 employees on the business days during the preceding calendar year and that employs at least two employees on the first day of a health benefit plan year; (19) late enrollee means a participant or beneficiary who requests enrollment in an employer's health care insurance plan following the initial enrollment period for which the participant or beneficiary was eligible to enroll under the terms of a health care insurance plan, except that a participant or beneficiary may not be considered a late enrollee if (A) the individual requests enrollment within 30 days after the termination of the creditable coverage or the exhaustion of coverage, was covered under creditable coverage at the time of the initial enrollment, and (i) has lost creditable coverage as a result of the termination of employer contributions toward coverage or the termination of eligibility, including death, divorce, dissolution of marriage, legal separation, or a reduction in number of hours of employment; or (ii) had coverage under a federal continuation provision and the coverage under that provision was exhausted; (B) the individual is employed by an employer who offers multiple health care insurance plans and the individual elects a different health care insurance plan during an open enrollment period; or (C) a court has ordered coverage to be provided for a spouse or minor child under a covered employee's plan and request for enrollment is made within 30 days after issuance of the court order; (20) medical and surgical benefits means benefits provided for medical or surgical services, but does not include mental health benefits; (21) mental health benefits means benefits provided for mental health services as defined under the terms of the health care insurance plan, but does not include benefits for treatment of substance abuse or chemical dependency; (22) network plan means a health care insurance plan offered in the group market or by an insurer under which the financing and delivery of medical care, including items and services paid for as medical care, are provided in whole or in part through a defined set of providers under contract with the insurer; (23) participant has the meaning given under 29 U.S.C. 1002(7) (Employee Retirement Income Security Act of 1974); participant includes a (A) partner in relation to a partnership; or (B) self-employed individual if the individual or the individual's beneficiaries are or may become eligible to receive benefits under a health benefit plan maintained by the self-employed individual; (24) placed for adoption means the assumption and retention by an individual of a legal obligation for total or partial support of a child in anticipation of adopting the child; (25) plan sponsor has the meaning given under 29 U.S.C. 1002(16)(B) (Employee Retirement Income Security Act of 1974); (26) preexisting condition exclusion means a limitation or exclusion of benefits relating to a physical or mental condition that was present before the enrollment date, regardless of whether medical advice, diagnosis, care, or treatment was recommended or received before the enrollment date; (27) small employer means an employer that employed an average of at least two but not more than 50 employees on the business days during the preceding calendar year and that employs at least two employees on the first day of a health benefit plan year; (28) waiting period means the period that must pass before an individual who is a potential participant or beneficiary in a health care insurance plan offered in the group market is eligible to be covered for benefits under the terms of the plan.
(a) There is established a nonprofit incorporated legal entity to be known as the Comprehensive Health Insurance Association. Membership consists of all licensed hospital or medical service corporations in the state that offer subscriber contracts for major medical coverage, all health maintenance organizations or other managed care arrangements approved by the director, all licensed self-funded multiple employer welfare arrangements in the state, and all insurers licensed to transact health insurance in the state that offer policies for major medical coverage on an expense incurred basis. All members shall maintain membership in the association as a condition of doing health insurance business, or being able to offer subscriber contracts or enrollment in a health maintenance organization, self-funded multiple employer welfare arrangement, or managed care arrangement in the state. (b) A member shall submit reports and provide information required by the board or the director to implement this chapter as a condition of transacting business in the state.
(a) The board of directors of the association consists of seven individuals. Five board members shall be selected by association members, subject to approval by the director of the division of insurance, and two board members shall be consumers selected by the director of the division of insurance. The director or the director's designee is a nonvoting ex officio member of the board. A member of the board serves for a term of three years and may be reappointed to an unlimited number of terms. The term of a board member shall continue until a successor is appointed. (b) In approving members of the board, the director shall consider, among other things, whether all types of association members are fairly represented. (c) In determining voting rights at association meetings, an association member is entitled to vote in person or by proxy. The vote shall be a weighted vote based on the association member's share of assessments as determined under AS 21.55.220. (d) At board meetings, a board member is entitled to one vote in person or by proxy. (e) A member of the board may be reimbursed from the association for expenses incurred as a result of board activities, but may not otherwise be compensated for services by the association. The costs of conducting meetings of the association and its board of directors shall be the responsibility of the members of the association. (f) The board shall study and prepare a report at least once every three years on the effectiveness of this chapter. The report must include an analysis of the effectiveness of this chapter in promoting rate stability, product availability, and affordability of coverage. The report may contain recommendations for legislative or other regulatory action. The board shall notify the legislature that the report is available. (g) In this section, board means the board of directors of the association.
The association may (1) exercise the powers granted to insurers under the laws of the state; (2) sue or be sued; (3) enter into contracts with insurers, similar associations in other states, or with other persons for the performance of administrative functions; (4) establish administrative and accounting procedures for the operation of the association; and (5) receive funds from sources other than members of the association.
(a) The association shall submit to the director a plan of operation and amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and amendments become effective upon approval in writing by the director. If the association fails to submit a suitable plan of operation by December 22, 1992, or if at subsequent time the association fails to submit suitable amendments to the plan, the director may, after notice and hearing, adopt reasonable regulations necessary or advisable to effectuate the provisions of this chapter. These regulations shall continue in force until modified by the director or superseded by a plan submitted by the association and approved by the director. (b) All members of the association shall comply with the plan of operation. (c) The plan of operation shall (1) establish procedures whereby all the powers and duties of the association under this chapter will be performed; (2) establish procedures for handling assets of the association; (3) establish the amount and method of reimbursing members of the board of directors under AS 21.55.020; (4) establish regular places and times for meetings of the board of directors; (5) establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors; (6) provide that a member insurer aggrieved by a final action or decision of the association may appeal to the director within 30 days after the action or decision; (7) establish procedures whereby selections for the board of directors will be submitted to the director; (8) contain additional provisions necessary or proper for the execution of the powers and duties of the association.
The association is exempt from AS 44.62 (Administrative Procedure Act).
The association is exempt from the payment of fees and taxes levied by the state or any of its political subdivisions except taxes levied on real or personal property.
(a) The association shall make available to a person who is eligible for coverage under this chapter at least one individual state plan of health insurance. The association shall offer a plan with the deductible, copayment, and calendar year maximum limits as described in AS 21.55.120 and may offer additional deductible, copayment, and calendar year maximum limits as approved by the director. (b) The association may make available to residents who are high risks, eligible for and covered by Medicare, 65 years of age or older, and eligible under this chapter one or more Medicare supplement plans that meet the minimum policy standards and minimum benefit standards established by regulations adopted by the director under AS 21.96.060. (c) The association may not refuse to offer coverage under a state plan to a person who is eligible under this chapter. The association may not refuse coverage under a state plan to a person who is eligible under this chapter, applies for coverage, and pays the required premium. (d) The association may make available to a person eligible under this chapter coverage through a health maintenance organization or other managed care arrangement if approved by the director. Deductible, copayment, and calendar year maximum limits provided through an organization or arrangement are not subject to the limits described in AS 21.55.120, but the limits must be approved by the director.
Except as provided in AS 21.55.120 - 21.55.140, the minimum standard benefits of a health insurance plan offered under AS 21.55.100(a) shall be benefits with a lifetime maximum of $1,000,000 for each individual for usual, customary, reasonable, or prevailing charges or, when applicable, the allowance agreed upon between a provider and the plan administrator for charges. The minimum standard benefits of the plan must cover the following medical services performed for an individual covered by the plan for the diagnosis or treatment of nonoccupational disease or nonoccupational injury: (1) hospital services; (2) subject to the limitations of AS 21.36.090(d), professional services that are rendered by a physician or by a registered nurse at the physician's direction, other than services for mental or dental conditions; (3) the diagnosis or treatment of mental conditions, as defined in regulations of the director, rendered during the year on other than an inpatient basis, up to a yearly maximum benefit of $4,000; (4) legend drugs requiring a physician's prescription; (5) services of a skilled nursing facility for not more than 120 days in a policy year; (6) home health agency services up to a maximum of 270 visits in a calendar year if the services commence within seven days following confinement in a hospital or skilled nursing facility of at least three consecutive days for the same condition, except that in the case of an individual diagnosed by a physician as terminally ill with a prognosis of six months or less to live, the home health agency services may commence irrespective of whether the covered person was previously confined or, if the covered person was confined, irrespective of the seven-day period, and the yearly benefit for medical social services may not exceed $200; (7) hospice services for up to six months in a calendar year; (8) use of radium or other radioactive materials; (9) outpatient chemotherapy; (10) oxygen; (11) anesthetics; (12) nondental prosthesis and maxillo-facial prosthesis used to replace any anatomic structure lost during treatment for head and neck tumors or additional appliances essential for the support of the prosthesis; (13) rental, or purchase if purchase is more cost effective than rental, of durable medical equipment that has no personal use in the absence of the condition for which it was prescribed; (14) diagnostic x-rays and laboratory tests; (15) oral surgery for excision of partially or completely unerupted impacted teeth or excision of a tooth root without the extraction of the entire tooth; (16) services of a licensed physical therapist rendered under the direction of a physician; (17) transportation by a local ambulance operated by licensed or certified personnel to the nearest health care institution for treatment of the illness or injury and round trip transportation by air to the nearest health care institution for treatment of the illness or injury if the treatment is not available locally; if the patient is a child under 12 years of age, the transportation charges of a parent or legal guardian accompanying the child may be paid if the attending physician certifies the need for the accompaniment; (18) confinement in a licensed or certified facility established primarily for the treatment of alcohol or drug abuse, or in a part of a hospital used primarily for this treatment, for a period of at least 45 days within any calendar year; (19) alternatives to inpatient services as defined by the association in the state plan benefits; (20) second surgical opinions; (21) other services that are medically necessary in the treatment or diagnosis of an illness or injury as may be designated or approved by the director.
(a) A state plan other than a Medicare supplement plan may require a deductible of not less than $500 a person as determined by the board and approved by the director. The amount of the deductible may not be greater when a service is rendered on an outpatient basis than when that service is offered on an inpatient basis. Expenses incurred during the last three months of a calendar year and actually applied to an individual's deductible for that year shall also be applied to that individual's deductible in the following calendar year. (b) A state plan other than a Medicare supplement plan shall require a maximum copayment of 20 percent for charges for all types of health care in excess of the deductible and 50 percent for services described in AS 21.55.110(3) in excess of the deductible. (c) The sum of the deductible and copayments required in any calendar year under a plan may not exceed a maximum limit of $1,500 plus the deductible. Covered expenses incurred after the applicable maximum limit has been reached shall be paid at the rate of 100 percent of usual, customary, reasonable, or prevailing charges, except that expenses incurred for treatment of mental and nervous conditions shall be paid at the rate of 50 percent. (d) [Repealed,  24 ch 31 SLA 1999.]  (e) [Repealed,  24 ch 31 SLA 1999.] 
(a) A preexisting condition exclusion in a state plan may not exclude coverage of a preexisting condition unless (1) the condition first manifested itself within the period of three months immediately before the effective date of coverage in a manner that would cause a reasonably prudent person to seek diagnosis, care, or treatment; or (2) medical advice or treatment was recommended or received within the period of three months immediately before the effective date of coverage. (b) A policy may not exclude coverage for a loss due to preexisting conditions for a period greater than six months following the effective date of coverage. (c) A state plan issued to a person whose previous subscriber contract, health policy, or Medicare supplement policy was involuntarily terminated shall credit the time covered under the previous contract or policy toward an exclusion for preexisting conditions under the state plan if the previous contract or policy had a similar preexisting condition exclusion and the person applies for a state plan within 31 days after termination of the previous contract or policy. If a person covered by this subsection is accepted by the plan administrator and pays a specified premium for retroactive coverage, the state plan is effective retroactively to the date that the person's previous contract or policy terminated. (d) A state plan issued to a federally defined eligible individual may not impose a preexisting condition exclusion. (e) A state plan issued to a qualified TAA eligible individual may not impose a preexisting condition exclusion.
(a) A state plan may not provide benefits for charges for the following: (1) care for an injury or disease either (A) arising out of and in the course of an employment subject to a workers' compensation or similar law or where the benefit is available to be provided under a workers' compensation policy or equivalent self-insurance to a sole proprietor, business partner, or corporation officer; or (B) to the extent benefits are payable without regard to fault under a coverage statutorily required to be contained in a motor vehicle or other liability insurance policy or equivalent self-insurance; (2) treatment for cosmetic purposes other than surgery for the prompt repair of an accidental injury sustained while covered or for replacement of an anatomic structure removed during treatment of tumors; (3) travel, other than transportation covered under AS 21.55.110(17); (4) private room accommodations to the extent it is in excess of the institution's most common charge for a semiprivate room; (5) services or articles to the extent that the charge exceeds the reasonable charge in the locality for the service; (6) services or articles that are determined not to be medically necessary, except for the fabrication or placement of the prosthesis as specified in AS 21.55.110(12) and (2) of this subsection; (7) services or articles that are not within the scope of the license or certificate of the institution or individual rendering the services or articles; (8) services or articles furnished, paid for, or reimbursed directly by or under any law of a government, except as otherwise provided in this chapter; (9) services or articles for custodial care or designed primarily to assist an individual in the activities of daily living; (10) service charges that would not have been made if no insurance existed or that the covered individual is not legally obligated to pay; (11) eyeglasses, contact lenses, or hearing aids or the fitting of them; (12) dental care not specifically covered by this chapter; (13) services of a registered nurse who ordinarily resides in the covered individual's home, or who is a member of the covered individual's family or the family of the covered individual's spouse; (14) experimental procedures, except during an approved clinical trial; in this paragraph, approved clinical trial has the meaning given in AS 21.42.415; and (15) services and supplies for which the patient was not charged. (b) [Repealed,  8 ch 102 SLA 2003.] 
(a) The association may not charge a rate for coverage issued by or through the association that is unfairly discriminatory. The board shall submit premium rates to the director for approval before use. (b) The association may use separate scales of premium rates based on age and geographic location of the insured. The association may use separate scales of premium rates based on other factors, including use or nonuse of tobacco, if approved by the director. (c) The board shall determine standard risk premium rates by considering the premium rates charged by members of the association offering, to residents of the state, health insurance benefits substantially equivalent to benefits under the state plan. The premium for a state plan may not exceed 150 percent of the standard risk premium rates determined by the board.
The board shall develop bid specifications and select a plan administrator through a competitive bidding process. The selection of the plan administrator shall be based upon criteria including the plan administrator's proven ability to handle health insurance coverage for individuals, efficient claim paying capacity, the estimate of total charges for administering the plan, the plan administrator's ability to apply effective cost containment programs and procedures and to administer the plan in a cost efficient manner, and the financial condition and stability of the plan administrator.
(a) The plan administrator shall perform the administrative and claims payment functions required by this section. The plan administrator shall provide these services for a period specified in the contract between the association and the plan administrator subject to the terms, conditions, and limitations of the contract between the association and the plan administrator. At least six months before the expiration of each contract period, the board shall invite eligible entities, including the plan administrator, to submit bids to serve as the plan administrator. The board shall follow the provisions of this subsection in selecting a plan administrator for the subsequent contract period. (b) The plan administrator shall provide to all eligible persons enrolled in a state plan an individual policy setting out a statement of the insurance protection to which the person is entitled, with whom claims are to be filed, and to whom benefits are payable. The policy must indicate that coverage was obtained through the association. (c) The plan administrator shall submit to the board and the director on a regular basis a report on the operation of the state plans. The board shall determine the specific information to be contained in the report and that information shall be specified in the contract between the association and the plan administrator. (d) The plan administrator shall pay claims and shall indicate when a claim is paid under a state plan. A claim payment must include a telephone number that can be used for inquiries regarding the claim. (e) The plan administrator shall (1) be reimbursed from the state plan receipts for services rendered in connection with administering the plan; and (2) at all times when carrying out its duties under this chapter be considered an agent of the association.
(a) Upon notification of eligibility under AS 21.55.320, a person may enroll in a state plan by payment of the appropriate state plan premium to the plan administrator. (b) [Repealed,  29 ch 30 SLA 2009.] (c) Each member of the association shall share the losses due to claims expenses of the state plans issued or approved for issuance by the association; each member of the association shall share the losses of a reinsurance program established by regulations adopted under AS 21.55.400 reinsuring residents who are high risks; and each member of the association shall share in the operating and administrative expenses incurred or estimated to be incurred by the association incident to the conduct of its affairs. Claims expenses of the state plan that exceed the premium payments allocated to the payment of benefits shall be the liability of the members. Each member shall share in the claims expense of the state plans, the operating and administrative expenses of the association, and the losses of a reinsurance program established by regulations adopted under AS 21.55.400 reinsuring residents who are high risks, in an amount equal to the ratio of the member's total major medical premiums, received from or on behalf of state residents, as divided by the total major medical premiums received by all members from or on behalf of state residents, as determined by the director. (d) The board shall make an annual determination of each member's liability, if any, and may make an annual fiscal year end assessment if necessary. The board may also provide for interim assessments against the members as may be necessary to assure the financial capability of the association in meeting the incurred or estimated claims expenses of the state plans and operating and administrative expenses of the association until the association's next annual fiscal year end assessment. Payment of an assessment is due within 30 days after receipt by a member of written notice of a fiscal year end or interim assessment. A member who fails to pay a fiscal year end or interim assessment as required in this subsection (1) shall pay a civil penalty to the director in the amount of $100 for each day the member fails to pay the required assessment, and (2) may have the member's certificate of authority revoked by the director. A member that ceases to do business in the state remains liable for assessments until the board determines under (c) of this section that no assessment is due. The board may decline to levy an assessment against a member if the assessment would be minimal. Assessments paid by a member are a general expense of the member. (e) Net gains, if any, from the operation of the state plans shall be held at interest and used by the association to offset future losses due to claims expenses of a state plan or allocated to reduce state plan premiums. (f) A member may offset 50 percent of the amount of the assessment under this section as a premium tax credit reducing the premium tax payable by the member under AS 21.09.210. The offset shall apply to the tax levied for the calendar year following an annual determination of each member's liability under (d) of this section. The offset may not reduce the premium tax payable by a member to less than zero or create a premium tax credit for the member. An unused offset may be carried over to the immediately following calendar year. An offset made under this subsection is not subject to AS 21.09.270.
(a) Except as provided in this section, a state resident who is a high risk, a TAA eligible individual, or a federally defined eligible individual is eligible to enroll in a state plan described in AS 21.55.100. (b) Except for a federally defined eligible individual or TAA eligible individual, a person may not be covered by the state plan (1) while covered by another health insurance policy or subscriber contract; or (2) if the person is eligible to be covered (A) by a plan subject to the requirements of AS 21.56.110 - 21.56.250; (B) under another state or federal law, including veterans' benefits, Native health care, or Medicaid, but not including Medicare; or (C) under another health benefit program, including self-insurance plan, health care trust, or welfare trust. (c) Upon ceasing to be a resident, a person is not eligible to purchase or renew coverage under a state plan, but previously purchased coverage remains in effect for the period covered by payments made while a resident. (d) Additional eligibility requirements for enrollment in a state plan may be imposed if approved by the director.
A person may enroll in a state plan by applying to the plan administrator. The application must include the following: (1) name, address, age, and length of residency of the applicant; (2) a designation of the plan desired, including deductible option chosen; (3) information relevant to whether the person is a high risk or a federally defined eligible individual; and (4) payment of the first premium.
(a) Within 30 days after receiving the application described in AS 21.55.310, the plan administrator shall (1) provide the applicant with either a notice of rejection for failing to comply with the requirements of AS 21.55.300 and 21.55.310 or a notice of acceptance; and (2) for a TAA eligible individual, send a notice to the director specifying the name, address, social security number, and effective date of coverage. (b) When a person with a disability that is covered under 42 U.S.C. 1395 - 1395b-10 (Title XVIII of the Social Security Act) is referred by an insurer to a state plan under AS 21.55.310, the plan administrator shall request that the Department of Health provide information to the person about applying for the federal benefits.
(a) Except as provided in (b) of this section and AS 21.55.130(c), insurance under a state plan is effective immediately upon receipt of the first premium, and is retroactive to the date of the application, if the applicant otherwise complies with the requirements of this chapter. (b) Insurance under a state plan is effective retroactively to the date that the person's previous contract or policy terminated if the person (1) applies for a state plan within 60 days after the previous contract or policy terminated; (2) is accepted by the plan administrator; and (3) pays a specified premium for the period of retroactive coverage.
(a) The association, under a plan approved by the director, shall disseminate appropriate information to the residents of the state regarding the existence of the state plans and the means of enrollment. Means of communication may include use of the press, radio, and television, as well as publication in appropriate state offices and publications. (b) The association shall devise and implement means of maintaining public awareness of the provisions of this chapter regarding the state plans and shall administer this chapter in a manner that facilitates public participation in the state plans. (c) A person may not sell or market a qualified state plan unless the person is acting within the scope of a license issued in this state. (d) An insurer or hospital or medical service corporation that rejects or applies underwriting restrictions to an applicant for a subscriber contract, a health insurance policy, or a Medicare supplement plan in the state shall notify the applicant of the existence of the state plans, the requirements for being accepted, and the procedure for applying.
The director may (1) approve the selection of the plan administrator by the association and approve the association's contract with the plan administrator, including the coverages and premiums to be charged; (2) contract with the federal government or another unit of government to ensure coordination of the state plans with other governmental assistance programs; (3) undertake, directly or through contracts with other persons, studies or demonstration programs to develop awareness of the benefits of this chapter; and (4) formulate general policy and adopt regulations that are reasonably necessary to administer this chapter, including regulations establishing a reinsurance program reinsuring residents who are high risks and specifying covered conditions eligible for payment through the reinsurance program.
The state is not liable for acts or omissions of the association or a plan administrator under this chapter, nor is the state liable for payment of a claim under a state plan issued by a plan administrator.
A member of the board of directors of the association may not be held civilly or criminally liable for an act or omission if the act or omission was in good faith and within the scope of the director's duties under this chapter.
(a) The Alaska comprehensive health insurance fund is established in the general fund. The Department of Administration shall deposit interest earned on the Alaska comprehensive health insurance fund in the general fund.  (b) The legislature may use the annual estimated balance in the Alaska comprehensive health insurance fund to make appropriations to the Department of Commerce, Community, and Economic Development to fund the reinsurance program under this chapter. (c) Payment for claims under the reinsurance program under this chapter is subject to appropriation. (d) Money in the fund does not lapse. (e) Nothing in this section creates a dedicated fund. (f) [Repealed,  3ch 46 SLA 2018.]
In this chapter, (1) association means the Comprehensive Health Insurance Association created in AS 21.55.010; (2) copayment means the portion of the eligible expenses, in excess of the deductible, for which the insured is responsible; (3) creditable coverage has the meaning given in AS 21.54.500; (4) deductible means the portion of eligible expenses for which the insured is responsible in each calendar year under AS 21.55.120(a); (5) federal continuation provision has the meaning given in AS 21.54.500; (6) federally defined eligible individual means an individual (A) with an aggregate of all periods of creditable coverage as provided under AS 21.54.110(b) of 18 or more months as of the date that the individual seeks coverage under this chapter; (B) whose most recent prior creditable coverage was under a health benefit plan or health care insurance plan offered in the large employer group market or the small employer group market; (C) who is not eligible for coverage under a health benefit plan, 42 U.S.C. 1395c or 42 U.S.C. 1395j (Part A or Part B of Title XVIII of the Social Security Act), or a state plan under 42 U.S.C. 1396 (Title XIX of the Social Security Act), and who does not have other health care insurance coverage; (D) whose most recent coverage within the period of aggregate creditable coverage as provided under AS 21.54.110(b) was not terminated based on a factor relating to nonpayment of premiums or fraud; (E) who, having been offered and having elected continuation coverage under a federal continuation provision or a similar state program, has exhausted coverage under the continuation provision or program; (7) group market has the meaning given in AS 21.54.500; (8) health benefit plan has the meaning given in AS 21.54.500; (9) health care insurance plan has the meaning given in AS 21.54.500; (10) health care insurer has the meaning given in AS 21.54.500; (11) health insurance has the meaning given in AS 21.12.050; (12) home health agency services means any of the following services provided upon recommendation of a licensed physician as part of a treatment plan: (A) intermittent or part-time nursing services of a registered nurse or a licensed practical nurse, that are provided to a person under the continued direction of the person's physician and within the limitation of the nurse's license; (B) nursing services that are provided to a person at the person's residence, including a residential care facility or adult boarding home; a hospital, skilled nursing facility, or intermediate care facility is not considered a residence; (C) home health aide services that are prescribed by and under the continued direction of a physician and supervised by a registered nurse; (D) home health aide services that are provided to a person at the person's residence, as described in (B) of this paragraph; (E) physical and occupational therapy services, speech pathology, and audiology services that are prescribed by a physician and provided to a person by or under the supervision of a qualified practitioner; these services may be provided to a person who is a patient in an intermediate care facility or skilled nursing facility; (13) hospice services means services provided under a coordinated comprehensive program of palliative and supportive care on a 24-hour, seven days per week basis for persons who have been diagnosed as terminally ill and their families by an interdisciplinary team of professionals or volunteers under an incorporated central administration that has a physician as medical director; (14) major medical (A) means health insurance or medical care coverage provided on an expense incurred basis, including Medicare supplement insurance; (B) does not include coverage for dental only, vision only, long-term care, nursing home care, home health care, community-based care, accident only, disability income, hospital confinement indemnity or other fixed indemnity, or credit, specified disease or specified accident, or other supplemental health insurance or coverage determined by the board not to constitute major medical and approved by the director; (15) medical social services means services rendered the patient under the direction of a physician by a qualified social worker holding a master's degree from an accredited school of social work, including assessment of the social, psychological and family problems related to or arising out of the covered person's illness and treatment, appropriate action and utilization of community resources to assist in resolving the problems, and participation in the development of treatment for the covered person; (16) plan administrator means an eligible entity that is licensed as a third-party administrator under AS 21.27 and is selected by the board and approved by the director to administer a state plan; (17) preexisting condition exclusion has the meaning given in AS 21.54.500; (18) qualified TAA eligible individual means a qualifying individual as defined under 26 U.S.C. 35 (Internal Revenue Code, as enacted by sec. 201(a) of the Trade Adjustment Assistance Reform Act of 2002); (19) resident means (A) except for a federally defined eligible individual or TAA eligible individual, an individual who meets the eligibility requirements in AS 43.23.005; or (B) for a federally defined eligible individual or TAA eligible individual, an individual who is legally domiciled in this state; (20) residents who are high risks means residents who (A) have been rejected for medical reasons after applying for a subscriber contract, a policy of health insurance, or a Medicare supplement policy by at least one association member within the six months immediately preceding the date of application for a state plan; medical reasons may include preexisting medical conditions, a family history that predicts future medical conditions, or an occupation that generates a frequency or severity of injury or disease that results in coverage not being generally available; (B) have had a restrictive rider placed on a subscriber contract, a health insurance policy, or a Medicare supplement policy that substantially reduces coverage; or (C) meet other requirements adopted by regulation by the director that are consistent with this chapter; (21) state plan means a policy of insurance offered by the association through a plan administrator; (22) TAA eligible individual means an eligible individual or a qualifying family member as defined under 26 U.S.C. 35 (Internal Revenue Code, as enacted by sec. 201(a) of the Trade Adjustment Assistance Reform Act of 2002); and (23) usual, customary, reasonable, or prevailing charge means the charge for a medical care procedure, service, or supply item that is the lowest of the following amounts: (A) the billed amount for the medical service provider's actual charge; (B) the charge usually made by that provider for performing that procedure or service or for providing the supply item; or (C) the customary charge, based on a profile of charges made for the same medical procedure, service, or supply item in the same geographical area by other providers that have performed the same procedure or service or can provide the same supply item.
(a) A health care insurance plan offered, issued for delivery, delivered, or renewed to small employers in this state is subject to the provisions of this chapter, except as prohibited under federal law. (b) [Repealed,  115 ch 81 SLA 1997.]  (c) Except as provided in this subsection, for purposes of this chapter, insurers that are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one insurer and a restriction or limitation imposed under this chapter shall apply as if all health care insurance plans delivered or issued for delivery to a small employer in this state by an affiliated insurer were issued by one insurer. An affiliated insurer that is a health maintenance organization having a certificate of authority under AS 21.86 may be considered to be a separate insurer for the purposes of this chapter. (d) [Repealed,  115 ch 81 SLA 1997.]  (e) The requirements of this chapter continue to apply with respect to coverage offered to a small employer until the plan anniversary following the date the employer no longer meets the definition of a small employer in AS 21.54.500.
(a) A premium rate for a health care insurance plan subject to this chapter is subject to the following provisions: (1) the premium rate charged or offered during a rating period to small employers with similar case characteristics as determined by the insurer for the same or similar coverage may not vary from the applicable index rate by more than 35 percent of the applicable index rate; (2) regarding a health care insurance plan issued before July 1, 1993, if premium rates charged or offered for the same or similar coverage under a health care insurance plan covering a small employer with similar case characteristics as determined by the insurer exceeds the applicable index rate by more than 35 percent, an increase in premium rates for a new rating period may not exceed the sum of (A) a percentage change in the base premium rate measured from the first day of the prior rating period to the first day of the new rating period; plus (B) adjustments due to changes in case characteristics or plan design of the small employer, as determined by the insurer; (3) the percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following: (A) the percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period; in the case of a health benefit plan into which the small employer insurer is no longer enrolling new small employers, the small employer insurer shall use the percentage change in the base premium rate, provided that the change does not exceed, on a percentage basis, the change in the new business premium rate for the most similar health care insurance plan into which the small employer insurer is actively enrolling new small employers; (B) any adjustment, not to exceed 15 percent annually and adjusted pro rata for rating periods of less than one year, due to the claim experience, health status, or duration of coverage of the employees or dependents of the small employer as determined from the small employer insurer's rate manual; and (C) any adjustment due to change in coverage or change in the case characteristics of the small employer, as determined from the small employer insurer's rate manual; (4) adjustments in rates for claim experience, health status, and duration of coverage may not be charged to individual employees or dependents; any adjustment must be applied uniformly to the rates charged for all employees and dependents of the small employer; (5) a premium rate for a health care insurance plan shall comply with the requirements of this section; (6) a small employer insurer may use industry as a case characteristic in establishing premium rates, provided that the rate factor associated with an industry classification may not vary by more than 15 percent from the arithmetic average of the highest and lowest rate factors associated with all industry classifications; (7) a small employer insurer shall (A) apply rating factors, including case characteristics, consistently with respect to all small employers; rating factors must produce premiums for identical groups that differ only by amounts attributable to plan design and do not reflect differences due to the nature of the groups assumed to select particular health care insurance plans; and (B) treat all health care insurance plans issued or renewed in the same calendar month as having the same rating period; (8) for the purposes of this subsection, a health care insurance plan that contains a restricted provider network may not be considered similar coverage to a health care insurance plan that does not use a restricted provider network if the restriction of benefits to network providers results in substantial differences in claim costs; (9) a small employer insurer may not use case characteristics, other than age, sex, industry, geographic area, family composition, and group size without prior approval of the director. (b) In connection with the offering for sale of a health care insurance plan to a small employer, a small employer insurer shall, as part of its solicitation and sales materials, disclose in a manner understandable by the average small employer and sufficient to reasonably inform small employers of their rights and obligations under the health care insurance plan (1) the extent that premium rates for a specified small employer are established or adjusted based upon the actual or expected variation in claims costs or actual or expected variation in health status of the employees of the small employer and their dependents; and (2) the provisions of the health care insurance plan (A) concerning the small employer insurer's right to change premium rates and factors that affect changes in premium rates; (B) relating to renewability of policies and contracts; (C) relating to any preexisting condition provision; and (D) concerning the benefits and premiums available under all health care insurance plans for which the small employer qualifies. (c) A small employer insurer shall (1) maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles; (2) file with the director annually, on or before March 15, an actuarial certification certifying that the insurer is in compliance with this chapter and AS 21.54.100 - 21.54.500 and that the rating methods of the small employer insurer are actuarially sound; the certification shall be in a form and manner, and must contain information, as specified by the director; a copy of the certification shall be retained by the small employer insurer at its principal place of business; (3) make the information and documentation described in (1) of this subsection available to the director upon request; the information is confidential and not subject to disclosure, except (A) as agreed to by the small employer insurer; (B) as ordered by a court of competent jurisdiction; or (C) the director may use the information or other discovered information in a judicial or administrative proceeding. (d) The director may adopt regulations to implement the provisions of this section and to ensure that rating practices used by small employer insurers are consistent with the purposes of this chapter, including ensuring that differences in rates charged for health care insurance plans by small employer insurers are reasonable and reflect objective differences in plan design, not including differences due to the nature of the groups assumed to select particular health care insurance plans. (e) In determining the premium rates for a small employer covered under an association health insurance policy authorized under AS 21.54.060(a)(6), a small employer insurer may not use the claims experience of the small employer while the employer was covered under another health insurance policy and may use only that underwriting information obtained through the insurer's normal application process for new small employer groups that are not written under the association plan.
(a) Except as provided under AS 21.56.160, a small employer insurer shall, as a condition of transacting business in this state with small employers, offer to small employers all health care insurance plans the small employer insurer actively markets to small employers in this state, including a basic health care insurance plan and a standard health care insurance plan approved by the director. (b) A small employer insurer shall issue a health care insurance plan to a small employer that applies for a plan and shall accept for enrollment under the health care insurance coverage all eligible employees and their dependents who apply for enrollment during the period in which the employee first becomes eligible to enroll under the terms of the plan. A small employer insurer may not place a restriction on an eligible employee or dependent with respect to being a participant or beneficiary that is inconsistent with AS 21.54.100. (c) A small employer insurer may not increase a requirement for minimum employee participation or for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage, except that a small employer insurer may vary application of minimum participation and employer contribution requirements by the size of the small employer group. In applying minimum employee participation requirements, a small employer insurer may not consider employees or dependents who have existing creditable coverage in determining whether the minimum employee participation level is met. (d) If a small employer insurer offers coverage to a small employer, the small employer insurer shall offer coverage to all of the eligible employees of the small employer and their dependents. A small employer insurer may not offer coverage to only certain individuals in a small employer group or to only part of the group, except in the case of late enrollees as provided in AS 21.54.110(d). For purposes of complying with this subsection, (1) a small employer insurer may issue a health care insurance plan that covers only those employees that the small employer selects to be covered under its plan, except that the small employer insurer shall initially offer a plan to the small employer that covers all eligible employees as defined in AS 21.56.250 and their dependents; (2) a small employer insurer, producer, or any other representative of the small employer insurer may not directly or indirectly influence a small employer in selecting which employees will be covered under the small employer's health care insurance plan based on the factors concerning unfair discrimination listed in AS 21.54.100; and (3) a small employer insurer shall apply the minimum employee participation and minimum employer contribution requirements to those employees that the small employer selects to be covered under the small employer's health care insurance plan. (e) The small employer insurer shall apply this section uniformly to all small employers without regard to the claims experience of the small employers and their employees and dependents or a health status factor of an employee or dependent. (f) A small employer insurer may not, directly or indirectly, encourage or direct small employers to refrain from filing an application for coverage with a small employer insurer or to seek coverage from another insurer because of a health status factor, the claims experience, the industry, the occupation, the size, or the geographic location of the small employer. (g) Except as provided in AS 21.54.110, a small employer insurer may not, by a rider or amendment applicable to a specific individual, restrict or exclude coverage or benefits by type of illness, treatment, medical condition, or service otherwise covered by the plan. (h) This section does not apply to health care insurance plans offered by a small employer insurer if the insurer makes the health care insurance plans available in the small employer market only through a bona fide association. (i) The director may, by order, establish benefits, cost sharing levels, exclusions, and limitations for the basic and standard health care insurance plans offered under (a) of this section.
(a) A small employer insurer offering health care insurance through a network plan is not required to offer or renew coverage or accept applications under AS 21.56.140(a) if (1) the small employer does not have eligible employees or dependents who live, work, or reside in the service area for the network plan; or (2) the small employer insurer demonstrates to the director that the small employer insurer (A) will not have the capacity to deliver services adequately to eligible employees or dependents of additional groups because of the small employer insurer's obligation to existing group contract holders and covered employees or dependents; and (B) applies this subsection uniformly without regard to the claims experience of the employers and their employees and dependents or to a health status factor relating to the employees and dependents. (b) A small employer insurer offering health care insurance is not required to offer or accept applications under AS 21.56.140(a) if (1) the small employer insurer is only maintaining in-force business and has ceased enrolling new employer groups on or before January 1, 1993; or (2) the certificate of authority or bylaws of an insurer does not permit the insurer to issue coverage on a marketwide basis; however, an insurer described in this paragraph shall comply with AS 21.56.140 regarding small employers that meet the requirements of the insurer's certificate of authority or bylaws. (c) A small employer insurer who denies health care insurance coverage in a service area under (a) of this section may not offer coverage in the small employer market within that service area for a period of 180 days after the date the coverage is denied. (d) If a small employer insurer demonstrates or the director determines under AS 21.09.175 that a small employer insurer does not have the financial reserves necessary to underwrite additional coverage, the small employer insurer may not offer or renew health care insurance coverage in the small employer group market. The small employer insurer may not reenter the small employer group market until the director has determined that the insurer has sufficient financial reserves to underwrite additional coverage.
(a) A small employer insurer may not, directly or indirectly, enter into a contract, agreement, or arrangement with an insurance producer, a managing general agent, or a third-party administrator that provides for or results in the compensation paid to an insurance producer for the sale of a health care insurance plan to vary based on the health status, claims experience, industry, occupation, size, or geographic location of the small employer. This subsection does not apply to a compensation arrangement that provides compensation to an insurance producer, a managing general agent, or a third-party administrator on the basis of a percentage of premium that does not vary based on the health status, claims experience, industry, occupation, size, or geographic location of the small employer. (b) A small employer insurer shall provide reasonable compensation, as provided under the plan of operation of the program, to an insurance producer, a managing general agent, or a third-party administrator, if any, for the sale of a basic or standard health care insurance plan. (c) A small employer insurer, an insurance producer, a managing general agent, or a third-party administrator may not induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment. (d) A small employer insurer may only deny an application for coverage from a small employer in writing, and the writing must state the reasons for the denial. (e) The director may establish by regulation additional standards to provide for the fair marketing of health care insurance plans to small employers in this state. (f) A person who enters into a contract, agreement, or other arrangement with a small employer insurer to provide administrative, marketing, or other services related to the offering of health care insurance plans to small employers in this state is subject to this section as if it were a small employer insurer. (g) A violation of this section by a person is an unfair trade practice for purposes of AS 21.36.
The director may adopt regulations to require small employer insurers, as a condition of transacting business with small employers in this state after July 1, 1993, to reissue a health care insurance plan to a small employer who has had its health care insurance plan terminated or not renewed by the insurer after January 1, 1993. The director may prescribe the terms for the reissue of coverage that the director determines are reasonable and necessary to provide continuity of coverage to small employers.
In this chapter, (1) actuarial certification means a written statement by a member of the American Academy of Actuaries or another individual acceptable to the director indicating that, based on the person's examination, including a review of the appropriate records, actuarial assumptions, and methods used by the insurer in establishing premium rates for applicable health insurance plans, a small employer insurer is in compliance with the provisions of AS 21.56.120; (2) affiliated means a person who directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with a specified person; (3) base premium rate means the lowest premium rate charged or that could have been charged under the rating system by the small employer insurer to small employers with similar case characteristics for health care insurance plans with the same or similar coverage; (4) basic health care insurance plan means a lower cost plan offered under AS 21.56.140; (5) beneficiary has the meaning given in AS 21.54.500; (6) case characteristics means demographic or other objective characteristics of a small employer that are considered by the small employer insurer in the determination of premium rates for the small employer, except that claim experience, health status, and duration of coverage may not be case characteristics for the purposes of this chapter; (7) eligible employee means an employee who works on a full-time basis, with a normal work week of 30 or more hours; eligible employee includes a sole proprietor, a partner of a partnership, or an independent contractor if the sole proprietor, partner, or contractor is included as an employee under a health care insurance plan of a small employer, but does not include an employee who works on a part-time, temporary, or substitute basis; (8) employee has the meaning given in AS 21.54.500; (9) group market has the meaning given in AS 21.54.500; (10) health care insurance plan has the meaning given in AS 21.54.500; (11) health care insurer has the meaning given in AS 21.54.500; (12) health status factor has the meaning given in AS 21.54.500; (13) index rate means, for small employers with similar case characteristics and plan designs as determined by the insurer for a rating period, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate; (14) late enrollee has the meaning given in AS 21.54.500; (15) network plan has the meaning given in AS 21.54.500; (16) new business premium rate means the lowest premium rate charged or offered, or that could have been charged or offered, by the small employer insurer to small employers with similar case characteristics for newly issued health care insurance plans with the same or similar coverage; (17) rating period means the calendar period for which premium rates established by a small employer insurer are assumed to be in effect; (18) small employer has the meaning given in AS 21.54.500; (19) small employer insurer means a health care insurer offering, issuing for delivery, delivering, or renewing health care insurance to small employers in the state; (20) standard health care insurance plan means a health care insurance plan offered under AS 21.56.140 that includes more comprehensive benefits than under a basic health care insurance plan.
The purpose of this chapter is to promote the public welfare by regulating consumer credit insurance. Nothing in this chapter is intended to prohibit or discourage reasonable competition. The provisions of this chapter shall be liberally construed.
Consumer credit insurance transacted in connection with a credit transaction for a personal, household, or family purpose is subject to the provisions of this chapter except (1) insurance written in connection with a credit transaction that is (A) secured by a first mortgage or first deed of trust; and (B) made to finance the purchase of real property, the construction of a dwelling, or to refinance a prior credit transaction made for that purpose; (2) an isolated insurance transaction by the insurer not related to an agreement or a plan for insuring debtors of the creditor; (3) insurance for which no identifiable charge is made to the debtor; or (4) a loan or other credit transaction that exceeds $30,000.
A type of consumer credit insurance defined in AS 21.57.160 may be written separately or in combination with other types of consumer credit insurance on an individual or group basis.
(a) The amount of coverage for credit life insurance payable at the time of loss (1) may not exceed the greater of the actual net debt or the scheduled net debt, except insurance on an (A) agricultural credit transaction commitment, not exceeding one year in duration, may be written up to the amount of the loan commitment on a nondecreasing or level term plan; and (B) educational credit transaction commitment may be written for the net outstanding balance plus any unused commitment; (2) may not be less than the actual net debt less any payments more than two months overdue if the coverage is written on the actual outstanding net debt; (3) may not exceed the following if the coverage is written on the scheduled outstanding net debt: (A) the scheduled net debt if the actual net debt is less than or equal to the scheduled net debt; (B) the actual net debt if the actual net debt is greater than the scheduled net debt but less than or equal to the scheduled net debt plus two months of payments; or (C) the scheduled net debt plus two months of payments if the actual net debt is greater than the scheduled net debt plus two months of payments; (4) must equal the actual net debt on the date of death if a premium is assessed to the debtor on a monthly basis and is based on the actual net debt; and (5) may be less than the net debt when the partial coverage is calculated using one of the following: (A) the amount of insurance is the lesser of a stated amount and the amount is determined by (2) of this subsection; (B) the amount of insurance is the lesser of a stated amount and the amount is determined by (3) of this subsection; (C) the amount of insurance is a constant percentage of the amount determined by (2) or (3) of this subsection; or (D) in the absence of any preexisting condition exclusion, the amount of insurance payable in the event of death due to natural causes is limited to the balance as it existed six months before the date of death if (i) there has been at least one increase in the outstanding balance during that six-month period, other than an increase due to the accrual of interest or late charges; and (ii) evidence of individual insurability has not been required during that six-month period. (b) The director may provide for other patterns of insurance consistent with (a) of this section by regulation. (c) The total amount of periodic indemnity payable in the event of disability or unemployment, as defined in the policy, may not exceed the sum of the periodic scheduled unpaid installments of the gross debt. The amount of a periodic indemnity payment may not exceed the original gross debt divided by the number of periodic installments. (d) If credit disability insurance or credit unemployment insurance is written in connection with an open-end consumer credit agreement, the amount of insurance may not exceed the gross debt that would accrue on the amount using the creditor's minimum repayment schedule. The periodic indemnity need not relate to the creditor's minimum repayment schedule.
(a) The effective date of coverage for (1) consumer credit insurance that is elected by the debtor before or contemporaneous with a credit transaction is the date when the debtor becomes obligated to the creditor, except that when evidence of individual insurability is required and the evidence is furnished more than 30 days after the date when the debtor becomes obligated to the creditor, the effective date may be the date on which the insurance company determines the evidence to be satisfactory; (2) insurance coverage that is elected by the debtor on a date subsequent to the date of the credit transaction is, subject to acceptance by the insurer, a date not earlier than the date the election is made by the debtor or later than 30 days following the date on which the insurer accepts the risk for coverage; an insurer shall determine if a risk is acceptable by an objective method, including one related to a particular date within a billing or repayment cycle or a calendar month; and (3) a group policy that provides coverage with respect to a debt existing on the policy effective date, must be on or after the effective date of the group policy. (b) A charge for insurance may not be made to the debtor and retained by the creditor or insurer for a time before commencement of the consumer credit insurance to which the charge is related. (c) The duration of coverage for consumer credit insurance may not extend (1) beyond the termination date specified in the policy; the termination date of insurance may precede, coincide with, or follow the scheduled maturity date of the debt to which it relates, subject to any other requirements and restrictions of this chapter; and (2) more than 15 days beyond the scheduled maturity date of the debt except when extended (A) without additional cost to the debtor; or (B) under a written agreement signed by the debtor, in connection with a variable interest rate credit transaction or a deferral, renewal, refinancing, or consolidation of debt. (d) If the debt is discharged due to renewal, refinancing, or consolidation before the scheduled termination date of the insurance, insurance in force must be terminated before new insurance may be written in connection with the renewed, refinanced, or consolidated debt. (e) If insurance coverage terminates before the scheduled termination of the insurance, the insurer shall make an appropriate refund or credit to the debtor. The refund or credit must consist of the unearned insurance charge paid by the debtor for insurance after the date of the termination, except that a refund is not required of a charge made for insurance if the insurance is terminated by performance of the insurer's obligation with respect to the insurance. (f) An insured debtor may terminate consumer credit insurance at any time by providing advance notice to the insurer. The individual policy or group certificate may require that the notice be in writing or that the debtor surrender the individual policy or group certificate, or both. The debtor's right to terminate coverage may also be subject to the terms of the credit transaction contract.
(a) Before a debtor elects to purchase consumer credit insurance in connection with a credit transaction, the insurer shall disclose the following in writing to the debtor: (1) the purchase of consumer credit insurance is optional and not a condition of obtaining credit approval; (2) if more than one kind of consumer credit insurance is being made available to the debtor, whether the debtor can purchase the insurance separately or the multiple coverage only as a package; (3) the conditions of eligibility; (4) if the debtor has other insurance that covers the risk, the debtor may not want or need credit insurance; (5) if the creditor requires insurance as additional security for a debt, the debtor has the option of furnishing the required amount of insurance through existing policies owned or procured by the debtor or of procuring and furnishing the required insurance through an insurer authorized to transact insurance business in this state; (6) the effective date of the coverage; (7) the debtor may cancel the coverage within the first 30 days after receiving the individual policy or group certificate and have a premium paid by the debtor refunded or credited; thereafter, the debtor may cancel the policy at any time during the term of the loan and receive a refund of unearned premium; (8) a brief description of the coverage, including (A) the amount; (B) the term; (C) any exceptions, limitations, or exclusions; (D) the insured event; (E) any waiting or elimination period; (F) any deductible; (G) any applicable waiver of premium provision; (H) to whom the benefits would be paid; and (I) the premium rate for a coverage or for multiple coverage in a package; (9) if the premium or insurance charge is financed, it is subject to finance charges at the rate applicable to the credit transaction or at another specified rate; and (10) whether or not the benefits provided are sufficient to pay off the debt existing on the date of death, disability, or unemployment. (b) The disclosure required in (a) of this section shall be provided in the following manner: (1) in connection with consumer credit insurance offered contemporaneously with the extension of credit or offered through direct mail advertisements, the disclosure shall be presented to the consumer in a clear and conspicuous manner; or (2) in conjunction with the offer of credit insurance by telephone and contemporaneously with the extension of credit or subsequent to the extension of credit by other than direct mail advertisements, the initial disclosure may be provided orally as long as written disclosure is provided to the debtor not later than 10 days after the offer or the date any other written material is provided to the debtor, whichever occurs first. (c) If the debtor elects to purchase coverage, the delivery of the disclosure required in (b) of this section shall be acknowledged by the debtor at the time of delivery, and the insurer shall maintain the debtor's written acknowledgement for at least five years.
(a) Consumer credit insurance shall be evidenced by an individual policy or a group certificate of insurance. (b) The individual policy or group certificate must, in addition to other requirements of law, set out (1) the name and home office address of the insurer; (2) the name of the debtor; (3) the premium to be paid by the debtor disclosed separately for each kind of coverage or for all coverage in a package, except that, for open-ended loans, the premium rate and the basis of premium calculation must be specified; (4) a full description of the coverage, including the amount, the term, and any exceptions, limitations, or exclusions; (5) a statement that the benefits shall be paid to the creditor to reduce or extinguish the unpaid debt and that, whenever the amount of insurance benefit exceeds the unpaid debt, the excess is payable to the debtor, a beneficiary other than the creditor named by the debtor, or the debtor's estate; (6) an explanation of how refunds are calculated in the event of policy termination; and (7) if the benefit is not adequate to completely pay off the debt existing on the date of death, disability, or unemployment, a statement to that effect on the face of the individual policy or group certificate in not smaller than 10 point, bold face type.
(a) Unless the individual policy or group certificate of insurance is delivered to the debtor at the time the debt is incurred or when the debtor elects to purchase coverage, a copy of the application for the policy or a notice of proposed insurance, signed by the debtor and setting out (1) the name and home office address of the insurer, (2) the name of the debtor, (3) the premium rate to be paid by the debtor for the insurance, and (4) the amount, term, and a brief description of the coverage provided, shall be delivered to the debtor at the time the debt is incurred or the election to purchase coverage is made, or, within 10 days from the date of the election to purchase coverage, if the election to purchase coverage is made by telephone. The copy of the application for or notice of proposed insurance must refer exclusively to insurance coverage and must be separate and apart from the loan, sale, other credit statement of account, instrument, or agreement, unless the information required by this subsection is prominently set out in it. Upon acceptance of the insurance by the insurer and within 30 days of the date upon which the debt is incurred or the election to purchase coverage is made, the insurer shall deliver the individual policy or group certificate of insurance to the debtor. The application or notice of proposed insurance must state that upon acceptance by the insurer, the insurance shall become effective as provided in AS 21.57.050(a). (b) The application or notice of proposed insurance may be used to fulfill all of the requirements of AS 21.57.055(a) and 21.57.060(b) if it contains all of the information required by those subsections. (c) A debtor has 30 days from the date the debtor receives the individual policy or the group certificate to review the coverage purchased. At any time within the 30-day period, the debtor may contact the creditor or insurer issuing the policy or certificate and request that the coverage be cancelled. An individual policy or group certificate may require the request be in writing, that the policy or certificate be returned to the insurer, or both. If a policy is cancelled, the insurer shall return a full refund or credit of all premiums or insurance charges to the debtor within 30 days. (d) If the named insurer does not accept the risk, the debtor shall receive a policy or certificate of insurance listing the name and home office address of the substituted insurer and the amount of the premium to be charged. If the amount of premium is less than the amount in the notice of proposed insurance, the insurer shall issue an appropriate refund within 30 days. If the risk is not accepted by an insurer, a premium paid by the debtor shall be refunded or credited to the debtor within 30 days of the date of application. (e) For the purposes of (a) of this section, an individual policy or group certificate delivered in conjunction with an open-end consumer credit agreement or consumer credit insurance requested by the debtor after the date of the debt is considered to be delivered at the time the debt is incurred or election to purchase coverage is made if the delivery occurs within 30 days of the date the insurance is effective. (f) An individual policy or group certificate delivered in conjunction with an open-end consumer credit agreement shall continue from its effective date through the term of the agreement unless the individual policy or group certificate is terminated under its terms at an earlier date.
(a) An insurance policy, certificate of insurance, notice of proposed insurance, insurance disclosure notice, application for insurance, endorsement, and rider delivered or issued for delivery in this state, and the applicable schedules of premium rates shall be filed with the director before being used. (b) A document required to be filed under (a) of this section must be on file for a waiting period of 30 days before it is used or becomes effective, unless the director gives prior written approval. This period may be extended for an additional 30 days if the director gives written notice within the waiting period to the insurer making the filing. The director shall disapprove a filing if the premium rate charged is not reasonable in relation to benefits or if it contains provisions that are unjust, unfair, inequitable, misleading, deceptive, encourage misrepresentation of the policy, or are contrary to a provision of this title or a regulation adopted under this title. A filing is considered to be approved unless it is disapproved by the director within the waiting period. In determining the reasonableness of premium rates in relation to benefits, the director may consider claim costs, general and administrative expenses, reasonable compensation to producers, profit, or other relevant data. (c) If the director notifies the insurer that a document required to be filed under (a) of this section is disapproved, the insurer may not issue or use any part of the document. In providing notice of disapproval to the insurer, the director shall specify the reason for disapproval and indicate that the insurer is entitled to a hearing. (d) The director may, at any time after a hearing, withdraw approval of a filing on the grounds specified under (b) of this section. The director shall provide the insurer at least 20 days' prior written notice of a hearing scheduled by the director, and the notice of the hearing must state the reason for the proposed withdrawal. (e) An insurer may not issue or use a document required to be filed under (a) of this section after the effective date of a withdrawal of approval under (d) of this section. (f) If a group policy of consumer credit insurance (1) has been delivered in this state before July 1, 1995, or (2) has been or is delivered in another state before or after July 1, 1995, the insurer shall be required to file only the group certificate and notice of proposed insurance delivered or issued for delivery in this state as specified in AS 21.57.060(b) and 21.57.070(a). (g) Consumer credit insurance forms used for insurance described under (f) of this section shall be approved by the director if they conform with the requirements specified in this section and if the schedules of premium rates applicable to the insurance evidenced by the certificate or notice are in accordance with the insurer's schedules of premium rates filed with the director. An item required to be filed under (a) of this section shall also be filed as specified in this chapter unless the item relates to a group policy that is delivered in another state and the director has determined that the other state has substantially similar statutes or regulations to this chapter. Upon this determination, the items required to be filed under (a) of this section shall be filed for informational purposes. If the director subsequently determines that the informational filing is not in compliance with the requirements of this chapter, the insurer may not use the insurance policy, form, certificate, notice of proposed insurance, disclosure notice, advertisement, application for insurance, endorsement, or rider.
(a) An insurer may revise its schedules of premium rates from time to time, and file the revised schedules with the director. An insurer may not issue a consumer credit insurance policy for which the premium rate differs from that determined by the schedules of the insurer then approved by the director. (b) An individual policy or group certificate must provide for a refund of all unearned premiums if the insurance is terminated before the scheduled maturity date of the insurance and notice of termination is given to the insurer. The refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled to it; provided, however, that the director shall prescribe a minimum refund and a refund that would be less than the minimum need not be made. A refund formula that an insurer desires to use must provide refunds that are at least as favorable to the debtor as refunds based on the rule of anticipation. The formula to be used in computing refunds shall be filed with and approved by the director. (c) If a creditor requires a debtor to make a payment for consumer credit insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to the debtor and shall promptly make an appropriate credit to the account or issue a refund. (d) The amount charged to a debtor for consumer credit insurance may not exceed the premium charged by the insurer, as computed at the time the charge to the debtor is determined. (e) Nothing in this chapter may be construed to authorize a payment for insurance prohibited under other provisions of law governing credit transactions.
All policies of credit life insurance and credit disability insurance shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business in this state, and shall be issued only through holders of licenses or authorizations issued by the director.
When consumer credit insurance is required as additional security for a debt, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by the debtor or of procuring and furnishing the required coverage through an insurer authorized to transact an insurance business in this state.
Except as otherwise prohibited by law, duties imposed upon an insurer by this chapter may be carried out by a creditor if the creditor is licensed under AS 21.27 as an insurance producer, a managing general agent, or a third-party administrator, and transacts business within the scope of its license on behalf of the insurer.
The director may, after notice and hearing, adopt regulations considered appropriate for the implementation of this chapter. Whenever the director finds that there has been a violation of this chapter or regulations adopted under it, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the director, the director shall set out the details of the findings together with an order for compliance by a specified date. The order shall be binding on the insurer and other person authorized or licensed by the director on the date specified unless sooner withdrawn by the director or a stay has been ordered by a court of competent jurisdiction.
A party to the proceeding affected by an order of the director shall be entitled to judicial review by following the procedure set out in AS 21.06.230.
(a) In addition to any other penalty provided by law, a person licensed under AS 21.27 that the director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to (1) a civil penalty equal to the compensation promised, paid, or to be paid, directly or indirectly, to the licensee in regard to a violation; (2) either a civil penalty of not more than $10,000 for a violation or, if the director determines that the person wilfully violated the provisions of this chapter, a civil penalty of not more than $25,000 for a violation; and (3) denial, nonrenewal, suspension, or revocation of a license. (b) In addition to any other penalty provided by law, an insurer that the director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to (1) a civil penalty equal to the premium earned, directly or indirectly, by the insurer in regard to a violation; (2) either a civil penalty of not more than $10,000 for a violation or, if the director determines that the insurer wilfully violated the provisions of this chapter, a civil penalty of not more than $25,000 for a violation; and (3) denial, suspension, or revocation of a certificate of authority. (c) In addition to any other penalty provided by law, any person that the director determines under AS 21.06.170 - 21.06.240 has violated the provisions of this chapter is subject to (1) either a civil penalty of not more than $10,000 for a violation or, if the director determines that the person wilfully violated the provisions of this chapter, a civil penalty of not more than $25,000 for a violation; and (2) denial of a license.
In this chapter, (1) agriculture credit transaction commitment means a binding agreement to loan money up to a fixed amount as needed for agricultural purposes; (2) compensation means commissions, dividends, retrospective rate credits, service fees, expense allowances or reimbursements, gifts, furnishing equipment, facilities, goods, or services, or any other form of remuneration resulting directly from the sale of consumer credit insurance; (3) consumer credit insurance means credit life insurance, credit disability insurance, or credit unemployment insurance; (4) credit disability insurance means insurance on a debtor to provide indemnity for payments or debt becoming due on a specific loan or other credit transaction while the debtor is disabled; (5) credit life insurance means insurance on the life of a debtor under or in connection with all or a part of a specific loan or other credit transaction; (6) credit transaction means a transaction by which the repayment for money loaned or a loan commitment made or payment for goods, services, or properties sold or leased is made at a future date; (7) credit unemployment insurance means insurance on a debtor to provide indemnity for payments or debt becoming due on a specific loan or other credit transaction while the debtor is involuntarily unemployed; (8) creditor means a person who lends money or who sells or leases goods, services, property, rights, or privileges, for which payment is arranged through a credit transaction, and includes a person who is a successor to the right, title, or interest of the lender, seller, or lessor; (9) debtor means a person who borrows money, or purchases or leases goods, services, property, rights, or privileges for which payment is arranged through a credit transaction; (10) educational credit transaction commitment means a binding agreement to loan money up to a fixed amount as needed for educational purposes; (11) gross debt means the total of the remaining payments owed to the creditor by the debtor; (12) identifiable charge means a charge for consumer credit insurance that is made to a debtor having the benefit of the insurance, including a charge for insurance that is disclosed in the consumer credit agreement or other instrument furnished to the debtor that sets out the financial elements of the credit transaction, and any difference in the finance, interest, service, or other similar charge made to a debtor in a like circumstance, except for their insured or noninsured status; (13) net debt means the amount necessary to liquidate the remaining debt in a single lump sum payment, excluding all unearned finance charges; (14) open-end consumer credit means consumer credit extended by a creditor under an agreement in which (A) the creditor reasonably contemplates repeated transactions; (B) the creditor imposes a periodic finance charge on an outstanding unpaid balance; and (C) the amount of consumer credit that may be extended to the debtor during the term of the agreement, up to any limit set by the creditor, is generally made available to the extent that any outstanding balance is repaid; (15) rule of anticipation means a refund method that results in refunds equal to the premium cost of scheduled benefits subsequent to the date of cancellation or termination, computed at the schedule of premium rates in effect on the date of issue.
(a) AS 21.59.010 - 21.59.090 applies to a person, firm, corporation, or organization providing or intending to provide automobile service corporation services for subscribers in exchange for periodic prepayments by a subscriber.  (b) AS 21.59.010 - 21.59.090 does not apply to a person issued a certificate of authority under AS 21.09 or to a person issued a provider license under AS 21.59.110 - 21.59.290, but only to the extent the person is offering a motor vehicle service contract in this state.  (c) Other provisions of this title do not apply to an automobile service corporation except as expressly provided in AS 21.59.010 - 21.59.090. 
(a) A person providing or intending to provide automobile service corporation services shall be a corporation currently authorized as an automobile service corporation under a certificate of authority issued by the director under AS 21.59.010 - 21.59.090. (b) If the corporation is to be formed under the laws of this state, the articles of incorporation of the proposed corporation or amendments to existing articles of incorporation shall be submitted to the director before they are filed with the commissioner of commerce, community, and economic development. The commissioner of commerce, community, and economic development may not file the articles or amendments unless the director's approval is endorsed. The director shall approve the articles or amendments unless the director finds that the articles or amendments do not comply with law. If not approved, the director shall return the proposed articles of incorporation to the incorporators or amendments to the corporation, together with a written, detailed statement of the reasons for nonapproval.
The director may not issue a certificate of authority to be or act as an automobile service corporation and shall revoke an existing certificate of authority unless the corporation (1) if a newly formed corporation, possesses sufficient available working funds to pay all reasonably anticipated costs of acquisition of new business and operating expenses, other than losses, for a period of not less than six months following the date of issuance of the certificate of authority; (2) posts with the director a bond in the amount of $50,000, issued by a corporate surety authorized under this title to act as surety and conditioned upon the organization's faithful fulfillment of its contracts; and (3) fulfills all other applicable requirements of AS 21.59.010 - 21.59.090.
(a) Application for a certificate of authority to transact business as an automobile service corporation shall be made to the director, on forms furnished by the director and requiring the information about the applicant, its directors, officers, and affairs as the director may reasonably require consistent with AS 21.59.010 - 21.59.090. (b) The applicant shall file the following documents with the application: (1) a copy of the applicant's articles of incorporation and all amendments, certified by the appropriate official of the state of incorporation; (2) a copy of the applicant's bylaws, certified by its corporate secretary; (3) a copy of each subscriber's contract proposed to be offered; (4) either (A) audited financial statements for the three fiscal years immediately preceding the application; or (B) a financial statement of the applicant prepared by a certified public accountant and dated not more than 30 days before the filing of the application, showing the amount of working funds available to the applicant, a reconciliation of the net worth or capital account, the source and application of the funds, and any data pertinent to the financial statement; (5) the bond required under AS 21.59.030(2) or 21.59.050(c); and (6) a copy of any other relevant document reasonably requested by the director.
(a) An automobile service corporation shall establish and maintain unimpaired reserves as follows: (1) a reserve in an amount not less than all legal obligations of the corporation, other than claims originating under subscriber's contracts, due but unpaid; (2) a reserve equal to not less than the amount necessary by reasonable estimate to pay all claims incurred under subscriber's contracts but currently unpaid, and including a reasonable additional amount to cover claims incurred but not reported to the corporation at the time of determination of the corporation's financial condition; and (3) a reserve equal to 50 percent of all sums charged and received by the corporation during the calendar period covered by the financial statement, on account of indemnity benefits provided in subscriber's contracts for terms for which premium was last paid and unexpired at the date of the financial statement. (b) The reserves required under (a) of this section constitute a liability of the corporation in a determination of its financial condition. (c) Instead of the reserves required by (a) of this section and the bond required by AS 21.59.030(2), the automobile service corporation may file a bond in the amount of $250,000.
(a) An automobile service corporation shall establish and maintain complete and accurate records and accounts covering its transactions and affairs in accordance with generally accepted accounting principles as applied to the business of the corporation. (b) The director may accept an audited financial statement instead of the examination required under AS 21.06.120.
In addition to the provisions of AS 21.59.010 - 21.59.090, the following provisions of this title shall apply to automobile service corporations, to the extent applicable and not in conflict with the express provisions of AS 21.59.010 - 21.59.090 and the reasonable implications of the express provisions, and, for the purposes of the application, the corporations shall be considered to be stock insurers: (1) AS 21.03; (2) AS 21.06; (3) AS 21.09.050; (4) AS 21.09.100; (5) AS 21.09.120 - 21.09.210; (6) AS 21.09.245; (7) AS 21.09.247; (8) AS 21.12; (9) AS 21.36; (10) AS 21.69; (11) AS 21.78; (12) AS 21.97.
In AS 21.59.010 - 21.59.090, (1) automobile service corporation means a corporation providing all or part of one or more automobile service corporation services for subscribers in exchange for periodic prepayment in identifiable amount by or as to the subscribers; (2) automobile service corporation services means any professional service, technical service, replacement of goods that the corporation may become obligated to provide upon a contingent event or a certain event that may occur at an uncertain time and for which a specified single or periodic prepayment is charged or collected, including (A) emergency road service; (B) reimbursement of legal fees for representation on traffic offenses; and (C) providing bail bonds for traffic offenses; an automobile service corporation may provide other services or benefits that do not fall within the definition of automobile service corporation services; (3) subscriber's contract means the contract between the automobile service corporation and its subscriber under which all or a part of one or more services is to be rendered to or on behalf of the subscriber by an automobile service corporation or by a provider that has entered into a service agreement with the automobile service corporation.
(a) A provider may, for separate or additional consideration, enter into a motor vehicle service contract for a specific duration to (1) maintain, service, or repair a motor vehicle for an operational or structural failure due to a defect in materials or workmanship or due to normal wear and tear; (2) indemnify for repair, replacement, or maintenance for an operational or structural failure due to a defect in materials or workmanship or normal wear and tear, with or without additional provisions for incidental payment of indemnity for towing, rental, emergency road service, and road hazard protection; (3) repair or replace tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards; (4) remove dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint or finish and without replacing vehicle body panels or requiring sanding, bonding, or painting; (5) repair chips or cracks in or replace motor vehicle windshields as a result of damage caused by road hazards; or (6) replace a motor vehicle key or key fob if the key or key fob becomes inoperable or is lost or stolen. (b) A motor vehicle service contract may not include coverage for the repair of damage to or replacement of the interior surfaces of a vehicle or for the repair or replacement of the exterior paint or finish of a vehicle. (c) A motor vehicle service contract marketed, offered for sale, sold, issued, made, or administered in this state must be written, printed, or typed in clear, understandable language, in eight point or larger type, and must include the following: (1) the name and address of the provider and an administrator if different from the provider, the service contract seller, and the service contract holder to the extent that the name of the service contract holder has been furnished by the service contract holder; names and addresses of the parties are not required to be preprinted on the motor vehicle service contract and may be added to the motor vehicle service contract at the time of sale; (2) the provider fee and the terms of the motor vehicle service contract; the provider fee is not required to be preprinted on the service contract and may be negotiated at the time of sale; (3) the applicable deductible amount, if any; (4) a description of the materials and services to be provided and applicable limitations, exceptions, or exclusions, including whether the service contract provides for or excludes consequential damages or preexisting conditions; (5) a description of the obligations and duties of the service contract holder; (6) whether the use of nonoriginal manufacturer's parts is allowed; (7) restrictions on the transferability of the service contract, if applicable; and (8) the terms for return and cancellation of the service contract.
(a) The following are exempt from AS 21.59.110 - 21.59.290: (1) a motor vehicle warranty or a product warranty under 15 U.S.C. 2301 - 2312 (Magnuson-Moss Warranty-Federal Trade Commission Improvement Act), as amended; (2) a motor vehicle maintenance agreement; in this paragraph, motor vehicle maintenance agreement means a contract of limited duration that provides only for regular maintenance to a motor vehicle; (3) a motor vehicle service contract sold or offered for sale to a person other than a consumer; (4) a subscriber's contract, as defined by AS 21.59.090, between an automobile service corporation holding a certificate of authority under AS 21.59 and its subscribers that provides for towing, rental car benefits, or emergency road service. (b) A motor vehicle manufacturer's motor vehicle service contract that applies to the motor vehicle manufacturer's product is exempt from AS 21.59.120 - 21.59.160 and AS 21.59.180 - 21.59.200. (c) A motor vehicle manufacturer is exempt from AS 21.59.180 and the license requirement in this title.
(a) A provider may not market, offer for sale, sell, issue, or make a motor vehicle service contract in this state unless the provider provides to the motor vehicle service contract holder (1) a receipt for, or other written evidence of, the purchase of the motor vehicle service contract; and (2) a copy of the motor vehicle service contract within a reasonable time after the date of purchase. (b) A provider shall, on request, provide a prospective purchaser with a sample copy of the provider's motor vehicle service contract showing terms and conditions. A provider may comply with this subsection by providing the prospective purchaser with a sample copy of the terms and conditions or by directing the prospective purchaser to an Internet website containing a complete sample of the terms and conditions of the proposed motor vehicle service contract. (c) A motor vehicle service contract provider may not use in the provider's name the word insurance, casualty, surety, mutual, or another word that describes insurance, casualty, or surety business activity, or use a name deceptively similar to the name or description of an insurance or surety corporation or another provider; however, the name of a provider may include the word guaranty. (d) A provider or the provider's representative may not make, or permit or cause to be made, a false or misleading statement or deliberately omit a material statement that would be misleading if omitted in a motor vehicle service contract or literature associated with the contract. (e) A person may not require the purchase of a motor vehicle service contract as a condition of a loan or a condition for the sale of a motor vehicle. (f) A provider may appoint an administrator or other designee to administer all or a part of a motor vehicle service contract if the provider and administrator have a written agreement that specifically sets out the duties, functions, powers, authority, and compensation of all parties to the agreement. A provider is liable for the acts of an administrator appointed by the provider to assist with the administration of the provider's motor vehicle service contracts to the extent the acts relate to the provider's motor vehicle service contracts offered in or from this state. (g) A provider or a third party acting on the provider's behalf may not make a false, deceptive, or misleading statement in a solicitation, during telemarketing, or in other advertising, including a statement regarding (1) the provider's affiliation with a motor vehicle manufacturer; (2) information in the provider's possession regarding a motor vehicle owner's current motor vehicle manufacturer's original equipment warranty; (3) the expiration of a motor vehicle owner's current motor vehicle manufacturer's original equipment warranty; or (4) a requirement that a motor vehicle owner register for a new motor vehicle service contract with the provider to maintain coverage under the motor vehicle owner's current motor vehicle service contract or manufacturer's original equipment warranty.
(a) A provider of a motor vehicle service contract sold in this state shall file an application for a license with the director on a form prescribed by the director and pay a licensing fee to the director in an amount determined by the director. The application shall include the applicant's name, full address, telephone number, a designated compliance officer, the designation of a person in this state for service of process, and a list of all officers and directors of the applicant. Additionally, an applicant shall file a copy of its basic organizational documents, such as articles of incorporation, articles of organization, articles of association, or a partnership agreement. An applicant shall also provide information required by the director to demonstrate compliance with the requirements of AS 21.59.180. The applicant shall declare, subject to penalty of denial, nonrenewal, suspension, or revocation of a license issued by the director, that the statements made in or in connection with the application are true, correct, and complete to the best of the applicant's knowledge and belief. The director may not issue a license except in compliance with AS 21.59.110 - 21.59.290 and may not issue a license to a person, or to be exercised by a person, found by the director to be untrustworthy, incompetent, or financially irresponsible, or who has not established to the satisfaction of the director that the person is qualified under AS 21.59.110 - 21.59.290. If the director denies an application for a license, the applicant has the right to request a hearing under AS 21.06.170 - 21.06.240. (b) If a change occurs in the information submitted to the director in an application, a provider shall update the information in the application by sending the changes to the director in writing within 30 days after the change. (c) A licensee shall report to the director in writing any administrative action taken against the licensee by a governmental agency of another state or by a governmental agency of another jurisdiction within 30 days after the final disposition of the action. A licensee shall submit to the director the final order and other relevant legal documents in the action. A licensee shall report to the director any criminal prosecution of the licensee within 30 days after the date of filing of the criminal complaint, indictment, or citation in the prosecution. The licensee shall submit to the director a copy of the criminal complaint, calendaring order, and other relevant legal documents in the prosecution. (d) In addition to any other penalty provided by law, a failure to notify the director as required by this section is cause for denial, nonrenewal, suspension, or revocation of a license.
(a) A provider may renew a license issued under AS 21.59.110 - 21.59.290 biennially on a date set by the director if the licensee continues to be qualified under AS 21.59.110 - 21.59.290 and, on or before the close of business of the renewal date, meets all renewal requirements established by regulation, and pays the renewal license fees set by the director. A licensee is responsible for knowing the date that a license will expire and for renewing a license on or before that date. The director shall notify the licensee of the impending expiration 30 days before the expiration date. The director may not renew a license except in compliance with AS 21.59.110 - 21.59.290 and may not renew the license of a person, or to be exercised by a person, found by the director to be untrustworthy, incompetent, or financially irresponsible, or who has not established to the satisfaction of the director that the person is qualified under AS 21.59.110 - 21.59.290. (b) If a provider's license is not renewed on or before the expiration date set by the director, the license expires. A licensee may not act as or represent to be a provider during the time a license has expired. The director may reinstate an expired license if the person continues to qualify for the license and pays license renewal fees and a delayed renewal penalty. Reinstatement does not exempt a person from a penalty provided by law for transacting business while unlicensed. A license that has expired for two years or longer may not be renewed.
(a) A person may not act as an administrator of motor vehicle service contracts sold in this state unless the person registers with the director by providing the following information: (1) the administrator's name, business address, and other information required by the director; and (2) the names of the providers for whom the person acts as an administrator. (b) A provider that is licensed under AS 21.59.110 - 21.59.290 may administer its own motor vehicle service contract program without registering separately as an administrator. However, if a provider administers another provider's motor vehicle service contract program, the provider shall register as an administrator under this section.
(a) A motor vehicle service contract must allow the service contract holder to cancel the motor vehicle service contract not later than 30 days after the date that the motor vehicle service contract was delivered to the service contract holder, not later than 10 days after the date of delivery if the motor vehicle service contract is delivered to the service contract holder at the time of sale, or within a longer period, as set out in the motor vehicle service contract. If the service contract holder returns the motor vehicle service contract to the provider within the applicable time period and a claim has not been made under the motor vehicle service contract before the contract is returned to the provider, the motor vehicle service contract is void, and the provider shall refund the full amount of the provider fee to the service contract holder or credit the account of the service contract holder not later than 45 days after the return of the contract to the provider. If the provider does not pay or credit a refund owed under this subsection not later than 45 days after a service contract holder returns a motor vehicle service contract, a penalty in the amount of 10 percent of the provider fee paid by the service contract holder for each month the refund remains unpaid shall be added to the refund. The right to void the motor vehicle service contract provided in this subsection is not transferable and applies only to the original service contract holder for a contract under which a claim is not made before the contract is returned to the provider. (b) After the time specified in (a) of this section, or if a claim has been made under the motor vehicle service contract within that time, a service contract holder may cancel the motor vehicle service contract, and the provider shall refund to or credit the account of the contract holder the prorated amount of the unearned provider fee, less any claims paid, not later than 45 days after the return of the service contract to the provider. If the provider does not pay or credit a refund owed under this subsection not later than 45 days after a service contract holder returns a motor vehicle service contract, a penalty in the amount of 10 percent of the unearned provider fee paid by the service contract holder for each month the refund remains unpaid shall be added to the refund. A provider may charge a reasonable cancellation fee not to exceed 7.5 percent of the unearned provider fee paid by the service contract holder. (c) A motor vehicle service contract shall state the terms, restrictions or conditions governing cancellation of the service contract by the provider. A provider may only cancel a service contract for (1) nonpayment of the provider fee; (2) conviction of the service contract holder of a crime having as one of its necessary elements an act increasing a hazard covered by the service contract; (3) discovery of fraud or material misrepresentation made by the service contract holder or a representative of the service contract holder in obtaining the service contract or by the service contract holder in pursuing a claim under the service contract; (4) discovery of a grossly negligent act or omission by the service contract holder that substantially increases the hazards covered by the service contract; (5) physical changes in the property covered by the service contract that result in the property becoming ineligible for coverage under the contract; or (6) a substantial breach of duties by the service contract holder related to the covered motor vehicle. (d) The provider of the service contract shall mail a written notice to the service contract holder at the last known address of the service contract holder contained in the records of the provider at least five days before cancellation by the provider. The notice shall state the effective date of the cancellation and the reason for the cancellation. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee or fraud or a material misrepresentation by the service contract holder in obtaining the service contract or by the service contract holder in pursuing a claim under the service contract. If the provider cancels the service contract, the provider shall refund or credit to the account of the contract holder the prorated amount of the unearned provider fee, less any claims paid, within 45 days after the return of the service contract to the provider. If the provider does not pay or credit a refund owed under this subsection within 45 days after the provider cancels the motor vehicle service contract, a penalty in the amount of 10 percent of the unearned provider fee paid by the service contract holder for each month the refund remains unpaid shall be added to the refund.
(a) To ensure the faithful performance of a provider's obligations to its service contract holders, a provider shall either (1) obtain from an insurer or risk retention group authorized to transact the business of insurance in the state insurance that either reimburses the provider for obligations arising from a provider's motor vehicle service contract issued in the state or, if the provider fails to perform its obligations under a motor vehicle service contract issued in the state, pays to the service contract holder the provider's covered contractual obligations under the terms of the service contract on behalf of the provider; an insurer issuing a policy under this paragraph must satisfy one of the following: (A) maintain surplus as to policyholders and paid-in capital of at least $15,000,000 and annually file with the director copies of the provider's financial statements, its annual statement to the National Association of Insurance Commissioners, and the statement of actuarial opinion and opinion summary required by and filed in the provider's state of domicile; or (B) maintain surplus as to policyholders and paid-in capital at least equal to $10,000,000, but not more than $15,000,000, and demonstrate to the satisfaction of the director that the company maintains a ratio of net written premiums, wherever written, to surplus as to policyholders and paid-in capital of not greater than 3 to 1 and annually files with the director copies of the provider's audited financial statements, its annual statement to the National Association of Insurance Commissioners, and the statement of actuarial opinion and opinion summary required by and filed in the provider's state of domicile; or (2) maintain, solely or together with the parent company, a net worth or stockholders' equity of $100,000,000 and, upon request by the director, provide the director with a copy of the provider's or the parent company's most recent annual report filed with the United States Securities and Exchange Commission within the last calendar year or, if the company does not file with the United States Securities and Exchange Commission, a copy of the company's audited financial statements, which show a net worth of the provider or its parent company of at least $100,000,000; if the parent company's annual report or financial statements are filed to meet the provider's financial stability requirement, then the parent company shall agree to guarantee the obligations of the provider relating to motor vehicle service contracts sold by the provider in this state. (b) A motor vehicle service contract provider that has obtained insurance under this section shall state the name and address of the provider and include a statement in substantially the following form: Performance or payment of the obligations of the provider under this service contract are insured. If the provider has not obtained insurance under this section, the service contract shall contain a statement in substantially the following form: Obligations of the provider under this service contract are not insured and are guaranteed only by the assets of the provider. (c) If the provider fails to provide a covered service under the terms of the motor vehicle service contract within 30 days after the service contract holder notifies the provider of the claim, the service contract holder is entitled to apply directly to the insurer for payment of the provider's obligation.
(a) The provider shall keep accurate accounts, books, and records related to the sale of motor vehicle service contracts, including (1) copies of each type of motor vehicle service contract sold; (2) the name and address of each service contract holder to the extent that the name and address have been furnished by the service contract holder; (3) the locations where motor vehicle service contracts are marketed, sold, or offered for sale; and (4) claim files describing claims related to the motor vehicle service contracts. (b) The provider shall retain all records required by this section for at least five years after a motor vehicle service contract has expired. (c) Records required to be maintained under this section may be maintained electronically. (d) A provider shall reply in writing within 10 working days to a records inquiry of the director. The director may inspect or request summary or detailed copies of records for examination by the division. Accounting and financial records inspected or examined under this section are confidential when in the possession of the division, but may be used by the director in a proceeding against the licensee. (e) A provider discontinuing business in this state shall maintain records as required by this section until the provider's obligations to all service contract holders in this state have been discharged.
(a) The director may conduct investigations or examinations of a provider, administrator, insurer, or other person to enforce the provisions of AS 21.59.110 - 21.59.290 and to protect service contract holders in this state in accordance with AS 21.06. (b) The director may take necessary or appropriate action to enforce this title, to the extent applicable, and protect service contract holders in this state, including the issuance of a cease and desist order, if the director determines that a person has violated a provision of this title, to the extent applicable to the person. A person aggrieved by the cease and desist order may request a hearing under AS 21.06.170 - 21.06.240. (c) Without prior hearing, the director may order summary suspension of the license of a provider if the director finds that protection of the public requires emergency action and incorporates this finding in an order. The suspension is effective on the date specified in the order or upon mailing by first class mail to the provider's business address on record with the division, whichever is later. If the provider requests a hearing, the director shall conduct a hearing on the suspension within a reasonable time but not later than 20 days after the effective date of the summary suspension unless the person whose license is suspended requests a later date. At the hearing, the director shall determine whether the suspension should be continued or withdrawn, and, if proper notice is given, may determine whether the license should be revoked. The director shall issue a decision within 30 days after the conclusion of the hearing. A suspension or revocation under this section must be based on one or more grounds in AS 21.27.410 or a finding that one or more of the circumstances in (d) of this section continue to exist. The summary suspension continues until the decision is issued. AS 21.06.190 and AS 44.64.030 do not apply to this subsection. (d) The director shall order summary suspension of the license of a provider if one or more of the following circumstances exist: (1) the provider is insolvent or impaired; (2) a proceeding for bankruptcy, receivership, conservatorship, or rehabilitation, or another delinquency proceeding regarding the provider has been commenced in any state or by a governmental agency of another jurisdiction; (3) the provider is in an unsound condition, or is in a condition or using methods or practices that render its further sale of service contracts in the state injurious to service contract holders or the public. (e) A person found to have violated AS 21.59.110 - 21.59.290 may be assessed a civil penalty in an amount determined by the director not to exceed $2,500 for each violation or, if the director determines that the person knowingly violated the provisions of AS 21.59.110 - 21.59.290, $5,000 for each violation. Penalties for violations may not exceed $50,000 in the aggregate for violations of a similar nature, except where the person knowingly violated the provisions of AS 21.59.110 - 21.59.290. In this subsection, (1) knowingly has the meaning given in AS 11.81.900; (2) violation of a similar nature means a violation consisting of the same or a similar course of conduct, action, or practice as another violation, notwithstanding the number of times the act, conduct, or practice occurred. (f) A service contract holder may bring an action in a court of competent jurisdiction for damages, injunctive relief, restitution, or other appropriate relief for a threatened or existing violation relating to the motor vehicle service contract. (g) The director may adopt regulations necessary for the implementation and enforcement of AS 21.59.110 - 21.59.290.
In AS 21.59.110 - 21.59.290, (1) administrator means a person who is responsible for the administration of a motor vehicle service contract or the motor vehicle service contract plan; (2) motor vehicle means a motor vehicle subject to registration under AS 28.10.011; (3) motor vehicle manufacturer means a person that (A) manufactures or produces motor vehicles and sells motor vehicles under the person's own name or label; (B) is a subsidiary of a person who manufactures or produces motor vehicles; (C) is a corporation that owns 100 percent of the person that manufactures motor vehicles; (D) sells motor vehicles under the trade name or label of a person that manufactures or produces motor vehicles; (E) manufactures and sells motor vehicles under the trade name or label of another person that manufactures or produces motor vehicles; or (F) under a written contract, licenses the use of its trade name or label to another person that manufactures motor vehicles and sells motor vehicles under the licensor's trade name or label; (4) nonoriginal manufacturer's parts means replacement parts or after market parts not made for or by the original manufacturer of the motor vehicle; (5) provider means a person that is contractually obligated to provide motor vehicle services to a service contract holder under the terms of a motor vehicle service contract; (6) provider fee means the consideration paid for a motor vehicle service contract; (7) road hazard means obstacles in the road, including potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps; (8) service contract holder means a person who is the purchaser or holder of a motor vehicle service contract; (9) warranty means a warranty made solely by the manufacturer, importer, or seller of a motor vehicle without consideration, that is not negotiated or separated from the sale of the motor vehicle and is incidental to the sale of the motor vehicle, and that guarantees indemnity for defective parts, mechanical or electrical breakdown, and labor or other remedial measures, such as repair or replacement of the motor vehicle or repetition of services.
(a) Over-insurance shall be considered to exist if property or an insurable interest in property is insured by one or more insurance contracts against the same hazard in an amount in excess of the fair value of the property or of the interest, as determined on the effective date of the insurance or the renewal of it. (b) A person may not knowingly issue, place, procure, or accept an insurance contract that would result in over-insurance of the property or interest in the property proposed to be insured, except as provided in AS 21.60.020. (c) Each violation of this section shall subject the violator to the penalties provided in AS 21.97.020. (d) In this section the term fair value means the cost of replacement less depreciation that is properly applicable to the subject insured.
By a contract of insurance of property or of any insurable interest in the property, the insurer may in connection with a special provision or endorsement made a part of the policy insure the cost of repair or replacement of the property, if damaged or destroyed by a hazard insured against, and without deduction of depreciation, subject to reasonable regulations that may be adopted by the director.
(a) An air ambulance service provider that meets the requirements of AS 21.61.105 may offer an air ambulance membership agreement. (b) The term of an air ambulance membership agreement may not exceed one year, but may be renewed annually. (c) An air ambulance membership agreement may not include a provision that requires an air ambulance service provider to pay for or indemnify a person for services provided by a third party, including a third party that is another air ambulance service provider.
(a) An air ambulance service provider that offers an air ambulance membership agreement shall register biennially with the director on a form prescribed by the director. (b) At the time of registration, an air ambulance service provider shall supply the director with evidence that the air ambulance service provider (1) has been certified as meeting the minimum standards prescribed by the Department of Health under AS 18.08.082(a)(3); and (2) has been in operation in the state for at least two years, or meets solvency requirements established by the director in regulation.
(a) In addition to the provisions of this chapter, the following provisions of this title apply to air ambulance service providers and air ambulance membership agreements to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications of the express provisions: (1) AS 21.36; (2) AS 21.42. (b) When applying the provisions listed in (a) of this section, the director shall treat an air ambulance service provider as an insurer and an air ambulance membership agreement as an excepted benefits insurance policy under AS 21.54.160. (c) Except as provided in this section, an air ambulance service provider or an air ambulance membership agreement that complies with this chapter is not otherwise subject to this title.
The director may adopt regulations to implement this chapter.
In AS 21.61.100 - 21.61.110, (1) air ambulance means a publicly or privately owned aircraft intended to be used and maintained or operated to provide critical care ambulance services, air medevacs, and medevac services for the transportation of individuals who are sick, injured, wounded, or otherwise helpless; (2) air ambulance membership agreement means an agreement in exchange for consideration, to pay for, indemnify, or provide an amount or benefit to a person for the cost of air ambulance services; (3) air ambulance service provider means a person that owns or operates an air ambulance; (4) consideration means a membership fee, receipt of insurance proceeds, performance of a service, waiver of a right, or anything of value.
A surety insurer authorized as such under this title shall have the power to become the surety on bonds and undertakings required by law, subject to all the rights and liabilities of private persons. This section does not limit in any way the powers, obligations, and liabilities of the insurers as provided for in other provisions of this title.
Whenever a bond, undertaking, recognizance, or other obligation is by law, or the charter, ordinance, rules, or regulations of a municipality, board, body, organization, or public officer, required or permitted to be made, given, tendered, or filed, with surety or sureties, and whenever the performance of an act, duty, or obligation, or the refraining from an act, is required or permitted to be guaranteed, the bond, undertaking, obligation, recognizance, or guaranty may be executed by a surety insurer qualified to act as surety or guarantor as authorized in this title. The execution by the insurer of the bond, undertaking, obligation, recognizance, or guaranty shall be in all respects a full and complete compliance with every requirement of the law, charter, ordinance, rule, or regulation that the bond, undertaking, obligation, recognizance, or guaranty shall be executed by one surety or by one or more sureties, or that the surety shall be a resident, or householder, or freeholder, or either or both, or possessed of any other qualifications; and all courts, judges, heads of departments, boards, bodies, municipalities, and public officers of every character shall accept and treat accordingly the bond, undertaking, obligation, recognizance, or guaranty when so executed by the insurer, as conforming to and fully and completely complying with every requirement of every law, charter, ordinance, rule, or regulation.
A surety insurer may be released from its liability on a bond referred to in AS 21.63.020 upon the same terms and conditions as are by law prescribed for the release of individual sureties.
(a) Before a domestic or foreign title insurance company is entitled to a certificate of authority to transact a title insurance business in this state, it shall have basic capital, additional surplus when first authorized, and additional maintained surplus as required by AS 21.09.070, including a deposit as required in AS 21.09.090. (b) A domestic or foreign title insurance company shall have on deposit with the director or insurance commissioner of the state of its domicile, before the issuance of any policy of title insurance in this state, the amount required by AS 21.09.090 for the purpose described in that section. The amount of this deposit shall be increased by the sum of $50,000 for each state or territorial subdivision of the United States or the District of Columbia, other than the state of its domicile, in which it becomes qualified to engage in the business of title insurance, less the amount required by and deposited in the other states or territorial subdivisions, provided the deposits shall be for the security and protection of its policyholders or their beneficiaries, wherever situated. When the aggregate of amounts deposited in this or other states or territorial subdivisions or the District of Columbia has reached the sum of $750,000, no further deposit is required of the title insurance company as a condition of engaging in the business of title insurance in this state. (c) If a company is unable to make the deposits required under this section in the state of its domicile because of a lack of statutory authority for making the deposits, the deposits may be made with the director of insurance of this state.
(a) In addition to the deposit required in AS 21.66.010(b), within 30 days after the filing of each annual statement, the title insurance company shall deposit with the director a sum equal to 10 percent of the premiums written during the preceding year covering property in this state, as shown by the annual statement, until the accumulated deposits, added to the sums originally deposited with the director, as provided in this chapter, total $750,000, but the title insurance company may not be required to deposit more than $50,000 in any one year. The purpose of this deposit is to provide a guaranty fund for payment of claims under title guaranties and policies issued in Alaska in the event of the insolvency of the title insurer. (b) When a title insurance company holding a certificate of authority under this chapter is found to be insolvent by a proceeding in a court of competent jurisdiction, the director shall take control of deposits made by the title insurance company and held in this state. If the finding of insolvency is from a court in another state, the director shall file for an ancillary receivership under AS 21.78 to administer the deposits and other assets in this state and pay claims in this state. Any funds remaining after payment of all claims under policies in this state shall be forwarded to the receiver. (c) On request of a title insurance company, the director shall return the assets held on deposit when the company is no longer authorized to write insurance in this state, the director is satisfied that there are no risks in the state covered by contracts of the company, and the assets are no longer required to be held by any provision of law. (d) In addition to the provisions of this section, the following provisions of this title also apply with respect to deposits under this section to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications of the express provisions: (1) AS 21.24.040(a), (d), and (e); (2) AS 21.24.060.
A title insurance company may not pay dividends except from net profits remaining on hand after retaining unimpaired (1) the subscribed capital stock; (2) the amount required to be set aside as unearned premium reserve fund under AS 21.18.073; (3) a sum sufficient to pay current liabilities for operating expenses and taxes, and losses established or in process of settlement, without impairment of the unearned premium reserve fund required under AS 21.18.073.
(a) Every company, on or before March 1 of each year, shall furnish the director or the director's designee a sworn statement of assets and liabilities, and of all title premiums received by it during the preceding calendar year, setting out, among other things, the amounts that have been set aside and held by it in an account required under AS 21.18.073. The reporting format for a given year is the most recently approved National Association of Insurance Commissioners Annual Financial Statement blank form and instructions, supplemented for additional information as required by the director. The director may require the statement to be filed on electronic media. The statement must also show all unpaid losses and claims upon title insurance policies of which the title insurance company has received due notice in writing from or on behalf of the insured. With the filing of the statement, the title insurance company shall pay a filing fee set under AS 21.06.250. (b) A domestic title insurance company shall comply with AS 21.09.200(f).
(a) The director may require an insurer to file quarterly financial statements. If required, the statements must follow the format specified in AS 21.66.080(a). (b) A quarterly financial statement, if required, is due 45 days after the end of the quarter to which it applies. (c) An insurer shall pay to the division $100 for each day the insurer fails to file the quarterly statement in the form required or within the time established in (b) of this section.
(a) Every company, before engaging in a title insurance business in this state, shall apply to the director for a certificate of authority to transact business under AS 21.09.  (b) With the filing of the application, the company shall pay a fee set under AS 21.06.250 and, in addition, shall pay all expenses incurred in examining the applicant's title plant or plants, as required by AS 21.06.160. 
(a) Each title insurance company shall pay a tax of one percent of the amount of gross title insurance premiums received by it, including as premium income received from guaranteed certificates of title and other guarantees of title covering property in this state, as shown by its annual statement to the director. The director shall specify the due dates and the method of payment. (b) The provisions of AS 21.96.070 apply to a taxpayer who is required to pay the tax due under this section. (c) A title insurance company shall pay to the division a late payment fee of $50 a month plus five percent of tax due each calendar month or part of a month during which the insurer fails to pay the full amount of the tax or a portion of the tax and interest at the rate of one percent of the tax due each calendar month or part of a month for the period the insurer fails to pay the premium tax. The late payment fee, not including interest, may not exceed $250 plus 25 percent of the tax due. The tax payment shall be made in the form required by the director, or a penalty shall be added to the tax equal to 25 percent of the tax due, not to exceed $2,000, with a minimum penalty of $100. In addition to any other penalty provided by law, if the provisions of this section are wilfully violated, then a civil penalty may be assessed of not more than $10,000. The director may suspend or revoke the certificate of authority of a title insurance company that fails to pay its taxes, a penalty, or a late payment fee as required under this section.
(a) The director is authorized to examine the books, accounts, assets, and title plants of a company authorized to write title insurance hereunder to determine that there has been no impairment of capital and that the company has complied with the provisions of this chapter. (b) [Repealed,  223 ch 67 SLA 1992.] 
(a) A policy or contract of title insurance may not be written until the title insurance company has, through a licensed title insurance limited producer, conducted a reasonable search and examination of the title and the company has made a determination of insurability of title in accordance with its established underwriting practices. Evidence of the determination shall be preserved and retained in the files of the title insurance company or its agent for a period of not less than 15 years after the policy or contract of title insurance has been issued. In lieu of retaining the original evidence, the title insurance company or the title insurance limited producer, may, in the regular course of business, establish a system by which all or part of these writings are recorded, copied, or reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic, or other process that accurately reproduces or forms a durable medium for reproducing the original. (b) This section does not apply to (1) a company assuming no primary liability in a contract of reinsurance; or (2) a company acting as a co-insurer if one of the other co-insuring companies has complied with this section.
A title insurance company may (1) do business as defined in AS 21.66.480; (2) do any act, directly or through a title insurance limited producer, incidental to making a contract or policy of title insurance, including conducting or holding an escrow, settlement, or closing of a transaction; and (3) provide other services relative or incidental to the sale and transfer of real or personal property.
(a) An insurer that transacts any class or kind of insurance other than title insurance is not eligible for the issuance or renewal of a certificate of authority to transact the business of title insurance in this state. (b) A title insurance company may not engage in the business of guaranteeing the payment of the principal or the interest of bonds or other obligations.
A title insurance company shall own and maintain in the recording district in which its principal office in the state is located a title plant consisting of adequate maps and fully indexed records showing all instruments of record affecting all land within the recording district for a period of at least 25 years immediately before the date a policy of title insurance is issued by the title insurance company. It shall also directly or through its agent own and maintain a comparable title plant for each additional recording district in which it or its agent maintains an office to transact a title insurance business.
(a) Two or more title insurance companies or two or more title insurance limited producers, or a combination of title insurance companies and title insurance limited producers, may apply to the director of insurance to form an association, corporation, or other legal entity, for the purpose of engaging in the business of preparing abstracts of title searches from public records or from records to be owned by the entity, upon the basis of which a title insurance limited producer or a title insurance company will issue title policies. The owners or participants are considered to be in compliance with the provisions of this section and AS 21.66.200 if the title plant of the association, corporation, or other legal entity complies with the provisions of this section. The application must contain (1) a copy of the proposed articles of incorporation or association and the bylaws or agreement governing the operation of the entity; (2) a list of the owners or participants; (3) the names and addresses of the persons who will operate the entity, with a description of their experience and qualifications; (4) the conditions under which ownership or participation in the entity may be sold or acquired; (5) a statement of whether or not title information will be compiled and sold to persons other than owners of or participants in the entity; (6) a pro forma balance sheet and other financial information to indicate the sufficiency of financing the entity; and (7) basic information, including the joint title plant name, the physical address, the mailing address, the electronic mailing address, and telephone numbers. (b) If the director finds that (1) the entity will be adequately financed, (2) the persons who will be operating the entity are qualified and (3) the rules of operation as expressed in the articles of incorporation or association and the bylaws will promote the efficiency of the operation of the subscribing owners or participants and will not unduly restrict competition, the director shall issue a certificate of authority to the entity and permit it to organize. Each application under this section shall be granted or denied in whole or in part by the director within 60 days from the date it is filed. A certificate of authority issued under this section remains in effect until suspended or revoked by the director. The fee for the certificate of authority is set under AS 21.06.250. The certificate of authority is subject to annual continuation. The fee for continuation is set under AS 21.06.250. A certificate of authority issued under this section may be suspended or revoked by the director after hearing upon notice if the entity ceases to operate as provided in the application or if the director determines that the operation has become a restraint on competition and is not in the interests of the public. Every entity issued a certificate of authority under this section shall notify the director promptly of every change occurring under this section.
(a) The net retained liability of a title insurance company under a single title insurance risk assumed in this state may not exceed 50 percent of the net amount remaining after deducting from the sum of its capital, surplus, unearned premium reserve, and voluntary reserves, the value, if any, assigned in the summation to its title plants, as shown in its most recent report on file with the director. The same limitation applies to any secondary risk assumed by means of reinsurance or to a policy of excess co-insurance. Upon application by a title insurance company and the showing of good cause, the director may waive the limitation in connection with the assumption of a particular risk. (b) Nothing in this section is intended to limit the amount of a single insurance risk, as defined in AS 21.66.480, that may be written or assumed by a title insurance company, if (1) it cedes to one or more other title insurance companies, on or before the effective date of the writing or assumption, the portion, or portions, of the risk sufficient to bring its net retained liability within the limits provided in this section; and (2) each cession of risk is also within the limits of this section as applied to the sum of the capital, surplus, unearned premium reserve, and voluntary reserves, less the value, if any, assigned in the summation to the title plants of the assuming and reinsuring title insurance company, as shown by its most recent report on file with the director or commissioner of insurance in the state of its domicile.
A title insurance company authorized to engage in the business of title insurance in this state may cede reinsurance of all or any part of its liability under one or more of its policies or contracts of reinsurance agreements to a title insurance company authorized to engage in the business of title insurance in this or any other state or the District of Columbia. However, no larger amount of reinsurance may be assumed by a title insurance company on a single policy, or contract of title insurance, or on any single title insurance risk as defined in AS 21.66.480, than the title insurance company would be permitted to retain if authorized to engage in the business of title insurance in this state. It may also reinsure policies of title insurance issued by other companies on risks whether located in or out of this state. A title insurance company authorized to transact business in this state shall pay to this state taxes required on all business taxable in this state and reinsured, as provided in this section, with any foreign or alien company not authorized to do business in this state. Issuance of contracts of reinsurance by a title insurance company not authorized to engage in the business of title insurance in a state or the District of Columbia, reinsuring a title insurance company authorized to engage in the business of title insurance in this state on property located in this state, does not of itself constitute the doing of business in this state by the reinsuring company.
A title insurance company may invest in title plants if it complies at all times with the minimum capital investment requirements under this chapter. A title plant shall be considered an asset at its fair value. In determining the fair value of a title plant, no value may be attributed to furniture and fixtures, and the real estate in which the title plant is housed shall be carried as real estate. The value of title abstracts, title briefs, copies of conveyances or other documents, indices, and other records comprising the title plant shall be determined by considering the expenses incurred in obtaining them, the age of them, the cost of replacements less depreciation, and all other relevant factors. Once the value of a title plant is determined under this section, the value may be increased only by the acquisition of another title plant by purchase, consolidation, or merger; however, in no event may the value of the title plant be increased by additions made to it as part of the normal course of abstracting and insuring titles to real estate. Subject to the limitations in this section and with the approval of the director as provided by AS 21.66.210, a title insurance company may enter into agreements with other title insurance companies to participate in the use, ownership, management, and control of a title plant in order to service the needs of all the title insurance companies, or the title insurance companies may hold stock of a corporation owning and operating a title plant for this purpose.
Except as provided in AS 34.80, trust funds or assets held in a fiduciary capacity by a title insurance company that is authorized to do a trust business shall be invested in accordance with AS 06.26.
A title insurance limited producer shall be licensed in the manner provided for in AS 21.27. A title insurance limited producer may not obtain a license unless the producer is a resident of the state. A title insurance limited producer may not be licensed to sell insurance other than title insurance.
(a) In addition to any other requirement of this title, a title insurance limited producer licensee shall maintain books of accounts and records and vouchers pertaining to the business of title insurance in a manner that the director, or an authorized representative, may readily ascertain whether the licensee has complied with the provisions of this chapter. (b) A title insurance limited producer licensee may engage in the business of handling escrows, settlements, and closings in connection with the business of title insurance; however, (1) the licensee shall maintain a separate record of all receipts and disbursements of escrow funds and may not commingle the funds with personal funds or with funds held by the licensee in any other capacity; (2) the licensee shall comply with the standards of solvency that the director requires; and (3) the licensee shall submit financial statements that the director requires. (c) In addition to any other penalty provided by law, if the director determines that a title insurance limited producer licensee has failed to comply with a provision of this section, the director may, after a hearing, revoke the limited producer license.
A title insurance limited producer shall reply in writing promptly, with a copy of the reply mailed to each title insurance company for which the licensee is acting, to an inquiry of the director relating to the licensee's acts as a title insurance limited producer. In addition to any other penalty provided by law, failure to reply is a ground for revocation of the license. A copy of the inquiry shall be sent by the director to each title insurance company for which the licensee is acting.
A title insurance limited producer for a title insurance company may not adopt a firm name containing the words title insurance, title guaranty, or title guarantee, unless the words are followed by the words agent or agency in the same size and type as the words preceding them. This section does not apply to a title insurance company acting as an agent for another title insurance company.
(a) A title insurer, or officer, employee, attorney, or title insurance limited producer of a title insurer, may not pay, allow, or give or offer to pay, allow, or give, directly or indirectly, as an inducement to obtaining a title insurance business, a rebate, reduction, or abatement of a rate or charge made incident to the issuance of the title insurance, a special favor or advantage, money consideration, or other inducement. A charge made incident to the issuance of the insurance is construed to include, without limitation, escrow, settlement, and closing charges. (b) An insured named in a title insurance policy or any other person directly or indirectly connected with the transaction involving the issuance of a title insurance policy, including a mortgage lender, real estate broker, builder, or attorney, or an officer, employee, agent, representative, or solicitor of a mortgage lender, real estate broker, builder, attorney, or other person, may not knowingly receive or accept, directly or indirectly, a rebate, reduction, or abatement of a charge or premium or a special favor or advantage, or a monetary consideration or inducement. (c) Nothing in this section prohibits (1) the payment of fees for services actually rendered as a result of a title insurance transaction; or (2) the payment of a commission to a legally appointed title insurance limited producer who issues the policy of title insurance.
If the director has reason to believe that a title insurance limited producer has violated or is in violation of AS 21.66.310, the director shall immediately examine the title insurance limited producer's books of account and record and vouchers pertaining to the business of title insurance. The title insurance limited producer shall pay to the director the cost of an examination conducted under this section.
A person who violates AS 21.66.310 is liable to the state for five times the amount or value of the rebate, reduction, or abatement of any rate or charge made incident to the issuance of title insurance, or a special favor or advantage, or a monetary consideration or inducement.
Nothing in this chapter prohibits the division of rates and charges between or among a title insurance company and its agent, two or more title insurance companies, one or more title insurance companies and one or more title insurance limited producers, or two or more title insurance limited producers if the division of rates and charges does not constitute an unlawful rebate and is not in payment of a forwarding fee or finder's fee.
The purpose of AS 21.66.370 - 21.66.400 is to promote the public welfare by regulating title insurance rates so that they are not excessive, inadequate, or unfairly discriminatory, and to authorize cooperative action between or among title insurance companies in rate making and other matters within the scope of this chapter. Nothing in this chapter is intended to prohibit or discourage uniformity in title insurance rates, rating systems, and rating plans and practices.
(a) A title insurance company shall file with the director its schedules of rates, manuals of classifications, rules and plans relating to schedules of rates or manuals of classification, and every modification of the schedules or manuals that it proposes to use in this state. A filing under this section must contain the effective dates of the documents filed, and indicate the character and extent of the coverage contemplated. (b) The director shall review the filings as necessary to carry out the provisions of this chapter. (c) Subject to the provisions of (e) of this section, a filing shall be on file for a period of 30 days before it becomes effective. The director may, upon written notice given within the 30-day period to the person making the filing, extend the waiting period for an additional period, not to exceed 30 days, in order to complete the review of the filing. Additional extensions of the waiting period may also be made with the consent of the title insurance company. Upon written application by the title insurance company, the director, after review of the application, may authorize a filing or any part of it to become effective upon the expiration of the waiting period or its extension. (d) Except for rates filed under (e) of this section, a filing that has become effective is considered to meet the requirements of this chapter. (e) When the director finds that a rate for a particular kind or class of risk cannot practicably be filed before it is used, or any contract or kind of title insurance, by reason of rarity or peculiar circumstances, does not lend itself to advance determination and filing of rates, the director may, under appropriate regulations, permit the rate to be used without a previous filing and waiting period. (f) A title insurance company or title insurance limited producer may not charge a rate for a policy or contract of title insurance except in accordance with filings or rates that are in effect for the title insurance company as provided in this chapter. (g) The director may not regulate, or require the filing of, rates paid by title insurance companies for reinsurance contracts or agreements, or policies of excess co-insurance.
(a) A rate filing shall be accompanied by a statement of the title insurance company making the filing, setting out the basis on which the rate was determined, with the rates computed. A filing of rates may be justified by (1) the experience or judgment of the title insurance company making the filing; (2) its interpretation of any statistical data relied upon; (3) the experience of other title insurance companies making the filings; or (4) any other factors that the title insurance company considers relevant. (b) The statement and justification provided for in this section shall be open to public inspection; however, information that can be used to identify the experience of a particular title insurance limited producer is confidential.
(a) A title insurance company shall make rates that are not excessive or inadequate, that do not unfairly discriminate between risks in this state that involve essentially the same exposure to loss and expense elements, and that give due consideration to (1) the desirability for stability of rate structures; (2) the necessity of assuring the financial solvency of title insurance companies in periods of economic depression by encouraging growth in assets of title insurance companies in periods of high business activity; (3) the necessity for assuring a reasonable margin of underwriting and operating profit; and (4) investment income. (b) A title insurance company shall adopt basic classifications of policies or contracts of title insurance that shall be used as the basis for rate-making.
(a) If within the waiting period provided for in AS 21.66.370(c) the director finds that a filing does not meet the requirements of this chapter, the director shall send to the title insurance company that made the filing written notice of disapproval of the filing specifying in what respects the director finds the filing fails to meet the requirements of this chapter and stating that the filing may not become effective. (b) If at any time after the applicable review period provided for in AS 21.66.370(c) the director finds that a filing does not meet the requirements of this chapter, the director shall, before issuing an order of disapproval, hold a hearing upon not less than 10 days written notice, specifying in reasonable detail the matters to be considered at the hearing. Notice of hearing shall be given to each title insurance company that made the filing, and if, after the hearing, the director finds that the filing or a part of the filing does not meet the requirements of this chapter, the director shall issue an order specifying how it is deficient, and when, within a reasonable period thereafter, the filing or a part of it is considered no longer effective. A title insurance company has the right to withdraw a filing or a part of a filing. Copies of the order issued under this section shall be sent to every title insurance company affected. The order does not affect a contract or policy made or issued before the expiration of the period set out in the order. (c) A person or organization aggrieved with respect to a filing that is in effect may make a written application to the director for a hearing on the filing. The title insurance company that made the filing may not proceed under this subsection. The application shall specify in reasonable detail the grounds to be relied on by the applicant. If the director finds that the application is made in good faith, that the applicant would be aggrieved if the applicant's grounds are established, and that the applicant's grounds otherwise justify holding a hearing, the director shall, within 60 days after receipt of the application, hold a hearing upon not less than 10 days written notice to the applicant and to each title insurance company that made such a filing. If, after the hearing, the director finds that the filing or a part of it does not meet the requirements of this chapter, the director shall issue an order specifying how the filing or a part of it fails to meet the requirements of this chapter, stating when, within a reasonable period after the order is issued, the filing or a part of it is considered no longer effective. Copies of the order shall be sent to the applicant and to every affected title insurance company. The order does not affect a contract or policy made or issued before the expiration of the period set out in the order. (d) A title insurance company to which the director has issued an order made without a hearing may, within 30 days after notice to it of the order, make a written request to the director for a hearing. The director shall hear the party or parties within 60 days after receipt of the request and shall give not less than 10 days written notice of the time and place of the hearing. Within 15 days after the hearing the director shall affirm, reverse, or modify the previous action, specifying the reasons. Pending the hearing and decision the director may suspend or postpone the effective date of the previous action. (e) A hearing under this section is not required to observe formal rules of pleading or evidence. (f) A filing or modification of a filing may not be disapproved if the rates in connection with the filing meet the requirements of this chapter.
(a) The director may prescribe by regulation (1) guidelines reasonably adaptable to each of the rating systems on file with the director; (2) a uniform classification of accounts to be observed; (3) statistics to be reported; and (4) uniform forms for reporting this data by all title insurance companies. (b) Regulations may be adopted by the director for the interchange of data necessary for the application of rating plans. (c) In order to more uniformly administer rate regulations, the director and each title insurance company may exchange information and experience data with insurance supervisory officials, title insurance companies, and title insurance rating organizations in other states, and may consult with them and with each other with respect to rate making and the application of rating systems.
A title insurance company or title insurance limited producer may not wilfully withhold information from, or knowingly give false or misleading information to the director that will affect the rates chargeable under this chapter.
(a) Each title insurance company shall file with the director all forms of title policies and other contracts of title insurance that it proposes to issue in this state before their issuance; however, in no event may a title insurance company issue a form of policy or contract before 30 days after it has been filed with the director, unless it has received earlier approval by the director. Unless the director disapproves a form of title policy or contract of title insurance within 30 days from the date of its filing, the filing is considered to be approved. (b) Forms of title policies and other contracts of insurance, as used in this section, are considered to include preliminary reports of title, binders for insurance, commitments to insure, and policies of insurance or guaranty, together with all the terms and conditions of insurance coverage or guaranty that relate to title to any interest in property, offered by a title insurance company. Forms of title policies and other contracts of insurance shall specifically exclude (1) reinsurance contracts or agreements; (2) all specific defects in title that may be ascertained from an examination of the risk and excepted in such reports, binder, commitments, or policies, together with any affirmative assurances of the title insurance company with respect to the defects whether given by endorsement or otherwise; and (3) further exceptions from coverage by reason of limitations upon the examination of the risk imposed by an applicant for insurance or through failure of an applicant for insurance to provide the data requisite to a judgment of insurability.
(a) Each title insurance company shall file with the director a schedule of the escrow, settlement, and closing charges that it proposes to use in this state for these services when performed in connection with the issuance of policies of title insurance. The filing must state the effective date of the schedule, which shall be not less than 30 days after the date of filing with the director. (b) All or any part of the schedule may be amended at any time. Each amendment shall be filed with the director, and shall state its effective date, which must be not less than 30 days after the date of its filing with the director. (c) Copies of schedules filed under this section shall be retained in each of the offices of a title insurance company in this state, and, upon request shall be furnished to the public. (d) A title insurance company may not make or impose a charge for escrow, settlement, or closing services when performed in connection with the issuance of a policy of title insurance except in accordance with the schedule of the charges filed with the director under this section.
The provisions of this title governing insurance companies, except to the extent that they are inconsistent with the provisions of this chapter, apply to the business of title insurance and to title insurance companies.
In this chapter, (1) applicants for insurance means those persons, whether or not prospectively insured, who apply to a title insurance company or to its agent, for title insurance, and who at the time of the application are not agents for a title insurance company; (2) business of title insurance is (A) the making or proposing to make as insurer, guarantor, or surety, a contract or policy of title insurance; or (B) the transacting or proposing to transact, any phase of title insurance including solicitation, negotiation preliminary to execution, execution of a title insurance contract, and insuring and transacting matters subsequent to the execution of the contract and arising out of it, including reinsurance; (3) net retained liability means the total liability retained by a title insurance company under a policy or contract of insurance, or under a single insurance risk as defined in or computed in accordance with (5) of this section, less the amount of reinsurance ceded; (4) rate means a charge for title insurance risk, abstracting, searching, examination or determination of insurability, and every other activity, exclusive of escrow, settlement, or closing charges, whether denominated premium or otherwise, made by a title insurance company or an agent of a title insurance company to an insured or to an applicant for insurance, for a policy or contract of title insurance; however, rate does not include charges paid to and retained by an attorney at law, abstractor, surveyor, tax service, or any other person acting in a capacity other than as a title insurance limited producer and on behalf of a client other than a title insurance company, or charges made for special services, even though performed in connection with a title insurance policy or contract; (5) single insurance risk means the insured amount of a policy or contract of title insurance issued by a title insurance company unless two or more policies or contracts are simultaneously issued on different estates in identical real property, in which case, it means the sum of the insured amounts of all of the policies or contracts; however, any policy or contract that insures a mortgage interest that is excepted in a fee or leasehold policy or contract, and that does not exceed the insured amount of the fee or leasehold policy or contract, is excluded in computing the amount of a single insurance risk; (6) title insurance means insuring, guaranteeing, or indemnifying owners of real or personal property or the holders of liens or encumbrances on it or others interested therein against loss or damage suffered by reason of (A) liens, encumbrances upon, defects in, or the unmarketability of the title to the property; or (B) the invalidity or unenforceability of liens or encumbrances on the property; (7) title insurance company means a domestic company organized under the provisions of this title for the purpose of carrying on the business of title insurance, or any foreign title insurance company issued a certificate of authority to transact a title insurance business in this state and any title insurance company having the power and authority to transact a title insurance business within this state; (8) title insurance limited producer means a person, firm, association, trust, corporation, cooperative, joint-stock company, or other legal entity authorized in writing by a title insurance company to solicit title insurance, collect premiums, determine insurability in accordance with the underwriting rules and standards prescribed by the title insurance company that the licensee represents, and issue policies in its behalf.
This chapter applies only to domestic stock insurers and domestic mutual insurers transacting, or proposing to transact, insurance on the cash premium or legal reserve plan, except that AS 21.69.280 and 21.69.460 also apply to foreign and alien insurers.
The applicable laws of this state as to domestic corporations formed for profit apply to domestic stock insurers and domestic mutual insurers, except where in conflict with the express provisions of this title and the reasonable implications of the provisions.
(a) This section applies to stock and mutual insurers incorporated in this state after July 1, 1966. (b) Five or more individuals, none of whom are less than 21 years of age, may incorporate a stock insurer; 10 or more individuals may incorporate a mutual insurer. At least a majority of the incorporators shall be citizens of the United States. At least a majority of the incorporators shall be residents of this state. (c) The incorporators shall execute articles of incorporation in triplicate and acknowledge their execution in the same manner as provided by law for the acknowledgment of deeds. The articles of incorporation must state the purpose for which the corporation is formed and must show (1) the name of the corporation; if a mutual, the word mutual must be a part of the name; an alternative name or names may be specified for use in jurisdictions in which conflict of name with that of another insurer or organization might otherwise prevent the corporation from being authorized to transact insurance therein; (2) the duration of its existence, which may be perpetual; (3) the kinds of insurance, as defined in this title, that the corporation is formed to transact; (4) if a stock corporation, its authorized capital stock, the number of shares of common stock into which divided, the par value of each share, which par value shall be at least $1; shares without par value, or other than one class of voting common stock, may not be authorized; the articles of incorporation may limit or deny present or future stockholders pre-emptive or preferential rights to acquire additional issues of the stock, or bonds, debentures, or other obligations convertible into stock, of the corporation, subject to the laws of this state fixing the required representation and proportion of outstanding capital stock required to be represented and voted, for specified action, at any and all corporate meetings, elections, votes, or consent proceedings; (5) if a stock corporation, the extent, if any, to which shares of its stock are subject to assessment; (6) if a stock corporation, the number of shares subscribed, if any, by each incorporator; (7) if a mutual corporation, the maximum contingent liability of its members, other than as to nonassessable policies, for payment of loses and expenses incurred; the liability shall be stated in the articles of incorporation, but may not be less than one or more than six times the premium for the member's policy at the annual premium rate for a term of one year; (8) the minimum, not less than five, and the maximum, not more than 21, number of directors who constitute the board of directors and conduct the affairs of the corporation; also, the names, addresses and terms of the members of the initial board of directors; the term of office of initial directors shall be for not more than one year after the date of incorporation; (9) the judicial district or other political subdivision within the judicial district, in which its principal office or principal place of business is to be located in this state; (10) other provisions, not inconsistent with law, considered appropriate by the incorporators; (11) the name and residence address of each incorporator, and the citizenship of each incorporator who is not a citizen of the United States.
(a) The incorporators of a proposed domestic insurer shall deliver the triplicate originals of the articles of incorporation to the director together with the filing fees set under AS 21.06.250. (b) When the articles of incorporation have been approved by the director, the director shall endorse the approval upon each set of the articles; except, that if the director finds that the proposed insurer would not be eligible for a certificate of authority under AS 21.09.100, the director shall refuse to approve the articles of incorporation, and shall return them to the proposed incorporators together with a written statement of the reasons for the refusal. If approved by the director, the director shall then forward the articles of incorporation, endorsed with the approval, to the incorporators. The incorporators shall immediately file one set of the articles of incorporation with the commissioner of commerce, community, and economic development, one set with the director bearing the certification of the commissioner, and the remaining set of articles shall be made a part of the corporation's record. (c) If the director finds that the proposed articles of incorporation do not comply with law, the director shall refuse to approve them, and shall return the triplicate sets to the incorporators, together with a written statement of the reasons for the refusal to approve. (d) The corporation shall have legal existence upon the issuance of the certificate of incorporation by the commissioner and the completion of the filings referred to in (b) of this section, but it may not transact business as an insurer until it has qualified for and received from the director a certificate of authority as provided in this title. (e) A copy of the certificate of incorporation, certified by the commissioner, shall be admissible in all the courts of this state as prima facie evidence of incorporation.
(a) A domestic stock insurer may amend its articles of incorporation for any lawful purpose by written authorization of the holders of a majority of the voting power of its outstanding capital stock or by affirmative vote of a majority voting at a lawful meeting of stockholders of which the notice given to stockholders included due notice of the proposal to amend. (b) A domestic mutual insurer formed after July 1, 1966, may amend its articles of incorporation for any lawful purpose by affirmative vote of a majority of those of its members present or represented by proxy at a lawful meeting of its members of which the notice given members included notice of the proposal to amend. (c) Upon adoption of an amendment the insurer shall make in triplicate under its corporate seal a certificate, sometimes referred to as articles of amendment, setting out the amendment and the date and manner of its adoption, which certificate shall be executed by the insurer's president or vice-president and secretary or assistant secretary and acknowledged by them before an officer authorized by law to take acknowledgements of deeds. The insurer shall deliver to the director the triplicate originals of the certificate, together with a filing fee set under AS 21.06.250. If the director finds that the certificate and amendments comply with law, the director shall endorse approval upon each of the triplicate originals and return them to the insurer. The insurer shall immediately file one set of the endorsed articles of amendment with the commissioner of commerce, community, and economic development, one set with the director bearing the certification of the commissioner, and retain the remaining set in the corporate records. The amendment shall be effective when the filings have been completed. (d) If the director finds that the proposed amendment or certificate does not comply with the law, the director shall not approve it, and shall return the triplicate certificate of amendment to the insurer together with a written statement of reasons for nonapproval. The filing fee is not returnable. (e) If an amendment of articles of incorporation would reduce the authorized capital stock of a stock insurer below the amount then outstanding, the director may not approve the amendment if there is reason to believe that the interests of policyholders or creditors of the insurer would be materially prejudiced by the reduction. If a reduction of capital stock is effectuated the insurer may require return of the original certificates of stock held by each stockholder for exchange for new certificates for the number of shares the stockholder is then entitled to in the proportion that the reduced capital bears to the amount of capital stock outstanding as of immediately before the effective date of the reduction.
(a) A person forming or proposing to form in this state an insurer, or insurance holding corporation, or stock corporation to finance an insurer or insurance production therefor, or corporation to manage an insurer, or corporation to be attorney-in-fact for a reciprocal insurer, or a syndicate for any of these purposes, may not advertise, or solicit or receive any funds, agreement, stock subscription, or membership on account thereof unless the person has applied for and has received from the director a solicitation permit. (b) A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have violated this section is subject to a civil penalty of not more than $25,000.
To apply for a solicitation permit the person shall (1) file with the director a request showing (A) the name, type, and purpose of insurer, corporation, or syndicate proposed to be formed; (B) the names, addresses, and business records of each person associated or to be associated in the formation of the proposed insurer, corporation, or syndicate; (C) the full disclosure of the terms of all understandings and agreements existing or proposed among persons so associated relative to the proposed insurer, corporation, or syndicate, or its formation; (D) the plan according to which solicitations are to be made; (E) additional information that the director may reasonably require; (2) file with the director (A) the original and copies in triplicate of the proposed articles of incorporation or syndicate agreement; or, if the proposed insurer is a reciprocal, original and duplicate of the proposed subscriber's agreement and attorney-in-fact agreement; (B) the original and duplicate copy of proposed bylaws; (C) a copy of the security proposed to be issued and copy of the application or subscription agreement therefor; (D) a copy of the insurance contract proposed to be offered and copy of the application therefor; (E) a copy of the prospectus, advertising, or literature proposed to be used; (F) a copy of the proposed form of escrow agreement required; (3) deposit with the director the fees required by law to be paid for the application, for filing of the articles of incorporation of an insurer, for filing the subscribers' agreement and attorney-in-fact agreement if the proposed insurer is a reciprocal, for the solicitation permit, if granted, and for filing articles of incorporation with the commissioner.
(a) The director shall expeditiously examine the application for a solicitation permit and make an investigation if considered necessary. If the director finds that (1) the application is complete; (2) the documents filed with it are equitable in terms and proper in form; and (3) the agreements made or proposed are equitable to present and future shareholders, subscribers, members, or policyholders, the director shall give notice to the applicant that the director will issue a solicitation permit, stating the terms to be contained in it, upon the filing of the bond required by AS 21.69.140. (b) If the director does not so find, or if the director finds that any of the persons named in the application as being associated or to be associated in the formation of the insurer, corporation, or syndicate are untrustworthy, the director shall give notice to the applicant that the permit will not be granted, stating the grounds therefor, and shall refund to the applicant all sums deposited except the application fee.
Upon the filing of the bond required by AS 21.69.140 after notice by the director, the director shall (1) file the articles of incorporation of the proposed incorporated insurer or other corporation with the commissioner; (2) issue to the applicant a solicitation permit.
Every solicitation permit issued by the director must (1) be for a period of not over two years, subject to the right of the director to grant a reasonable extension for good cause; (2) state the securities for which subscriptions are to be solicited, the number, classes, par value, and selling price thereof, or identify the insurance contract for which applications and advance premiums or deposits are to be solicited; (3) limit the portion of funds received on account of stock or syndicate subscriptions, if any are proposed to be taken, which may be used for promotion and organization expenses to an amount the director considers adequate, but in no event to exceed 15 percent of the funds as and when actually received; (4) if to be a mutual or reciprocal insurer, limit the portion of funds received on account of applications for insurance that may be used for promotion or organization expenses to a reasonable commission upon the funds, giving consideration to the kind of insurance and policy involved and to the costs incurred by insurers generally in the production of similar business, and provide that no commission shall be considered to be earned or be paid until the insurer has received its certificate of authority and the policies applied for and upon which the commission is to be based, have been actually issued and delivered; (5) contain other information required by this chapter or reasonable conditions relative to accounting and reports or otherwise that the director considers necessary.
The granting of a solicitation permit is permissive only and does not constitute an endorsement by the director of any person or thing related to the proposed insurer, corporation, or syndicate and the existence of the permit may not be advertised or used as an inducement in a solicitation. The substance of this section in bold faced type not less than 10 point shall be printed at the top of each solicitation permit.
Solicitation for sale of securities to members of the public under a solicitation permit shall be made only by individuals licensed under the provisions of the securities act.
(a) The director may, for cause, modify a solicitation permit, or may, after a hearing, revoke a solicitation permit for violation of a provision of this title, or of the terms of the permit, or of a proper order of the director, or for misrepresentation. (b) The director shall revoke a solicitation permit if requested in writing by a majority of the syndicate members, or by a majority of the incorporators and two-thirds of the subscribers to stock or applicants for insurance in the proposed incorporated insurer or corporation, or if the director is requested by a majority of the subscribers of a proposed reciprocal insurer.
(a) Except as provided in AS 21.69.230, the director may not issue a solicitation permit until the person applying for it files with the director a corporate surety bond in the penalty of $10,000, in favor of the state and for the use and benefit of the state and of subscribers and creditors of the proposed organization. (b) The bond shall be conditioned upon the payment of costs incurred by the state in the event of a legal proceeding for liquidation or dissolution of the proposed organization before completion of organization or if a certificate of authority is not granted; and upon a full accounting for funds received until the proposed insurer has been granted its certificate of authority, or until the proposed corporation or syndicate has completed its organization as defined in the solicitation permit. (c) In lieu of filing the bond, the person may deposit with the director $10,000 in cash or in United States government bonds at par value, to be held in trust upon the same conditions as required for the bond. (d) The director may waive the requirement for a bond or deposit in lieu of a bond if the permit provides that (1) the proposed securities are to be distributed solely and finally to those few persons who are the active promoters intimate to the formation of the insurer, or other corporation or syndicate; or (2) the securities are to be issued in connection with subsequent financing as provided in AS 21.69.200. (e) A bond filed or deposit or remaining portion of a bond held under this section shall be released and discharged upon settlement or termination of all liabilities against it.
(a) All funds received under a solicitation permit shall be deposited and held in escrow in a bond or trust company under an agreement approved by the director. Funds deposited may not be withdrawn, except (1) for the payment of promotion and organization expenses as authorized by the solicitation permit; (2) for the purpose of making a deposit with the director required for the issuance of a certificate of authority to an insurer; (3) if the proposed organization is not to be an insurer, upon completion of payments on stock or syndicate subscriptions made under the solicitation permit and deposit or appropriation of the funds to the purposes specified in the solicitation permit; or (4) for making refunds as provided in AS 21.69.190. (b) When the director has issued a certificate of authority to an insurer the funds remaining in escrow for its account shall be released to the insurer.
(a) The incorporators of an insurer or other corporation, or the persons proposing to form a reciprocal insurer, or a syndicate, shall be jointly and severally liable for its debts or liabilities until it has secured a certificate of authority, if an insurer, or has completed its organization if a corporation other than an insurer or a syndicate. (b) Any portion of funds received on account of stock or syndicate subscriptions which is allowed under the solicitation permit, may be applied concurrently toward the payment of promotion and organization expense theretofore incurred.
(a) A proposed stock insurer, corporation, or syndicate may not issue a share of stock or participation agreement except for payment in cash or in securities eligible for investment of funds of insurers. Shares or an agreement may not be issued until all subscriptions received under the solicitation permit have been fully paid, or, if an insurer, until a certificate of authority has been issued to it. (b) Every subscription contract to shares of a stock insurer or other corporation calling for payment in installments, together with all amounts paid, may be forfeited at the option of the corporation, upon failure to make good a delinquency in an installment upon not less than 45 days notice in writing, and every such contract must so provide.
All applications for insurance obtained in forming a mutual or reciprocal insurer must provide that (1) issuance of the policy is contingent upon completion of organization of the insurer and issuance to it of a certificate of authority; (2) the prepaid premium or deposit will be refunded in full to the applicant if the organization is not completed and certificate of authority issued before the solicitation permit's date of expiration; (3) the agreement for insurance is not effective until a policy has been issued under it.
The director shall withdraw all funds held in escrow and refund to subscribers or applicants all sums paid in on stock or syndicate subscriptions, less that part of the sums paid in on subscriptions as has been allowed and used for promotion and organization expenses, and all sums paid in on insurance applications, and shall dissolve the proposed insurer, corporation or syndicate if (1) the proposed insurer, corporation, or syndicate fails to complete its organization and obtain full payment for subscriptions and applications, and, if an insurer, it fails to secure its certificate of authority, all before expiration of the solicitation permit; or (2) the director revokes the solicitation permit.
(a) A domestic insurer, or insurance holding corporation, or stock corporation for financing operations of a mutual insurer, or attorney-in-fact corporation of a reciprocal insurer, after (1) it has received a certificate of authority, if an insurer; or (2) it has completed its initial organization and financing if a corporation other than an insurer, may not solicit or receive funds in exchange for a new issue of its corporate securities, other than through a stock dividend, until it has applied to the director for, and has been granted, a solicitation permit. (b) The director shall issue a permit unless the director finds that (1) the funds proposed to be secured are excessive in amount for the purpose intended; (2) the proposed securities or the manner of their distribution are inequitable; or (3) the issuance of the securities would jeopardize the interests of policyholders or the holders of other securities of the insurer or corporation. (c) A solicitation permit granted by the director shall be for the duration, and must contain the terms and be issued upon the conditions that the director may reasonably specify or require.
A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have knowingly exhibited, with intent to deceive, a false account, document, or advertisement, relative to the affairs of an insurer, or of a corporation or syndicate of the kind enumerated in AS 21.69.060, formed or proposed to be formed, is subject to a civil penalty of not more than $25,000.
(a) When newly organized, a domestic mutual insurer may be authorized to transact any one of the kinds of insurance listed in the schedule contained in (b) of this section. (b) When applying for an original certificate of authority, the insurer must be otherwise qualified under this title, and must have received and accepted bona fide applications as to substantial insurable subjects for insurance coverage of a substantial character of the kind of insurance proposed to be transacted, must have collected in cash the full premium at a rate not less than that usually charged by stock insurers for comparable coverages, must have surplus funds on hand and deposited as of the date the insurance coverages are to become effective, or, in lieu of the applications, premiums, and surplus, may deposit surplus, all in accordance with that part of the following schedule that applies to the one kind of insurance the insurer proposes to transact:(A)(B)(C)(D) Kind of InsuranceMinimum No. of applicants AcceptedMinimum No. of Subjects CoveredMinimum Premium CollectedLife (1)500500annualHealth (2)500500quarterlyProperty (3)100250annualCasualty (4)250500annualWith Workers'Compensation2501,500quarterlyMarine, WetMarine, andTransportation5050annual(E)(F)(G)(H) Minimum Amount of Insurance Each SubjectMaximum Amount of Insurance Subject(5)Minimum Surplus Funds Deposited(6)Deposit of Surplus in Lieu of(6)$1,000$ 2,500$ 800,000$ 800,000$ 10$ 25$ 800,000$ 800,000(weekly(weeklyindem.)indem.)$1,000$ 3,000$ 600,000$ 600,000$1,000$10,000$1,000,000$1,000,000$1,000$10,000$1,000,000$1,000,000$1,000$25,000$1,000,000$1,000,000 (c) The following provisos are respectively applicable to the schedule in (b) of this section and provisions as indicated by like numerals appearing in the schedule: (1) group insurance or term policies for terms of less than 10 years may not be included; (2) group, blanket, or family plans of insurance may not be included; in lieu of weekly indemnity a like premium value in medical, surgical and hospital benefits may be provided; any accidental death or dismemberment benefit provided may not exceed $2,500; (3) only insurance of the owner's interest in real property may be included; (4) must include insurance of legal liability for bodily injury and property damage, to which the maximum and minimum insured amounts apply; (5) the maximums provided for in column (F) are net of applicable reinsurance; (6) the deposit of surplus in the amount specified in columns (G) and (H) must thereafter be maintained unimpaired; the deposit is subject to the provisions of AS 21.24.
(a) Before soliciting applications for insurance required under AS 21.69.220 as qualification for the original certificate of authority, the incorporators of the proposed insurer shall file with the director a corporate surety bond in the penalty of $20,000, in favor of the state and for the use and benefit of the state and of applicant members and creditors of the corporation. The bond shall be conditioned as follows: (1) for the prompt return to applicant members of all premiums collected in advance; (2) for payment of all indebtedness of the corporation; (3) for payment of costs incurred by the state in event of legal proceedings for liquidation or dissolution of the corporation, all in the event the corporation fails to complete its organization and secure a certificate of authority within one year after the date of its certificate of incorporation. (b) In lieu of the bond, the incorporators may deposit with the director $20,000 in cash or United States government bonds, negotiable and payable to the bearer, with a market value at all times of not less than $20,000, to be held in trust upon the same conditions as required for the bond. (c) The bond filed or deposit or remaining portion thereof held under this section shall be released and discharged upon settlement and termination of all liabilities against it.
(a) Upon receipt of the director's approval of the bond or deposit as provided in AS 21.69.230, the directors and officers of the proposed domestic mutual insurer may commence solicitation of the requisite applications for insurance policies which they may accept, and may receive deposits of premiums on them. (b) The applications must be in writing signed by the applicant, covering subjects of insurance resident, located, or to be performed in this state. (c) The applications must provide that (1) issuance of the policy is contingent upon the insurer qualifying for and receiving a certificate of authority; (2) no insurance is in effect unless and until the certificate of authority has been issued; (3) the prepaid premium or deposit, and membership or policy fee, if any, shall be refunded in full to the applicant if organization is not completed and the certificate of authority is not issued and received by the insurer before a specified reasonable date which date shall be not later than one year after the date of the certificate of incorporation. (d) All qualifying premiums collected shall be in cash. (e) Solicitation for qualifying applicants for insurance shall be by licensed agents of the corporation, and the director shall, upon the corporation's application, issue temporary agent's licenses expiring on the date specified under (c)(3) of this section to individuals qualified for a resident agent's license except as to the taking or passing of an examination. The director may suspend or revoke a license for any of the causes and under the same procedures applicable to suspension or revocation of licenses of agents in general under AS 21.27.
(a) All sums collected by a domestic mutual corporation as premiums or fees on qualifying applications for insurance shall be deposited in trust in a bank or trust company in this state under a written trust agreement consistent with this section and AS 21.69.240(c)(3). The corporation shall file an executed copy of the trust agreement with the director. (b) Upon issuance to the corporation of a certificate of authority as an insurer for the kind of insurance for which the applications were solicited, all funds so held in trust shall become the funds of the insurer, and the insurer, shall thereafter in due course issue and deliver its policies for which premiums had been paid and accepted. The insurance provided by the policies shall be effective as of the date of the certificate of authority or thereafter as provided by the respective policies.
If the proposed domestic insurer fails to complete its organization and to secure its original certificate of authority within one year from and after the date of its certificate of incorporation, its corporate powers shall cease, and the director shall return or cause to be returned to the persons entitled thereto all advance deposits or payments of premiums held in trust under AS 21.69.250.
A domestic mutual insurer, after being authorized to transact one kind of insurance, may be authorized by the director to transact the additional kinds of insurance that are permitted under AS 21.09.060 while otherwise in compliance with this title and while maintaining unimpaired surplus funds in an amount not less than the amount of paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance, subject further to the additional expendable surplus requirements of AS 21.09.080 applicable to such a stock insurer.
(a) Each policyholder of a domestic mutual insurer, other than of a reinsurance contract, is a member of the insurer with all rights and obligations of the membership, and the policy must so specify. (b) A person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee, or fiduciary may be a member of a domestic, foreign, or alien mutual insurer. An officer, stockholder, trustee, or legal representative of any such corporation, board, association, or estate may be recognized as acting for or on its behalf for the purpose of the membership, and is not personally liable upon a contract of insurance for acting in the representative capacity. (c) A domestic corporation may participate as a member of a mutual insurer as an incidental purpose for which the corporation is organized.
(a) A domestic mutual insurer shall have bylaws for the governing of its affairs. The initial board of directors of the insurer shall adopt original bylaws, subject to the approval of the insurer's members at the next succeeding meeting. The members shall have power to make, modify, and revoke bylaws. (b) The bylaws must provide (1) that each member is entitled to one vote upon each matter coming to a vote at meetings of members; or to more votes in accordance with a reasonable classification of members as set out in the bylaws and based upon the amount of insurance in force, number of policies held, or upon the amount of the premiums paid by the member, or upon other reasonable factors; a member shall have the right to vote in person or by a written proxy; a proxy may not be made irrevocable or for longer than a reasonable period of time; (2) for election of directors by the members; and the number, qualifications, terms of office, and powers of directors; (3) the time, notice, quorum, and conduct of annual and special meetings of members and voting at meetings; the bylaws may provide that the annual meeting shall be held at a place, date, and time to be set out in the policy and without giving other notice of the meeting; (4) the number, designation, election, terms, and powers and duties of the respective corporate officers; (5) for deposit, custody, disbursement, and accounting as to corporate funds; (6) for other reasonable provisions customary, necessary, or convenient for the management or regulation of its corporate affairs. (c) A provision in the bylaws for determining a quorum of members at a meeting of less than a majority of all the insurer's members is not effective unless approved by the director. This subsection does not affect any other provision of law requiring a vote of a larger percentage of members for a specified purpose. (d) The insurer shall promptly file with the director a copy, certified by the insurer's secretary, of its bylaws and of every modification or addition. The director shall disapprove a bylaw provision considered by the director to be unlawful, unreasonable, inadequate, unfair, or detrimental to the proper interests or protection of the insurer's members or a class of them. The insurer may not, after receiving written notice of the disapproval and during the existence thereof, effectuate the disapproved bylaw provision.
A bylaw adopted at a meeting of stockholders of a domestic insurer may not be modified or revoked except by the stockholders at a subsequent meeting unless the bylaw as adopted or amended by the stockholders grants authority to the board of directors to revoke or modify bylaw provisions; but the board of directors may not revoke or modify a bylaw relating to the qualifications, election, terms, or compensation of directors, or to the calling or notice of meetings of stockholders. A revocation or modification of bylaws made by the directors under this provision shall be presented at the next meeting of stockholders for the information of the stockholders.
(a) Meetings of stockholders or members of a domestic insurer shall be held in the city or town of its principal office or place of business. The meetings may be held, for good cause, in another location upon approval of the director. (b) A meeting of stockholders or members may not amend the insurer's articles of incorporation unless the proposal to amend was included in the notice of the meeting. (c) Each insurer shall, during the first six months of each calendar year, hold the annual meeting of its stockholders or members to fill vacancies existing or occurring in the board of directors, receive and consider reports of the insurer's officers as to its affairs, and transact other business that may properly be brought before it. The director may approve a later date for the annual meeting upon written request by the insurer and with good cause shown. The request for a later annual meeting date shall be made in writing to the director at least 30 days before the end of the six-month requirement. Not less than 20 days' notice shall be given of the meeting in the manner provided in the bylaws, except where notice of the annual meeting of a mutual insurer is contained in its policies. (d) Special meetings of the stockholders or members may be called at any time for any purpose by the board of directors upon not less than 10 days' notice as provided in the bylaws. The notice shall state the purpose of the meeting, and no business may be transacted at the meeting if notice was not given. (e) If more than 15 months are allowed to elapse without an annual stockholders' or members' meeting being held, a stockholder or member may call a meeting to be held. At any time, upon written request of a director, or of stockholders or members holding in the aggregate one-fifth of the voting power of all stockholders or members, it shall be the duty of the secretary to call a special meeting of stockholders or members to be held at the time the secretary may fix, not less than 10 or more than 30 days after the receipt of the request. If the secretary fails to issue the call, the director, stockholders, or members making the request may do so. (f) A stockholders' or members' meeting can be organized for the transaction of business whenever a quorum is present. Except as otherwise provided by law or the articles of incorporation, (1) the presence, in person or by proxy, of the holders of a majority of the voting power of all stockholders or of all members constitutes a quorum; (2) the stockholders or members present at a meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders or members to leave less than a quorum; (3) if a necessary officer fails to attend the meeting, a stockholder or member present may be elected to act temporarily in lieu of the absent officer; (4) if a meeting cannot be organized because a quorum has not attended, those present may adjourn the meeting to a time they may determine, but if a meeting was called for the election of a director the adjournment must be to the next day. Those who attend the second of the adjourned meetings, although less than a quorum, constitute a quorum for the purpose of electing a director; (5) an annual or special meeting of stockholders or members may be adjourned to another date without new notice being given.
The director shall adopt regulations concerning proxies, consents and authorizations in respect to securities issued by domestic insurance companies. The regulations adopted shall substantially conform to the recommendations of the National Association of Insurance Commissioners.
The director shall adopt regulations regarding the conduct of meetings of shareholders and members of an insurer and the purchase, sale, and bartering of votes and proxies.
(a) The affairs of every domestic insurer shall be managed by the number of directors fixed in the insurer's bylaws, which shall not be less than five or more than 21 directors. (b) Directors must be elected at the time and place, and for the terms, not exceeding three years, provided in a domestic insurer's bylaws. Unless the bylaws provide otherwise, a director is not required to be a member or stockholder of the insurer. (c) The term of a director extends until a successor has been elected and has qualified.
The bylaws of a domestic stock life insurer may provide a plan for its policyholders to participate in the election of its directors.
(a) The president, secretary, and treasurer of a mutual insurer shall each file with the director and thereafter maintain in force as long as the person is an officer, a fidelity bond in the sum of $10,000 issued by an authorized corporate surety in favor of the insurer. In lieu of individual bonds, all these officers may be covered under a blanket bond for the same respective amounts; the blanket bond shall be filed with the director. (b) The premium for the bond shall be payable by the insurer. (c) A bond is not subject to cancellation except upon written notice to both the insurer and the director, delivered not less than 30 days in advance of the effective date of the cancellation. (d) The insurer shall provide for the bonding by authorized corporate surety of all other officers in any way responsible for the handling of the funds of the insurer. (e) This section does not limit the amount of bonded protection which the insurer may carry as to any officer.
(a) An officer or director, or a member of a committee or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds may not deposit or invest the funds except in the insurer's corporate name; may not borrow the funds of the insurer; may not be pecuniarily interested in a loan, pledge of deposit, security, investment, sale, purchase, exchange, reinsurance, or other similar transaction or property of the insurer except as a stockholder or member; and may not take or receive to personal use a fee, brokerage, commission, gift, or other consideration for or on account of a transaction made by or on behalf of the insurer. (b) An insurer may not guarantee a financial obligation of any of its officers or directors. (c) This section does not prohibit a director or officer, or member of a committee or employee from becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders. (d) The director may, by regulations from time to time, define and permit additional exceptions to the prohibition contained in (a) of this section solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer, or to a corporation or firm in which a director is interested, for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of the director or the corporation or firm.
(a) A domestic insurer may not make a contract granting a person or permitting a person to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with and approved by the director. The contract shall be considered approved unless disapproved by the director within 20 days after date of filing, subject to a reasonable extension of time that the director may require by notice given within the 20 days. A disapproval shall be delivered to the insurer in writing, stating the grounds for it. (b) The director shall disapprove a contract upon a finding that it (1) subjects the insurer to excessive charges; (2) is to extend for an unreasonable length of time; (3) does not contain fair and adequate standards of performance; or (4) contains other inequitable provision or provisions that impair the proper interests of stockholders or members of the insurer.
(a) Each domestic insurer shall have and maintain a place of business in this state, and shall keep in this state and in its principal place of business a complete record of its assets, transactions, and affairs in accordance with the methods and systems that are customary or suitable as to the kind or kinds of insurance transacted. (b) A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have removed or attempted to remove any records from the place where they are required to be kept under (a) of this section with the intent to wrongfully remove them, or to have concealed or attempted to conceal them from the director, is subject to a civil penalty of not more than $25,000. If a domestic insurer violates a provision of this section the director may institute delinquency proceedings against the insurer under the provisions of AS 21.78. (c) [Repealed,  42 ch 14 SLA 1987.] (d) [Repealed,  64 ch 41 SLA 2016.] (e) A domestic insurer may change the place of business or the location of records with the written approval of the director. The domestic insurer must submit a list of the records and the locations of the records that will be maintained outside of this state when requesting approval. Any change in place of business, the approved list of records, and the location of the records maintained outside of this state shall be submitted 60 days before relocation and is considered approved if not disapproved by the director within 30 days after receipt. The director shall approve the change in place of business or location of records outside of this state subject to the following standards: (1) the place of business is readily accessible by the general public by visit and telephone; (2) the records are immediately available to examiners representing the director in an examination; (3) the domestic insurer agrees to ship the records to the state if the insurer is ordered to do so under AS 21.78; (4) the location of the place of business and records outside of the state has a valid business purpose that is not satisfied by maintaining a place of business or the records in the state; (5) the list of records and location is of sufficient detail to readily locate specific records.
(a) An insurer may not make a disbursement of $100 or more, unless evidenced by a voucher correctly describing the consideration for the payment and supported by a check or receipt endorsed or signed by or on behalf of the person receiving the money. (b) If the disbursement is for services and reimbursement, the voucher must describe the services and expenditures. (c) If the disbursement is in connection with a matter pending before a legislature or public body or before a public official, the voucher must also correctly describe the nature of the matter and of the insurer's interest in it. (d) If a voucher cannot be obtained, the expenditure referred to in (a) of this section must be evidenced by an affidavit in which is set out the character and object of the expenditure and the reasons for not obtaining the voucher.
An insurer may not enter into an agreement to withhold from sale any of its property. Disposition of an insurer's property shall be at all times within the control of its board of directors.
(a) A domestic insurer may not knowingly solicit insurance business in a reciprocating state in which it is not then licensed as an authorized insurer. (b) This section does not prohibit advertising through publication and radio, television, and other broadcasts originating outside the reciprocating state, if the insurer is licensed in a majority of the states in which the advertising is disseminated, and if the advertising is not specifically directed to residents of the reciprocating state. (c) This section does not prohibit insurance covering persons or risks located in a reciprocating state under contract solicited and issued in states in which the insurer is then licensed. This section does not prohibit insurance effectuated by the insurer as an unauthorized insurer in accordance with the laws of the reciprocating state. (d) The director shall suspend or revoke the certificate of authority of a domestic insurer found by the director, after a hearing, to have violated this section. (e) In this section a reciprocating state is one that imposes a similar prohibition upon insurers domiciled in that state.
(a) Each member of a domestic mutual insurer shall, except as provided with respect to nonassessable policies, have a contingent liability, pro rata and not one for another, for the discharge of its obligations, which contingent liability shall be expressed in the policy and be in the maximum amount that is specified in the insurer's articles of incorporation. (b) Termination of the policy of the member does not relieve the member of contingent liability for the member's proportion, if any, of the obligations of the insurer that accrued while the policy was in force. (c) Unrealized contingent liability of members does not constitute an asset of the insurer in a determination of its financial condition.
(a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it by this title for authority to transact the kinds of insurance being transacted and the deficiency is not cured from other sources, its directors shall levy an assessment only upon its members who held policies providing for contingent liability at any time within the 12 months preceding the date notice of the assessment was mailed to them, and the members shall be liable to the insurer for the amount assessed. (b) The assessment shall be for the amount required to cure the deficiency and to provide a reasonable amount of working funds above the minimum amount of surplus, but the working funds so provided may not exceed five percent of the insurer's liabilities as of the date as on which the amount of the deficiency was determined. (c) In levying an assessment upon a policy providing for contingent liability, the assessment shall be computed on the basis of the premiums earned on the policy during the period to which the assessment relates. (d) A member may not have an offset against an assessment for which the member is liable, on account of a claim for unearned premium or loss payable. (e) As to life insurance, any part of the assessment upon a member that remains unpaid following notice of assessment, demand for payment, and lapse of a reasonable waiting period as specified in the notice, may, if approved by the director as being in the best interests of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of the member.
(a) An assessment made by an insurer under AS 21.69.440 or 21.69.540 shall be considered to be prima facie correct. The amount of the assessment to be paid by each member as determined by the insurer shall be considered to be likewise prima facie correct. (b) The insurer shall notify each member of the amount of the assessment to be paid by written notice mailed to the address of the member last of record with the insurer. Failure of the member to receive the notice so mailed, within the time specified for the payment of the assessment or at all, is no defense in an action to collect the assessment. (c) If a member fails to pay the assessment within the period specified in the notice, which period may not be less than 20 days after mailing, the insurer may institute suit to collect it.
(a) When possessing surplus funds in an amount not less than the paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance, a domestic mutual insurer may, upon receipt of the director's order so authorizing, extinguish the contingent liability of its members as to all its policies in force and may omit provisions imposing contingent liability in all its policies currently issued. (b) A foreign or alien mutual insurer may issue nonassessable policies to its members in this state under its article of incorporation and the laws of its domicile. (c) A policy of a domestic mutual insurer that, under the director's order, is without contingent liability and thereby nonassessable by its terms may not be subject to assessment for a debt or liability of the insurer.
The director shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if at any time the insurer's assets are less than the sum of its liabilities and the surplus required for the authority, or if the insurer, by resolution of its board of directors approved by a majority of its members, requests that the authority be revoked. During the absence of the authority the insurer may not issue a policy without including a provision for the contingent liability of the policyholder or renew a policy that is renewable at the option of the insurer without an endorsement providing for the contingent liability.
(a) If provided in its articles of incorporation, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, or unabsorbed portions of premiums, may classify policies issued on a participating and nonparticipating basis, and may determine the right to participate and the extent of participation of a class or classes of policies. The classification or determination shall be reasonable, and may not unfairly discriminate between policyholders within the same classifications. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged. A domestic insurer that, before July 1, 1966, has been issuing all or part of its policies on a participating basis without specific authorization in its articles of incorporation may continue to issue the policies on a basis not inconsistent with this section. (b) After the third policy year a dividend otherwise earned may not be made contingent upon the payment of renewal premium on the policy.
(a) A domestic stock insurer may not pay a cash dividend to stockholders except out of that part of its available surplus funds that is derived from realized net profits on its business. (b) A stock dividend may be paid out of any available surplus funds in excess of the aggregate amount of surplus loaned to the insurer under AS 21.69.520. (c) A dividend otherwise proper may be payable out of the insurer's earned surplus even though its total surplus is then less than the aggregate of its past contributed surplus resulting from issuance of its capital stock at a price in excess of the par value.
(a) The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds that represents net realized savings and net realized earnings in excess of the surplus required by law to be maintained. (b) A dividend otherwise proper may be payable out of the savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.
(a) A director of a domestic stock or mutual insurer determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have voted for or concurred in a declaration or payment of a dividend to stockholders or members other than as authorized under AS 21.69.490 or 21.69.500 is subject to a civil penalty of not more than $2,500 and is jointly and severally liable, together with other directors likewise voting for or concurring, for any loss sustained by the insurer. (b) A stockholder receiving an illegal dividend shall be liable in the amount of it to the insurer. (c) The director may revoke or suspend the certificate of authority of an insurer that has declared or paid an illegal dividend.
(a) Subject to the director's prior written approval, a domestic stock or mutual insurer may borrow money to defray the expenses of its organization or provide it with surplus funds upon a written agreement that the money is required to be repaid only out of the insurer's surplus in excess of that stipulated in the agreement. The agreement may provide for interest not exceeding six percent a year, which interest may or may not constitute a liability of the insurer as to its funds other than the excess of surplus, as stipulated in the agreement. A commission or promotion expense may not be paid in connection with the loan. (b) Money borrowed, together with the interest, if so stipulated in the agreement, may not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount stipulated in the agreement, or be the basis of any setoff; but until repaid financial statements filed or published by the insurer shall show as a footnote the amount then unpaid together with any interest accrued but unpaid. (c) The loan to a mutual insurer is subject to the director's approval. The insurer shall, in advance of the loan, file with the director a statement of the purpose of the loan and a copy of the proposed loan agreement. The loan and agreement shall be considered approved unless within 15 days after the date of the filing the insurer is notified of the director's disapproval and the reasons for it. The director shall disapprove a proposed loan or agreement upon a finding that the loan is unnecessary or excessive for the purpose intended, or that the terms of the loan agreement are not fair and equitable to the parties, and other similar lenders, if any, to the insurer, or that the information filed by the insurer is inadequate. (d) This section does not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, or to loans secured by pledge or mortgage of assets.
(a) If an insurer becomes impaired, the director shall determine the amount of deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of the notice. (b) The deficiency may be made good in cash or in assets eligible under AS 21.21 for the investment of the insurer's funds; or if a stock insurer, by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its certificate of authority to cover only the kind or kinds of insurance thereafter for which the insurer has sufficient surplus under this title.  (c) If the deficiency is not made good and proof filed with the director within the 60-day period, the insurer shall be considered insolvent and the director shall institute delinquency proceedings against it under AS 21.78; except that if the deficiency exists because of increased loss reserves required by the director, or because of disallowance by the director of certain assets or reduction of the value at which carried in the insurer's accounts, the director may, upon application and good cause shown, extend for not more than an additional 60 days the period within which the deficiency may be made good and the proof filed. 
(a) An insurer receiving the director's notice mentioned in AS 21.69.530(a) (1) if a stock insurer, by resolution of its board of directors and subject to limitations upon assessment contained in its articles of incorporation, may assess its stockholders for amounts necessary to cure the deficiency and provide the insurer with a reasonable amount of surplus in addition; if a stockholder fails to pay a lawful assessment after notice given to the stockholder in person or by advertisement in the time and manner approved by the director, the insurer may require the return of the original certificate of stock held by the stockholder, and issue a new certificate for the number of shares the stockholder may then be entitled to, upon the basis of the stockholder's proportionate interest in the amount of the insurer's capital stock as determined by the director to be remaining at the time of determination of amount of impairment under AS 21.69.530, after deducting from the proportionate interest the amount of the unpaid assessment; the insurer may pay for or reissue fractional shares under this subsection; (2) if a mutual insurer, shall levy an assessment upon members as provided for under AS 21.69.440; (b) Neither this section nor AS 21.69.530 prohibits the insurer from curing the deficiency through any lawful means other than those referred to in those sections.
The directors of the insurer shall be individually liable for losses incurred under policies issued by the insurer after expiration of the period provided in AS 21.69.530 for curing a deficiency of the insurer's capital stock or surplus and before the deficiency is cured.
A transfer of the stock of a domestic insurer made during the existence of an impairment of the insurer's capital does not release the stockholder making the transfer from liability as a stockholder of the insurer that accrued before the transfer.
(a) A stock insurer other than a title insurer may become a mutual insurer under the plan and procedure that may be approved by the director after a hearing. (b) The director may not approve a plan, procedure, or mutualization unless (1) it is equitable to stockholders and policyholders; (2) it is subject to approval by the holders of not less than three-fourths of the insurer's outstanding capital stock having voting rights and by not less than two-thirds of the insurer's policyholders who vote on the plan in person, by proxy, or by mail under the notice and procedure which may be approved by the director; (3) if a life insurer, the right to vote on it is limited to holders of policies other than term or group policies, and whose policies have been in force for more than one year; (4) mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value as determined by competent disinterested appraisers; (5) the plan provides for the purchase of the shares of a nonconsenting stockholder in the same manner and subject to the same applicable conditions as provided by the general corporation law of the state, as to rights of nonconsenting stockholders, with respect to consolidation or merger of private corporations; (6) the plan provides for definite conditions to be fulfilled by a designated early date upon which the mutualization will be considered effective; (7) the mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to enable it to continue successfully in business in the state in which it is then authorized to transact insurance, and for the kinds of insurance included in its certificates of authority in those states. (c) This section does not apply to mutualization ordered by a court to rehabilitate or reorganize an insurer under AS 21.78.
A mutual insurer may not be converted to a stock insurer.
(a) A domestic stock insurer may merge or consolidate with one or more domestic or foreign stock insurers authorized to transact insurance in this state, by complying with the applicable provisions of the statutes of this state governing the merger or consolidation of stock corporations formed for profit, but subject to (b) and (c) of this section. (b) A merger or consolidation may not be effectuated unless the plan and agreement for it have been filed with the director and approved in writing by the director after a hearing. The director shall give approval within a reasonable time after the filing unless the director finds the plan or agreement (1) is contrary to law; (2) inequitable to the stockholders of a domestic insurer involved; or (3) would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere. (c) A director, officer, agent, or employee of an insurer party to the merger or consolidation may not receive a fee, commission, compensation, or other valuable consideration for aiding, promoting, or assisting therein except as set out in the plan or agreement. (d) If the director does not approve the plan or agreement the director shall so notify the insurer in writing specifying the reasons. (e) If a domestic insurer involved in the proposed merger or consolidation is authorized to transact insurance also in other states, the director may request the insurance commissioner, director of insurance, superintendent of insurance, or other similar public insurance supervisory official of the two other states in which the insurer has in force the larger amounts of insurance, to participate in the hearing provided for under (b) of this section, with full right to examine all witnesses and evidence and to offer to the director the pertinent information and suggestions they consider proper. (f) A plan or proposal through which a stock insurer proposes to acquire a controlling stock interest in another stock insurer through an exchange of stock of the first insurer, issued by the insurer for the purpose, for the controlling stock of the second insurer, is considered to be a plan or proposal of merger of the second insurer into the first insurer for the purposes of this section and is subject to the applicable provisions hereof.
(a) A domestic mutual insurer may not merge or consolidate with a stock insurer. (b) A domestic mutual insurer may merge or consolidate with another mutual insurer under the applicable procedures prescribed by the statutes of this state applying to corporations formed for profit, except as provided in this section. (c) The plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds of the members of each mutual insurer involved and voting in person or by proxy at a meeting called for the purpose after reasonable notice and under procedures that have been approved by the director. If a life insurer, the right to vote may be limited to members whose policies are other than term and group policies and have been in effect for more than one year. (d) A merger or consolidation may not be effectuated unless the plan and agreement for it have been filed with the director and approved by the director in writing after a hearing. The director shall give the approval within a reasonable time after the filing unless the director finds the plan or agreement (1) is inequitable to the policyholders of a domestic insurer involved; or (2) would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state and elsewhere. (e) If the director does not approve the plan or agreement the director shall notify the insurers in writing specifying the reasons. (f) AS 21.69.590(e) also applies to mergers and consolidations of mutual insurers.
(a) Notwithstanding (b) of this section, a domestic stock insurer may reinsure a portion or all of its insurance in force or a major class of its insurance with another insurer by a reinsurance agreement. A reinsurance agreement shall be filed with the director within 30 days after all parties have signed the agreement. A reinsurance agreement is designated as confidential for purposes of AS 21.06.060. (b) A domestic stock insurer may reinsure a portion or all of its insurance in force or a major class of its insurance with another insurer by an agreement of assumption reinsurance, but an agreement of assumption reinsurance is not effective unless filed with and approved in writing by the director after a hearing. (c) The director shall approve the agreement within a reasonable time after the filing unless the director finds that it is inequitable to the stockholders of the domestic insurer or would substantially reduce the protection or service to its policyholders. If the director does not approve the agreement, the director shall notify the insurer in writing specifying the reasons. (d) This section does not apply to a facultative reinsurance contract. In this subsection, facultative reinsurance contract means an agreement whereby individual risk is offered by an insurer for acceptance or rejection by a reinsurer. Under a facultative reinsurance contract, both parties are free to act in their own best interest, regardless of any prior contractual arrangement.
(a) A domestic mutual insurer may reinsure a portion or all of its business in force or a portion or all of a major class of its business with another insurer, stock or mutual, by a reinsurance agreement. A reinsurance agreement shall be filed with the director within 30 days after all parties have signed the agreement. The agreement filed with the director is designated as confidential for the purposes of AS 21.06.060. A domestic mutual insurer may reinsure a portion or all of its insurance in force or a major class of its insurance with another insurer by an agreement of assumption reinsurance. An agreement of assumption reinsurance is not effective unless filed with and approved in writing by the director after a hearing. (b) The director shall approve the agreement within a reasonable time after filing if the director finds it to be fair and equitable to each domestic insurer involved, and that the reinsurance, if effectuated, would not substantially reduce the protection or service to its policyholders. If the director does not approve, the director shall notify each insurer involved in writing specifying the reasons. (c) The plan and agreement for the reinsurance must be approved by a vote of not less than two-thirds of each domestic mutual insurer's members voting on the plan or agreement at meetings of members called for the purpose, after reasonable notice and under procedures that the director may approve. If a life insurer, the right to vote may be limited to members whose policies are other than term or group policies, and have been in effect for more than one year. (d) If the agreement is for reinsurance in a stock insurer of all or substantially all of the insurance in force of a mutual insurer, the agreement must provide for payment in cash to each member of the insurer entitled thereto of the member's equity in the business reinsured as determined under a fair formula approved by the director, as based upon the reserves, assets, whether or not admitted assets, and surplus, if any, of the mutual insurer to be taken over by the stock insurer. (e) A director, officer, agent, or employee of an insurer party to the reinsurance, or any other person, may not receive a fee, commission, or other valuable consideration for aiding, promoting, or assisting therein except as set out in the reinsurance agreement.
(a) Upon the liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shall be distributed to existing persons who were its members at any time within 36 months immediately preceding the date the liquidation was authorized or ordered, or date of last termination of the insurer's certificate of authority, whichever date is the earlier. (b) The distributive share of each member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of that member's membership bear to the aggregate of all premiums earned on the policies of all the members. The insurer may, and if a life insurer shall, make a reasonable classification of its policies held by the members, and a formula based upon the classification, for determining the equitable distributive share of each member. The classification and formula is subject to the approval of the director.
(a) The corporate charter of a corporation formed under the laws of this state more than three years before July 1, 1966, for the purpose of becoming an insurer, which corporation, within the three-year period, has not actively engaged in business as a domestic insurer under a certificate of authority issued to it by the director under laws then in force, is extinguished and nullified. (b) The corporate charter of any other corporation formed under the laws of this state for the purpose of becoming an insurer, and which corporation during any period of 36 consecutive months after July 1, 1966, is not actively engaged in business as a domestic insurer under a certificate of authority issued to it by the director under law currently in force, is automatically extinguished and nullified at the expiration of the 36-month period. (c) The period during which the corporation referred to in (b) of this section is the subject of delinquency proceedings under AS 21.78 shall not be counted as part of the 36-month period. (d) Upon merger or consolidation of a domestic insurer with another insurer under this chapter, the corporate charter of the merged or consolidated domestic insurer is automatically extinguished and nullified.
(a) An insurer organized under the laws of another state and admitted to do business in this state may become a domestic insurer of this state by complying with the requirements of this title relative to the organization and licensing of a domestic insurer and by designating its principal place of business at a place in this state. (b) A domestic insurer may, upon approval of the director, transfer its domicile to another state in which it is admitted to transact the business of insurance. Upon a transfer as described in this subsection, the insurer shall cease to be a domestic insurer of this state but shall be considered admitted to this state. The insurer shall meet the qualifications to remain admitted to this state for a period of three years or, if ordered by the director, a longer period. The director may approve a proposed transfer unless the transfer is not in the interest of the policyholders of the insurer or the insurance marketplace of this state. (c) Upon transfer of domestic status to or from this state, the certificate of authority, appointments under AS 21.27.100, rates, and other items that the director allows, and that are in existence at the time the insurer is licensed to transact the business of insurance in this state, shall continue in full force and effect and the insurer shall remain duly qualified to transact the business of insurance in this state. Outstanding policies of a transferring insurer shall remain in full force and effect and shall be endorsed with the new name of the company, its new location, and any other information the director may require. A transferring insurer shall notify the director of the details of the proposed transfer 30 days before the effective date of the transfer and shall promptly file any resulting amendments to corporate documents filed or required to be filed with the director. (d) A transfer of domestic status by merger, consolidation, or any other lawful method of combination must meet the requirements of AS 21.69.590 or 21.69.600. The certificate of authority, appointments under AS 21.27.100, rates, and other items that the director allows, and that are in existence at the time the insurer is licensed to transact the business of insurance in this state, shall continue in full force and effect, and the insurer shall remain duly qualified to transact the business of insurance in this state. Outstanding policies of a domestic insurer being merged, consolidated, or otherwise combined shall remain in full force and effect, and shall be endorsed with the new name of the company, its new location, and any other information the director may require. (e) An insurer that is transferring its domicile to this state shall file its revised policy forms for approval under AS 21.42. (f) A domestic insurer that is transferring its domicile to another state is not required to file policy forms at the time of transfer if the forms have already been approved under AS 21.42.
To voluntarily surrender the certificate of authority of a domestic insurer, a request shall be made to the director to extinguish the certificate of authority six months before the planned effective date of the extinguishment of the charter. Before the request is granted, the director shall conduct an examination under AS 21.06.120. The examination shall be completed within 12 months before the effective date of an extinguishment and all issues contained in the examination report must be resolved to the satisfaction of the director. Insurance business of the domestic insurer shall be cancelled or reinsured as required under AS 21.69.610 or 21.69.620.
The legislature declares that it is desirable for the general welfare and in particular for the welfare of insurance beneficiaries, policyholders, injured claimants, and others that the business of domestic insurers be continued notwithstanding the event of a national emergency. The specific purpose of AS 21.69.650 - 21.69.690 is to facilitate the continued operation of domestic insurers in the event that a national emergency is caused by an attack on the United States or by a nuclear, atomic, or other disaster which makes it impossible or impracticable for an insurer to conduct its business in strict accord with applicable provisions of law, its bylaws, or its charter.
The board of directors of a domestic insurer may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for the insurer, which shall be operative during a national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes, or of the insurer's charter, make any provision that may be reasonably necessary for the operation of the insurer during the period of the emergency.
If the board of directors of a domestic insurer has not adopted emergency bylaws, the following provisions become effective upon the occurrence of a national emergency: (1) Three directors constitute a quorum for the transaction of business at all meetings of the board. (2) A vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. (3) If there are no surviving directors, but at least three vice presidents of the insurer survive, the three vice presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and the powers that are granted herein or by subsequently enacted legislation. By a majority vote the emergency board of directors may elect other directors. If there are not at least three surviving vice presidents, the director of insurance or designated person exercising the powers of director of insurance shall appoint three persons as directors who shall possess all of the powers of the previous board of directors and the powers that are granted herein or by subsequently enacted legislation, and these persons by majority vote may elect other directors.
At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of a national emergency and in the event of the death or incapacity of the president, the secretary, or the treasurer of the insurer, the officers, or any of them, shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. The list may be on the basis of named persons or position titles, must establish the order of priority, and may prescribe the conditions under which the powers of the office shall be exercised.
At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of a national emergency the home office or principal place of business of the insurer shall be at the location named or described in the resolution. The resolution may provide for alternate locations and establish an order of preference.
A domestic stock insurer is an incorporated insurer with capital divided into shares and owned by its stockholders.
A domestic mutual insurer is an incorporated insurer without capital stock, and the governing body of which is elected by the policyholders.
(a) This chapter applies only to benevolent associations. (b) The provisions of this title do not apply to an association unless contained or referred to in this chapter.
(a) A benevolent association may not transact or be authorized to transact business in this state unless it lawfully had authority to transact business as an association immediately before July 1, 1966. (b) A new benevolent association may not be organized or formed in this state after July 1, 1966. (c) An association formed or existing under the laws of another state or jurisdiction may not be authorized to transact business in this state after July 1, 1966.
Each benevolent association shall promptly file with the director a copy, certified to by its president and secretary, of each of the following: (1) if incorporated, any amendment of articles of incorporation or of bylaws; (2) if not incorporated, any amendment of articles of association, of agreement, or of rules or agreements with its members; (3) any modification of its form of membership contracts.
(a) Each benevolent association shall be in charge of its officers, and may not have more than five officers. (b) The treasurer and any other officer having charge of funds of a benevolent association shall each be bonded in the amount of $5,000, executed to the state, joint and several, for the use and benefit of the members or beneficiaries of the association. Each bond shall be on file in the principal office and address of the association and a certified copy must be filed with the director.
Agents for a benevolent association may be appointed in accordance with AS 21.27, and shall be subject to the applicable provisions of that chapter, except as provided in AS 21.72.060. An agent may not be appointed if there are less than three officers in charge of the association.
No more than five officers of a benevolent association may act for the association without obtaining a license as an agent. The officers shall be subject to the jurisdiction of the director in the same manner as though they were licensed as agents under AS 21.27.
Every benevolent association shall issue a receipt or other evidence of payment to each person making a payment of any kind to the association.
Each benevolent association shall have at all times not less than 200 members in good standing.
(a) The total expenses of a benevolent association during a calendar year may not exceed the larger of: (1) 10 percent of the total amount received during the year, whether as assessments, dues, donations or by whatever name called, except fees collected for new memberships; or (2) $15 per death loss incurred during the year. (b) The association may, instead of providing for expenses as in (a) of this section, assess each of its members for expenses at an amount not to exceed $3 a calendar year, except that the assessment may not exceed $4 a year if a membership certificate includes within its protection a family group consisting of two or more persons. The proceeds of the assessments shall be placed in an expense fund out of which all of the expenses of the association for the year shall be paid. The association shall show the condition of the expense fund in its annual statement. (c) The association shall state in its annual statement whether the expenses to be shown in its next annual statement will be determined as in (a) of this section or whether the members will be assessed for the same as in (b) of this section. An association may not use both methods or a combination of both methods.
(a) Each completed proof of claim for death of a member of a benevolent association shall be assigned a number by the association in consecutive order of receipt for each calendar year. (b) Payment in full on final settlement of death benefits shall be made by the association to the legal heir or heirs, or the designated beneficiary or beneficiaries, within 20 days after the expiration date stated in the association's notice referred to in AS 21.72.110(a)(3).
(a) Within 30 days after a benevolent association receives a completed proof of claim for death of a member, it must mail to each of its members in good standing an assessment notice stating (1) the name, date, and place of death of the deceased member; (2) the number of the proof of death claim assigned by the association; (3) the amount of the assessment and the expiration date of the assessment payment; (4) the number of members in good standing to whom notices are being sent, as computed from the last completed assessment. (b) At the time of mailing the assessment notice required by (a) of this section, the association shall send a duplicate copy to the director for filing, together with information as to the mailing of the notice to members.
(a) In addition to compliance with AS 21.09.200, the annual statement of a benevolent association must exhibit the following items and facts: (1) the name and business address of the association; (2) the names and addresses of the officers of the association; (3) the number of membership contracts in force at the commencement of the year and the number of memberships in good standing at the close of the year for which the statement is made; this provision is also applicable to each subgroup or class, if any, of the association; (4) the number of death losses claimed; the number and total amount of death losses paid; the number of death claims compromised, denied, or resisted and reasons therefor; (5) the number of assessments in the association and in each subgroup or class, if any; the amount collected in each assessment; income to the benevolent association from all other sources; and all other fees, assessments, donations, of any kind or nature, except new membership fees from new members; (6) the expenses actually incurred during the year; debts unpaid at the commencement of the year; debts and obligations of any kind, not including death losses actually paid, incurred during the year; debts unpaid at the close of the year; a breakdown of expenses to show the amount paid in salaries or commissions, office expense, and other expenses, in those cases where members of the benevolent association are assessed for operating expenses of the association; (7) whether the association has complied with the provisions of AS 21.72.090 and 21.72.100; (8) the information required by AS 21.72.090. (b) Two officers of the association shall attest under oath to the truth of the facts contained in the annual statement. At least one of the officers must have charge of making up the statement. (c) A copy of the annual statement certified by the director must be filed on or before the first day of March each year by the association in the office of the magistrate in the judicial district in which the business office of the association is located.
The director may require a benevolent association to file quarterly financial statements as provided in AS 21.09.205. The statements must exhibit the items and facts required under AS 21.72.120(a).
(a) A corporation, association, or society, or by whatever name called, that issues a certificate, policy, membership agreement, or makes a promise or agreement with its members, whereby, upon the death of a member, money or other benefit, charity, aid, or relief is to be paid, provided, or rendered by the corporation, association, or society to the legal representatives of the member, or to the beneficiary designated by the member, which money, benefit, charity, aid, or relief is derived from voluntary donations, or from admission fees, dues, or assessments, or any of them collected or to be collected from the members, or members of a class therein, or interest or accretions, or accumulations; and if the money or other benefit, charity, aid, or relief, so realized, is applied to or accumulated for the uses and purposes herein specified, the uses of the corporation, association, or society, or the expenses of management and prosecution of its business, is considered to be a benevolent association for the purposes of this chapter. (b) The definition of benevolent association in (a) of this section does not apply to (1) burial or death benefits, annuities, endowments, or any other benefit payments of a legal reserve life or health insurer, or of a labor union, railroad brotherhood, or lodge having as a primary business the improvement of working conditions; (2) a ladies auxiliary to a labor union, railroad brotherhood, or lodge referred to in (1) of this subsection; or (3) the benevolent plans within fraternal orders if limited to members and if the plan is not the principal object for the formation or continuance of the fraternal order.
A member or member in good standing is an individual who must contribute to a benevolent association upon notice of assessment.
(a) A membership contract is a certificate, policy, membership agreement, by whatever name called, or a promise or agreement, of a benevolent association with any or all of its members, whereby money or other benefit, charity, aid, or relief is to be paid, provided, or rendered by the association upon the decease of a member to the legal representatives of the member, or to the beneficiary or beneficiaries designated by the member. (b) There shall be one contributing member for each membership contract, but a membership contract may cover more than one individual.
Officer is any of the individuals having supervision and control of a benevolent association, and engaging in the management and the prosecution of the business thereof, whether designated as officers, trustees, comptrollers, managers, or by whatever name called.
In addition to the provisions contained in the chapter, other chapters and provisions of this title shall apply to benevolent associations, to the extent applicable, as follows: (1) AS 21.03; (2) AS 21.06; (3) AS 21.09.010, 21.09.050, 21.09.100, and 21.09.130 - 21.09.190; (4) AS 21.09.247; (5) AS 21.18.010 and 21.18.030; (6) AS 21.36; (7) AS 21.42; (8) AS 21.69.370, 21.69.390, 21.69.400, 21.69.630, and 21.69.640; (9) AS 21.78.
(a) All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals. (b) Existing authorized reciprocal insurers shall, after July 1, 1966, comply with the provisions of this chapter, and shall make amendments to their subscribers' agreement, power of attorney, policies, and other documents and accounts and perform other acts that may be required for compliance.
(a) Except as provided in (c) of this section, a reciprocal insurer may, upon qualifying as provided for by this title, transact any kind or kinds of insurance defined by this title, other than life or title insurances. (b) The insurer may purchase reinsurance, and may grant reinsurance as to any kind of insurance it is authorized to transact. (c) The director shall establish by regulation the type of marine insurance that a reciprocal insurer may provide.
(a) A reciprocal insurer shall (1) have and use a business name; the name must include the word reciprocal or interinsurer or exchange or underwriters or underwriting or association; (2) sue and be sued in its own name. (b) In addition to the requirements of (a) of this section, a cooperative insurer organized under AS 21.75.300 - 21.75.330 shall include the word cooperative in its name.
(a) [Repealed,  223 ch 67 SLA 1992.] (b) The attorney-in-fact of a foreign or alien reciprocal insurer, that is authorized to transact insurance in this state, may not, by virtue of discharge of its duties as the attorney-in-fact with respect to the insurer's transactions in this state, be considered to be doing business in this state within the meaning of a law of this state applying to foreign firms or corporations.
(a) A person may not act in the capacity of attorney-in-fact for a subscriber regarding a subject that is resident, located, or to be performed in this state or for a reciprocal insurer licensed to do business in this state unless the person is licensed under this chapter. The director may adopt regulations that establish qualifications for being licensed as an attorney-in-fact. The attorney-in-fact for a reciprocal insurer is exempt from licensing under this title if the attorney-in-fact (1) is a wholly-owned subsidiary of the reciprocal; and (2) does not act as attorney-in-fact for another unaffiliated reciprocal insurer. (b) The director may not issue or renew a license under this chapter to a person, or to be exercised by a person, found by the director to be untrustworthy, incompetent, financially irresponsible, or who has not established to the satisfaction of the director that the person is qualified under this chapter. (c) To qualify for issuance or renewal of a license under this chapter, an applicant or licensee shall comply with this title and (1) be a trustworthy person; (2) have active working experience in administrative functions that, in the director's opinion, exhibits the ability to competently perform the administrative functions of an attorney-in-fact; (3) not have committed an act that is a cause for denial, nonrenewal, suspension, or revocation of a license in this state or another jurisdiction; (4) have and maintain a lawfully established place of business physically accessible to the public where the attorney-in-fact principally conducts transactions under the license in this state, or if for a foreign reciprocal, in the state of domicile; (5) disclose to the director all officers, directors, partners, principals, or managers and whether or not they are licensed in this state or another jurisdiction; (6) designate an officer, partner, or principal responsible for the firm's compliance with the insurance statutes and regulations of this state; (7) provide certified financial statements for the prior two years prepared by an independent certified public accountant that establish that the applicant is solvent, that the applicant's system of accounting, internal control, and procedure is operating effectively to provide reasonable assurance that money is promptly accounted for and paid to the person entitled to the money, and any other information that the director may require to review the current financial condition of the applicant; (8) provide to the director documents necessary to verify statements contained in or in connection with the application; and (9) notify the director within 30 days in writing by certified mail of a change in officer, director, partner, principal, or manager; place of business; mailing address; telephone number; suspension or revocation of an insurance license by another state or jurisdiction; or a conviction of a misdemeanor or felony of the attorney-in-fact, its officers, directors, partners, owners, or employees. (d) The director may adopt regulations establishing education requirements, experience requirements, or examination requirements for applicants or licensees under this chapter. (e) The director may require that an attorney-in-fact maintain an errors and omissions insurance policy acceptable to the director. (f) If the director finds that the applicant or licensee is qualified and that application, license, or renewal fees set under AS 21.06.250 have been paid, the director may issue or renew the license. (g) A license issued under this chapter shall be renewed each year by the attorney-in-fact when the annual statement is filed under AS 21.75.130. (h) An attorney-in-fact shall be subject to hearings and orders on violations; denial, nonrenewal, suspension, or revocation of license; penalties; and surrender of a license under the procedures of AS 21.27.405 - 21.27.460.
(a) A domestic reciprocal insurer formed in accordance with the provisions of this chapter shall have and maintain a surplus no less than an amount equal to the total of the capital and one-half of the surplus that would be required of a domestic stock insurer writing the same lines for which the reciprocal insurer seeks to be authorized. (b) A foreign reciprocal insurer shall have and maintain a surplus no less than an amount equal to the total capital and surplus that would be required of a domestic stock insurer writing the same lines for which the reciprocal seeks to be authorized. (c) A domestic reciprocal insurer formed under this chapter by and insuring only 10 or more municipalities shall (1) comply with (a) of this section or post a bond for an amount equal to the capital that would be required of a domestic stock insurer writing the same lines of insurance for which the reciprocal insurer seeks to be authorized; and (2) maintain a surplus of $250,000 in admitted assets or a surplus sufficient to operate the reciprocal insurer for one year, whichever is greater. (d) Notwithstanding (a) and (c) of this section, or AS 21.09.080, domestic reciprocal insurers duly licensed and capitalized on December 31, 1984, shall have and maintain the capital and surplus required at the date of their original license. (e) Notwithstanding (a) - (c) of this section, the director shall establish by regulation the level of surplus to be maintained by a reciprocal insurer providing marine insurance.
A cooperative insurer organized under AS 21.75.300 - 21.75.330, if it has otherwise complied with the applicable provisions of this chapter, may be authorized to transact insurance if it has and maintains surplus funds equal to one-half of the capital required for a domestic reciprocal insurer under AS 21.75.050(a) and such additional surplus as the director considers sufficient.
(a) Ten or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the director for a certificate of authority to transact insurance. (b) The proposed attorney-in-fact shall fulfill the requirements of and shall execute and file with the director when applying for a certificate of authority, a declaration setting out (1) the name of the insurer; (2) the location of the insurer's principal office, which shall be the same as that of the attorney-in-fact and shall be maintained in this state, and the mailing address, electronic mailing address, and telephone numbers; (3) the kinds of insurance proposed to be transacted; (4) the names and addresses of the original subscribers; (5) the designation and appointment of the proposed attorney-in-fact and a copy of the power of attorney; (6) the names and addresses of the officers and directors of the attorney-in-fact, if a corporation, or its members, if a firm; (7) the powers of the subscribers' advisory committee, and the names and terms of office of the members; (8) that all money paid to the reciprocal insurer shall, after deducting any sum payable to the attorney-in-fact, be held in the name of the insurer and for the purposes specified in the subscribers' agreement; (9) a copy of the subscribers' agreement; (10) a statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted and that the insurer has received from each subscriber the full premium or premium deposit required for the policy applied for, for a term of not less than six months at an adequate rate filed with and approved by the director; (11) a statement of the financial condition of the insurer, a schedule of its assets, and a statement that the surplus as required by AS 21.75.050 is on hand; (12) a copy of each policy, endorsement, and application form it then proposes to issue or use. (c) The declaration shall be acknowledged by the attorney-in-fact in the manner required for the acknowledgment of deeds. (d) The director may provide financial and technical assistance to persons who wish to establish a reciprocal insurer to provide marine insurance under this chapter. (e) The areas the director may assist the person with under (d) of this section include (1) preparing the documentation necessary to form the reciprocal insurer; (2) obtaining reinsurers for the reciprocal insurer; (3) preparing subscriber rules and management procedures for the reciprocal insurer; (4) financing the formation expenses of the reciprocal insurer; (5) managing the reciprocal insurer.
(a) The certificate of authority of a reciprocal insurer shall be issued to its attorney-in-fact in the name of the insurer. (b) The director may refuse, suspend, or revoke the certificate of authority, in addition to other grounds, for failure of the attorney-in-fact to comply with a provision of this title.
(a) A subscriber's agreement providing for an advisory committee consistent with AS 21.75.170 shall be executed by each subscriber and shall grant authority to the attorney-in-fact to manage the affairs of the reciprocal insurer. (b) The duties of the attorney-in-fact shall be specified in the subscriber's agreement. The agreement shall be approved by the director and amendments shall be approved by the director and the advisory committee. The agreement must, at a minimum, provide that (1) the attorney-in-fact shall provide written notice of and make the necessary arrangements for the election, in person or by proxy, of the members of the advisory committee; the cost of notice, ballot, or proxy for a meeting and the cost of a meeting that may be called for an election shall be paid by the reciprocal insurer; (2) the attorney-in-fact shall provide written notice to the members of the advisory committee of not less than 10 business days for a regular meeting or a special meeting called under AS 21.75.170(e); the cost of notice shall be paid by the reciprocal insurer; (3) the advisory committee may, upon majority vote of its members at a regular or special meeting and upon written notice of the vote to the director and the attorney-in-fact, recommend termination of the attorney-in-fact for a stated cause and the appointment of a new attorney-in-fact; (4) termination of the attorney-in-fact shall require the approval of a two-thirds majority of the subscribers present in person or by proxy at a meeting called for that purpose; the attorney-in-fact shall provide written notice to all subscribers by certified mail not less than 30 days before the meeting; the notice must include the recommendation of termination and replacement drafted by the advisory committee and other appropriate documents drafted by the attorney-in-fact; a copy of all documents mailed and certification of mailing to all subscribers must be provided to all members of the advisory committee; the cost of notice and proxy for the meeting shall be paid by the reciprocal insurer; at least 25 percent of all subscribers shall constitute a quorum for reciprocal insurers with less than 10,000 subscribers; 2,500 subscribers or five percent of all subscribers, whichever is greater, shall constitute a quorum for all other reciprocals; (5) the assets of the reciprocal insurer and its subscribers shall be invested under AS 21.21; investment guidelines shall be approved by the advisory committee and shall be properly accounted for on the financial records of the reciprocal insurer as being held for or on behalf of the subscribers; the cash assets of the reciprocal insurer and its subscribers not otherwise invested in short-term securities, covering policy obligations arising out of policies issued, or issued for delivery in the United States shall be held in one or more appropriately identified accounts in banks that are members of the Federal Reserve System; these accounts shall be drawn on by the attorney-in-fact or by employees or representatives of the reciprocal insurer authorized by the attorney-in-fact for payments on behalf of the reciprocal insurer; (6) if the attorney-in-fact is acting for more than one reciprocal insurer, separate records and accounts shall be maintained for each reciprocal; (7) the attorney-in-fact may not assign responsibilities detailed in the subscriber's agreement in whole or in part without prior approval of the advisory committee and the director; (8) the attorney-in-fact shall (A) establish and maintain underwriting procedures and manuals that state the rates and conditions for the acceptance or rejection of risks; (B) make a report to the advisory committee at each regular meeting of the committee on the financial condition of the reciprocal insurer and all material transactions entered into during the period since the last meeting; (C) annually provide to each member of the advisory committee (i) on or before March 2, a copy of the reciprocal insurer's annual statement and the accompanying statement of actuarial opinion filed with the director under AS 21.75.130; and (ii) on or before June 1, a copy of a statement prepared by an independent certified public accountant addressing the financial condition and solvency of the attorney-in-fact; (D) maintain a financially solvent condition; (9) the forms, amounts, and formulas of compensation the attorney-in-fact will receive for services rendered are specified; (10) the books, accounts, and records of the reciprocal insurer, its subscribers, and the attorney-in-fact are maintained to clearly and accurately disclose the nature and details of each transaction, including all notes, workpapers, documents, and similar material in sufficient detail that relevant events, dates, and persons participating can be identified and information necessary to determine that the compensation received by or owing to the attorney-in-fact conforms to the subscriber's agreement; the books, accounts, and records of the reciprocal insurer are the sole property of the reciprocal insurer; (11) if the subscriber's agreement provides that any of the attorney-in-fact's compensation is contingent upon the reciprocal insurer's profits, that compensation may not be determined and paid until at least five years after the premiums on casualty insurance are earned, at least one year after the premiums are earned on any other kind of insurance, and not until the adequacy of loss reserves on the remaining claims, known and unknown, have been verified under (8) of this subsection; and (12) the attorney-in-fact shall conduct the affairs of the reciprocal insurer as required under this title. (c) Unless subject to AS 21.22, a material transaction between the reciprocal insurer, its subscribers, the attorney-in-fact, and an affiliate of the attorney-in-fact may not be entered into unless it has been filed with the director of the reciprocal insurer's state of domicile, if accredited by the National Association of Insurance Commissioners, or with the director of this state, if not accredited, at least 30 days before its effective date and the director of the accredited state has not disapproved it; however, a transaction involving five percent or more of admitted assets is subject to prior approval of the director of the reciprocal insurer's state of domicile and the transaction must meet the following standards: (1) the terms shall be fair and equitable; (2) charges or fees for services performed shall be reasonable; (3) expenses incurred and payments received shall be allocated to the reciprocal insurer on an equitable basis in conformity with statutory insurance accounting practices being consistently applied; and (4) the books, accounts, and records of each party shall be maintained to disclose clearly and accurately the precise nature and details of the transaction, including accounting information that is necessary to support the reasonableness of the charges or fees to the respective parties. (d) A subscriber's agreement containing the duties of the attorney-in-fact shall be provided by the attorney-in-fact to all subscribers. Renewing subscribers shall be informed that their failure to return a signed rejection of the subscriber's agreement within 30 days after the renewal date will be considered acceptance of the subscriber's agreement.
Modifications of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney-in-fact and the subscribers' advisory committee. A modification may not be effective retroactively, or apply to an insurance contract issued before the modification.
(a) Concurrently with the filing of the declaration provided in AS 21.75.060, the attorney-in-fact of a domestic reciprocal insurer shall file with the director a bond in favor of this state for the benefit of all persons damaged as a result of a breach by the attorney-in-fact of the conditions of the bond as set out in (b) of this section. The bond shall be executed by the attorney-in-fact and by an authorized corporate surety, shall meet the requirements established under AS 21.27.190, and shall be subject to the director's approval. (b) The bond shall be in the sum of $100,000, aggregate in form, conditioned that the attorney-in-fact will faithfully account for all money and other property of the insurer coming into the hands of the attorney-in-fact and that the attorney-in-fact will not withdraw or appropriate to personal use from the funds of the insurer, money or property to which the attorney-in-fact is not entitled under the subscriber's agreement. (c) [Repealed,  223 ch 67 SLA 1992.] (d) The director may require the attorney-in-fact, unless wholly owned by the reciprocal insurer, to maintain an errors and omissions policy issued by an admitted insurer acceptable to the director providing coverage in an amount and issued by an insurer approved by the director. This requirement is satisfied if the attorney-in-fact maintains an errors and omissions policy to satisfy the laws of another state in an amount approved by the director.
Action on the attorney-in-fact's bond or to recover against a deposit made in lieu of the bond may be brought at any time by one or more subscribers suffering loss through a violation of its conditions, or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of the bond.
An attorney-in-fact of a reciprocal insurer is subject to examination by order of the director under AS 21.06.120 and 21.06.140 - 21.06.160 for the purpose of determining compliance with this title relating to the operations of the reciprocal insurer or its attorney-in-fact that the director determines cannot be obtained by examination of the reciprocal insurer. The cost of the examination shall be paid by the attorney-in-fact.
(a) Legal process shall be served upon a domestic reciprocal insurer by serving the insurer's attorney-in-fact at the principal offices of the attorney-in-fact or by serving the director as the insurer's process agent under AS 21.09.180 and 21.09.190. (b) A judgment based upon legal process so served shall be binding upon each of the insurer's subscribers as their respective interests may appear but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had upon each subscriber.
(a) The annual statement of a reciprocal insurer shall be made by its attorney-in-fact and filed with the director, as provided in AS 21.09.200. (b) The statement shall be supplemented by information that may be required by the director relative to the affairs and transactions of the attorney-in-fact insofar as they relate to the reciprocal insurer.
(a) The director may require a reciprocal insurer's attorney-in-fact to file a quarterly financial statement as provided in AS 21.09.205. (b) A statement required under (a) of this section shall be supplemented by information that may be required by the director relative to the affairs and transactions of the attorney-in-fact that relate to the reciprocal insurer.
The attorney-in-fact or other parties may advance to a domestic reciprocal insurer upon reasonable terms the funds it may require from time to time in its operations. Sums advanced may not be treated as a liability of the insurer, and, except upon liquidation of the insurer, may not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. A withdrawal or repayment may not be made without the advance approval of the director. This section does not apply to bank loans or to loans for which security is given.
In determining the financial condition of a reciprocal insurer the director shall apply the following rules: (1) the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis shall be charged as liabilities; (2) the surplus deposits of subscribers shall be allowed as assets, except the premium deposits delinquent for 90 days shall first be charged against the surplus deposit; (3) the surplus deposits of subscribers may not be charged as a liability; (4) all premium deposits delinquent less than 90 days shall be allowed as assets; (5) an assessment levied upon subscribers, and not collected, may not be allowed as an asset; (6) the contingent liability of subscribers may not be allowed as an asset; (7) the computation of reserves shall be based upon premium deposits other than membership fees and without deductions for expenses and the compensation of the attorney-in-fact.
Individuals, partnerships, and corporations of this state may make application, enter into agreement for, and hold policies or contracts in or with and be a subscriber of a domestic, foreign, or alien reciprocal insurer. A corporation now or hereafter organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its articles of incorporation, have full power and authority as a subscriber to exchange insurance contracts through the reciprocal insurer. The right to exchange the contracts is incidental to the purposes for which the corporations are organized and to be as fully granted as the rights and powers expressly conferred upon the corporations. Government or governmental agencies, state or political subdivisions, boards, associations, estates, trustees, or fiduciaries are authorized to exchange nonassessable reciprocal interinsurance contracts with each other and with individuals, partnerships, and corporations to the same extent that individuals, partnerships, and corporations are authorized to exchange reciprocal interinsurance contracts. An officer, representative, trustee, receiver, or legal representative of a subscriber shall be recognized as acting for or on its behalf for the purpose of the contract but shall be personally liable upon the contract by reason of acting in the representative capacity.
(a) The subscriber's advisory committee shall meet at least annually and shall consist of not less than nine individuals elected by the subscribers, at least two-thirds of whom are subscribers or officers or directors of subscriber corporations and, except for a reciprocal insurer that wholly owns its attorney-in-fact, not more than one-third of whom may be (1) the attorney-in-fact or an employee, officer, director, affiliate, or a person having a financial interest in the attorney-in-fact; or (2) a person representing the attorney-in-fact or an employee, officer, director, affiliate, or other person having a financial interest in the attorney-in-fact; a person shall be treated as having a financial interest in the attorney-in-fact if the person (A) owns, directly or indirectly, more than one percent of the outstanding stock in the attorney-in-fact; (B) has an outstanding loan from the attorney-in-fact; or (C) earns a commission or other compensation as a producer for the reciprocal insurer. (b) A member of the subscriber's advisory committee may be elected to a term of office of not less than one year nor more than four years. A member may be reelected for an unlimited number of terms. Terms of office may be staggered to provide for continuity. (c) The chair of the committee shall be elected by the members of the committee and the committee shall adopt rules consistent with the purposes of the committee. (d) The attorney-in-fact shall appoint a secretary. (e) Special meetings of the committee may be called by the attorney-in-fact, the chair of the committee, three members of the committee, or a signed petition of at least one percent of the subscribers or three individual subscribers, whichever is greater, as of the most recent annual report of the reciprocal insurer. (f) The committee shall (1) supervise the finances of the reciprocal insurer; (2) supervise the reciprocal insurer's operations to assure conformity with the subscriber's agreement; (3) procure the audit of the accounts and records of the reciprocal insurer and of the attorney-in-fact at the expense of the reciprocal insurer; and (4) have additional powers and functions that may be conferred by the subscriber's agreement. (g) Notwithstanding (a) of this section, a domestic reciprocal insurer transacting all of its insurance activities on a subject resident, located, or to be performed in this state may, with the prior written approval of the director, have a subscriber's advisory committee that consists of not less than five individuals who are elected by the subscribers, and who otherwise meet the requirements of (a) of this section.
(a) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several, and proportionate liability, and not joint. (b) Except as to a nonassessable policy each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while the subscriber's policy was in force. The contingent liability may be at the rate of not less than one or more than ten times the premium deposit stated in the policy, and the maximum aggregate shall be computed in the manner set out in AS 21.75.190. (c) Each assessable policy issued by the insurer must contain a statement of the contingent liability.
(a) An action may not lie against a subscriber upon an obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for 30 days. (b) The judgment shall be binding upon each subscriber only in the proportion which the subscriber's interest may appear and in an amount not exceeding the contingent liability of the subscriber, if any.
(a) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable under the terms of their policies by the attorney-in-fact upon approval in advance by the subscribers' advisory committee and the director; or by the director in liquidation of the insurer. (b) Each subscriber's share of a deficiency for which an assessment is made, but not exceeding the aggregate contingent liability of the subscriber as stated in accordance with AS 21.75.180, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during the period upon all policies subject to the assessment. (c) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy shall be used as a base, deducting only charges not recurring upon the renewal or extension of the policy. (d) A subscriber may not have an offset against an assessment for which the subscriber is liable, on account of a claim for unearned premium or losses payable.
A subscriber of a domestic reciprocal insurer having contingent liability is liable for and shall pay the subscriber's share of any assessment, as computed and limited under this chapter, if (1) while the subscriber's policy is in force or within one year after its termination, the subscriber is notified by either the attorney-in-fact or the director of an intention to levy the assessment; or (2) an order to show cause why a receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while the subscriber's policy is in force or within one year after its termination.
A single policy or subscriber as to the policy may not be assessed or charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year, in excess of the amount provided for in the power of attorney or in the subscribers' agreement, computed solely upon premium earned on the policy during that year.
(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital and surplus required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney-in-fact and as approved by the subscribers' advisory committee, the director shall issue a certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state, and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for as long as all the surplus remains unimpaired. (b) Upon impairment of the surplus, the director shall immediately revoke the certificate. The revocation shall not render subject to contingent liability a policy then in force and for the remainder of the period for which the premium has theretofore been paid; but after the revocation a policy may not be issued or renewed without providing for contingent assessment liability of the subscriber. (c) The director may not authorize a domestic reciprocal insurer to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish the liability of all its subscribers and in all the policies for all kinds of insurance transacted by it. Except, that if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of those subscribers which may acquire the policies in that state, and need not extinguish the contingent liability applicable to policies theretofore in force in that state. (d) Notwithstanding (a) - (c) of this section, a reciprocal insurer that provides marine insurance may issue policies that are nonassessable.
A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. The distribution may not unfairly discriminate between classes of risks, or policies, or between subscribers, but this does not prevent retrospective rating, or distribution on a retrospective plan, or distribution varying as to classes of subscribers based on the experience of the subscribers.
Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of contributions of the attorney-in-fact or other persons to its surplus made as provided in AS 21.75.140, and the return of an unused premium, savings, or credits then standing on subscribers' account, shall be distributed to its subscribers who were subscribers within the 12 months before the last termination of its certificate of authority, according to a reasonable formula that the director may approve.
(a) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of its subscribers who vote on the merger after due notice and the approval of the director of the terms therefor, may merge with another reciprocal insurer or be converted to a stock or mutual insurer. (b) The stock or mutual insurer is subject to the same capital or surplus requirements and has the same rights as a like domestic insurer transacting like kinds of insurance. (c) The director may not approve a plan for a merger or conversion which is inequitable to subscribers, or which, if for conversion to a stock insurer, does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to the subscriber's interest in the reciprocal insurer as determined in accordance with AS 21.75.250 and a reasonable length of time within which to exercise the right.
(a) If the assets of a reciprocal insurer are at any time insufficient to discharge its liabilities, other than a liability on account of funds contributed by the attorney-in-fact or others, and to maintain the required surplus, its attorney-in-fact shall immediately make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency; but subject to the limitation set out in the subscriber's agreement. (b) If the attorney-in-fact fails to make up the deficiency or to make the assessment within 30 days after the director orders the attorney-in-fact to do so, or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer shall be considered insolvent and shall be proceeded against as authorized by this title. (c) If liquidation of an insurer is ordered, an assessment shall be levied upon the subscriber for an amount, subject to limits as provided by this chapter, that the director determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney-in-fact or other persons, but including the reasonable cost of the liquidation. (d) If liquidation of a domestic reciprocal insurer is ordered, the receiver appointed under the order has a right to recover on behalf of the reciprocal insurer a payment in the form of a bonus, termination settlement, or extraordinary lump-sum compensation adjustment made by the reciprocal insurer or its subscribers to the attorney-in-fact if the distribution or payment is made during the 12 months preceding the order of liquidation, unless it can be shown that the payment was lawful and reasonable and that the reciprocal insurer did not know and, using due diligence, could not have known that the distribution might adversely affect the ability of the reciprocal insurer to fulfill its subscriber's contractual obligation.
(a) The director shall, by regulation, provide a general plan for the implementation of cooperative insurance coverage limited to the risks defined in AS 21.75.330. (b) The regulations adopted under (a) of this section must include (1) procedures whereby not less than the number of persons required by AS 21.75.060(a) to organize a domestic reciprocal insurer may petition the director to initiate formation of a cooperative insurer; (2) provision whereby the director may obtain information required to be provided by AS 21.75.060(b) to implement organization of a domestic reciprocal insurer; (3) provision under which the petitioners shall describe the territory within which the plan of cooperative insurance shall operate; (4) provision by which the director may obtain any additional information that the director considers reasonably necessary to determine whether the total amount initially at risk and its distribution permit a sound cooperative insurance operation; (5) provision whereby the director, after indicating an intention to issue a certificate of authority to a cooperative insurer under AS 21.75.300 - 21.75.330, shall provide public notice for a period of not less than 30 days to provide nonsubscribing residents within the territory or adjacent geographical area an opportunity to subscribe to the plan of insurance; and (6) provision by which, after the issuance of a certificate of authority, the cooperative insurer may receive applications from nonsubscribing residents of the territory or adjacent geographical area for inclusion within the insurer unless the application of the nonsubscribing resident is rejected by a majority vote of the members of the subscribers' advisory committee of the cooperative insurer.
If the director is satisfied that the plan of insurance and other information provided by petitioners under AS 21.75.300 permits a sound insurance operation and complies with all other applicable requirements for a certificate of authority, the director shall issue a certificate of authority to the insurer.
Except as otherwise specifically provided, the provisions of AS 21.75.010 - 21.75.270 and 21.75.900(2) and (3) are applicable to cooperative insurers.
(a) A cooperative insurer organized under AS 21.75.300 is authorized to transact only property insurance, limited to physical damage of (1) licensed private passenger motor vehicles; (2) single-family residences, and related structures; (3) multiple dwellings of not more than four-family units if at least one unit is owner-occupied, and related structures; (4) mobile homes; (5) commercial structures of not more than $100,000 value. (b) Cooperative insurance coverage is limited to risks located or principally garaged within a geographic radius determined by the director to be within the ability of the insureds to control and have an influence over the level of loss.
In this chapter, (1) material transaction means a transaction, other than a claim payment, involving more than one-half of one percent of the reciprocal insurer's admitted assets as of December 31 of the prior year; (2) reciprocal insurance is that resulting from an interexchange among persons, known as subscribers, of reciprocal agreements of indemnity, the interexchange being effectuated through an attorney-in-fact common to all such persons; (3) reciprocal insurer means an unincorporated aggregation of subscribers operating individually and collectively through an attorney-in-fact to provide reciprocal insurance among themselves.
(a) Municipalities and their public corporations, city and borough school districts, and regional educational attendance areas may enter into cooperative agreements with each other for the purpose of establishing, operating, or participating in joint insurance arrangements through which the participating members agree to pool contributions in order to either assume risks from losses to the participants on a group basis or purchase coverage for the participants on a group basis. (b) A joint insurance arrangement may be for any kind of insurance defined by this title except for health insurance, life insurance, and title insurance. (c) A joint insurance arrangement shall be considered an alternative or supplement to any other policy or contract of insurance authorized or required by law, including insurance under AS 21.75. (d) For purposes of AS 23.30.075, a joint insurance arrangement is considered to be an association duly authorized to transact workers' compensation insurance in the state.
(a) A joint insurance arrangement may not be considered insurance for the purpose of any other law of the state and is not subject to regulations adopted by the director. (b) By October 1 of each year, the administrator of a joint insurance arrangement shall prepare and deliver to the Legislative Budget and Audit Committee and the director a report showing the true and correct financial condition of the joint insurance arrangement. The report must (1) be attested to by the administrator and the board of directors; (2) include an analysis, certified by a member of the American Academy of Actuaries, of the sufficiency of the loss reserves; and (3) be certified by a certified public accountant.
A cooperative agreement must provide for the proper operation of the joint insurance arrangement and include provisions for (1) administration of the arrangement by a board of directors, specifying the number of members of the board and other requirements necessary for the proper functioning of the board; (2) appointment of an administrator and other persons as necessary for the proper functioning of the arrangement; (3) organization of the arrangement, including a roster of participating members and the names of the members of the board of directors; (4) procedures to establish and promote an aggressive risk management and program among the members of the arrangement, including procedures for identifying and reducing the risks that can be reduced through implementing better safety technologies and improved work techniques and procedures; (5) enforcing the collection of contributions or payments in default from members of the arrangement; (6) the addition of new members to the arrangement or the withdrawal of members from the arrangement; (7) the method of apportioning costs and disposition of excess contributions; (8) transmission of financial statements and audit reports of the arrangement to participating members; (9) terminating the arrangement and disposing of its assets; and (10) establishing and administering a joint insurance fund.
(a) A cooperative agreement must include a provision requiring an annual determination by a casualty actuary who is a member of the American Academy of Actuaries that procedures for establishing reserves for losses of the joint insurance arrangement are actuarially sound. (b) A joint insurance arrangement shall be subject to an annual independent audit. The audit shall be conducted in accordance with generally accepted auditing standards and must include a review of the actuarial assumptions used for establishing the reserves under (a) of this section. The audit report must include certification from a casualty actuary who is a member of the American Academy of Actuaries that the actuarial assumptions continue to be sound and the level of the reserves are adequate.
A cooperative agreement may authorize the board of directors to enter into contracts for services necessary to perform the functions of a joint insurance arrangement. The person contracting to perform the functions must be appropriately licensed under this title if this title so requires.
A cooperative agreement may delegate to the board of directors, or authorize delegation by the board to another person or group, the power to compromise, arbitrate, or otherwise settle claims on behalf of the arrangement.
A cooperative agreement may authorize the board of directors to purchase excess or catastrophic insurance on behalf of the joint insurance arrangement. The cost of the insurance shall be apportioned in the manner specified in the joint insurance agreement. The board may purchase insurance under this section only from an insurer authorized to do business in the state, except that an arrangement formed by municipalities or school districts may purchase insurance under this section from a risk-sharing pool established by a national association of similar entities if the risk-sharing pool meets the qualifications for an unauthorized insurer under AS 21.34.040(b) and (d) and 21.34.220 and has capital and policyholders surplus in an amount at least as great as would be required if the association were a domestic multiple line insurer. An arrangement may purchase insurance under this section for property and liability risks from unauthorized insurers allowed for use by licensed Alaska surplus lines brokers.
(a) A joint insurance arrangement shall establish a joint insurance fund. The fund consists of money (1) contributed by members of the joint insurance arrangement through budgetary appropriations or transfers from a self-insurance reserve; (2) contributed by officers and employees of members of the joint insurance arrangement under an employee benefit plan; and (3) collected by the joint insurance arrangement through subrogation of a claim paid from the fund to a member of the arrangement. (b) An expenditure may be made from a joint insurance fund only to (1) pay claims, losses, or benefits, including interest on them, and the administrative and adjustment expenses incurred in connection with them, involving the types of protection for which the fund provides coverage as specified in the joint insurance agreement; (2) pay contractual obligations of a joint insurance fund established by a municipal joint insurance arrangement to the Alaska Municipal Bond Bank Authority or other lender; and (3) purchase insurance coverage for members of a municipal joint insurance arrangement on a group basis. (c) The administrator shall keep the fund separate from other funds of a member of a joint insurance arrangement. (d) For each type of protection offered by the joint insurance arrangement, the method of accounting must show the order, source, date, and amount of each payment from the fund. (e) Within 150 days of the end of the fiscal year, the administrator shall furnish a detailed report of the operation and condition of the fund to the board of directors and the director of the division of insurance. (f) Money held by a fund as reserves and money not needed for daily operations may be invested by the board of directors. (g) A fund may not be terminated unless the administrator certifies that an amount of money sufficient to pay accrued and contingent expenditures has been placed in a fully collateralized escrow account.
The board of directors shall file a copy of the cooperative agreement with the director of insurance at least 60 days before the effective date of the agreement. The agreement shall be available for public inspection.
A cooperative agreement may authorize the board of directors to adopt rules not inconsistent with law for the fair and equitable administration of the joint insurance arrangement and the joint insurance fund.
A joint insurance arrangement has a right of subrogation with respect to its participants to the same extent that an insurer has a right of subrogation with respect to one of its insureds.
(a) A municipality or a municipal joint insurance arrangement may authorize the issuance of negotiable or nonnegotiable bonds, notes, or certificates of participation to establish reserves and to self-insure against liability not covered by excess insurance or reinsurance. A bond, note, or certificate issued under this subsection by a municipal joint insurance arrangement shall be secured and payable from participating members of the municipal joint insurance arrangement as provided in the cooperative agreement. (b) A municipality that has entered into a municipal joint insurance arrangement may enter into contracts and agreements concerning debt issued under (a) of this section and provide for matters that affect the security of the debt. Bonds, notes, and certificates of participation issued under (a) of this section may be sold at either public or private sale as provided by the participants in the municipal joint insurance arrangement in the manner and at the price the participants determine.
In this chapter, (1) adjustment expenses means expenses for investigative, processing, legal, actuarial, arbitration, and settlement services incurred in the adjustment of losses, claims, or benefits; (2) administrator means a person or group appointed by the board of directors to administer a joint insurance arrangement or a joint insurance fund; (3) board or board of directors means the board of directors provided for in a cooperative agreement; (4) cooperative agreement means a written agreement entered into by two or more entities described in AS 21.76.010 for the purpose of establishing, operating, or participating in a joint insurance arrangement; (5) fund or joint insurance fund means a fund established under AS 21.76.080; (6) joint insurance arrangement means a joint insurance arrangement authorized under AS 21.76.010.
(a) The court is vested with exclusive original jurisdiction of delinquency proceedings under this chapter, and is authorized to make all necessary and proper orders to carry out the purposes of this chapter. (b) Except as provided under AS 21.24, delinquency proceedings under this chapter constitute the sole and exclusive method of liquidating, rehabilitating, reorganizing, or conserving an insurer, and a court may not entertain a petition for the commencement of the proceedings unless it has been filed in the name of the state on the relation of the director. (c) An appeal shall lie to the supreme court from an order granting or refusing rehabilitation, liquidation, or conservation, and from every other order in delinquency proceedings having the character of a final order as to the particular portion of the proceedings embraced therein.
(a) A delinquency proceeding may not be commenced under this chapter unless commenced by the director. A court does not have jurisdiction to entertain, hear, or determine a delinquency proceeding commenced by a person other than the director. (b) The director shall commence the proceedings by application to the court for an order directing the insurer to show cause why the director should not have the relief requested. On the return of the order to show cause, and after a full hearing, the court shall either deny the application or grant the application, together with other relief that the nature of the case and the interest of the policyholders, creditors, stockholders, members, subscribers, or the public might require. (c) A court does not have jurisdiction to entertain, hear, or determine a complaint asking for an injunction or restraining order or other relief concerning the dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of an insurer, other than as provided under this chapter. (d) In addition to other grounds for jurisdiction provided by the laws of this state, a court having jurisdiction of the subject matter has jurisdiction over a person served under the Alaska Rules of Civil Procedure or other applicable provisions of law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this state if the person (1) served is obligated to the insurer in any way as an incident to an agency or brokerage arrangement that might exist or has existed between the insurer and the agent or broker, in an action on or incident to the obligation; (2) served is a reinsurer who has at any time written a policy of reinsurance for an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced, or is an agent or broker of or for the reinsurer, in any action or incident related to the reinsurance contract; or (3) is or has been an officer, manager, trustee, organizer, promoter, or person in a position of comparable authority or influence in an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced, in any action resulting from such a relationship with the insurer. (e) If the court, on motion of a party, finds that an action should, as a matter of substantial justice, be tried in a forum outside this state, the court may enter an appropriate order to stay further proceedings on the action in this state. (f) The court shall appoint the director as the receiver in all actions taken under this chapter.
(a) A receiver appointed in a proceeding under this chapter may at any time apply for, and a court may grant, a restraining order, preliminary or permanent injunction, or other order considered necessary to prevent (1) the transaction of further business; (2) the transfer of property; (3) interference with the receiver or with a proceeding under this chapter; (4) waste of the insurer's assets; (5) dissipation and transfer of bank accounts; (6) the institution or further prosecution of any actions or proceedings; (7) the obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets, or its policyholders; (8) the levying of execution against the insurer, its assets, or its policyholders; (9) the making of a sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer; (10) the withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or (11) any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors, or shareholders, or the administration of a proceeding under this chapter. (b) The receiver may apply to a court outside of the state for the relief described in (a) of this section. (c) A bond may not be required of the director as a prerequisite to issuing an injunction or restraining order under this section.
(a) The director may apply to the court for an order appointing the director as receiver of and directing the director to rehabilitate a domestic insurer when the insurer (1) is impaired or insolvent; (2) has refused to submit any of its books, records, accounts, or affairs to reasonable examination by the director; (3) has concealed or wrongfully removed records or assets or otherwise violated AS 21.69.390; (4) has failed to comply with an order of the director to make good an impairment of capital or surplus or both; (5) has transferred or attempted to transfer substantially its entire property or business, or has entered into a transaction the effect of which is to merge substantially its entire property or business in that of any other insurer without having first obtained the written approval of the director; (6) is found, after examination, to be in such condition that its further transaction of business will be hazardous to its policyholders, or to its creditors, or to its members, subscribers, or stockholders, or to the public; (7) has an officer, director, or manager who has refused to be examined under oath, concerning its affairs, for which purpose the director is authorized to conduct and to enforce by all appropriate and available means an examination under oath in another state or territory of the United States, in which the officer, director, or manager may then presently be, to the full extent permitted by the laws of the other state or territory, this special authorization considered; (8) has been or is the subject of an application for the appointment of a receiver, trustee, custodian, or sequestrator of the insurer or its property otherwise than under the provisions of this title, but only if the appointment has been made or is imminent and its effect is or would be to oust the courts of this state of jurisdiction; (9) has consented to such an order through a majority of its directors, stockholders, members, or subscribers; (10) has failed to pay a final judgment rendered against it in this state upon any insurance contract issued or assumed by it, within 30 days after the judgment became final or within 30 days after the time for taking an appeal has expired, or within 30 days after dismissal of an appeal before final termination, whichever date is the later; (11) has failed to remove a person who, in fact, has executive authority in the insurer, whether an officer, manager, general agent, employee, or other person, if the person has been found after notice and hearing by the director to be dishonest or untrustworthy in a way affecting the insurer's business; (12) after demand by the director under AS 21.06.120 or under this chapter, has failed to promptly make available for examination its own property, books, accounts, documents, or other records, or those of a subsidiary or related company within the control of the insurer, or those of a person having executive authority in the insurer so far as they pertain to the insurer; (13) has, within the previous four years, wilfully violated its charter or articles of incorporation, its bylaws, an insurance law of this state, or a valid order of the director issued under this title; (14) has failed to file, within the time allowed by law, its annual report or other financial report required by statute and, after written demand by the director, has failed to give an immediate and adequate explanation; or (15) has reached an authorized control level event under AS 21.14.040 or a mandatory control level event under AS 21.14.050. (b) The director may apply to the court for an order appointing the director as receiver of a domestic insurer, and directing the director to rehabilitate the insurer if (1) there is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that, if established, would endanger assets in an amount threatening the solvency of the insurer; (2) control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons found after notice and hearing to be untrustworthy; (3) a person who, in fact, has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee, or other person, has refused to be examined under oath by the director concerning the insurer's affairs, whether in this state or elsewhere, and after reasonable notice of the fact the insurer has failed to promptly and effectively terminate the employment and status of the person and the person's influence on management.
The director may apply to the court for an order appointing the director as receiver, if an appointment of the director as receiver is not then in effect, and directing the director to liquidate the business of a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this state, regardless of whether or not there has been a prior order directing the director to rehabilitate the insurer, upon any of the grounds specified in AS 21.78.040 or if the insurer (1) has ceased transacting business for a period of one year; or (2) is an insolvent insurer and has commenced voluntary liquidation or dissolution, or attempts to commence or prosecute an action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian or sequestrator under any law except this title.
The director may apply to the court for an order appointing the director as receiver or ancillary receiver, and directing the director to conserve the assets in this state, of a foreign insurer upon (1) any of the grounds specified in AS 21.78.040 or 21.78.050; or (2) the ground that it's property has been sequestrated in its domiciliary sovereignty or in any other sovereignty.
The director may apply to the court for an order appointing the director as receiver or ancillary receiver, and directing the director to conserve the assets within this state, of an alien insurer upon (1) any of the grounds specified in AS 21.78.040 or 21.78.050; (2) the ground that the insurer has failed to comply, within the time designated by the director, with an order made by the director to make good an impairment of its trusteed funds; or (3) the ground that the property of the insurer has been sequestrated in its domiciliary sovereignty or elsewhere.
The director may apply to the court for an order appointing the director as ancillary receiver of and directing the director to liquidate the business of a foreign insurer having assets, business, or claims in this state upon the appointment in the domiciliary state of the insurer of a receiver, liquidator, conservator, rehabilitator, or other officer by whatever name called for the purpose of liquidating the business of the insurer.
(a) An order to rehabilitate a domestic insurer must require the director to take immediate possession of the property of the insurer and to conduct its business, and to take steps toward removal of the causes and conditions that have made rehabilitation necessary as the court may direct. (b) If at any time the director considers that further efforts to rehabilitate the insurer would be useless, the director may apply to the court for an order of liquidation. (c) The director, or an interested person upon due notice to the director, at any time may apply to the court for an order terminating the rehabilitation proceedings and permitting the insurer to resume possession of its property and the conduct of its business, but the order may not be made or entered except when, after a hearing, the court has determined that the purposes of the proceeding have been fully accomplished. (d) An order issued under this section must require an accounting to the court by the receiver. Accountings must be at the intervals that the court specifies in its order. (e) Entry of an order of rehabilitation does not constitute an anticipatory breach of contracts of the issuer. (f) A court in this state before which an action or proceeding is pending in which the insurer is a party or in which the insurer is obligated to defend a party shall stay the action or proceeding when a rehabilitation order against the insurer is entered. The stay shall be imposed for that period of time necessary for the receiver to obtain proper representation and prepare for further proceedings. The receiver shall take action respecting the pending litigation that the receiver considers necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The receiver shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays if necessary to protect the estate of the insurer. (g) A statute of limitations or defense of laches does not run with respect to an action by or against an insurer between the filing of a petition for appointment of a receiver for the insurer and the order granting or denying that petition. An action by or against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered or the petition is denied. (h) A guaranty association or foreign guaranty association has standing to appear in a court proceeding concerning the rehabilitation of a domestic insurer if the association is or might become liable to act as a result of the rehabilitation.
(a) An order to liquidate the business of a domestic insurer must require the director to take immediate possession of the property of the insurer, to liquidate its business, to deal with the insurer's property and business in the director's name as director of insurance or in the name of the insurer, as the court may direct, and to give notice to all creditors who may have claims against the insurer to present the claims. (b) The director may apply for and secure an order dissolving the corporate existence of a domestic insurer upon the director's application for an order of liquidation of the insurer or at any time after the order has been granted. (c) An order issued under this section must require an accounting to the court by the receiver. Accountings must be at the intervals that the court specifies in its order. (d) Policies, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation continue in force only for the lesser of (1) a period of 30 days after the date of entry of the liquidation order; (2) the expiration of the policy coverage; (3) the date on which the insured replaces the insurance coverage with equivalent insurance in another insurer or otherwise terminates the policy; or (4) the date on which the receiver effects a transfer of the policy obligation to a solvent assuming insurer. (e) For purposes of any other provision of law, an order of liquidation terminates policy coverage at the time specified in (d) of this section. (f) A policy of life or health insurance, or annuities, in effect at the time an order of liquidation is issued, continues in force for the period and under the terms provided for by an applicable guaranty association or foreign guaranty association. (g) A policy of life or health insurance, or annuities, and any period of coverage not covered by a guaranty association or foreign guaranty association terminates as provided in (d) and (e) of this section. (h) Upon issuance of an order appointing a receiver of a domestic insurer or of an alien insurer domiciled in this state, an action may not be brought against the insurer or receiver, whether in this state or elsewhere, and an existing action may not be maintained or further presented after issuance of an order. A court of this state shall give full faith and credit to an injunction against the receiver or the company, or against the continuation of an existing action against the receiver or the company, if an injunction is included in an order to liquidate an insurer that is issued under corresponding provisions in another state. If, in the receiver's judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this state, the receiver may intervene in the action. The receiver may defend an action in which the receiver intervenes under this section at the expense of the estate of the insurer. (i) The receiver may, within two years after an order for liquidation, or within the additional time that applicable law permits, institute an action or proceeding on behalf of the estate of the insurer if the period of limitation applicable to the action or proceeding fixed by law has not expired at the time of the filing of the petition upon which the liquidation order is entered. If, by agreement, a period of limitation is fixed for instituting a suit or proceeding upon a claim, or for filing a claim, proof of claim, proof of loss, demand, or notice, or if in a judicial or other proceeding a period of limitation is fixed, either in the proceeding or by applicable law, for taking an action, filing a claim or pleading, or doing an act, and if the period had not expired as of the date of the filing of the petition for liquidation, the receiver may, for the benefit of the estate, take an action or do an act, required of or permitted to the insurer, within a period of 180 days after the entry of an order for liquidation, or within a longer period that is shown to the satisfaction of the court not to be unfairly prejudicial to the other party. (j) A statute of limitations or defense of laches does not run with respect to an action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. An action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the petition is denied. (k) A guaranty association or foreign guaranty association has standing to appear in a court proceeding concerning the liquidation of an insurer if the association is, or might become, liable to act as a result of the liquidation.
An order to liquidate the business of a United States branch of an alien insurer having trusteed assets in this state shall be in the same terms as those prescribed for domestic insurers, except that the assets of the business of the United States branch shall be the only assets included in the order.
(a) An order to conserve the assets of a foreign or alien insurer must require the director to take immediate possession of the property of the insurer in this state and to conserve it, subject to the further direction of the court. (b) An order to liquidate the assets in this state of a foreign insurer must require the director to take immediate possession of the property of the insurer in this state and to liquidate it subject to the orders of the court and with due regard to the rights and powers of the domiciliary receiver, as provided in this chapter.
(a) When under this chapter a receiver is to be appointed in delinquency proceeding for a domestic or alien insurer, the court shall appoint the director as the receiver. The court shall order the director immediately to take possession of the assets of the insurer and to administer the assets under orders of the court. (b) As a domiciliary receiver, the director shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer, wherever located, as of the date of entry of the order directing the director to rehabilitate or liquidate a domestic insurer or to liquidate the United States branch of an alien insurer domiciled in this state, and the director shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers that are herein prescribed for ancillary receivers appointed in this state as to assets located in this state. (c) The filing or recording of the order directing possession to be taken, or a certified copy of the order, in any office where instruments affecting title to property are required to be filed or recorded shall impart the same notice as would be imparted by a deed, bill of sale, or other evidence of title duly filed or recorded. (d) The director as domiciliary receiver shall be responsible for the proper administration of all assets coming into the possession or control of the director. The court may at any time require a bond from the director or a deputy of the director if considered desirable for the protection of the assets. (e) Upon taking possession of the assets of an insurer, the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take steps authorized by this chapter for the purpose of rehabilitating, liquidating, or conserving the affairs or assets of the insurer. (f) In connection with delinquency proceedings, the director may appoint one or more special deputies and the director may employ counsel, clerks, and assistants that the director considers necessary. The compensation of the special deputies, counsel, clerks, or assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the receiver, subject to the approval of the court, and shall be paid out of the funds or assets of the insurer. Within the limits of duties imposed upon them, special deputies shall possess all the powers given to, and in the exercise of those powers shall be subject to all of the duties imposed upon, the receiver with respect to the proceedings. (g) If it appears to the receiver that there has been a violation of civil or criminal law, or breach of a contractual or fiduciary obligation detrimental to the insurer by an officer, manager, insurance producer, employee, or other person, the receiver may pursue all appropriate legal remedies on behalf of the insurer. (h) If the receiver determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, the receiver shall prepare a plan to implement the changes. Upon application of the receiver for approval of the plan, and after the notice and hearings that the court prescribes, the court may either approve or disapprove the plan proposed or may modify it and approve it as modified. A plan approved under this section must be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the receiver shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company, if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies, for the period, and to the extent, considered necessary. (i) If the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the director may advance the costs incurred out of an appropriation to the division for that purpose. Amounts advanced for expenses of administration must be repaid to the state out of the first available money of the insurer. (j) The receiver may (1) hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine a person under oath, and compel a person to subscribe to the person's testimony after it has been correctly reduced to writing, and may require the production of books, papers, records, or other documents that the receiver determines are relevant to the inquiry; (2) remove records and property of the insurer to the offices of the director or to another place that is convenient for the purposes of efficient and orderly execution of the liquidation; a guaranty association or a foreign guaranty association shall be allowed reasonable access to the records of the insurer that is necessary for the association to carry out its statutory obligations; (3) intervene in a proceeding, wherever instituted, that might lead to the appointment of a receiver or trustee, and may act as the receiver or trustee if the appointment is offered; (4) enter into agreements with a receiver or commissioner of another state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both this state and the other state.
(a) When under this chapter an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this state, the court shall appoint the director as ancillary receiver. The director shall file a petition requesting the appointment on the grounds set out in AS 21.78.080, (1) upon a finding that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver; or (2) if 10 or more persons resident in this state having claims against the insurer file a petition with the director requesting the appointment of the ancillary receiver. (b) The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer located in this state, and has the immediate right to recover balances due from local agents and to obtain possession of any books and records of the insurer found in this state. The domiciliary receiver shall also be entitled to recover the other assets of the insurer located in this state, except that upon the appointment of an ancillary receiver in this state, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover the other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims that are proved and allowed in the ancillary proceedings in this state, and shall pay the necessary expenses of the proceedings. The ancillary receiver shall promptly transfer all remaining assets to the domiciliary receiver. Subject to these provisions, the ancillary receiver and deputies of the receiver shall have the same powers and be subject to the same duties with respect to the administration of the assets as a receiver of an insurer domiciled in this state. (c) The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this state to recover assets of the insurer to which the domiciliary receiver may be entitled under the laws of this state.
(a) In a delinquency proceeding begun in this state against a domestic insurer, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary receiver. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings. (b) Controverted claims belonging to claimants residing in reciprocal states may either (1) be proved in this state; or (2) if ancillary proceedings have been commenced in the reciprocal states, be proved in those proceedings; if a claimant elects to prove the claim in ancillary proceedings, if notice of the claim and opportunity to appeal and be heard is afforded the domiciliary receiver of this state, as provided in AS 21.78.160 with respect to ancillary proceedings in this state, the final allowance of the claim by the courts in the ancillary state shall be accepted in this state as conclusive as to its amount and its priority, if any, against special deposits or other security located in the ancillary state.
(a) In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside in this state may file claims either with the ancillary receiver, if any, appointed in this state, or with the domiciliary receiver. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings. (b) Controverted claims belonging to claimants residing in this state may either (1) be proved in the domiciliary state as provided by the law of that state; or (2) if ancillary proceedings have been commenced in this state, be proved in those proceedings; in the event that a claimant elects to prove the claim in this state, the claimant shall file the claim with the ancillary receiver and shall give notice in writing to the receiver in the domiciliary state, either by registered mail or by personal service at least 40 days before the date set for hearing; the notice must contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any; if the domiciliary receiver within 30 days after the giving of notice gives notice in writing to the ancillary receiver and to the claimant, either by registered mail or by personal service, of intention to contest the claim, the domiciliary receiver shall be entitled to appear or to be represented in any proceeding in this state involving adjudication of the claim; the final allowance of the claim by the courts of this state shall be accepted as conclusive as to its amount and its priority, if any, against special deposits or other security located in this state.
(a) All claims against an insurer against which delinquency proceedings have been begun must set out in reasonable detail the amount of the claim, or the basis upon which the amount can be ascertained, the facts upon which the claim is based, and the priorities asserted, if any. The claims shall be verified by the affidavit of the claimant, or someone authorized to act on behalf of the claimant and having knowledge of the facts, and shall be supported by documents that may be material to the claims. (b) All claims filed in this state shall be filed with the receiver, whether domiciliary or ancillary, in this state, on or before the last date of filing as specified in this chapter. (c) If a claim is denied in whole or in part by the receiver, written notice of the determination shall be given to the claimant or the claimant's attorney by first class mail at the address shown in the proof of claim. An objection by the claimant must be filed with the receiver within 60 days after the date of mailing of the notice. If an objection is not filed, the claimant may not object to the determination. (d) If an objection is filed with the receiver and the receiver does not alter the denial of the claim as a result of the objection, the receiver shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or the claimant's attorney and to any other person directly affected, not less than 10 nor more than 30 days before the date of the hearing. (e) A claim need not be considered or allowed if it does not contain all the information in (a) of this section that might be applicable. The receiver may require that a prescribed form be used and may require that other information and documents be included. (f) At any time, the receiver may request the claimant to present information or evidence supplementary to that required under (a) of this section, and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence. (g) A judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and a judgment or order against an insured or the insurer entered at any time by default or by collusion, need not be considered as evidence of liability or the amount of damages. A judgment or order against an insured or the insurer entered within the four months before the filing of the petition need not be considered evidence of liability or of the amount of damages. (h) A claim of a guaranty association or foreign guaranty association shall be in the form and contain the substantiation agreed to by the association and the receiver.
(a) In a delinquency proceeding against an insurer domiciled in this state, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of this state. Claims owing to residents or nonresidents shall be given equal priority of payment from general assets regardless of where the assets are located. (b) In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of this state shall be preferred if like claims are preferred by the laws of that state. (c) The owners of special deposit claims against an insurer for which a receiver is appointed in this or any other state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of the deposits. If there is a deficiency in a deposit so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit. (d) The determination of the value of a security held by a secured creditor shall be under the supervision and control of the court, with due regard for recommendations made by the receiver. The value determined must be credited upon the secured claim, and a deficiency must be treated as an unsecured claim. If the claimant surrenders the security to the receiver, the entire claim shall be allowed as if unsecured. The value of a security held by a secured creditor must be determined in one of the following ways, as the court directs: (1) by converting the security into money according to the terms of the agreement under which the security was delivered to the creditor; or (2) by agreement, arbitration, compromise, or litigation between the creditor and the receiver. (e) If a creditor, whose claim against an insurer is secured in whole or in part by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name, and is subrogated to the rights of the creditor, whether the claim was filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking. In the absence of an agreement with the creditor, the other person is not entitled to a distribution until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by the creditor in trust for the other person. In this subsection, other person does not include a guaranty association or foreign guaranty association.
During the pendency of delinquency proceedings in this or a reciprocal state, an action or proceeding in the nature of an attachment, garnishment, or execution may not be commenced or maintained in the courts of this state against the delinquent insurer or its assets. A lien obtained for the action or proceeding within four months before the commencement of the delinquency proceeding or at any time thereafter shall be void as against any rights arising in the delinquency proceeding.
(a) AS 21.78.020, 21.78.030, 21.78.130 - 21.78.190 and 21.78.330(1) - (4) and (6) - (12) constitute and may be referred to as the Uniform Insurers Liquidation Act. (b) The Uniform Insurers Liquidation Act shall be interpreted and construed to effectuate its general purpose to make uniform the law of those states that enact it. To the extent that its provisions when applicable conflict with other provisions of this chapter, the provisions of the Uniform Insurers Liquidation Act shall control.
The money collected by the director in a proceeding under this chapter shall be from time to time deposited in one or more state or national banks, savings banks, and in the case of the insolvency or voluntary liquidation of a depositary that is an institution organized and supervised under the laws of this state, the deposits shall be entitled to priority of payment on an equality with any other priority given by the banking laws of this state. The director may deposit the money or any part of it in a national bank or as a trust fund.
The director shall not be required to pay a fee to a public officer in this state for filing, recording, issuing a transcript or certificate, or authenticating a paper or instrument pertaining to the exercise by the director of any of the powers or duties conferred upon the director under this chapter, whether or not the paper or instrument is executed by the director or the director's deputies, employees, or attorneys of record and whether or not it is connected with the commencement of an action or proceeding by or against the director, or with the subsequent conduct of the action or proceeding.
For the purpose of facilitating the rehabilitation, liquidation, conservation, or dissolution of an insurer under this chapter, the director may, subject to the approval of the court, borrow money and execute, acknowledge, and deliver notes or other evidences of indebtedness and secure the repayment of the same by the mortgage, pledge, assignment, transfer in trust, or hypothecation of any or all of the property, whether real, personal, or mixed, of the insurer, and the director, subject to the approval of the court shall have power to take any and all other action necessary and proper to consummate the loan and to provide for its repayment. The director, shall be under no obligation personally or in an official capacity to repay a loan made under this section.
The rights and liabilities of the insurer and of its creditors, policyholders, stockholders, members, subscribers, and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date on which the order directing the liquidation of the insurer is filed in the office of the clerk of the court that made the order, subject to the provisions of this chapter with respect to the rights of claimants holding contingent claims.
(a) A transfer made, or an obligation incurred, by an insurer within one year before the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors. A transfer made, or an obligation incurred, by an insurer ordered to be rehabilitated or liquidated under this chapter that is fraudulent under this section, may be avoided by the receiver, unless the transfer or obligation was to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value. A purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for the transfer, lien, or obligation may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order a transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee. (b) A transfer (1) of property other than real property is considered to be made when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under AS 21.78.252; (2) of real property is considered to be made when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee; (3) that creates an equitable lien is not considered to be perfected if there are available means by which a legal lien could be created; (4) not perfected before the filing of a petition for liquidation is considered to be made immediately before the filing of the successful petition. (c) The provisions of (b) of this section apply whether or not there is or was a creditor who might have obtained a lien or a person who might have become a bona fide purchaser. (d) A transaction of the insurer with a reinsurer is considered fraudulent and may be avoided by the receiver under (a) of this section if (1) the transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from a part of its duty to pay the originally specified share of losses that occurred before the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release; and (2) a part of the transaction took place within one year before the date of filing of the petition through which the receivership was commenced.
(a) After a petition for rehabilitation or liquidation has been filed, a transfer of the real property of the insurer made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee has a lien on the property transferred. The commencement of a proceeding in rehabilitation or liquidation is constructive notice upon the recording of a copy of the petition for, or order of, rehabilitation or liquidation with the recorder of deeds in the jurisdiction where the real property in question is located. The exercise by a court of the United States, or any state or jurisdiction, to authorize or effect a judicial sale of real property of the insurer in any county or borough in any state is not impaired by the pendency of a proceeding unless the copy is recorded in the county or borough before the consummation of the judicial sale. (b) After a petition for rehabilitation or liquidation has been filed, and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted, (1) a transfer of any of the property of the insurer, other than real property, made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value, or, if not made for a fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee has a lien on the property transferred; (2) a person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part of it, to the insurer or upon the insurer's order, with the same effect as if the petition were not pending; (3) a person having actual knowledge of the pending rehabilitation or liquidation is considered not to have acted in good faith; (4) a person asserting the validity of a transfer under this section has the burden of proof. (c) Except as otherwise provided in this section, a transfer by or on behalf of the insurer after the date of the petition for liquidation by a person other than the receiver is not valid against the receiver. (d) Nothing in this section impairs the negotiability of currency or negotiable instruments.
(a) A transfer of property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made by the insurer within one year before the filing of a successful petition for liquidation under this chapter, the effect of which might be to enable the creditor to obtain a greater percentage of the debt than another creditor of the same class would receive is considered a preference. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then a transfer is considered a preference if it is made within one year before the filing of the successful petition for rehabilitation, or within two years before the filing of the successful petition for liquidation, whichever time is shorter. (b) A preference may be avoided by the receiver if (1) the insurer was insolvent at the time of the transfer; (2) the transfer was made within the four months before the filing of the petition; (3) the creditor receiving it or to be benefited by it or the creditor's agent had, at the time the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or (4) the creditor receiving it was an officer, or was an employee, attorney, or other person who acted in that capacity whether or not the creditor held such a position, or was a shareholder holding directly or indirectly more than five percent of a class of an equity security issued by the insurer, or was another person, firm, corporation, association, or group of persons with whom the insurer did not deal at arm's length. (c) If a preference is voidable, the receiver may recover the property or, if it has been converted, the value of the property, from a person who has received or converted the property, except that if a bona fide purchaser or lienor has given less than fair equivalent value, the person has a lien upon the property to the extent of the consideration actually given by the person. If a preference by way of lien or security title is voidable, the court may, after notice, order the lien or title to be preserved for the benefit of the estate, in event the lien or title passes to the receiver. (d) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers. A transfer (1) of property other than real property is considered to be made when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a contract could become superior to the rights of the transferee; (2) of real property is considered to be made when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee; (3) that creates an equitable lien is not considered to be perfected if there are available means by which a legal lien could be created; or (4) not perfected before the filing of a petition for liquidation is considered to be made immediately before the filing of the successful petition. (e) A lien obtainable by legal or equitable proceedings (1) upon a contract is one arising in the ordinary course of a proceeding upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy; it does not include a lien that, under applicable law, is given a special priority over other liens that are prior in time; or (2) could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of (d) of this section, if the consequences would follow only from the lien or purchase itself, or from the lien or purchase followed by a step completely within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials; a lien could not, however, become superior and a person could not create superior rights for the purpose of (d) of this section through acts subsequent to the obtaining of a lien or subsequent to a purchase that requires the agreement or concurrence of a third party or that requires further judicial action or ruling. (f) A transfer of property for or on account of a new and contemporaneous consideration that is considered under (d) of this section to be made after the transfer because of delay in perfecting it, does not become a transfer for or on account of an antecedent debt if acts required by the applicable law to be performed in order to perfect the transfer against a lien or bona fide purchaser's rights are performed within 21 days, or a period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if a loan is actually made, or a transfer that becomes security for a future loan, has the same effect as a transfer for or on account of a new and contemporaneous consideration. (g) If a lien that is considered voidable under (b) of this section has been dissolved by the furnishing of a bond or other obligation, and the bond or other obligation has been indemnified directly or indirectly by the transfer or creation of a lien upon property of an insurer before the filing of a petition under this chapter that results in a liquidation order, the indemnifying transfer or lien is also considered voidable. (h) The property affected by a lien that is considered voidable under (b) and (g) of this section shall be discharged from the lien, and that property and the indemnifying property transferred to or for the benefit of a surety shall be transferred to the receiver, except that the court may order a lien to be preserved for the benefit of the estate, and the court may direct that a conveyance be executed as is proper or adequate to evidence the title of the receiver. (i) The court has jurisdiction of a proceeding by the receiver to hear and determine the rights of parties under this section. Reasonable notice of a hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. If an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of a party in interest, shall in the same proceeding determine the value of the property or lien, and if the value of the property is less than the amount of the indemnity or the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as determined by the court, to the receiver, within the time that the court fixes. (j) The liability of a surety under a releasing bond or other obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien avoided by the receiver, or, if the property is retained under (i) of this section, to the extent of the amount paid to the receiver. (k) If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property that becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference that would otherwise be recoverable from the creditor. (l) If an insurer, directly or indirectly, within four months before the filing of a successful petition for liquidation under this chapter or at any time in contemplation of a proceeding to liquidate it, pays money or transfers property to an attorney for services rendered or to be rendered, the transaction may be examined by the court on its own motion or shall be examined by the court on petition of the receiver. The transaction may be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the receiver for the benefit of the estate, except that if the attorney is in a position of influence in the insurer or an affiliate, payment of money or the transfer of property to the attorney for services rendered or to be rendered is governed by (b)(4) of this section. (m) An officer, manager, employee, shareholder, member subscriber, attorney, or other person acting on behalf of an insurer, who knowingly participates in giving a preference even though the person has reasonable cause to believe that the insurer is, or is about to become, insolvent at the time of the preference, is personally liable to the receiver for the amount of the preference. It is a rebuttable presumption that a preference was given with reasonable cause to believe the insurer is or is about to become insolvent if the transfer was made within four months before the filing of a successful petition for liquidation. (n) If a person receives property from the insurer, or the benefit of the property, and the preference for the property is found voidable under (b) of this section, the person is personally liable for the value of the property and shall account to the receiver for it. (o) Nothing in (m) or (n) of this section affects any other claim by the receiver against any person.
(a) A claim of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance that is voidable under this chapter may not be allowed unless the creditor surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is affected by a proceeding in which a final judgment has been entered, the claim may not be allowed unless the money is paid or the property is delivered to the receiver within 30 days after the date of the entering of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding. (b) A claim allowable under (a) of this section by reason of avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment, or encumbrance, may be filed as an excused late filing under AS 21.78.292 if filed within 30 days after the date of avoidance, or within the further time allowed by the court under (a) of this section.
The priority of distribution of claims from an insurer's estate is in accordance with the order in which each class of claims is set out in this section. Every claim in each class must be paid in full, or adequate money retained for payment, before the members of the next class may receive payment. A subclass may not be established within a class. The order of distribution of claims is (1) class 1: the costs and expenses of administration during rehabilitation and liquidation, including (A) the actual and necessary costs preserving or recovering the assets of the insurer; (B) compensation for all services rendered in the rehabilitation and liquidation; (C) any necessary filing fees; (D) the fees and mileage payable to witnesses; (E) reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; (F) the reasonable expenses of a guaranty association or foreign guaranty association that is handling claims; (2) class 2: reasonable compensation to employees for services performed, to the extent that the claim does not exceed two months of monetary compensation and represents payment for services performed within one year before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within one year before the filing of the petition for rehabilitation; principal officers and directors of the insurer are not entitled to the benefit of this priority except as otherwise approved by the receiver and the court; the priority in this paragraph is in place of any other similar priority that might be authorized by law as to wages or compensation of employees; (3) class 3: all claims under policies, including claims of the federal or a state or local government, for losses incurred, including third-party claims, and all claims of a guaranty association or foreign guaranty association; all claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values, shall be treated as loss claims; that portion of a loss for which indemnification is provided by other benefits or advantages recovered by the claimant, may not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations or support, or by way of succession at death, or as proceeds of life insurance, or as gratuities; payment by an employer to an employee may not be treated as a gratuity; (4) class 4: claims under nonassessable policies for unearned premium or other premium refunds and claims of general creditors, including claims of ceding and assuming companies under contracts of reinsurance; (5) class 5: claims of the federal or a state or local government, other than claims under (3) of this section; claims, including those of a government body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, along with reasonable and actual costs attributable to it; the remaining portion of the claims are in the class of claims set out in (7) of this section; (6) class 6: claims filed late, or any other claims other than claims under (7) and (8) of this section; (7) class 7: surplus or contribution notes, or similar obligations, and premium refunds on assessable policies; payments to members of domestic mutual insurance companies shall be limited in accordance with law; (8) class 8: the claims of shareholders or other owners, in their capacity as shareholders.
(a) Except as provided in (b) of this section and in AS 21.78.271, a mutual debt or mutual credit between an insurer and another person in connection with an action or proceeding under this chapter shall be set off, and only the balance may be allowed or paid. (b) A setoff or counterclaim may not be allowed in favor of a person if the obligation of the (1) insurer to the person would not, at the date of the filing of a petition for liquidation, entitle the person to share as a claimant in the assets of the insurer; (2) insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff; (3) person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution; or (4) person is to pay premiums, whether earned or unearned, to the insurer.
(a) An (1) insurance producer, premium finance company, or any other person, other than the insured, responsible for the payment of a premium is obligated to pay an unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer; neither a credit nor a setoff is allowed to an insurance producer or premium finance company for an amount advanced to the insurer by the insurance producer or premium finance company on behalf of, but in the absence of a payment by, the insured; (2) insured is obligated to pay an unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer. (b) If there are grounds for believing that a person has violated this section, the director may initiate proceedings under AS 21.06.170 - 21.06.230. (c) Upon a finding of a violation of this section, the director may order a penalty of not more than $1,000 for each act in violation of this section and may suspend or revoke the person's license issued under this title.
The amount recoverable by the receiver from reinsurers may not be reduced as a result of delinquency proceedings, regardless of a provision in the reinsurance contract or other agreement. Payment made directly to an insured or other creditor does not diminish the reinsurer's obligation to the insurer's estate unless the reinsurance contract provided for direct coverage of a named insured and the payment was made in discharge of that obligation.
(a) A contingent and unliquidated claim may not share in a distribution of the assets of an insurer that has been adjudicated to be insolvent by an order made under this chapter, except that the claim shall be considered, if properly presented, and may be allowed to share if (1) the claim becomes absolute against the insurer on or before the last day for filing claims against the assets of the insurer; or (2) there is a surplus and the liquidation is, after that, conducted upon the basis that the insurer is solvent. (b) The claim of a third party that is contingent only on the third party claimant first obtaining a judgment against the insured shall be considered and allowed as if there were not a contingency. (c) A claim may be allowed even if contingent, if it is filed under AS 21.78.292. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation. (d) A claim that is due except for the passage of time shall be treated as an absolute claim is treated, except that the claim may be discounted at the legal rate of interest. (e) A claim made under an employment contract by a director, principal officer, or person in fact performing similar functions or having similar powers, is limited to payment for services rendered before the issuance of an order of rehabilitation or liquidation under this chapter.
(a) If a third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the receiver. (b) Whether or not the third party files a claim, the insured may file a claim on the insured's own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within 60 days after mailing of the notice required by AS 21.78.290, whichever is later, the insured is an unexcused late filer. (c) The receiver shall make a recommendation to the court under AS 21.78.260 for the allowance of an insured's claim under (b) of this section after consideration of the probable outcome of a pending action against the insured on which the claim is based, the probable damages recoverable in the action, and the probable costs and expenses of defense. After allowance by the court, the receiver shall withhold from the undistributed assets of the insurer as a reserve the amounts payable on the claim, pending the outcome of litigation and negotiation with the insured. If appropriate, the receiver may reconsider the claim on the basis of additional information and may amend recommendations made to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendations as in its initial determination. The court may amend its allowance. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage as was paid on other claims of like property, based on the lesser of (1) the amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expenses of defense, or (2) the amount allowed on the claims by the court. After all claims are settled or barred, any sum remaining from the amount withheld reverts to the undistributed assets of the insurer. Delay in final payment under this subsection is not a reason for unreasonable delay of the final distribution and discharge of the receiver. (d) If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total amount of the claims equals the policy limit. Claims by the insured shall be evaluated as in (c) of this section. If an insured's claim is subsequently reduced under (c) of this section, the amount available shall be apportioned ratably among the claims that have been reduced under this subsection. (e) A claim may not be presented under this section if it is or might be covered by a guaranty association or foreign guaranty association.
(a) Unless the court directs otherwise, the receiver shall give or cause to be given notice of the liquidation order as soon as possible after the date of the entry of the order of liquidation (1) by first class mail and telephone, to the insurance director, commissioner, or superintendent of each jurisdiction in which the insurer is doing business; (2) by first class mail to a guaranty association or a foreign guaranty association that is or that might become obligated as a result of the liquidation; (3) by first class mail to all insurance agents of the insurer; (4) by first class mail to all persons known or reasonably expected to have claims against the insurer, including all policyholders, at the person's last known address as indicated by the records of the insurer; and (5) by publication in a newspaper of general circulation in the locale in which the insurer has its principal place of business and in other locations that the receiver considers appropriate. (b) Notice to potential claimants under (a) of this section must state that a claimant shall file a claim with the receiver, along with the information required by AS 21.78.170(a), on or before the date specified in the notice. The time specified in the notice may not be less than six months after the date the liquidation order was entered. The liquidation need not require a person claiming a cash surrender value or other investment value in life insurance and annuities to file a claim. A claimant has a duty to keep the receiver informed of a change of address.
(a) A person who receives notice in the form prescribed in AS 21.78.290 that an insurer that the person represents as an agent is the subject of a liquidation order, shall, within 15 days after receipt of that notice, give written notice of the liquidation order as provided in this section. The notice must be in writing and shall be sent by first class mail to each policyholder or other person named in a policy issued through the agent by the insurer, at the last address contained in the agent's records. A policy is considered to be issued through an agent if the agent has a property interest in the expiration of the policy, or if the agent has had in the agent's possession a copy of the declarations of the policy at any time during the life of the policy, unless the ownership of the expiration of the policy has been transferred to another. The written notice issued under this section must include the name and address of the insurer, the name and address of the agent, identification of the policy impaired and the nature of the impairment, including termination of coverage as specified in AS 21.78.100(d) - (g). Notice under this section by a general agent satisfies the notice requirement for an agent under contract to the general agent. Each agent obligated to give notice under this section shall file a report of compliance with the receiver. (b) An agent failing to give notice or file a report of compliance as required in (a) of this section is, after a proceeding under AS 21.06.070 - 21.06.240, subject to a penalty of not more than $1,000 and suspension or revocation of the agent's license issued under this title. (c) The receiver may waive the duties imposed by this section if the receiver determines that other notice to policyholders of the insurer under liquidation is adequate.
(a) Proof of a claim shall be filed with the receiver, in the form required by AS 21.78.170, on or before the last day for filing specified in the notice required under this chapter, except that proof of a claim for cash surrender value or other investment value in life insurance and annuities need not be filed unless expressly required by the receiver. (b) The receiver may, under the following circumstances, permit a claimant who makes a late filing to share in distributions, whether past or future, as if the claim was not late, to the extent that a payment does not prejudice the orderly administration of the liquidation: (1) the existence of the claim was not known to the claimant and the claim was filed as promptly as was reasonably possible after learning of it; (2) a transfer to a creditor was avoided under this chapter, or was voluntarily surrendered under this chapter, and the filing satisfies the conditions of AS 21.78.253; or (3) the valuation under AS 21.78.180(d), of security held by a secured creditor, shows a deficiency, a claim for which is filed within 30 days after the valuation. (c) The receiver shall permit late-filed claims to share in distributions, whether past or future, as if they were not late, if the claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, after the last day for filing, and if the payments were made and expenses were incurred as provided by law. (d) The receiver may consider a claim that is filed late and that is not covered by (b) of this section and may permit it to receive distributions that are subsequently declared on any claims of the same or lower priority, if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive, at each distribution, the same percentage of the amount allowed on the claim as is then being paid to claimants of a lower priority, until the claim has been paid in full.
(a) The receiver shall review all claims filed in the liquidation and shall make further investigation that the receiver considers necessary. The receiver may compound, compromise, or negotiate the amount for which a claim will be recommended to the court, unless the receiver is required by law to accept a claim as settled by a person or organization, including a guaranty association or foreign guaranty association. As soon as practicable, the receiver shall present to the court a report of the claims against the insurer, along with the receiver's recommendations. The report must include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the receiver shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment values, and the amounts owed. (b) The court shall review and adopt the receiver's report on claims by approving those claims that are supported by substantial evidence and disapproving allowed claims that are not supported by substantial evidence. Claims in a report that are not disapproved by the court within a period of 120 days following submission by the receiver shall be treated by the receiver as allowed claims.
Under the direction of the court, the receiver shall distribute assets in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third-party claims. Distribution of assets in kind may be made at valuations set by agreement between the receiver and the creditor, and approved by the court.
(a) All unclaimed money that is subject to distribution and remains in the receiver's hands when the receiver is ready to apply to the court for discharge, including the amount distributable to a creditor, shareholder, member, or other person who is unknown and cannot be found, shall be deposited with the Department of Revenue and shall be paid, without interest, to the person entitled to receive it or to the person's legal representative upon proof satisfactory to the Department of Revenue of the person's right to it. Notwithstanding the provisions of AS 34.45, an amount on deposit with the Department of Revenue that is not claimed within six years after the discharge of the receiver is considered to be abandoned and shall, without further proceedings, be deposited in the general fund. (b) All money retained for claims described in AS 21.78.280 and not distributed, shall, upon discharge of the receiver, be deposited with the Department of Revenue and paid in accordance with AS 21.78.260. Any amount remaining that, under AS 21.78.260, would revert to the undistributed assets of the insurer, shall be transferred to the Department of Revenue. Remaining amounts become the property of the state under (a) of this section, unless the director, in the director's discretion, petitions the court to reopen the liquidation under AS 21.78.297.
(a) When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the receiver shall apply to the court for discharge. The court may grant the discharge and make additional orders the court considers appropriate. (b) Any other person may apply to the court at any time for an order under (a) of this section. If the application is denied, the applicant shall pay the receiver's costs and expenses incurred in resisting the application, including a reasonable attorney fee.
After the liquidation proceeding has been terminated and the receiver discharged, the director or an interested party may at any time petition the court to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall order the liquidation proceeding reopened.
If it appears to the director that the records of an insurer that is in the process of liquidation, or is completely liquidated, are no longer useful, the director may recommend to the court, and the court shall direct, which records should be retained for future reference and which should be destroyed.
Within three years after the date of the entry of an order of rehabilitation or liquidation of a domestic mutual insurer or a domestic reciprocal insurer, the director may make and file a report and petition to the court setting out (1) the reasonable value of the assets of the insurer; (2) the liabilities of the insurer to the extent thus far ascertained by the director; (3) the aggregate amount of the assessment, if any, that the director considers reasonably necessary to pay all claims, the costs and expenses of the collection of the assessments, and the costs and expenses of the delinquency proceedings in full; (4) other information relative to the affairs or property of the insurer that the director considers material.
(a) Upon the filing and reading of the report and petition provided for in AS 21.78.300, the court, ex parte, may order the director to assess all members or subscribers of the insurer who may be subject to the assessment, in the aggregate amount the court finds reasonably necessary to pay all valid claims as may be timely filed and proved in the delinquency proceedings, together with the costs and expenses of levying and collecting assessments and the costs and expenses of the delinquency proceedings in full. The order must require the director to assess each member or subscriber for a proportion of the aggregate assessment, according to the reasonable classification of the members or subscribers and formula that may be made by the director and approved by the court. (b) The court may order additional assessments upon the filing and reading of any amendment or supplement to the report and petition referred to in (a) of this section, if the amendment or supplement is filed within three years after the date of the entry of the order of rehabilitation or liquidation. (c) After the entry of the order to levy and assess members or subscribers of an insurer referred to in (a) or (b) of this section, the director shall levy and assess members or subscribers in accordance with the order. (d) The total of all assessments against a member or subscriber with respect to a policy, whether levied under this chapter or under another provision of this title, shall be for no greater amount than that specified in the policy or policies of the member or subscriber and as limited under this title, except as to a policy that was issued at a rate of premium below the minimum rate lawfully permitted for the risk insured, in which event the assessment against the policyholder shall be upon the basis of the minimum rate for the risk. (e) An assessment may not be levied against a member or subscriber with respect to a nonassessable policy issued in accordance with this title, when the insurer has a nonrevoked authority to issue nonassessable policies.
(a) An assessment of a subscriber or member of an insurer made by the director under the order of court fixing the aggregate amount of the assessment against all members or subscribers and approving the classification and formula made by the director under AS 21.78.310 shall be prima facie correct. (b) Each member or subscriber shall be notified of the amount of assessment to be paid by the member or subscriber by written notice mailed to the address of the member or subscriber last of record with the insurer. Failure of the member or subscriber to receive the notice so mailed, within the time specified therein for the payment of the assessment or at all, shall be no defense in a proceeding to collect the assessment. (c) If the member or subscriber fails to pay the assessment within the period specified in the notice, which period may not be less than 20 days after mailing, the director may obtain an order in the delinquency proceedings requiring the member or subscriber to show cause at a time and place fixed by the court why judgment should not be entered against the member or subscriber for the amount of the assessment together with all costs, and a copy of the order and a copy of the petition shall be served upon the member or subscriber within the time and in the manner designated in the order. (d) If the subscriber or member after due service of a copy of the order and petition referred to in (c) of this section is made upon the member or subscriber (1) fails to appear at the time and place specified in the order, judgment shall be entered against the member or subscriber as prayed for in the petition; or (2) appears in the manner and form required by law in response to the order, the court shall hear and determine the matter and enter a judgment in accordance with its decision. (e) The director may collect the assessment through any other lawful means.
(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order has a right to recover on behalf of the insurer (1) from a parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions, other than a distribution of shares of the same class of stock, paid by the insurer on the insurer's capital stock; or (2) a payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or the insurer's subsidiary to a director, officer, or employee. If the distribution or payment is made during the 12 months preceding the petition for liquidation, conservation, or rehabilitation, the distribution or payment is subject to the limitations of (b) - (d) of this section. (b) A distribution may not be recovered if the parent or affiliate shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations. (c) A person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distribution was paid is liable up to the amount of the distribution or payment that the person received. If two or more persons are liable with respect to the same distribution, the persons are jointly and severally liable. (d) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds that expended funds or incurred expenses or may expend funds or may incur expenses in connection with the impaired or insolvent insurer. (e) To the extent that a person liable under (c) of this section is insolvent or otherwise fails to pay a claim due under (c) of this section, the person's parent corporation or holding company or person who otherwise controlled the parent corporation or holding company at the time the distribution was paid is jointly and severally liable for the resulting deficiency in the amount recovered from the parent corporation or holding company or the person who otherwise controlled the parent corporation or holding company.
In this chapter, (1) delinquency proceeding means a proceeding commenced against an insurer under this chapter for the purpose of liquidating, rehabilitating, reorganizing, or conserving the insurer; (2) domiciliary state means the state in which an insurer is incorporated or organized, or in the case of an insurer incorporated or organized in a foreign country, the state in which the insurer, having become authorized to do business in the state, has at the commencement of delinquency proceedings, the largest amount of its assets held in trust and assets held on deposit for the benefit of its policyholders or policyholders and creditors in the United States, and the insurer is considered to be domiciled in that state; (3) foreign country means territory not in a state; (4) general assets means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to the specifically encumbered property the term includes all the property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby; assets held in trust and assets held on deposit for the security or benefit of all policyholders or all policyholders and creditors in the United States shall be considered general assets; (5) impairment or insolvency means that the capital of a stock insurer or the surplus of a mutual or reciprocal insurer shall be considered to be impaired and the insurer shall be considered to be insolvent, when the insurer is not possessed of assets at least equal to all liabilities and required reserves together with its total issued and outstanding capital stock if a stock insurer, or the minimum surplus if a mutual or reciprocal insurer required by this title to be maintained for the kind or kinds of insurance it is then authorized to transact; (6) insurer means a person, firm, corporation, association, or aggregation of persons doing an insurance business and subject to the insurance supervisory authority of or to liquidation, rehabilitation, reorganization, or conservation by the director or the equivalent insurance supervisory official of another state; (7) preferred claim means a claim with respect to which the law of the state or of the United States accords priority of payments from the general assets of the insurer; (8) receiver means receiver, liquidator, rehabilitator, or conservator as the context may require; (9) reciprocal state means a state other than this state in which in substance and effect the provisions of the Uniform Insurers Liquidation Act, as defined in AS 21.78.200, are in force, including the provisions requiring that the director of insurance or equivalent insurance supervisory official be the receiver of a delinquent insurer; (10) secured claim means a claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets; the term also includes claims which more than four months prior to the commencement of delinquency proceedings in the state of the insurer's domicile have become liens upon specific assets by reason of judicial process; (11) special deposit claim means a claim secured by a deposit made under statute for the security or benefit of a limited class or classes of persons, but not including general assets; (12) state means a state of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.
The purpose of this chapter is to protect, subject to certain limitations, the persons specified in AS 21.79.020(a) against failure in the performance of contractual obligations under life, health, and annuity policies, plans, or contracts specified in AS 21.79.020(b) because of the impairment or insolvency of the member insurer that issued the policies, plans, or contracts. To provide this protection, an association of member insurers is created under AS 21.79.040 to pay benefits and continue coverages as limited by this chapter, and members of the association are subject to assessment to provide funds to carry out the purpose of this chapter.
(a) This chapter applies to a policy and contract specified in (b) of this section and to a person who (1) except for a nonresident certificate holder under a group policy or contract, is the beneficiary, assignee, or payee, including health care providers rendering services covered under health insurance policies or certificates, of a person described in (2) of this subsection; and (2) except in the case of an unallocated annuity contract or a structured settlement annuity, is the owner of, or a certificate holder or enrollee under, the policy or contract, and who (A) is a resident; or (B) is not a resident, if the following conditions are satisfied: (i) the member insurer that issued the policy or contract is domiciled in this state; (ii) the state in which the person resides has an association similar to the association created by this chapter; and (iii) the person is not eligible for coverage by an association in any other state due to the fact that the insurer, hospital or medical service corporation, or health maintenance organization was not licensed at the time specified in the guaranty association law of that state. (b) This chapter applies to a person specified in (a) of this section for a policy or contract of direct, nongroup life insurance, health insurance, annuity, and supplemental policy or contract, to a certificate under a direct group life, health, annuity, or supplemental policy or contract, to a subscriber's contract issued by a hospital or medical service corporation under AS 21.87, to a subscriber's contract issued by a health maintenance organization under AS 21.86, and to an unallocated annuity contract issued by a member insurer, except as otherwise limited by this chapter. In this subsection, annuity policy or contract or certificate under a direct group life, health, annuity, or supplemental policy or contract includes a guaranteed investment contract, a deposit administration contract, an unallocated funding agreement, an allocated funding agreement, a structured settlement annuity, an annuity issued to or in connection with a government lottery, and an immediate or deferred annuity contract. (c) This chapter does not apply to (1) that part of a policy or contract that is not guaranteed by the member insurer; (2) that part of the risk borne by the policy or contract owner; (3) a policy or contract of reinsurance, unless an assumption certificate has been issued; (4) that part of a policy or contract, except for part of a policy or contract, including a rider, that provides long-term care or other health insurance benefits, to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value, (A) averaged over the period of four years before the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever occurs first, exceeds the rate of interest determined by subtracting two percentage points from the published monthly average for that same four-year period or for a lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this chapter, whichever occurs first; and (B) on and after the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever occurs first, exceeds the rate of interest determined by subtracting three percentage points from the most recent published monthly average; (5) a portion of a policy or contract issued to a plan or program of an employer, association, or similar entity to provide life, health, or an annuity benefit to an employee, member, or other person, to the extent that the plan or program is self-funded or uninsured, including a benefit payable by the employer, association, or similar entity under (A) a multiple employer welfare arrangement as defined in 29 U.S.C. 1002 (Employee Retirement Income Security Act of 1974); (B) a minimum premium group insurance plan; (C) a stop-loss group insurance plan; or (D) an administrative services only contract; (6) that part of a policy or contract that provides a dividend or experience rating credit or voting rights, or provides that a fee or allowance be paid to a person, including the policy or contract owner, in connection with the service to or administration of the policy or contract; (7) a policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state; (8) a person who is a payee or beneficiary of a contract owner who is a resident of this state if the payee or beneficiary is provided coverage by the association of another state; (9) a person covered under (d) of this section if any coverage is provided by the association of another state to that person; (10) an unallocated annuity contract issued to or in connection with a benefit plan protected under the United States Pension Benefit Guaranty Corporation, regardless of whether the United States Pension Benefit Guaranty Corporation has become liable to make any payments with respect to the benefit plan; (11) that part of an unallocated annuity contract that is not issued to or in connection with a specific employee, union, or association of natural persons benefit plan or a government lottery; (12) that part of a policy or contract to the extent that assessments required by AS 21.79.070 with respect to the policy or contract are preempted by law; (13) an obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner, including, without limitation, (A) a claim based on marketing materials; (B) a claim based on a side letter or other document that was issued by the member insurer without meeting applicable policy or contract form filing or approval requirements; (C) a misrepresentation of or regarding policy or contract benefits; (D) an extra contractual claim; or (E) a claim for penalties or consequential or incidental damages; (14) a contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which, in each case, is not an affiliate of the member insurer; (15) that part of a policy or contract to the extent the part of the policy or contract provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but that have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier; if a policy's or contract's interest or changes in value are credited less frequently than annually, then, for purposes of determining the values that have been credited and are not subject to forfeiture under this paragraph, the interest or change in value determined by using the procedures defined in the policy or contract shall be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture;  (16) a policy or contract providing a hospital, medical, prescription drug, or other health care benefit in accordance with 42 U.S.C. 1395w-21 - 1395w-154 or federal regulations adopted under those sections;  (17) a person who acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the transaction occurred before, on, or after 26 U.S.C. 5891(c)(3)(A) became effective; or  (18) structured settlement annuity benefits to which a payee or beneficiary has transferred the payee's or beneficiary's rights in a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the transaction occurred before, on, or after 26 U.S.C. 5891(c)(3)(A) became effective. (d) This chapter, except for (a) of this section, applies to an unallocated annuity contract and shall provide coverage to a person who is the owner of (1) the unallocated annuity contract if the contract is issued to or in connection with a specific benefit plan whose plan sponsor has its principal place of business in this state; and (2) an unallocated annuity contract issued to or in connection with a government lottery if the owner is a resident. (e) This chapter, except for (a) of this section, applies to a structured settlement annuity and shall provide coverage to a person who is a payee under a structured settlement annuity, or the beneficiary of a payee if the payee is deceased, if the payee is (1) a resident, regardless of where the contract owner resides; or (2) not a resident, but only if both of the following conditions exist: (A) the contract owner of the structured settlement annuity is (i) a resident; or (ii) not a resident, but the insurer that issued the structured settlement annuity is domiciled in this state, and the state in which the contract owner resides has an association similar to the association created by this chapter; and (B) the payee, or the payee's beneficiary, and the contract owner are not eligible for coverage by the association of the state in which the payee or contract owner resides. (f) [Repealed,  58 ch 47 SLA 2018.]
(a) The benefits for which the association may become liable may not exceed the lesser of (1) the contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired or insolvent insurer; (2) with respect to any one life, regardless of the number of policies or contracts, (A) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance; (B) for health insurance benefits, (i) $100,000 for coverage not defined as disability income insurance, health benefit plans, or long-term care insurance, including any net cash surrender and net cash withdrawal values; (ii) $300,000 for disability income insurance as defined in AS 21.12.052 and $300,000 for long-term care insurance as defined in AS 21.53.200; (iii) $500,000 for health benefit plans; (C) $250,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; (3) with respect to either one contract owner provided coverage under AS 21.79.020(d)(2) or one plan sponsor whose plan owns directly or in trust one or more unallocated annuity contracts not included in (4) of this subsection, $5,000,000 in unallocated annuity contract benefits, irrespective of the number of contracts held by that contract owner or plan sponsor except that, in the case of one or more unallocated annuity contracts that are covered under this chapter and that are owned by a trust or other entity for the benefit of two or more plan sponsors, coverage shall be provided by the association if the largest interest in the trust or entity owning the contract is held by a plan sponsor whose principal place of business is in this state; however, the association is not liable to cover more than $5,000,000 in benefits, regardless of the number of policies and contracts held by the owner; (4) with respect to an individual participating in a governmental retirement benefit plan established under 26 U.S.C. 401, 26 U.S.C. 403(b), or 26 U.S.C. 457 and covered by an unallocated annuity contract, or to a beneficiary of the individual if the individual is deceased, in the aggregate, $250,000 in present-value annuity benefits, including net cash surrender and net cash withdrawal values; or (5) with respect to each payee of a structured settlement annuity, or beneficiary of the payee if the payee is deceased, $250,000 in present-value annuity benefits in the aggregate, including net cash surrender and net cash withdrawal values, if any. (b) The limitations imposed under this section are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of an impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations under this chapter may be met by the use of assets attributable to covered policies or reimbursed to the association under its subrogation and assignment rights. (c) In providing coverage required under AS 21.79.060, the association may not be required to guarantee, assume, reissue, reinsure, or perform, or cause to be guaranteed, assumed, reissued, reinsured, or performed, the contractual obligations of an insolvent or impaired insurer under a covered policy or contract when the obligations do not materially affect the economic values or economic benefits of the covered policy or contract. (d) The association may not be required to cover more than (1) an aggregate of $300,000 in benefits with respect to any one life under (a)(2), (4), and (5) of this section, except that, with respect to benefits for health benefit plans under (a)(2)(B) of this section, the aggregate liability of the association may not exceed $500,000 for any one individual; or (2) $5,000,000 in benefits with respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, regardless of the number of policies and contracts held by the owner. (e) For purposes of this chapter, benefits provided by a long-term care rider to a life insurance policy or annuity contract will be considered the same type of benefits as the base life insurance policy or annuity contract to which the rider relates.
(a) This chapter shall be construed to achieve the purposes set out in AS 21.79.010. (b) This chapter is intended to provide coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this chapter is provided coverage under the law of any other state, the person may not be provided coverage under this chapter. In determining the application of the provisions of this subsection, in situations where a person could be covered by the association of more than one state, whether as an owner, payee, beneficiary, or assignee, this chapter shall be construed in conjunction with other state laws to result in coverage by only one association.
(a) There is established as a nonprofit legal entity the Alaska Life and Health Insurance Guaranty Association. Each member insurer shall be a member of the association as a condition of the insurer's authority to transact insurance, a hospital or medical service corporation business, or a health maintenance organization business in this state. The association shall perform its functions under a plan of operation established and approved under AS 21.79.080 and shall exercise its powers through the Board of Governors established under AS 21.79.050. For purposes of administration and assessment, the association shall maintain the following accounts: (1) the health account; and (2) the life insurance and annuity account, including the following subaccounts: (A) life insurance account; (B) annuity account that must include annuity contracts owned by a governmental retirement benefit plan, or its trustee, qualified under 26 U.S.C. 401, 26 U.S.C. 403(b), or 26 U.S.C. 457 (Internal Revenue Code), but that otherwise excludes unallocated annuities; and (C) unallocated annuity account that must exclude contracts owned by a governmental retirement benefit plan, or its trustee, qualified under 26 U.S.C. 401, 26 U.S.C. 403(b), or 26 U.S.C. 457 (Internal Revenue Code). (b) The association is under the supervision of the director and is subject to the insurance laws of the state. Except as provided in AS 21.79.110(b), meetings or records of the association may be open to the public upon majority vote of the Board of Governors of the association.
(a) The Board of Governors of the association consists of not less than seven nor more than 11 representatives of member insurers. The director may appoint two individuals as members of the board to represent the public. Terms of office for board members shall be established in the plan of operation submitted under AS 21.79.080. Member insurers shall select the insurer board members, subject to the approval of the director. A vacancy in a board membership held by an insurer member shall be filled for the unexpired term by a majority vote of the remaining board members, subject to the approval of the director. A vacancy in a board membership held by a representative of the public shall be filled by the director. A board member who represents the public may not be an officer, director, or employee of an insurer, hospital or medical service corporation, or health maintenance organization and may not be engaged in the business of insurance. (b) Before the director approves the selection of an insurer board member, the director shall consider whether all member insurers are fairly represented on the board. (c) A board member is not entitled to compensation by the association. However, a board member may be reimbursed from the assets of the association for expenses incurred while performing duties as a member of the board.
(a) If a member insurer becomes impaired, the association may, with the approval of the director and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer, (1) guarantee, assume, reissue, reinsure, or provide for the guarantee, assumption, reissuance, or reinsurance of the policies or contracts of the impaired insurer; and (2) provide money, pledges, loans, notes, guarantees, or other means that are necessary to act under (1) of this subsection and to assure payment of the contractual obligations of the impaired insurer until those obligations are guaranteed, reinsured, or assumed. (b) If a member insurer becomes insolvent, the association shall, in its discretion and with the approval of the director, (1) guarantee, assume, reissue, reinsure, or provide for the guarantee, assumption, reissuance, or reinsurance of the covered policies or contracts of the insolvent insurer, or otherwise assure payment of the contractual obligations of the insolvent insurer; and provide money, pledges, loans, notes, guarantees, or other means that are necessary to discharge the association's duties under this section; or  (2) provide benefits and coverage in accordance with the following provisions:  (A) with respect to policies and contracts, assure payment of benefits that would have been payable under a policy or contract of the insolvent insurer for claims incurred with respect to  (i) a group policy or contract, not later than the earlier of the next renewal date under the policy or contract or 45 days, but in no event less than 30 days, after the date on which the association becomes obligated with respect to the policy or contract;  (ii) an individual policy, contract, or annuity, not later than the earlier of the next renewal date, if any, under the policy or contract or one year, but in no event less than 30 days, after the date on which the association becomes obligated with respect to the policy or contract; (B) with respect to an individual or group policy or contract, make a diligent effort to provide a known insured, an enrollee, an annuitant, or a group policy owner or group contract owner 30 days' notice of the termination of the benefits provided;  (C) with respect to an individual policy or contract, make available to each known insured, enrollee, or annuitant, or owner if other than an insured, enrollee, or annuitant, and with respect to an individual who was formerly an insured, enrollee, or annuitant under a group policy or contract who is not eligible for replacement group coverage, make available substitute coverage on an individual basis under (D) of this paragraph, if the insured, enrollee, or annuitant had a right under law or under the terminated policy or contract to convert coverage to individual coverage or to continue an individual policy or contract in force until a specified age, or for a specific time during which the insurer, hospital or medical service corporation, or health maintenance organization did not have the unilateral right to make changes in any provision of the policy or contract or had a right only to make changes in premium by class;  (D) in providing the substitute coverage under (C) of this paragraph, the association (i) shall offer either to reissue the terminated coverage or to issue an alternate policy or contract at actuarially justified rates;  (ii) shall offer an alternative or reissued policy or contract without requiring evidence of insurability and may not provide for a waiting period or exclusion that would not have applied under the terminated policy or contract; and  (iii) may reinsure an alternative or reissued policy or contract; (E) an alternative policy or contract must  (i) if adopted by the association, be subject to the approval of the director; the association may adopt alternative policies or contracts of various types for future issuance without regard to a particular impairment or insolvency;  (ii) contain at least the minimum statutory provisions required in the state and provide benefits that may not be unreasonable in relation to the premium charged; the association shall set the premium under a table of rates that it shall adopt; the premium must reflect the amount of insurance to be provided and the age and class of risk of each insured, but may not reflect changes in the health of the insured after the original policy or contract was last underwritten;  (iii) if issued by the association, provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association;  (F) if the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium shall be actuarially justified and set by the association according to the amount of insurance or coverage provided and the age and class of risk;  (G) the association's obligations with respect to coverage under a policy or contract of an impaired or insolvent insurer or under a reissued or alternative policy or contract stop on the date the coverage, policy, or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, the enrollee, or the association;  (H) when proceeding under this subsection with respect to a policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with AS 21.79.020(c)(4). (c) Nonpayment of a premium within 31 days after the date required under the terms of a guaranteed, assumed, alternative or reissued policy or contract or substitute coverage terminates the obligations of the association under the policy, contract, or coverage except with respect to the claims incurred or the net cash surrender value that may be due under the provisions of this chapter. (d) A premium due for coverage after entry of an order of liquidation of an insolvent insurer belongs to and is payable at the direction of the association. Upon request of a liquidator of an insolvent insurer, the association shall provide a report to the liquidator regarding the premium collected by the association. The association is liable for unearned premiums due to a policy or contract owner arising after the entry of the order. (e) The protection provided by this chapter does not apply if guaranty protection is provided to residents of this state by the laws of another state or jurisdiction that is the domicile of the impaired or insolvent insurer. (f) In carrying out its duties under (b) of this section, the association may impose a permanent policy or contract lien under a guarantee, assumption, or reinsurance agreement if the policy or contract lien is approved by a court and the association finds that (1) the amount that may be assessed under this chapter is less than the amount needed to assure full and prompt performance of the association's duties under this chapter; or (2) the economic or financial condition that affects member insurers is sufficiently adverse that the imposition of a policy or contract lien is in the public interest. (g) In carrying out its duties under (b) of this section, the association may request the superior court to impose an injunction against the payment of a cash value and policy loan, or the exercise of another right to withdraw funds held in connection with a policy or contract, in addition to a contractual provision for deferral of a cash or policy loan value. In addition, if the receivership court imposes an injunction on payment of cash values or policy loans or on any other right to withdraw funds of an impaired or insolvent insurer held in conjunction with a policy or contract, the association may defer payment of cash values, policy loans, or other rights for the period of the injunction, except for claims covered by the association to be paid as required by a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court. (h) If the association fails to take action under (b) of this section within a reasonable period of time after a member insurer becomes insolvent, the director shall assume the powers of the association under (b) of this section. (i) If requested by the director, the association may assist and advise the director concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of an impaired or insolvent insurer. (j) The association is entitled to appear or intervene in a court or agency proceeding in this state involving an impaired or insolvent insurer that the association is or may be obligated to or involving a person or property against which the association may have rights. The standing conferred by this subsection extends to all matters germane to the powers and duties of the association, including proposals to reinsure or guarantee a covered policy of the impaired or insolvent insurer and the determination of a covered policy and a contractual obligation. The association also has the right to appear or intervene before a court or agency in another state in a proceeding involving an impaired or insolvent insurer that the association is or may be obligated to or involving a person or property against which the association may have rights. (k) A person who receives benefits under this chapter is considered to have assigned the rights under, and any cause of action against a person for losses arising under, resulting from, or otherwise relating to, the covered policy to the association to the extent of the benefits received under this chapter, whether the benefits are payment of or on account of contractual obligations, continuations of coverage, or provisions of substitute or alternative policies, contracts, or coverages. The association may require an assignment to the association of those rights by the enrollee, payee, policy or contract owner, beneficiary, insured, or annuitant before a person receives the rights or benefits conferred by this chapter. The priority of the association's subrogation right to the assets of the insolvent insurer is the same as the priority of the person entitled to benefits under this chapter. In addition to the rights described in this subsection, the association has common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, enrollee, or payee of a policy or contract with respect to the policy or contract. These rights include, in the case of a structured settlement annuity, the rights of the enrollee, owner, beneficiary, or payee of the annuity, to the extent of benefits received under this chapter, against a person originally or by succession responsible for the losses arising from the personal injury relating to the annuity or annuity payment, except for a person responsible solely by reason of being an assignee in respect to a qualified assignment under 26 U.S.C. 130 (Internal Revenue Code). If the provisions of this subsection are invalid with respect to a person or claim, the amount payable by the association with respect to the related coverage obligation shall be reduced by the amount realized by another person from the person or claim covered by the association. If the association has provided benefits with respect to a covered obligation and a person recovers amounts to which the association has rights as described in this subsection, the person recovering the amounts shall pay to the association the portion of the recovery attributable to the policies or contracts covered by the association. (l) In addition to the rights and powers otherwise established in this chapter, the association may (1) enter into contracts that are necessary or proper to carry out the provisions of this chapter; (2) sue or be sued, and take legal action necessary or proper for recovery of an unpaid assessment under AS 21.79.070 or settlement of a claim or potential claim; (3) borrow money to carry out the purposes of this chapter; notes or other evidence of indebtedness of the association not in default are legal investments for domestic member insurers and may be carried as admitted assets; (4) employ or retain those persons necessary to handle the financial transactions of the association and other functions under this chapter; (5) negotiate and contract with a liquidator, rehabilitator, conservator, or ancillary receiver to carry out the powers and duties of the association; (6) exercise, for the purposes of this chapter and to the extent approved by the director, the powers of a domestic life insurer, health insurer, hospital or medical service corporation, or health maintenance organization; however, the association may not issue policies or contracts other than those issued to perform its obligations under this chapter; (7) take legal action to prevent or recover the payment of improper claims; (8) join an organization of one or more other state associations with similar purposes; (9) determine, using reasonable business judgment, the means by which the association is to provide the benefits of this chapter in an economical and efficient manner; (10) request information from a person seeking coverage from the association in order to determine the obligations of the association under this chapter; a person receiving a request under this paragraph shall promptly comply with the request; (11) request information from a member insurer in order to aid in the exercise of a power under this section; a member insurer receiving a request under this paragraph shall promptly comply with the request; (12) unless prohibited by law, in accordance with the terms of the policy or contract, file for actuarially justified rates or premium increases for a policy or contract for which it provides coverage under this chapter; and  (13) perform all other acts necessary or proper to implement this chapter. (m) When the association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the association's obligations under this chapter, the covered person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement. (n) In carrying out its duties in connection with guaranteeing, assuming, or reinsuring a policy or contract, the association may, subject to approval of the receivership court, issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract under the following provisions: (1) in place of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for (A) a fixed interest rate; (B) payment of dividends with minimum guarantees; or (C) a different method for calculating interest or changes in value; (2) there is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract; and (3) the alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms. (o) The rights and obligations of the association, reinsurers of an insolvent insurer, and the receiver of an insolvent insurer are governed by the following provisions: (1) not later than 180 days after the date of the order of liquidation, the association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies, contracts, or annuities covered, in whole or in part, by the association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association; an assumption is effective as of the date of the order of liquidation; the election shall be effected by the association or the National Organization of Life and Health Insurance Guaranty Associations on the association's behalf by written notice, return receipt requested, to the affected reinsurers; to facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance and to protect the financial position of the estate, as soon as possible after commencement of formal delinquency proceedings, the receiver and each reinsurer of the ceding member insurer shall make available, upon request, to the association or the National Organization of Life and Health Insurance Guaranty Associations on the association's behalf (A) copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether those contracts should be assumed; and (B) notices of any defaults under the reinsurance contracts or any known event or condition that, with the passage of time, could become a default under the reinsurance contracts; (2) as to reinsurance contracts assumed by the association under this subsection, (A) the association is responsible for all unpaid premiums due under the reinsurance contracts for periods before, on, and after the date of the order of liquidation and is responsible for the performance of all other obligations to be performed on and after the date of the order of liquidation in each case that relates to policies, contracts, or annuities covered, in whole or in part, by the association; the association may charge policies, contracts, or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and shall provide notice and an accounting of those charges to the liquidator; (B) the association is entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods on and after the date of the order of liquidation and that relate to policies, contracts, or annuities covered, in whole or in part, by the association, if, upon receiving those amounts, the association is obliged to pay to the beneficiary, under the policy, contract, or annuity for which the amounts were paid, a portion of the amount equal to the lesser of the amount (i) received by the association; and (ii) by which the amount received by the association exceeds the amount equal to the benefits paid by the association under the policy, contract, or annuity, less the amount retained by the insurer applicable to the loss or event; (C) not later than 30 days after the association's election, the association and each reinsurer under contracts assumed by the association shall calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies, contracts, or annuities covered, in whole or in part, by the association; in making the calculation, the association and reinsurer shall give full credit to all items paid by either the member insurer or its receiver or the reinsurer before the election date; the reinsurer shall pay the receiver any amounts due for losses or events before the date of the order of liquidation, subject to any set-off for premiums unpaid for periods before the date, and the association or reinsurer shall pay any remaining balance due the other, in each case, not later than five days after the completion of the calculation; a dispute over the amount due to the association or reinsurer shall be resolved by arbitration under the terms of the affected reinsurance contract or, if the contract does not contain an arbitration clause, as otherwise provided by law; if the receiver has received an amount due to the association under (B) of this paragraph, the receiver shall remit the amount to the association as promptly as practicable; (D) if the association or receiver on the association's behalf, not later than 60 days after the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies, contracts, or annuities covered, in whole or in part, by the association, the reinsurer may not terminate the reinsurance contracts for failure to pay premium insofar as the reinsurance contracts relate to policies, contracts, or annuities covered, in whole or in part, by the association, and may not set off an unpaid amount due under another contract or an unpaid amount due from a party other than the association against amounts due to the association; (3) during the period from the date of the order of liquidation until the election date, or, if the election date does not occur, until 180 days after the date of the order of liquidation, (A) neither the association nor the reinsurer shall have any rights or obligations under reinsurance contracts that the association has the right to assume, whether for periods before, on, or after the date of the order of liquidation; and (B) the reinsurer, the receiver, and the association shall, to the extent practicable, provide to each other data and records reasonably requested, if, once the association has elected to assume a reinsurance contract, the parties' rights and obligations are governed by this subsection; (4) if the association does not elect to assume a reinsurance contract by the election date, the association does not have rights or obligations, in each case for periods before, on, and after the date of the order of liquidation, with respect to the reinsurance contract; (5) when policies, contracts, annuities, or covered obligations with respect to policies or annuities are transferred to an assuming insurer, the association may also transfer reinsurance on the policies, contracts, or annuities, in the case of contracts assumed by the association, subject to the following: (A) unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred may not cover any new policies or insurance, contracts, or annuities in addition to those transferred; (B) the obligations described in (1) of this subsection do not apply with respect to matters arising on and after the effective date of the transfer; and (C) notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than 30 days before the effective date of the transfer; (6) the provisions of this subsection supersede the provisions of any state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods on and after the date of the order of liquidation, to the receiver of the insolvent insurer or another person; the receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods before the date of the liquidation, subject to applicable set-off provisions; (7) except as otherwise provided in this section, nothing in this subsection (A) alters or modifies the terms and conditions of a reinsurance contract; (B) abrogates or limits the right of a reinsurer to claim that the reinsurer is entitled to rescind a reinsurance contract; (C) gives a policy or contract owner, enrollee, certificate holder, or beneficiary an independent cause of action against a reinsurer that is not otherwise set out in the reinsurance contract; (D) limits or affects the association's rights as a creditor of the estate against the assets of the estate; and (E) applies to a reinsurance agreement covering property or casualty risks.
(a) For the purpose of providing funds necessary to carry out the powers and duties of the association, the Board of Governors shall by resolution assess the member insurers, separately for each account, at a time and for an amount that the board finds necessary. Assessments are authorized when a resolution is passed and are due not less than 30 days after prior written notice to the member insurers and accrue interest at 10 percent a year from the date payment is due. Authorized assessments become called when notice is mailed by the association to member insurers. (b) There shall be two assessments as follows: (1) class A assessments shall be authorized and called for the purpose of meeting administrative and legal costs and other expenses and examinations conducted under the authority of AS 21.79.060; class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer; (2) class B assessments shall be authorized and called only as necessary to carry out the powers and duties of the association with regard to an impaired or an insolvent insurer. (c) The amount of a class A assessment shall be determined by the board and may be made on a pro rata or non pro rata basis. If a pro rata assessment is made, the board may provide that it be credited against future class B assessments. The amount of a class B assessment, except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts and among the subaccounts of the life insurance and annuity account under an allocation formula that may be based on the premiums or reserves of the impaired or insolvent insurer or by another standard determined by the board in its sole discretion as being fair and reasonable under the circumstances. The amount of the class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the association's plan of operation approved by the director. The methodology must provide for 50 percent of the assessment to be allocated to accident and health member insurers and 50 percent to be allocated to life and annuity member insurers. (d) Class B assessments shall be based on the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account in proportion to the premiums received on business in this state by all assessed member insurers during the three calendar years preceding the year in which the insolvency or impairment occurred. (e) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, a payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. The amount by which an assessment against a member insurer is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in (c) of this section. Once the conditions that caused a deferral are removed or rectified, the member insurer shall pay all assessments that were deferred under a repayment plan approved by the association. (f) Except as provided in this subsection, the total of all assessments on a member insurer for each subaccount of the life and annuity account and for the health account may not in any one calendar year exceed two percent of the member insurer's average annual premiums received in this state on policies or contracts covered by the account or subaccount during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer. If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation imposed under this subsection shall be limited to the highest of the average annual premiums during the preceding three calendar years for the applicable subaccount or account as calculated under this section. If the maximum assessment, together with the other assets of the association in an account, does not provide in any one year in either account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds shall be assessed as soon as permitted by this chapter. (g) The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims. (h) If the maximum assessment for a subaccount of the life and annuity account in any one year does not provide an amount sufficient to carry out the responsibilities of the association, the board shall, as provided under (d) of this section, access all subaccounts of the life and annuity account for the necessary additional amount, subject to the assessment limit provided in (f) of this section. (i) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer may not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under (b) of this section and computation of assessments under this section shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized. (j) The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains, and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future losses claims. (k) A member insurer may, in determining its premium rates and policy owner dividends as to any kind of insurance, hospital or medical service corporation business, or health maintenance organization business within the scope of this chapter, consider the amount reasonably necessary to meet its assessment obligations under this chapter. (l) A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set out in the notice provided by the association. The payment shall be available to meet association obligations during the pendency of the protest or any subsequent appeal. If a payment is made under protest, payment must be accompanied by a statement in writing that the payment is made under protest and setting out a brief statement of the grounds for the protest. Within 60 days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest. Within 30 days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within 60 days after receipt of notice of the final decision, the protesting member insurer may appeal that final action to the director. In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the director for a final decision with or without recommendation from the association. If a protest or appeal on an assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the association.
(a) The association shall submit to the director a plan of operation and any amendments to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments take effect on the written approval of the plan by the director or 30 days after receipt by the director if not disapproved by the director. (b) If the association fails to submit suitable amendments to the plan, the director shall, after notice and hearing, adopt regulations to implement this chapter. These regulations remain in effect until amended or repealed by the director. (c) A member insurer shall comply with the plan of operation. The plan of operation must (1) establish procedures for handling assets of the association; (2) establish the amount and method of reimbursing members of the board under AS 21.79.050(c); (3) establish regular places and times for meetings of the board in the state; the board may conduct meetings telephonically; (4) establish procedures for keeping records of all financial transactions of the association, its agents, and the board; (5) establish terms of office for members of the board, and establish procedures for the selection of the members of the board and for the director's approval of the members selected; (6) establish additional procedures for assessments under AS 21.79.070; (7) establish procedures for removing a member of the board for cause, including procedures for removing a member of the board who becomes an impaired or insolvent insurer; (8) establish policy and procedures for addressing conflicts of interest; and  (9) contain additional provisions necessary or proper for the association to exercise its powers and duties. (d) The plan of operation may delegate the powers and duties of the association, other than those under AS 21.79.060(l)(3) and 21.79.070, to a corporation or other organization performing functions similar to those of the association, or its equivalent, in two or more states. The association shall reimburse the corporation or organization for a payment made for the association and for performing a function of the association. A delegation under this subsection takes effect only with the approval of the board and the director.
(a) Upon request of the board, the director shall provide the association with a statement of the premiums in the appropriate states for each member insurer. (b) The director may (1) after notice and hearing as provided in AS 21.06.180 - 21.06.230, suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay an assessment when due or fails to comply with the plan of operation; (2) levy a penalty on a member insurer that fails to comply with the plan of operation; or (3) levy a penalty on a member insurer that fails to pay an assessment when due; if the unpaid assessment is more than $2,000, the penalty may not exceed five percent of the unpaid assessment a month or be less than $100 a month; if the unpaid assessment is $2,000 or less, the penalty is $100 a month. (c) A final action of the board or the association may be appealed to the director by a member insurer if the appeal is taken not later than 60 days after the date the notice of the action is mailed. Final action or order of the director may be reviewed by the superior court. (d) The liquidator, rehabilitator, or conservator of an impaired or insolvent insurer may notify all interested persons of the effect of this chapter.
(a) The director shall notify, by mail, the commissioner, director, or superintendent of insurance of the other states, territories of the United States, and the District of Columbia within 30 days after the date on which the following actions are taken against a member insurer: (1) revocation of a license; (2) suspension of a license; or (3) a formal order that a member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policyholders, contract owners, certificate holders, or creditors. (b) The director shall report to the board if an action set out in (a) of this section is taken or a report is received from a state insurance regulator that similar action has been taken in another state. The report to the board must contain all significant details of the action taken or the report received from another insurance regulator. (c) The director shall report to the board if there is reasonable cause to believe, during or after an examination of a member insurer, that the company may be impaired or insolvent. (d) The director shall furnish the board with the NAIC Insurance Regulatory Information System (IRIS) ratios and a listing of companies not included in the ratios developed by the NAIC, and the board may use that information to carry out its duties and responsibilities under this section. The information shall be kept confidential by the board until it is made public by the director. (e) The director may seek the board's advice and recommendations concerning the financial condition of member insurers, insurers, hospital and medical service corporations, and health maintenance organizations who apply for admission to transact insurance business in the state. (f) The board may (1) make reports and recommendations to the director relating to the solvency, liquidation, rehabilitation, or conservation of a member insurer or the solvency of an insurer, hospital or medical service corporation, or health maintenance organization that applies to transact insurance business in the state; the director and the board shall keep the reports and recommendations confidential; (2) notify the director of any information that indicates that a member insurer may be impaired or insolvent. (g) [Repealed,  46 ch 119 SLA 2000.]  (h) The board may make recommendations to the director for detecting and preventing member insurer insolvencies. (i) [Repealed,  46 ch 119 SLA 2000.] 
(a) This chapter does not reduce the liability for unpaid assessments of an insured of an impaired or insolvent insurer operating under an insurance policy with assessment liability. (b) The association shall keep records of meetings relating to its activities. Records of meetings may only be made public under AS 21.79.040(b) (1) after the termination of a liquidation, rehabilitation, or conservation proceeding that involves the impaired or insolvent insurer; (2) [Repealed,  58 ch 47 SLA 2018.] (3) upon the order of a court of competent jurisdiction. (c) The association is considered to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies that are reduced by an amount to which the association is entitled under AS 21.79.060(k). Assets of the impaired or insolvent insurer that are attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies or contracts include those assets that should have been established as reserves for the covered policies or contracts. These assets are determined by multiplying the total assets of the impaired or insolvent insurer by a fraction, the numerator of which is the amount that should have been established as reserves for the covered policies or contracts of the impaired or insolvent insurer, and the denominator of which is the amount that should have been established as reserves for all policies or contracts of insurance issued in all states by that insurer. As a creditor of the impaired or insolvent insurer, the association and other similar entities in other states are entitled to receive a disbursement of assets out of the marshaled assets as a credit against contractual obligations under this chapter from time to time as the assets become available. If the liquidator has not, within 120 days after the date of a final determination of insolvency of a member insurer by the court, made an application to the court for the approval of a proposal to disburse assets, the association may make application to the court for the approval of the association's proposal to disburse assets. (d) Before the termination of a liquidation, rehabilitation, or conservation proceeding, the court may consider the contributions of the respective parties, including the association, shareholders, contract owners, certificate holders, enrollees, and policyholders of the impaired or insolvent insurer, and any other party with a bona fide interest, in distributing the ownership rights of the impaired or insolvent insurer. The court shall consider the welfare of policyholders, contract owners, certificate holders, and enrollees of the continuing or successor member insurer. A distribution to stockholders of an impaired or insolvent insurer may not be made until the total amount of valid claims of the association for money spent in carrying out its powers and duties under AS 21.79.060, with respect to the impaired or insolvent insurer, has been fully recovered by the association. (e) [Repealed,  58 ch 47 SLA 2018.] (f) A deposit in this state, held by law or required by the director for the benefit of creditors, including policy or contract owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of a member insurer domiciled in this state or in a reciprocal state shall be promptly paid to the association. The association (1) is entitled to retain a portion of any amount paid to it equal to the percentage determined by dividing the aggregate amount of policy or contract owners' claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy or contract owners' claims in this state related to that insolvency; and (2) shall remit to the domiciliary receiver the amount paid to the association and retained under (1) of this subsection; any amount paid to the association not retained by it under (1) of this subsection shall be treated as a distribution of state assets under AS 21.78.294 or a similar provision of the state of domicile of the impaired or insolvent insurer. (g) The association may not be required to give an appeal bond in an appeal of a civil action arising under this chapter.
The association may be examined by the director. The board shall submit to the director, not later than July 1 of each year, a certified financial report for the preceding calendar year in a form approved by the director and a report of its activities during the preceding calendar year. Nothing in AS 21.79.110(b) limits the duty of the association to report under this section. Upon request, the association shall provide a copy of the report to a member insurer.
The association is exempt from payment of all fees and taxes levied by the state or its political subdivisions, other than real property taxes.
The association and its agents and employees, members of the Board of Governors, member insurers, and agents and employees of member insurers, and the director and the director's representatives are not civilly liable, and a cause of action of any nature may not arise, for an action or omission in performing duties under this chapter. The immunity extends to the participation in an organization of one or more other state associations of similar purposes and to that organization and its agents or employees.
Proceedings involving an insolvent insurer shall be stayed at least 180 days after the date of a final order of liquidation, rehabilitation, or conservation in order to allow the association to exercise a power or duty authorized under this chapter. If a default judgment is entered against an insolvent insurer, the association may apply to have the judgment set aside or may defend against the action on its merits.
(a) A person, including a member insurer, agent, or affiliate of a member insurer, may not make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, an advertisement, announcement, or statement, written or oral, that uses the existence of the association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by the association. However, this section does not apply to the association or any other entity that does not sell or solicit insurance, coverage by a hospital or medical service corporation, or coverage by a health maintenance organization. (b) The association shall prepare a summary document describing the general purposes and current limitations of this chapter and complying with (c) of this section. This document shall be submitted to the director for approval. Beginning 60 days after the date on which the director approves the document, a member insurer may not deliver a policy or contract to a policy or contract owner, certificate holder, or enrollee unless the summary document is delivered to the policy or contract owner, certificate holder, or enrollee at the time of delivery of the policy or contract. The document shall also be available upon request by a policy or contract owner, certificate holder, or enrollee. The distribution, delivery, contents, or interpretation of this document does not guarantee that either the policy or the contract, or the policy or contract owner, certificate holder, or enrollee is covered in the event of the impairment or insolvency of a member insurer. The description document shall be revised by the association as amendments to this chapter may require. Failure to receive this document does not give the policy or contract owner, certificate holder, enrollee, or insured any greater rights than those stated in this chapter. (c) The document prepared under (b) of this section must contain a clear and conspicuous disclaimer on its face. The director shall establish the form and content of the disclaimer. The disclaimer must (1) state the name and address of the association and the division of insurance; (2) prominently warn the policy or contract owner, certificate holder, or enrollee that the association may not cover the policy or, if coverage is available, that the policy will be subject to substantial limitations and exclusions and conditioned on continued residence in this state; (3) state the types of policies or contracts for which guaranty funds will provide coverage; (4) state that the member insurer and its agents are prohibited by law from using the existence of the association for the purpose of sales, solicitation, or inducement to purchase any form of insurance, hospital or medical service corporation coverage, or health maintenance organization coverage; (5) state that the policy or contract owner, certificate holder, or enrollee should not rely on coverage under the association when selecting an insurer; (6) explain rights available and procedures for filing a complaint to allege a violation of a provision of this chapter; and (7) provide other information as required by the director, including sources for information about the financial condition of insurers if the information is not proprietary and is subject by law to disclosure. (d) A member insurer shall retain evidence of compliance with (b) of this section for so long as the policy or contract for which the notice is given remains in effect.
The principal place of business of a plan sponsor consisting of (1) a single employer or an employee organization is that state in which the plan sponsor exercises the direction, control, and coordination of the operations of the entity, as determined by the association in its reasonable judgment by considering the following factors: (A) the state in which the primary executive and administrative headquarters of the entity are located; (B) the state in which the principal office of the chief executive officer of the entity is located; (C) the state in which the board of directors or a similar governing body of the entity conducts the majority of its meetings; (D) the state in which the executive or management committee of the board of directors or a similar governing body of the entity conducts the majority of its meetings; (E) the state from which the management of the overall operations of the entity is directed; and (F) in the case of a benefit plan sponsored by affiliated companies making up a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the factors described in (A) - (E) of this paragraph; however, if more than 50 percent of the participants in the benefit plan are employed in a single state, that state is considered to be the principal place of business of a plan sponsor that is a single employer or an employee organization; (2) two or more employers or employee organizations is that state in which the employers or employee organizations have the largest investment in the benefit plan.
A citizen of the United States that is either a (1) resident of a foreign country, or (2) resident of a United States possession, territory, or protectorate that does not have an association similar to the association created by this chapter is, for purposes of this chapter, a resident of the state of domicile of the insurer that issued the policy or contract.
In this chapter, (1) account means an account created under AS 21.79.040; (2) association means the Alaska Life and Health Insurance Guaranty Association; (3) authorized assessment means an assessment approved by a resolution by the board that will be called immediately or in the future from member insurers for a specified amount; (4) benefit plan means a specific employee, union, or association of natural persons benefit plan; (5) board means the Board of Governors of the Alaska Life and Health Insurance Guaranty Association; (6) called means that a notice has been mailed by the association to member insurers requiring that an authorized assessment be paid within the time set out in the notice; (7) contractual obligation means an obligation under a policy, contract, or certificate under a group policy or contract, or a portion of one for which coverage is provided under AS 21.79.020(a), (b), (d), or (e); (8) covered contract or covered policy means a policy or contract or a portion of a policy or contract for which coverage is provided under AS 21.79.020(a), (b), (d), or (e); (9) election date means the date of the association's election under AS 21.79.060(o); (10) extra contractual claim includes a claim related to bad faith in payment of a claim, punitive or exemplary damages, and attorney fees and costs; (11) health benefit plan means a hospital or medical expense policy or certificate, a hospital or medical service corporation subscriber contract, or a health maintenance organization subscriber contract or any other similar health contract; health benefit plan does not include (A) accident only insurance; (B) credit insurance; (C) dental only insurance; (D) vision only insurance; (E) Medicare supplement insurance; (F) benefits for long-term care, home health care, community-based care, or any combination thereof; (G) disability income insurance; (H) coverage for on-site medical clinics; or (I) specified disease, hospital confinement indemnity, or limited benefit health insurance if the types of coverage do not provide coordination of benefits and are provided under separate policies or certificates; (12) impaired insurer means a member insurer that is not an insolvent insurer and that is placed under an order of rehabilitation or conservation by a court of competent jurisdiction; (13) insolvent insurer means a member insurer that is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency; (14) member insurer means an insurer licensed to transact insurance in the state, a hospital or medical service corporation licensed under AS 21.87, or a health maintenance organization licensed under AS 21.86, for which coverage is provided in AS 21.79.020 and includes an insurer, a hospital or medical service corporation licensed under AS 21.87, or a health maintenance organization licensed under AS 21.86, whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn; member insurer does not include (A) a fraternal benefit society licensed under AS 21.84; (B) a mandatory state pooling plan; (C) a mutual assessment company or an entity that operates on an assessment basis; (D) an insurance exchange licensed under AS 21.75; (E) an organization that has a license or certificate limited to the issuance of charitable gift annuities; or (F) an entity similar to one described under (A) - (E) of this paragraph; (15) NAIC means the National Association of Insurance Commissioners; (16) owner, when used with respect to a policy or contract, policyholder, policy owner, and contract owner (A) mean the person who is identified as the legal owner under the terms of the policy or contract, or who is otherwise vested with legal title to the policy or contract through a valid assignment completed under the terms of the policy or contract and who is properly recorded as the owner on the records of the member insurer; (B) do not include a person with a mere beneficial interest in a policy or contract; (17) plan sponsor means, in the case of a benefit plan established or maintained by (A) a single employer, the employer; (B) an employee organization, the employee organization; or (C) two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan; (18) premium means the amounts or considerations, by whichever name called, received on a covered policy or contract less a premium, consideration, and deposit returned, and less a dividend and experience credit; premium does not include (A) amounts or considerations charged for an assessment or an amount received for a policy or contract or for the portions of a policy or contract for which coverage is not provided under AS 21.79.020(b) and (c), except that assessable premium may not be reduced on account of AS 21.79.020(c)(4) relating to interest limitations and AS 21.79.025(a)(2) - (5), (b), and (d) relating to limitations with respect to one individual, one participant, and one policy or contract owner; (B) premiums in excess of $5,000,000 on an unallocated annuity contract not issued under a governmental retirement benefit plan or its trustee established under 26 U.S.C. 401, 26 U.S.C. 403(b), or 26 U.S.C. 457; or  (C) with respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, premiums in excess of $5,000,000 with respect to those policies or contracts, regardless of the number of policies or contracts held by the owner; (19) published monthly average means the monthly average of corporate bond yields, as published by Moody's Investors Service, Inc., or its successor or, if Moody's average of corporate bond yields is not published, a substantially similar average established by regulation adopted by the director; (20) receivership court means the court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer; (21) resident means a person to whom a contractual obligation is owed under this chapter and who resides in this state on the date of entry of a court order that determines a member insurer to be an impaired or insolvent insurer; a person may be a resident of only one state, which, in the case of a person other than a natural person, shall be the principal place of business; (22) state means a state of the United States, the District of Columbia, Puerto Rico, or a United States possession, territory, or protectorate; (23) structured settlement annuity means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant; (24) supplemental contract means a written agreement entered into for the distribution of proceeds under life, health, or annuity policy or contract benefits; (25) unallocated annuity contract means an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent of annuity benefits guaranteed to an individual by an insurer under the contract or certificate.
This chapter may be cited as the Alaska Life and Health Insurance Guaranty Association Act.
The purposes of this chapter are to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and, to the extent provided in this chapter, to minimize financial loss to claimants or policyholders because of the insolvency of an insurer, and to provide an association to assess the cost of this protection among insurers.
This chapter applies to all kinds of direct insurance written by an admitted insurer, except that this chapter does not apply to the following: (1) life, annuity, health, or disability insurance; (2) residual value, mortgage guaranty, or financial guaranty of other forms of insurance offering protection against investment risks; (3) bonding obligations, including fidelity or surety bonds; (4) insurance protecting the interests of a creditor arising out of a creditor-debtor transaction, including credit insurance, vendors' single interest insurance, or collateral protection insurance; (5) insurance of warranties or service contracts, including insurance providing for (A) the repair, replacement, or service of goods or property; (B) indemnification for repair, replacement, or service of goods or property; or (C) reimbursement for liability incurred by a person issuing a warranty or service contract; (6) title insurance; (7) a transaction or combination of transactions between a person, including the person's affiliates, and an insurer, including the insurer's affiliates, that involves the transfer of investment or credit risk unaccompanied by the transfer of insurance risk; (8) insurance provided by or guaranteed by a government; (9) a risk retention group formed under 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act); (10) insurance written on a retroactive basis to cover known losses for which a claim has already been made and the claim is known to the insurer at the time the insurance is bound.
This chapter shall be construed to effect the purposes under AS 21.80.010, which constitute an aid and guide to interpretation.
(a) There is created a nonprofit incorporated legal entity to be known as the Alaska Insurance Guaranty Association. All insurers defined as member insurers in AS 21.80.180 shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under a plan of operation established and approved under AS 21.80.070 and shall exercise its powers through a board of governors established under AS 21.80.050. For purposes of administration and assessment, the association shall be divided into three separate accounts: the workers' compensation insurance account; the automobile insurance account; and the account for all other insurance to which this chapter applies. (b) A member insurer ceases to be a member on the day following the termination or expiration of the member insurer's license to transact the kinds of insurance to which this chapter applies; however, the insurer remains liable as a member insurer for any and all obligations, including obligations for assessments levied before the termination or expiration of the member insurer's license and assessments levied after the termination or expiration with respect to an insurer that became an insolvent insurer before the termination or expiration of the insurer's license.
(a) The board of governors of the association consists of not fewer than five nor more than nine members as specified in and serving terms as established in the plan of operation. The director may appoint two individuals as members of the board to represent the public. The insurer members of the board shall be selected by member insurers, subject to the approval of the director. A vacancy in a board membership held by an insurer member shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the director. If an insurer member is not selected to fill a vacancy on the board of governors within 90 days of the vacancy, the director may appoint a member for the remaining period of the term. A vacancy in a board membership held by a representative of the public may be filled by the director. A board member who represents the public may not be an officer, director, or employee of an insurer and may not be engaged in the business of insurance. (b) In approving member insurer selections to the board, the director shall consider among other things whether all member insurers are fairly represented. (c) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of governors.
(a) The association (1) is obligated to pay covered claims existing before the order of liquidation and arising within 30 days after the order of liquidation, or before the policy expiration date if less than 30 days after the order of liquidation, or before the insured replaces the policy or causes its cancellation if the insured does so within 30 days after the order of liquidation, but this obligation includes only that amount of each covered claim that is less than $500,000, except that a covered claim for return of unearned premium may not exceed $10,000 for each policy, and except that the association shall pay the full amount of any covered claim arising out of a workers' compensation policy; the association is not obligated (A) to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises; or (B) to pay a claim filed with the association after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer; (2) is considered the insurer to the extent of its obligation on the covered claims and to that extent has all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent; (3) shall allocate claims paid and expenses incurred among the three accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligation of the association under (1) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and other expenses authorized by this chapter; under this paragraph, (A) the assessments of each member insurer must initially be based on a uniform percentage, as determined by the association, of the net direct written premiums of each member insurer for the last year for which annual statements have been filed on the kinds of insurance in the account; this initial assessment shall be adjusted by applying the same uniform percentage as initially used to each member insurer's net direct written premiums for the calendar year following the year in which the initial assessment was issued; any difference between the initial assessment amount and the adjusted assessment amount allocated to a member insurer shall be levied against or credited back to the member insurer, as appropriate, by the association; the association shall calculate and issue all appropriate levies and credits as soon as practical after all member insurers have filed their annual statements for the calendar year following the year in which the initial assessment was issued; (B) on an annual basis, the association shall determine if funding is required for any of the three accounts; based on this determination, the association shall, during November of each year, issue initial assessments as may be necessary to cover the projected reasonable costs of claims and expenses to administer the association for the following year; under this subparagraph, (i) the association shall use the services of an independent actuary to assist the association to evaluate and make the projection; and (ii) an initial assessment may be made at any other time if the association determines funding is necessary, except that a member insurer may not be assessed initial assessments on any account in an amount greater than two percent of the member insurer's net direct written premiums for the applicable calendar year; (C) the association may pay claims in any order that it determines reasonable, including the payment of claims as they are received from claimants or in groups or categories of claims; however, if the maximum of all assessments made under this section, together with the other assets of the association in any account, does not provide, in any one year, in any account, an amount sufficient to make all necessary payments from that account, the funds available shall be prorated, and the unpaid portion shall be paid as soon thereafter as funds become available; (D) the association may defer, in whole or in part, an assessment of any member insurer if the assessment would endanger the ability of the member insurer to fulfill the insurer's contractual obligations or cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance; however, during the period of deferment, the member insurer may not pay dividends to shareholders or policyholders; a deferred assessment may only be paid when the payment does not reduce capital or surplus below minimums required by law; a member insurer who pays a larger assessment as a result of a deferment given to another member insurer shall receive a refund when the deferment ends or, at the election of the member insurer, receive a credit against future assessments; (E) each member insurer may set off against an assessment authorized payments made on covered claims and expenses incurred in the payment of these claims by the member insurer if they are chargeable to the account for which the assessment is made; (4) shall investigate claims brought against the association, adjust, compromise, settle, and pay covered claims to the extent of the association's obligation, and deny all other claims, and may review settlements, releases, and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which settlements, releases, and judgments may be properly contested; (5) may, subject to AS 21.96.100, appoint, substitute, or direct legal counsel retained under an insurance policy for the defense of a covered claim; (6) shall handle claims through its employees or through one or more insurers or other persons designated as servicing facilities; a servicing facility shall operate and maintain its principal office in this state unless the use of a servicing facility located outside of the state would result in operating cost savings of at least 10 percent and would not result in material delay in claim payments; designation of a servicing facility is subject to the approval of the director, but designation may be declined by a member insurer; (7) shall reimburse each servicing facility for obligations of the association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the association and shall pay the other expenses of the association authorized by this chapter. (b) The association may (1) employ or retain those persons necessary to handle claims and perform other duties of the association; (2) borrow funds necessary to effect the purposes of this chapter in accord with the plan of operation and secure guarantees from the Alaska Industrial Development and Export Authority for association loans that are necessary to make the association financially able to meet cash flow needs; (3) sue or be sued; (4) negotiate and become a party to those contracts that are necessary to carry out the purposes of this chapter; (5) perform all other acts necessary or proper to carry out the purposes of this chapter; (6) retain amounts excess of claims, expenses, credits, and other liabilities in any account to be applied to reduce future assessments in that account, except that, if, in any year, the association determines that significant funds in excess of projected claims, expenses, credits, and other liabilities exist in an account, the association shall return amounts to policyholders, through procedures established by the association, whereby the association reimburses member insurers for providing uniform credits against rates and premiums charged for all policies applicable to the account issued during the next calendar year.
(a) The association shall submit to the director a plan of operation and any amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and amendments become effective upon approval in writing by the director. If the association fails to submit suitable amendments to the plan, the director shall, after notice and hearing, adopt reasonable regulations necessary or advisable to effectuate the provisions of this chapter. These regulations shall continue in force until modified by the director or superseded by a plan submitted by the association and approved by the director. (b) All member insurers shall comply with the plan of operation. (c) The plan of operation must (1) establish the procedures whereby all the powers and duties of the association under AS 21.80.060 will be performed;  (2) establish procedures for handling assets of the association, including procedures for handling assets received from the estate of an insolvent insurer; (3) establish the amount and method of reimbursing members of the board of governors under AS 21.80.050;  (4) establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims; notice of claims to the receiver or liquidator of the insolvent insurer is considered notice to the association or its agent, and a list of these claims shall be periodically submitted to the association or similar organization in another state by the receiver or liquidator; (5) establish regular places and times for meetings of the board of governors; (6) establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of governors; (7) provide that any member insurer aggrieved by a final action or decision of the association may appeal to the director within 30 days after the action or decision; (8) establish the procedures whereby selections of the board of governors will be submitted to the director; (9) provide for a member insurer serving on the board of governors to appoint an individual to represent the member insurer on the board, including appointment of an alternate or substitute representative for the appointed person; (10) contain additional provisions necessary or proper for the execution of the powers and duties of the association; (11) establish procedures whereby the association shall, concurrent with making any initial assessments for the following year under AS 21.80.060(a)(3)(B), determine uniform surcharge percentages that may be applied by member insurers to all policies related to an account;  (12) establish procedures whereby the association shall determine surcharge percentages related to an account so that adjusted assessments match, as closely as possible, the amounts that would be collected by member insurers, in the aggregate, if the surcharge percentages were applied to all new and renewal policies issued by member insurers during the applicable 12-month period; any estimated or actual difference between the aggregate assessment and maximum allowable surcharge amounts related to an account shall be taken into account by the association in determining future surcharge percentages. (d) [Repealed,  12 ch 52 SLA 1990.] 
(a) The director shall (1) notify the association of the existence of an insolvent insurer no later than three days after the director receives notice of the determination of the insolvency; (2) upon request of the board of governors, provide the association with a statement of the net direct written premiums of each member insurer. (b) The director may (1) suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation; as an alternative, the director may levy a fine on any member insurer that fails to pay an assessment when due; this fine may not exceed five percent of the unpaid assessment per month or portion of a month, except that a fine may not be less than $250 a month; (2) revoke the designation of any servicing facility upon a finding that claims are being handled unsatisfactorily; (3) upon a finding by the superior court that the board of governors has failed to comply with a requirement of this chapter or the plan of operation, assume the powers of the board of governors under AS 21.80.060.
(a) A person recovering under this chapter is considered to have assigned the person's rights under the policy to the association to the extent of the recovery from the association. Every insured or claimant seeking the protection of this chapter shall cooperate with the association to the same extent as the person would have been required to cooperate with the insolvent insurer. The association does not have a cause of action against the insured of the insolvent insurer for any sums the association has paid out except a cause of action the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided under (b) of this section. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the association do not operate to reduce the liability of insured to the receiver, liquidator, or statutory successor for unpaid assessments. (b) The association or a similar organization in another state shall be recognized as a claimant in the liquidation of an insolvent insurer for amounts paid by the association or the similar organization on covered claims as determined by this chapter or a similar law of another state and shall receive distributions as provided under AS 21.78.260 or a similar law of another state. The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the association or a similar organization in another state to the extent the settlement satisfies obligations of the association. The receiver may not be bound in any way by a settlement of covered claims to the extent there remains a claim that exceeds the claims limit imposed under AS 21.80.060. The court having jurisdiction shall grant these claims priority against the assets of the insolvent insurer equal to the priority that the claimant would have been entitled to in the absence of this chapter. The expenses of the association or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses. (c) The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association which shall preserve the rights of the association against the assets of the insolvent insurer.
An insurer, reinsurer, insurance pool, or underwriting association may not assert a claim against a person insured under a policy issued by an insolvent insurer except for an amount not covered by the claims limit established under AS 21.80.060.
(a) A person having a claim against an insurer, whether or not the insurer is a member insurer, under a provision in an insurance policy other than a policy of an insolvent insurer that is also a covered claim is required to exhaust first the person's right under the policy. An amount payable on a covered claim under this chapter shall be reduced by the amount of recovery under the insurance policy. (b) A person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property, and if it is a workers' compensation claim, the person shall seek recovery first from the association of the residence of the claimant. A recovery under this chapter shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent.
The board of governors may (1) upon a majority vote, make recommendations to the director regarding matters generally related to improving or enhancing regulation for insurer solvency; or (2) at the conclusion of an insurer insolvency in which the association was obligated to pay covered claims, prepare a report on the history and causes of the insolvency, based on the information available to the association, and submit this report to the director.
The association is subject to examination and regulation by the director. The board of governors shall submit, not later than June 30 of each year, a certified financial report for the preceding calendar year in a form approved by the director.
The association is exempt from payment of all fees and all taxes levied by the state or any of its subdivisions except taxes levied on real or personal property.
The rates and premiums charged for insurance policies to which this chapter applies may include surcharge rates sufficient to offset the adjusted assessments made under this chapter and paid to the association by member insurers, and these surcharge rates may not be considered excessive because they contain an amount reasonably calculated to offset the full amounted of adjusted assessments paid by member insurers. The association shall notify the director of each surcharge percentage determined by the association, and this surcharge percentage shall be the maximum surcharge rate that may be applied by member insurers related to the assessment, except that a member insurer may make application to the director to apply a higher surcharge rate. The amount charged on a policy shall be shown separate from the premium for coverage on the policy. The surcharge rate is not considered a premium and is not subject to the premium tax imposed under AS 21.09.210.
There is no liability on the part of and a cause of action of any nature may not arise against a member insurer, the association or its agents or employees, the board of governors or a person serving as an alternate or substitute representative of a governor, or the director or representatives of the director for action taken or a failure to act by them in the performance of their powers and duties under this chapter. However, immunity from liability under this section does not apply to wilful or wanton misconduct.
All proceedings in which the insolvent insurer is a party or is obligated to defend a party in a court in this state shall, subject to waiver by the board of governors of the association in specific cases involving covered claims, be stayed for 90 days or additional time as ordered by a court from the date the insolvency is determined or an ancillary proceeding is instituted in this state, whichever is later, to permit proper defense by the association for all pending causes of action as to any covered claims arising from a judgment under a decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured. The association, either on its own behalf or on behalf of the insured, may apply to have this judgment, order, decision, verdict, or finding set aside by the same court or administrator that made the judgment, order, decision, verdict, or finding and shall be permitted to defend against the claim on the merits.
In this chapter, unless the context requires otherwise, (1) account means any one of the three accounts created by AS 21.80.040(a); (2) affiliate of an insolvent insurer means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer; (3) association means the Alaska Insurance Guaranty Association; (4) claimant means an insured making a first party claim or a person making a liability claim; claimant does not include a person who is an affiliate of an insolvent insurer; (5) control has the meaning given in AS 21.22.200; (6) covered claim means an unpaid claim, including one of unearned premiums, that arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy issued by an insurer to which this chapter applies if the insurer becomes an insolvent insurer and (A) the claimant or insured is a resident of this state at the time of the insured event, or (B) the claim is a first party claim for damage to property that is permanently located in this state; covered claim does not include an amount awarded for punitive or exemplary damages, an amount sought as a return of premium under a retroactive rating plan, or an amount due a reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise; (7) insolvent insurer means an insurer (A) authorized to transact insurance in this state either at the time the policy was issued or when the insured event occurred, except an assessable reciprocal insurer formed by and insuring only municipalities or nonprofit public utilities, a reciprocal insurer formed under AS 21.75 to provide marine insurance, and a joint insurance arrangement formed under AS 21.76, either at the time the policy was issued or when the insured event occurred, and (B) against which a court of competent jurisdiction in the insurer's state of domicile has made a final order of liquidation with a finding of insolvency; (8) member insurer means a person, except an assessable reciprocal insurer formed by and insuring only municipalities or nonprofit public utilities, a reciprocal insurer formed under AS 21.75 to provide marine insurance, and a joint insurance arrangement formed under AS 21.76, who (A) writes insurance to which this chapter applies under AS 21.80.020, including the exchange of reciprocal or interinsurance contracts; and (B) is authorized to transact insurance in the state; (9) net direct written premiums means direct gross premiums written in this state on insurance policies to which this chapter applies, less return premiums thereon and dividends paid or credited to policyholders on direct business; net direct written premiums does not include premiums on contracts between insurers or reinsurers; (10) resident means, for a person other than an individual, the state in which the person's principal place of business is located at the time of the insured event.
This chapter may be known and cited as the Alaska Insurance Guaranty Association Act.
(a) A society has a representative form of government if (1) the society has a supreme governing body constituted as described in (b) or (c) of this section; (2) officers of the society are elected either by the supreme governing body or by the board of directors; (3) only benefit members are eligible for election to the supreme governing body or an intermediate assembly or to the board of directors; and (4) a voting member has one vote, and a vote may not be cast by proxy. (b) The supreme governing body may be constituted in an assembly. The assembly is composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates prescribed in the society's laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority of the delegates entitled to vote, and they shall have neither less than two-thirds of the total votes cast, nor less than the number of votes required to amend the society's laws. The assembly shall be elected, shall meet at least once every four years, and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws. (c) The supreme governing body may be constituted in a board. The board is composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, together with other persons prescribed in the society's laws. A society may provide for election of the board by mail. A term of a board member may not exceed four years. Vacancies on the board between elections may be filled in the manner prescribed by the society's laws. The elected board members shall constitute a majority of the number of directors entitled to vote, and they shall have not less than the number of votes required to amend the society's laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society.
(a) A society shall operate for the benefit of members and their beneficiaries by (1) providing benefits as specified in AS 21.84.201, and (2) operating for a social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purpose for the benefit of its members, which benefits may also be extended to others. A purpose may be carried out directly by the society or indirectly through subsidiary corporations or affiliated organizations. (b) A society may adopt and amend laws and rules for the government of the society, the admission of its members, and the management of its affairs and may have other powers necessary to carrying into effect the objects and purposes of the society.
(a) A society shall specify in its laws or rules (1) eligibility standards for each class of membership, but, if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than 15 years of age and not more than 21 years of age; (2) the process for admission to membership for each membership class; and (3) the rights and privileges of each membership class; however, only benefit members may vote on the management of the insurance affairs of the society. (b) A society may also admit social members, but the social members may not have a voice or vote in the management of the insurance affairs of the society. (c) A society may organize and operate lodges for children under the minimum age for adult membership. Membership and initiation in local lodges may not be required of children, nor may children have a voice or vote in the management of the society. (d) Membership rights in the society are personal to the member and are not assignable.
(a) The principal office of a domestic society must be located in this state. The meetings of the supreme governing body of a society may be held in a state, district, province, or territory in which the society has at least one subordinate lodge or in another location as determined by the supreme governing body. All business transacted at the meetings is as valid in all respects as if the meetings were held in this state. The minutes of the proceedings of the supreme governing body and of the board of directors must conform to language requirements for documents filed under AS 21.84.070. (b) A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. If published in the official publication, required reports, notices, and statements shall be printed conspicuously. If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is considered to be mailed to all members at the same address unless a member requests a separate copy. (c) A synopsis of the society's annual statement providing an explanation of the facts concerning the condition of the society shall be printed not later than June 1 of each year and mailed to each benefit member of the society or published in the society's official publication. (d) A society may provide in its laws or rules for grievance or complaint procedures for members.
(a) The officers and members of the supreme governing body or a subordinate body of a society are not personally liable for benefits provided by a society. (b) A society shall indemnify and reimburse a person for expenses reasonably incurred by, and liabilities imposed upon, that person in connection with an action, suit, or proceeding, or threat of an action, suit, or proceeding, whether civil, criminal, administrative, or investigative, in which the person is involved by reason of the fact of service in the capacity of a director, officer, employee, or agent of the society or service in any capacity in a firm, corporation, or organization at the request of the society. However, a society may not indemnify or reimburse a person in connection with a matter in an action, suit, or proceeding, or threat of an action, suit, or proceeding, that has been made the subject of a compromise settlement, or in which the person is adjudged to be guilty of breach of a duty as a director, officer, employee, or agent of the society, unless the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society, and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that the person's conduct constituted a violation of a criminal law of this state or another jurisdiction. The determination of whether the conduct of the person meets the standard required to justify indemnification and reimbursement may be made by the supreme governing body or the board of directors through a majority vote of a quorum consisting of persons who were not parties to the action, suit, or proceeding or by a court of competent jurisdiction. The termination of an action, suit, or proceeding by judgment, order, settlement, conviction, or plea of no contest as to the person does not in itself create a conclusive presumption that the person did not meet the standard of conduct required to justify indemnification and reimbursement. The right of indemnification and reimbursement is not exclusive of other rights to which a person may be entitled as a matter of law and inures to the benefit of the person's heirs, executors, and administrators. (c) A society may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee, or agent of the society, or who is or was serving at the request of the society as a director, officer, employee, or agent of a firm, corporation, or organization, against a liability asserted against the person and incurred by the person arising out of that capacity, whether or not the society would have the power to indemnify the person against that liability under this section. (d) A director, officer, employee, member, or volunteer of a society serving without compensation is not liable, and no cause of action may be brought against the person for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of the person for the society unless the act or omission involved reckless or intentional misconduct.
The laws of the society may provide that a subordinate body or its subordinate officers or members may not waive any provision of the laws of the society. The provision is binding on the society and every member and beneficiary of a member.
(a) A domestic society may amend its laws in accordance with its provisions by action of its supreme governing body at a regular or special meeting or, if its laws provide, by referendum. The referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members, or by the vote of local lodges. A society may provide for voting by mail. An amendment submitted for adoption by referendum may not be adopted unless, within six months from the date of submission of the amendment, at least two-thirds of the members voting signify consent to the amendment by one of the methods specified under this subsection. (b) An amendment to the laws of a domestic society may not take effect unless approved by the director. The director shall approve the amendment if the director finds that it has been legally adopted and is not inconsistent with the requirements of the laws of this state or with the character, objects, and purposes of the society. Unless the director disapproves the amendment within 60 days after it is filed, the amendment is considered approved. The approval or disapproval of the director shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. If the director disapproves the amendment, the reason for the disapproval shall be stated in the written notice. (c) Within 90 days from the approval of the amendments by the director, all amendments, or a synopsis of them, shall be furnished to all members of the society, either by mail or by publication in full in the official publication of the society. The affidavit of an officer of the society or of a person authorized by the society to mail amendments, or a synopsis of them, stating facts that show that the amendments have been addressed and mailed, is prima facie evidence that the amendments, or a synopsis of them, have been furnished to the addressee. (d) A foreign or alien society authorized to do business in this state shall file with the director a certified copy of all amendments of, or additions to, its laws within 90 days after the enactment of them. (e) Printed copies of the laws, as amended, certified by the secretary or corresponding officer of the society are prima facie evidence of the legal adoption of those laws.
The organization of a domestic society organized on or after January 1, 1998, shall be formed as follows: Seven or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign, and acknowledge before some officer, competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated (1) the proposed corporate name of the society, which may not so closely resemble the name of any society or insurance company as to be misleading or confusing; (2) the purposes for which it is being formed and the mode in which its corporate powers are to be exercised; the purposes may not include more liberal powers than are granted by this chapter; (3) the names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all the officers shall be elected by the supreme governing body, which election shall be held no later than one year from the date of the issuance of the permanent certificate of authority.
The articles of incorporation, certified copies of the domestic society's laws and rules, copies of all proposed forms of certificates, applications, and circulars to be issued by the society, and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year, shall be filed with the director, who may require further information considered necessary. The bond with sureties approved by the director shall be in an amount, not less than $300,000 or more than $1,500,000, required by the director. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the director shall so certify, retain, and file the articles of incorporation and furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided.
A preliminary certificate of authority is not valid after one year from its date or after such further period, not exceeding one year, as may be authorized by the director upon cause shown, unless the 500 applicants hereinafter required have been secured and the organization has been completed as herein provided. The articles of incorporation and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the domestic society has completed its organization and received a certificate of authority to do business as hereinafter provided.
Upon receipt of a preliminary certificate of authority from the director, the domestic society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each applicant a receipt for the amount collected. A domestic society may not incur any liability other than for the return of the advance premium, or issue any certificate, or pay, allow, or offer or promise to pay or allow, a death or health care benefit to any person until (1) actual bona fide applications for benefits have been secured on 500 applicants and any necessary evidence of insurability has been furnished to and approved by the society; (2) certificates of examinations or acceptable declarations of insurability have been filed and approved by the chief medical examiner of the society; (3) 10 subordinate lodges or branches have been established into which the 500 applicants have been admitted; (4) there has been submitted to the director, under oath of the president or secretary, or corresponding officer of the society, a list of the applicants, giving their names, addresses, date each was admitted, name and number of the subordinate branch of which each applicant is a member, amount of benefits to be granted, and premiums for them; (5) it has been shown to the director, by sworn statement of the treasurer, or corresponding officer of the society, that at least 500 applicants have each paid in cash at least one regular monthly premium, which premiums in the aggregate shall amount to at least $150,000; the advance premiums shall be held in trust during the period of organization, and, if the society has not qualified for a certificate of authority within one year, the premiums shall be returned to the applicants.
The director may make the examination and require further information the director considers advisable. Upon presentation of satisfactory evidence that the domestic society has complied with all the provisions of law, the director shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business under this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of the certificate. The director shall cause a record of the certificate of authority to be made. A certified copy of the record may be given in evidence with like effect as the original certificate of authority.
An incorporated society authorized to transact business in this state on January 1, 1998, may not be required to reincorporate.
(a) After July 1, 1967, an unincorporated or voluntary association may not be permitted to transact business in this state as a fraternal benefit society. (b) [Repealed,  36 ch 96 SLA 1997.]  (c) [Repealed,  36 ch 96 SLA 1997.] 
(a) It is lawful for a society to create, maintain, and operate organizations to operate not for profit institutions to further the purposes permitted by AS 21.84.015(a)(2). The institutions may provide services free or at a reasonable charge. Real or personal property owned, held, or leased by the society for this purpose shall be reported in every annual statement but may not be allowed as an admitted asset of the society. (b) [Repealed,  36 ch 96 SLA 1997.]  (c) A society may not own or operate funeral homes or undertaking establishments.
(a) A domestic society may, by a reinsurance agreement, cede an individual risk or risks in whole or in part to an insurer, other than another fraternal benefit society, that has the power to make reinsurance and that is authorized to do business in this state or, if not authorized, that is approved by the director. However, a society may not reinsure substantially all of its insurance in force without the written permission of the director. A society may take credit for the reserves on the ceded risks to the extent reinsured, but a credit may not be allowed as an admitted asset or a deduction from liability to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after January 1, 1998, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society. (b) Notwithstanding the limitation in (a) of this section, a society may reinsure the risks of another society in a consolidation or merger approved by the director under AS 21.84.185.
(a) A domestic society may consolidate or merge with another society by complying with the provisions of this section. It shall file with the director (1) a certified copy of the written contract containing in full the terms and conditions of the consolidation or merger; (2) a sworn statement by the president and secretary or corresponding officers of each society showing the financial condition of the society on a date fixed by the director but not earlier than December 31 immediately preceding the date of the contract; (3) a certificate of the president and secretary or corresponding officers of each society, verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme governing body of each society, the vote being conducted at a regular or special meeting of each body or, if the society's laws so permit, by mail; and (4) evidence that, at least 60 days prior to the action of the supreme governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official publication of each society. (b) If the director finds that the contract is in conformity with the provisions of this section, that the financial statements are correct, and that the consolidation or merger is just and equitable to the members of each society, the director shall approve the contract and issue a certificate to that effect. On approval, the contract is in full force and effect unless a society that is a party to the contract is incorporated under the laws of another state or territory. In that event, the consolidation or merger may not become effective unless it has been approved as provided by the laws of that state or territory and a certificate of that approval has been filed with the director. If the laws of that state or territory contain no such provision, the consolidation or merger may not become effective unless it has been approved by the director of that state or territory and a certificate of that approval has been filed with the director. (c) When the consolidation or merger becomes effective under this section, all the rights, franchises, interests, and things in action of the consolidated or merged societies in every type of property, real, personal, or mixed, belonging to the consolidated or merged societies are vested in the society resulting from or remaining after the consolidation or merger without another instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest in it, vested under the laws of this state in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after the consolidation or merger. (d) The affidavit of an officer of the society or of a person authorized by the society to mail a notice or document stating that a notice or document has been addressed and mailed is prima facie evidence that such notice or document has been furnished to the addressees.
A domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with the applicable requirements of AS 21.69 if the plan of conversion has been approved by the director. A plan of conversion shall be prepared in writing by the board of directors setting out the terms and conditions of conversion. The affirmative vote of two-thirds of the members of the supreme governing body at a regular or special meeting is necessary for approval of the plan. A conversion may not take effect unless and until approved by the director, who may give the approval if the director finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.
(a) A society may provide the following contractual benefits in any form: (1) death benefits; (2) endowment benefits; (3) annuity benefits; (4) temporary or permanent health care benefits; (5) hospital, medical, or nursing benefits; (6) monument or tombstone benefits to the memory of deceased members; and (7) other benefits authorized for life and health insurers that are not inconsistent with this chapter. (b) A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits described in (a) of this section consistent with providing benefits to members and the members' dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.
(a) The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society, by laws or rules, may limit the scope of beneficiaries and shall provide that a beneficiary may not have or obtain a vested interest in the proceeds of a certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract. (b) A society may make provision for the payment of funeral benefits to the extent of the portion of a payment under a certificate which might reasonably appear to be due to a person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member, but the portion paid may not exceed the sum of $500. (c) If, at the death of a person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds are payable, the amount of the benefits, except to the extent that funeral benefits may be paid as provided in (b) of this section, shall be payable to the estate of the deceased insured the same as other property not exempt, but, if the owner of the certificate is not the insured, the amount of the benefits shall be payable to the owner.
Money or other benefit, charity, relief, or aid to be paid, provided, or rendered by a society is not liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by a legal or equitable process or operation of law to pay a debt or liability of a member or beneficiary, or any other person who may have a right, either before or after payment by the society.
(a) A society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided under the contract. The certificate, together with any riders or endorsements attached to it, the laws of the society, the application for membership, the application for insurance, and the declaration of insurability, if any, signed by the applicant, and all amendments to each constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate must so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. A waiver of this provision is void. (b) Except as provided in AS 21.84.320(d)(3), changes, additions, or amendments to the laws of the society enacted subsequent to the issuance of the certificate shall bind the owner and the beneficiaries and shall govern and control the benefit contract in all respects as though the changes, additions, or amendments were made before and were in force at the time of the application for insurance, except that a change, addition, or amendment may not destroy or diminish benefits that the society contracted to give the owner as of the date of issuance. (c) A person upon whose life a benefit contract is issued before the person attains the age of majority is bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority were attained at the time of application. (d) Except as provided in AS 21.84.320(d)(3), a society shall provide in its laws that if the society's reserves as to a class of certificates become impaired, the society's board of directors or corresponding body may require that the owner shall pay to the society the amount of the owner's equitable proportion of the deficiency as determined by its board and that, if the payment is not made, (1) the amount shall stand as an indebtedness against the certificate and shall draw interest not to exceed the rate specified for certificate loans under the certificates, or (2) in place of or in combination with the provisions of (1) of this subsection, the owner may accept a proportionate reduction in benefits under the certificate. The society may specify the manner of the election and the alternative that is to be presumed if no election is made. (e) Copies of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions of the document. (f) A certificate may not be delivered or issued for delivery in this state unless a copy of the form has been filed with the director in the manner provided for similar policies issued by life and health insurers in this state. A filing is considered approved unless disapproved within 60 days after the date of filing. A life, accident, health, or disability insurance certificate and an annuity certificate issued on or after one year after January 1, 1998, must meet the standard contract provision requirements not inconsistent with this chapter for similar policies issued by life and health insurers in this state, except that a society may provide in a certificate for a grace period for payment of premiums of one full month. The certificate must also contain a provision stating the amount of premiums that are payable under the certificate and a provision reciting or setting out the substance of sections of the society's laws or rules in force at the time of issuance of the certificate that, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate must also contain a provision that any member expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, is entitled to maintain the certificate in force by continuing payment of the required premium. (g) A benefit contract issued on the life of a person below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer and may provide in all other respects for the regulation, government, and control of those certificates and all rights, obligations, and liabilities incident to and connected with those certificates. Ownership rights before transfer shall be specified in the certificate. (h) A society may specify the terms and conditions on which benefit contracts may be assigned.
(a) For certificates issued before one year after the January 1, 1998, the value of a paid-up nonforfeiture benefit and the amount of a cash surrender value, loan, or other option granted shall comply with the provisions of law applicable on December 31, 1997. (b) For certificates issued on or after January 1, 1999 for which reserves are computed on the Commissioner's 1941 Standard Ordinary Mortality Table, the Commissioner's 1941 Standard Industrial Table, the Commissioner's 1958 Standard Ordinary Mortality Table, the Commissioner's 1980 Standard Mortality Table, or a more recent table made applicable to life insurers, a paid-up nonforfeiture benefit and the amount of a cash surrender value, loan, or other option granted may not be less than the corresponding amount based on the interest rate and mortality tables authorized by the laws of this state for the calculation of those benefits by life and health insurers issuing policies containing similar benefits based upon these tables.
A society shall invest its funds only in investments authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations on the investment of assets of life insurers. A foreign or alien society permitted or seeking to do business in this state that invests its funds in accordance with the laws of the state, district, territory, country, or province in which it is incorporated shall meet the requirements of this section for the investment of funds.
(a) All assets shall be held, invested, and disbursed for the use and benefit of the society, and a member or beneficiary may not have or acquire individual rights or become entitled to an apportionment or the surrender of a part of the assets, except as provided in the benefit contract. (b) A society may create, maintain, invest, disburse, and apply special funds necessary to carry out a purpose permitted by the laws of the society. (c) [Repealed,  36 ch 96 SLA 1997.]  (d) A society may, under a resolution of its supreme governing body, establish and operate one or more separate accounts and issue contracts on a variable basis, subject to laws regulating life and health insurers establishing those accounts and issuing those contracts. To the extent the society considers it necessary in order to comply with applicable federal or state law, or any rule made under applicable federal or state law, the society may (1) adopt special procedures for the conduct of the business and affairs of a separate account; (2) for persons having beneficial interests in the account, provide special voting and other rights, including special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account; and (3) issue contracts on a variable basis to which AS 21.84.255(b) and (d) do not apply.
(a) Except as provided in this section, societies are governed by this chapter and are exempt from all other provisions of the insurance laws of this state for all purposes, including governmental relations with the state. (b) In addition to the provisions of this chapter, the following provisions of this title apply to fraternal benefit societies to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications of this chapter: (1) AS 21.03; (2) AS 21.06; (3) AS 21.09.050; (4) AS 21.09.100; (5) AS 21.09.200; (6) AS 21.09.205; (7) AS 21.09.245; (8) AS 21.09.247; (9) AS 21.18; (10) AS 21.21; (11) AS 21.27; (12) AS 21.33; (13) AS 21.36; (14) AS 21.42.290; (15) AS 21.42.355; (16) AS 21.53; (17) AS 21.54; (18) AS 21.56; (19) AS 21.69.370; (20) AS 21.69.640; (21) AS 21.78; and (22) AS 21.96.060.
Every society organized or licensed under this chapter is a charitable and benevolent institution, and all of its funds shall be exempt from every state, or other political subdivision, tax other than taxes on real estate and office equipment.
(a) Standards of valuation for certificates issued before January 1, 1999 shall be those provided by the laws applicable immediately before January 1, 1998. (b) The minimum standards of valuation for certificates issued on or after January 1, 1999 shall be based on the following tables, which shall be under valuation methods and standards, including interest assumptions, in accordance with the laws of this state applicable to life and health insurers issuing policies containing similar benefits: (1) for certificates of life insurance, the Commissioner's 1941 Standard Ordinary Mortality Table, the Commissioner's 1941 Standard Industrial Mortality Table, the Commissioner's 1958 Standard Ordinary Mortality Table, the Commissioner's 1980 Standard Ordinary Mortality Table, or a more recent table made applicable to life insurers; (2) for annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits, and for noncancellable accident and health benefits, the tables authorized for use by life and health insurers in this state. (c) The director may, in the director's discretion, accept other standards for valuation if the director finds that the reserves produced under those standards will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard presented in this section. The director may, in the director's discretion, vary the standards of mortality applicable to benefit contracts on substandard lives or other extrahazardous lives by any society authorized to do business in this state. (d) A society, with the consent of the insurance supervisory official of the state of domicile of the society and under conditions that the director may impose, may establish and maintain reserves on its certificates in excess of the reserves required, but the contractual rights of any benefit member shall not be affected.
(a) Reports shall be filed in accordance with the provisions of this section. (b) A society transacting business in this state shall annually, before March 2, unless the time has been extended by the director for cause shown, file with the director a true statement of the society's financial conditions, transactions, and affairs for the preceding calendar year and pay the applicable fee under AS 21.06.250. The statement shall be in the general form and content approved by the National Association of Insurance Commissioners for fraternal benefit societies and supplemented by additional information required by the director. (c) As a part of the annual statement required by this section, each society shall, on or before March 1, file with the director a valuation of the society's certificates in force on the preceding December 31, but the director may, in the director's discretion, for cause shown, extend the time for filing the valuation for not more than two calendar months. The valuation shall be done in accordance with the standards specified in AS 21.84.455. The valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the insurance regulatory agency of the state of domicile of the society. (d) If a society fails to file the annual statement in the form and within the time provided by this section, the society shall forfeit $100 for each day that the neglect continues, and, upon notice by the director to that effect, the society's authority to do business in this state shall cease while the default continues. (e) A synopsis of its annual statement providing an explanation of the facts concerning the condition of the society shall be either printed and mailed to each benefit member of the society not later than June 1 of each year or published in the society's official publication. (f) The director may require a society to file quarterly financial statements. If quarterly financial statements are required, the statements must follow for a given quarter the reporting specified in the quarterly financial statement blank form and instructions most recently approved by the National Association of Insurance Commissioners.
Societies that are authorized to transact business in this state on January 1, 1998, and societies licensed after January 1, 1998 and before July 1, 1998, may continue the business through June 30, 1998. The authority of those societies and all other societies licensed after January 1, 1998 may be renewed annually, but, in all cases, terminates on the first day of the succeeding July. However, a license issued continues in full force and effect until the new license is issued or specifically refused. For each license or renewal, the society shall pay a fee set under AS 21.06.250. A certified copy or duplicate of the license shall be prima facie evidence that the licensee is a fraternal benefit society under this chapter.
The director may examine a society in the manner authorized for an insurer under AS 21.06.120 - 21.06.230. The requirements, procedures, authorization, and process for examinations authorized under this section shall be the same as for an insurer.
A foreign or alien society may not transact business in this state without a license issued by the director. A foreign or alien society desiring admission to this state shall comply with the requirements and limitations of this chapter applicable to domestic societies. The society may be licensed to transact business in this state upon filing with the director (1) a certified copy of its articles of incorporation; (2) a copy of its bylaws, certified by its secretary or corresponding officer; (3) a power of attorney to the director as prescribed in AS 21.84.625; (4) a statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the director, verified by an examination made by the supervising insurance official of its home state or other state, territory, province, or country, satisfactory to the director; (5) certification from the proper official of its home state, territory, province, or country that the society is legally incorporated and licensed to transact business therein; (6) copies of its certificate forms; (7) information showing that its assets are invested in accordance with the provisions of this chapter; and (8) other information the director may consider necessary.
(a) When the director upon investigation finds that a domestic society (1) has exceeded its powers; (2) has failed to comply with this chapter; (3) is not fulfilling its contracts in good faith; (4) has a membership of fewer than 400 after an existence of one year or more; or (5) is conducting business fraudulently or in a manner hazardous to its members, creditors, the public, or the business; the director shall notify the society of the findings, state in writing the reasons for dissatisfaction, and demand that the society correct the deficiency. After receipt of the director's notice the society shall have 30 days in which to comply with the director's request, and if the society fails to comply with the director, the director shall notify the society of the findings of noncompliance and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society. (b) If on the date named the society does not present good and sufficient reasons why it should not be enjoined or why the action should not be commenced, the director may present the facts to the attorney general who shall, if the attorney general considers the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto. The court shall notify the officers of the society of a hearing. If after a full hearing it appears that the society should be enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. (c) A society so enjoined does not have the authority to do business until (1) the director finds that the violation complained of has been corrected; (2) the costs of the action have been paid by the society if the court finds that the society was in default as charged; (3) the court has dissolved its injunction; (4) the director has reinstated the society's license. (d) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, and the receiver of the society shall proceed at once to take possession of the books, papers, money, and other assets of the society and, under the direction of the court, proceed immediately to close the affairs of the society and to distribute its funds to those entitled to them. (e) An action under this section may not be recognized in a court of this state unless brought by the attorney general upon request of the director. When a receiver is to be appointed for a domestic society, the court shall appoint the director as the receiver. (f) The provisions of this section relating to hearing by the director, action by the attorney general at the request of the director, hearing by the court, injunction, and receivership shall be applicable to a society that voluntarily determines to discontinue business.
(a) When the director, upon investigation, finds that a foreign or alien society transacting or applying to transact business in this state (1) has exceeded its powers, (2) has failed to comply with a provision of this chapter, (3) is not fulfilling its contracts in good faith, or (4) is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public, the director shall notify the society in writing of the deficiency or deficiencies and state in writing the reasons for the director's dissatisfaction. The director shall immediately issue a written order to the society requiring that the deficiency or deficiencies be corrected. After receipt of the order, the society shall have 30 days to comply with the director's order for correction. If the society fails to comply, the director shall notify the society of the findings of noncompliance and require the society to show cause on a date to be named why its license should not be suspended, revoked, or refused. If, on that date, the society does not present good and sufficient reason why its authority to do business in this state should not be suspended, revoked, or refused, the director may suspend or refuse the license of the society to do business in this state until satisfactory evidence is furnished to the director that the suspension or refusal should be withdrawn, or the director may revoke the authority of the society to do business in this state. (b) Nothing in this section shall be construed to prevent the society from continuing in good faith all contracts made in this state during the time the society was legally authorized to transact business in this state.
An application or petition for injunction against a domestic, foreign, or alien society, or branch thereof, may not be recognized in a court of this state unless made by the attorney general upon request of the director.
(a) Agents of societies shall be licensed in accordance with the provisions of AS 21.27. (b) An examination or license may not be required of a regular salaried officer, employee, or member of a licensed society who devotes substantially all the person's services to activities other than the solicitation of fraternal insurance contracts from the public and who receives for the solicitation of fraternal insurance contracts no commission or other compensation directly dependent upon the amount of business obtained.
A society and an agent authorized to do business in this state are subject to the provisions of AS 21.36; however, nothing in those provisions shall be construed as applying to or affecting (1) the right of a society to determine its eligibility requirements for membership; or (2) the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.
(a) A society authorized to do business in this state shall appoint in writing the director and the director's successors in office to be its true and lawful attorney upon whom all lawful process in an action or proceeding against it shall be served. The society shall agree in writing that any lawful process against it that is served on the appointed attorney is of the same legal force and validity as if served on the society and that the authority continues in force so long as any liability remains outstanding in this state. Copies of the appointment, certified by the director, are sufficient evidence of the appointment and shall be admitted in evidence with the same force and effect as the original. (b) Service may only be made on the director or, if the director is absent, upon the person in charge of the director's office. Service shall be made in duplicate and shall constitute sufficient service on the society. When legal process against a society is served on the director, the director shall immediately forward one of the duplicate copies by registered mail, prepaid, to the secretary or corresponding officer. Legal process shall not be served on a society except in the manner provided in this section. At the time of serving a process on the director, the plaintiff or complainant in the action shall pay to the director a fee set under AS 21.06.250. (c) A society shall respond to the service of process as provided in the Alaska Rules of Civil Procedure.
(a) A person who knowingly makes a false or fraudulent statement or representation in or with reference to an application for membership, or for the purpose of obtaining money from or a benefit in a society, is guilty of a misdemeanor and is punishable by a fine of not more than $2,500 and is liable for a civil penalty of three times the amount received by the violator as compensation or commission. A civil penalty may be sued for and recovered by the aggrieved person or society for the person's or society's own use and benefit. (b) A person who makes a false sworn statement in a report or declaration required or authorized by this chapter or in a statement concerning the death or disability of an insured for the purpose of obtaining payment of a benefit named in the certificate and who does not believe the statement to be true is guilty of perjury and, upon conviction, is subject to the penalties prescribed by law for perjury under AS 11.56.200. (c) A person who solicits membership for, or in any manner assists in procuring membership in, a society not licensed to do business in this state is guilty of a violation and, upon conviction, is punishable by a fine of not less than $50 or more than $200. (d) A person who knowingly engages in conduct that constitutes a violation of the provisions of this chapter for which a penalty is not otherwise prescribed is guilty of a misdemeanor and, upon conviction, is punishable by a fine of not more than $2,500. (e) In this section, knowingly has the meaning given in AS 11.81.900.
Decisions and findings of the director made under the provisions of this chapter are subject to review by proceedings in a court of competent jurisdiction in this state.
(a) Nothing contained in this chapter shall be construed to affect or apply to (1) grand or subordinate lodges of societies, orders, or associations doing business in this state that provide benefits exclusively through local or subordinate lodges; (2) societies, orders, or associations that admit to membership only persons engaged in one or more crafts or hazardous occupations, in the same or similar lines of business, and that insure only members and families of the society, order, or association, and the ladies' societies or ladies' auxiliaries of the societies, orders, or associations; (3) domestic societies that limit their membership to employees of a particular city or town, designated firm, business house, or corporation and that provide for death benefits of not more than $400 or health care benefits of not more than $350 to a person in one year, or both; or (4) domestic societies or associations of a purely religious, charitable, or benevolent description that provide for death benefits of not more than $350 or health care benefits of not more than $350 to a person in one year, or both. (b) A society or association described in (a)(3) or (4) of this section that provides for death or health care benefits for which benefit certificates are issued and a society or association described in (a)(4) of this section that has more than 1,000 members are not exempt from the provisions of this chapter but shall comply with the requirements of this chapter. (c) A society that, by the provisions of this section, is exempt from the requirements of this chapter, except a society described in (a)(2) of this section, may not give or allow or promise to give or allow to a person compensation for procuring new members. (d) A society that provides benefits for health care or death resulting solely from accident and that does not obligate itself to pay natural death or health care benefits has all of the privileges and is subject to all the applicable provisions and regulations of this chapter, except that the provisions of this chapter relating to medical examination, evaluations of benefit certificates, and incontestability do not apply to the society. (e) The director may require a society or association to provide, by examination or otherwise, information that will enable the director to determine whether the society or association is exempt from the provisions of this chapter. (f) Societies that are exempt from the provisions of this chapter under the provisions of this section shall also be exempt from all other provisions of the insurance laws of this state.
In this chapter, (1) alien society means a society formed under the laws other than those of the United States of America, its states, territories, or the District of Columbia; (2) benefit contract means the agreement for provision of benefits authorized by AS 21.84.201, as that agreement is described in AS 21.84.255(a); (3) benefit member means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract; (4) certificate means the document issued as written evidence of the benefit contract; (5) domestic society means a society formed under the laws of this state; (6) foreign society means a society formed under the laws of another state, a territory belonging to the United States of America, or the District of Columbia; (7) fraternal benefit society means an incorporated society, order, or supreme lodge, without capital stock, including one exempted under AS 21.84.700(a)(2), whether incorporated or not, that is conducted solely for the benefit of its members and their beneficiaries and not for profit, that is operated on a lodge system with ritualistic form of work, that has a representative form of government, and that makes provision for the payment of benefits under this chapter; (8) laws means the society's articles of incorporation, constitution, and bylaws, however designated; (9) lodge means subordinate member units of the society known as camps, courts, councils, branches, or another designation; (10) lodge system means a society having a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted under its laws, ritual, and rules; subordinate lodges are required by the laws of the society to hold regular meetings at least once in each month in furtherance of the purposes of the society; (11) premiums means rates, dues, or other required contribution by whatever name known that are payable under the certificate; (12) rules means all rules, regulations, or resolutions adopted by the supreme governing body or board of directors that are intended to have general application to the members of the society; (13) society, unless otherwise indicated, means a fraternal benefit society.
(a) A person may not establish or maintain a self-funded multiple employer welfare arrangement except as authorized by a subsisting certificate of authority issued to the arrangement by the director. (b) A self-funded multiple employer welfare arrangement is established or maintained in this state if (1) one or more of the employer members participating in the arrangement is domiciled or maintains its principal place of business in the state; or (2) the multiple employer welfare arrangement solicits an employer that is domiciled in this state or has its principal headquarters or principal administrative offices in this state.
A self-funded multiple employer welfare arrangement may not use a name that includes the words insurance, casualty, surety, health and accident, mutual, or other terms descriptive of an insurer or insurance business. A self-funded multiple employer welfare arrangement may not have or use a name that is the same as or so similar to that of another self-funded multiple employer welfare arrangement or insurer that the name is likely to mislead the public.
(a) The director may not issue a certificate of authority to a self-funded multiple employer welfare arrangement unless the arrangement establishes to the satisfaction of the director that (1) employers participating in the arrangement are members of a bona fide association or group of two or more businesses in the same or a closely related trade, profession, or industry that provide support, services, or supplies primarily to that trade, profession, or industry; (2) employers or employees participating in the arrangement exercise direct control over the arrangement; as described in this paragraph, (A) subject to (B) of this paragraph, direct control exists if the employers or employees participating in the arrangement have the right to elect at least 75 percent of the individuals designated in the arrangement's organizational documents as having control over the operations of the arrangement and the individuals designated in the arrangement's organizational documents in fact exercise control over the operation of the arrangement; (B) use of a third-party administrator to process claims and to assist in the administration of the arrangement is not evidence of the lack of exercise of control over the operations of the arrangement; (3) the arrangement is a nonprofit organization; (4) the arrangement provides only allowable benefits, except the arrangement may also provide (A) life or disability insurance coverage to its participants if the life or disability insurance coverage is provided under contracts with other insurers that comply with this title; or (B) limited short-term disability insurance coverage, if approved by the director; (5) the arrangement has adequate facilities and competent personnel, as determined by the director, to service the health benefit plan or has contracted with a third-party administrator licensed under AS 21.27 to service the health benefit plan; (6) the arrangement provides allowable benefits to not less than two employers and not less than 75 employees; (7) the arrangement does not solicit participation in the arrangement from the general public, except the arrangement may employ or independently contract with a licensed insurance producer who may be paid a commission or other remuneration to enroll employers in the arrangement; (8) the arrangement is not organized or maintained solely as a conduit for the collection of premiums and the forwarding of premiums to an insurance company, except that the arrangement may act as a conduit for the collection and forwarding of premiums for life insurance coverage under (4) of this subsection; (9) the arrangement (A) has deposited $200,000 with the director to be used for the payment of claims in the event the arrangement becomes insolvent and has submitted to the director a written plan of operation that, in the discretion of the director, ensures the financial integrity of the arrangement; and (B) is able to remain financially solvent; the director may consider the following in determining the ability of the arrangement to remain financially solvent: (i) pro forma financial statements; (ii) types and levels of stop-loss insurance coverage, including attachment points of the coverage; (iii) whether a deposit is required for each employee covered under the arrangement equal to at least one month's cost of providing benefits under the arrangement; (iv) the experience of the individuals who will be involved in the management of the arrangement, including employees, independent contractors, and consultants; and (v) other factors the director considers relevant to determining the ability of the arrangement to remain financially solvent. (b) The director may require that the articles, bylaws, agreements, trusts, or other documents or instruments describing the rights and obligations of the employers, employees, and beneficiaries of the arrangement require that employers participating in the arrangement are liable for a pro rata share of all liabilities of the arrangement that are unpaid. (c) The arrangement shall maintain stop-loss insurance coverage covering 100 percent of claims in excess of the attachment point recommended by a qualified actuary.
To apply for an original certificate of authority, a self-funded multiple employer welfare arrangement shall file with the director its application, accompanied by the applicable fees set under AS 21.06.250, showing its name, the location of its home office, its date of organization, its state of domicile, and additional information that the director may reasonably require. The application shall be submitted together with (1) a copy of all articles, bylaws, agreements, trusts, or other documents or instruments describing the rights and obligations of the employers, employees, and beneficiaries of the arrangement; (2) a copy of each summary plan description of the arrangement filed or required to be filed with the United States Department of Labor, including any amendments to each description; (3) evidence of coverage of or letter of intent to participate executed by at least two employers providing allowable benefits to at least 75 employees; (4) a copy of the arrangement's most recent financial statement in compliance with AS 21.85.080 or, if the arrangement has been in existence for less than one year, pro forma financial statements, including a balance sheet, an income statement, a statement of changes in financial condition, and an actuarial opinion that the unpaid claim liability of the arrangement satisfies the standards in AS 21.18.080 - 21.18.086; (5) proof that the arrangement maintains and will continue to maintain fidelity bonds required by the United States Department of Labor under 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 1974); (6) a copy of any stop-loss insurance policies maintained or proposed to be maintained by the arrangement; (7) biographical reports, on forms prescribed by the National Association of Insurance Commissioners, evidencing the general trustworthiness and competence of each individual who is serving or who will serve as a managing employee or fiduciary of the arrangement; (8) a notarized statement executed by an officer of the arrangement certifying, to the best knowledge and belief of the officer, that the information provided in the application is true and correct and that the arrangement is in compliance with the requirements in (A) AS 21.85.020; (B) 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 1974) or a statement of any requirements with which the arrangement is not in compliance and a statement of proposed corrective action; and (C) AS 21.85.050; (9) base contribution rates for participation under the arrangement for its initial year of operations; and (10) for a foreign multiple employer welfare arrangement, (A) a certificate of the public official having supervision of insurance in its state or country of domicile or state of entry into the United States, showing that it is authorized to transact the kinds of insurance proposed to be transacted in this state or an affidavit attesting to the reasons why a certificate is not available; (B) a copy of the arrangement's most recent financial statement filed with its state of domicile, if any, with an actuarial opinion on reported unpaid claims; (C) a copy of a management discussion and analysis filed with its state of domicile, if any; and (D) a copy of the report of last examination, if any, made of the insurer, issued by the insurance supervisory official of its state of domicile or state of entry into the United States.
A self-funded multiple employer welfare arrangement shall establish and maintain reserves equal to the greater of (1) 30 percent of the unpaid claim liability of the arrangement; or (2) the amount recommended and certified by a qualified actuary.
A multiple employer welfare arrangement shall maintain an amount at least equal to 85 percent of net unpaid claim liability in (1) cash and cash equivalents; (2) the fully insured portion of a bank deposit when the insurance is provided by a solvent agency of the United States government or by collateral; (3) a bank certificate of deposit, subject to review by the director; if the director determines that the amount of the certificate of deposit purchased by an insurer in any one bank is not a sound investment, the director may require the insurer to liquidate that portion found to be an unsound investment; (4) a share or savings account of a savings and loan or building and loan association, to the extent that an account is insured by the Federal Deposit Insurance Corporation; or (5) a rated credit instrument that is issued, assumed, guaranteed, or insured by the United States or Canada or by a government-sponsored enterprise of the United States or Canada if the instrument is assumed, guaranteed, or insured by the United States or Canada or is otherwise backed or supported by the full faith and credit of the United States or Canada.
(a) A self-funded multiple employer welfare arrangement shall establish and maintain contribution rates that (1) fund the greater of (A) the amount recommended and certified by a qualified actuary in order for the self-funded multiple employer welfare arrangement to remain financially solvent; or (B) the sum of projected claims liability for the year, plus all projected costs of operation of the arrangement for the year, plus an amount equal to any deficiency in the reserves of the arrangement for the prior year, minus an amount equal to the reserves of the arrangement in excess of the minimum required level of reserves; and (2) are not excessive, inadequate, or unfairly discriminatory. (b) A self-funded multiple employer welfare arrangement shall, before use, file with the director (1) a rate or fee of any kind to be charged a participating employer or employee; (2) every rating manual, schedule, plan, rule, or formula; and (3) any modification to the rating manual, schedule, plan, rule or formula. (c) The director shall disapprove by order a contribution rate or fee submitted under (b) of this section that does not meet the requirements of (a) of this section or is in any respect not in compliance with or in violation of law. (d) A filing under (b) of this section must state the effective date and must provide a comprehensive description of the coverage. The director may withhold the information provided under (b)(2) and (3) of this section from public inspection for as long as the director determines that withholding the information is necessary to protect the arrangement against unwarranted injury or is in the public interest.
(a) A self-funded multiple employer welfare arrangement shall annually, before March 2, file with the director on forms prescribed by the director, a full and true statement of its financial condition, transactions, and affairs as of the preceding December 31, including (1) a statement of financial condition; (2) a statement of change in financial condition for the year accompanied by an actuarial opinion by a qualified actuary that includes (A) a certification that the unpaid claim liability of the arrangement meets the requirements of AS 21.18.080 - 21.18.086; (B) the recommended level of specific and aggregate stop-loss insurance the arrangement should maintain; (C) a description of the actuarial soundness of the arrangement, including any recommended actions the arrangement should take to improve its actuarial soundness; (3) a statement of the arrangement's contribution rates for the next year; (4) if the total payments to the arrangement for participation during the prior year of operations exceeded the sum of $2,000,000, certified financial statements for the prior two years, or for each year and partial year that the self-funded multiple employer welfare arrangement has been in business if less than two years; (5) a report showing the number of participating employers and number of covered lives at the end of the year and contributions received during the year in the state; (6) additional information the director determines is necessary in order to determine the financial integrity of the arrangement. (b) A self-funded multiple employer welfare arrangement shall, within 60 days after the end of each quarter, file with the director, on forms prescribed by the director, a full and true statement of its financial condition, transactions, and affairs as of the preceding quarter, including (1) a statement of financial condition; (2) a statement of change in financial condition for the period since the end of the prior year; (3) a report showing the number of participating employers and number of covered lives at the end of the quarter and contributions received during the quarter in the state; (4) additional information the director determines is necessary in order to determine the financial integrity of the arrangement. (c) A self-funded multiple employer welfare arrangement shall file with the director a copy of the arrangement's Internal Revenue Service form 5500, including all attachments to the form.
A self-funded multiple employer welfare arrangement must provide a written notice to each participating employee at the time that coverage becomes effective. The notice must (1) be clear and conspicuous; (2) be in at least 10-point type; (3) state that (A) the coverage is issued by a self-funded multiple employer welfare arrangement; (B) coverage and benefits provided under a self-funded multiple employer welfare arrangement are not protected by the Alaska Life and Health Insurance Guaranty Association; and (C) if the self-funded multiple employer welfare arrangement does not pay expenses that are eligible for payment under the plan for any reason, the employer or employee covered by the plan may be responsible for the payment of those expenses.
In addition to the provisions contained or referred to in this chapter, the following chapters and provisions of this title also apply with respect to self-funded multiple employer welfare arrangements to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications of the express provisions, and, for the purposes of the application, the arrangements shall be considered to be a mutual insurer: (1) AS 21.03; (2) AS 21.06; (3) AS 21.07; (4) AS 21.09.100, 21.09.120, 21.09.130, 21.09.140 - 21.09.200, 21.09.210, 21.09.245 - 21.09.270, 21.09.300, and 21.09.320; (5) AS 21.18.010 - 21.18.050, 21.18.080 - 21.18.086, and 21.18.100; (6) AS 21.24; (7) AS 21.33; (8) AS 21.36; (9) AS 21.42.120, 21.42.130, and 21.42.345 - 21.42.599; (10) AS 21.48; (11) AS 21.54; (12) AS 21.55; (13) AS 21.56; (14) AS 21.78; (15) AS 21.96.060; (16) AS 21.97.
In this chapter, (1) allowable benefit means a benefit for medical care; (2) bona fide association has the meaning given in AS 21.54.500; (3) claims liability means the total of all incurred and unpaid claims for allowable benefits under a self-funded multiple employer welfare arrangement that are not reimbursed or reimbursable by stop-loss insurance, subrogation, or other sources; (4) health benefit plan has the meaning given in AS 21.54.500; (5) multiple employer welfare arrangement has the meaning given in 29 U.S.C. 1002; (6) qualified actuary means an individual who (A) is a member in good standing of the American Academy of Actuaries; (B) meets the qualification standards of the American Academy of Actuaries to sign statements of actuarial opinion; (C) is familiar with the valuation requirements under AS 21.18; and (D) has not been disqualified by the director, after notice and hearing under AS 21.06.180, for (i) a violation of this title or other law pertinent to the duties or responsibilities of a qualified actuary; (ii) conviction of a fraudulent act; (iii) conduct considered by the director to reflect incompetence or untrustworthiness; (iv) resignation or removal as an actuary with a company or a consulting firm within the past five years due to acts or omissions indicated in a report of examination or due to failure to adhere to generally accepted actuarial standards; or (v) failure to notify the director of an action taken against the actuary by an insurance regulator of another state for grounds that are substantially the same as a provision under this paragraph; (7) reserves means the excess of assets of a self-funded multiple employer welfare arrangement minus the liabilities of the arrangement; (8) self-funded multiple employer welfare arrangement or arrangement means a multiple employer welfare arrangement that does not provide for payment of benefits under the arrangement solely through a policy of insurance issued by one or more authorized insurance companies.
(a) A person may apply to the director for and obtain a certificate of authority to establish and operate a health maintenance organization in compliance with this chapter. A person may not establish or operate a health maintenance organization in this state unless the person obtains a certificate of authority under this chapter. A foreign corporation may, subject to its registration, qualify under this chapter to do business in this state as a foreign corporation. (b) An application for a certificate of authority must be verified by an officer or authorized representative of the applicant, must be in a form prescribed by the director, and must contain or be accompanied by (1) a copy of the organizational documents of the applicant, including the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments to the documents; (2) a copy of the bylaws, regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant; (3) a list of the names, addresses, and official positions of the persons who are responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association; (4) a copy of contracts made or to be made between the applicant and providers or between the applicant and persons listed in (3) of this subsection; (5) a copy of the form of evidence of coverage that is to be issued to the enrollees; (6) a copy of the form or group contract, if any, that is to be issued to employers, unions, trustees, or other organizations; (7) financial statements showing the applicant's assets, liabilities, and sources of financial support; if the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent certified financial statement satisfies the requirement of this paragraph unless the director finds that additional or more recent financial information is required for the proper administration of this chapter; (8) a description of the proposed method of marketing, a financial plan that includes a projection of operating results anticipated until the organization has had net income for at least one year, and a statement as to the sources of working capital as well as any other sources of funding; (9) a power of attorney executed by the applicant, if not domiciled in this state, appointing the director and the director's successors in office, and authorized deputies, as the true and lawful attorney of the applicant in and for this state, upon whom all lawful process in any legal action or proceeding against the health maintenance organization, on a cause of action arising in this state, may be served; (10) a statement reasonably describing the geographic area or areas to be served; (11) a description of the complaint procedures to be used, as required under AS 21.86.100; (12) as required by regulations adopted by the director, a description of the procedures and programs to be implemented to assure compliance with state and federal statutes and regulations regarding the quality of health care; (13) a description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under AS 21.86.040; (14) the deposit required under AS 21.86.140(b); (15) other information that the director requires in order to make a determination under AS 21.86.020; (16) the application fee prescribed under AS 21.06.250. (c) An applicant, or a health maintenance organization holding a certificate of authority granted under this chapter, shall, unless otherwise provided for, file a notice describing any material modification of the organization's operation as described in the information submitted under (b) of this section. The notice shall be filed with the director before the modification. If the director does not disapprove the modification within 30 days after the filing of the notice, the modification is considered approved. The director may adopt regulations exempting from the filing requirements of this subsection those items that the director considers unnecessary to report. (d) An applicant, or a health maintenance organization holding a certificate of authority granted under this chapter, shall file with the director all contracts of reinsurance. An agreement between the organization and an insurer is subject to the laws of this state regarding reinsurance. All reinsurance agreements and modifications to a reinsurance agreement shall be filed with the director and must be approved by the director. A reinsurance agreement remains in full force and effect for at least 90 days following written notice to the director, by registered mail, of cancellation by either party.
(a) Within 10 days after receipt of an application for a certificate of authority, the director shall forward a copy of the application to the commissioner of health. Within 60 days after the commissioner of health receives the copy of the application, the commissioner shall make a recommendation regarding the granting of the certificate of authority. (b) The director shall either issue or deny a certificate of authority within 30 days after receipt of the commissioner of health's recommendation. However, the director may extend the time for issuance or denial of a certificate of authority if additional information is needed in order to make a decision, and notice of the extension is provided to the applicant by the 90th day after the director received the application. A certificate of authority shall be issued if the director determines that the following conditions are met: (1) the persons responsible for the conduct of the affairs of the applicant are competent and trustworthy; (2) the applicant will effectively provide or arrange for the provision of basic health care services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments; (3) the applicant is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees; in determining if this condition is met, the director may consider (A) the financial soundness of the arrangements for health care services and the schedule of charges used in connection with those services; (B) the adequacy of working capital; (C) an agreement with an insurer, a hospital or medical service corporation, a government, or other organization for ensuring the payment of the cost of health care services or providing for automatic applicability of an alternative coverage if the health maintenance organization is discontinued; (D) an agreement with providers for the provision of health care services; and (E) a deposit of cash or securities submitted under AS 21.86.140; (4) the enrollees will be afforded an opportunity to participate in matters of policy and operation as provided in AS 21.86.040; (5) nothing in the proposed method of operation, as shown by the information submitted under AS 21.86.010 or by independent investigation, is contrary to the public interest; (6) the information submitted under AS 21.86.010(b)(12) indicates that the applicant will be able to comply with state and federal statutes and regulations regarding the quality of health care. (c) If a certificate of authority is denied under this section, the applicant may request a hearing under AS 21.86.200.
(a) A health maintenance organization may (1) purchase, lease, construct, renovate, operate, or maintain hospitals, other health care facilities, their ancillary equipment, and property reasonably required for its principal office or for purposes necessary in the transaction of the business of the organization; (2) make loans to a medical group under contract with it in furtherance of its program, or make loans to a corporation or corporations under its control for the purpose of acquiring or constructing medical facilities and hospitals or in furtherance of a program providing health care services to enrollees; (3) furnish health care services through providers that are under contract with or employed by the health maintenance organization; (4) contract with a person for the performance, on the organization's behalf, of certain functions such as marketing, enrollment, and administration; (5) contract with an insurance company licensed in this state, or with a hospital or medical service corporation authorized to do business in this state, for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the health maintenance organization; (6) offer other health care services, in addition to basic health care services. (b) A health maintenance organization shall file a notice and adequate supporting information with the director before the exercise of a power granted in (a)(1), (2), or (4) of this section. The director may disapprove the exercise of a power only if, in the director's opinion, it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. If the director does not disapprove the exercise of power within 30 days after the filing of the notice, it is considered approved. The director may adopt regulations exempting from the filing requirement of this section those activities having a minimal effect on the health maintenance organization. (c) Nothing in this section relieves a health maintenance organization that wishes to exercise the power described in (a)(1) of this section from the requirements of (1) AS 18.07, regarding obtaining a certificate of need; (2) AS 47.32, regarding regulation of hospitals; and (3) other statutes applicable to hospitals or other health care facilities.
(a) The governing body of a health maintenance organization may include providers, or other individuals, or both. At least one-third of the governing body must consist of consumers who are substantially representative of enrollees. (b) The governing body of a health maintenance organization shall establish a mechanism to afford its enrollees an opportunity to participate in matters of policy and operation through the establishment of advisory panels, by the use of advisory referenda on major policy decisions, or through the use of other mechanisms.
A domestic health maintenance organization shall file with the director a complete affidavit of biographical information not later than 30 days after the appointment of an officer or member of the governing body of the organization. If requested by the director, a foreign health maintenance organization shall file with the director an affidavit of biographical information for the appointment of an officer or member of the governing body of that organization. A filing under this section must be on a form approved by the director. A filing is not required if a biographical affidavit of the officer or member of the governing body of the organization has been submitted to the director within one year before the date of appointment. A biographical affidavit filed under this section is confidential and not subject to public inspection.
(a) A director, officer, employee, or partner of a health maintenance organization who receives, collects, disburses, or invests money in connection with the activities of that organization is responsible for that money in a fiduciary relationship to the organization. (b) A health maintenance organization shall maintain in force a fidelity bond on employees and officers in an amount not less than $100,000 or another amount prescribed by the director. The bond must be written with at least a one-year discovery period and, if written with less than a three-year discovery period, must contain a provision that cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, does not take effect sooner than 90 days after written notice of cancellation or termination has been filed with the director, unless an earlier cancellation or termination date is approved by the director.
(a) A health maintenance organization may provide provider services directly, through provider employees, or may provide the services under arrangements with individual providers or one or more groups of providers. (b) In addition to basic health care services, a health maintenance organization may provide, or arrange for, other health care services on a prepayment or other financial basis. (c) Health care services may be provided only by appropriately licensed health care providers.
(a) An enrollee residing in this state is entitled to evidence of coverage. If an enrollee obtains coverage from an insurance policy or from a subscriber contract issued by a hospital or medical service corporation, whether by option or otherwise, the insurer or hospital or medical service corporation shall issue the evidence of coverage; otherwise, the health maintenance organization shall issue the evidence of coverage. Each subsequent change in coverage must be evidenced in a separate document issued to the enrollee. (b) Except as provided in (d) of this section, evidence of coverage, or an amendment or endorsement to coverage, may not be issued or delivered to a person in this state until a copy of the form of the evidence of coverage, amendment, or endorsement has been filed with and approved by the director. A filing shall be made not less than 30 days before the intended date of delivery or issuance. The form of evidence of coverage, amendment, or endorsement is considered approved 30 days after it was filed, unless it is affirmatively approved or disapproved by an order of the director before the expiration of the 30-day period. If the form of evidence of coverage, amendment, or endorsement is disapproved, the director's order must specify the reasons for disapproval. A hearing shall be granted to a person aggrieved by either an approval or disapproval under this subsection if a written request is made by that person to the director. The hearing shall be granted within 30 days after the receipt of the written request. (c) An evidence of coverage (1) may not contain a provision or statement that is unjust, unfair, inequitable, misleading, deceptive, or encourages misrepresentation, or that is untrue, misleading, or prohibited under AS 21.86.150; and (2) must contain a clear and concise statement if a contract, or a reasonably complete summary if a certificate, of (A) the health care services and the insurance or other benefits, if any, to which the enrollee is entitled; (B) limitations on the services, kind of services, benefits, or kind of benefits, to be provided, including a deductible or copayment feature; (C) where, and in what manner, information is available as to how services may be obtained; (D) the total amount of payment for health care services and the indemnity or service benefits, if any, that the enrollee is obligated to pay with respect to individual contracts; (E) the health maintenance organization's method for resolving enrollee complaints; and (F) guidelines explaining when treatment may be denied. (d) If a form of the evidence of coverage, or an amendment or endorsement to it, is subject to the jurisdiction of the director under AS 21.42.120 and 21.42.130, or under AS 21.87.180, the filing requirements of (b) of this section do not apply. If a form of evidence of coverage, or an amendment or endorsement to it, is subject to AS 21.42.120 and 21.42.130, or to AS 21.87.180, those applicable provisions, as well as (c) of this section, apply to the content of the form of evidence of coverage, amendment, or endorsement. (e) A schedule of charges for enrollee coverage for health care services, or an amendment or endorsement to it, may not be used until a copy of the schedule has been filed with and approved by the director. A filing shall be made not less than 30 days before its proposed use. The schedule of charges, amendment, or endorsement is considered approved 30 days after it was filed unless it was affirmatively approved or disapproved by an order of the director before the expiration of the 30-day period. If a schedule of charges, amendment, or endorsement is disapproved, the director's order must specify the reasons for disapproval. A hearing shall be granted to a person aggrieved by either an approval or disapproval under this subsection if a written request is made by that person to the director. The hearing shall be granted within 30 days after receipt of the written request. (f) A schedule of charges, or an amendment or endorsement to it, shall be established according to sound actuarial principles for various categories of enrollees, but charges applicable to an enrollee may not be individually determined based on that enrollee's health status. The charges may not be excessive, inadequate, nor unfairly discriminatory. Certification by an actuary who is a member in good standing of the American Academy of Actuaries or another person who is considered qualified by the director, as to the appropriateness of the application of the charges, based on reasonable assumptions, must accompany each filing under (e) of this section, along with adequate supporting information. (g) The director may require that additional relevant material considered necessary by the director be submitted in order to determine the acceptability of a filing made under either (b) or (e) of this section.
(a) An enrollee may use the services of a licensed chiropractor of the enrollee's choosing and may not be required to obtain the prior approval of the enrollee's health maintenance organization, a gatekeeper, or primary care physician. Within 10 days after an enrollee's first visit, a chiropractor shall transmit a report containing the enrollee's primary complaint, related history, examination findings, initial diagnosis, and treatment plan to the enrollee's health maintenance organization. If the enrollee and the enrollee's chiropractor determine that the condition of the enrollee has not improved within 30 days after the initial treatment, the chiropractor shall refer the enrollee back to the enrollee's health maintenance organization for examination and possible concurrent care. (b) If the enrollee's chiropractor recommends chiropractic treatment beyond 30 days, the chiropractor shall conduct a second examination and transmit the findings to the enrollee's health maintenance organization. The transmitted information must include the enrollee's current status regarding the primary complaint, the progress of a revised treatment plan, and the objectives for continued care. (c) After receiving a 30-day treatment report from a chiropractor under (b) of this section, the enrollee's health maintenance organization may request a review by another chiropractor. The reviewing chiropractor shall conduct a physical examination of the enrollee. The findings of the reviewing chiropractor must be disclosed to the enrollee and the enrollee's chiropractor. Charges for additional chiropractic care recommended by the reviewing chiropractor must be included as covered health care services provided by the health maintenance organization. (d) If the enrollee's treating chiropractor and the reviewing chiropractor determine that the enrollee's condition has stabilized, ongoing preventative or maintenance care is limited to two chiropractic visits a month. If the treating chiropractor and the reviewing chiropractor disagree on the enrollee's continued treatment, the enrollee and the health maintenance organization shall jointly select a third chiropractor to review the enrollee's chiropractic treatment. Selection of a third chiropractor must occur not more than 60 days after the date of the enrollee's initial treatment by the enrollee's treating chiropractor. Until the third chiropractor's opinion is received in writing by the enrollee and the health maintenance organization, the enrollee may receive chiropractic treatment recommended by the treating chiropractor. The opinion of the third chiropractor as to continued chiropractic treatment is binding on the enrollee and the health maintenance organization. This subsection does not apply if a new documented injury or a substantial exacerbation of the enrollee's previous primary complaint occurs.
(a) A health maintenance organization shall offer to every enrollee a point-of-service plan option that would allow a covered person to receive covered services from an out-of-network health care provider without obtaining a referral or prior authorization from the health maintenance organization. The point-of-service plan option may require that an enrollee pay a higher deductible or copayment and higher premium for the plan. (b) A health maintenance organization shall provide each enrollee with an opportunity at the time of enrollment and during the annual open enrollment period to enroll in the point-of-service plan option. The health maintenance organization shall provide written notice of the point-of-service plan option to each enrollee and shall include in that notice a detailed explanation of the financial costs to be incurred by an enrollee who selects that option.
(a) A health maintenance organization shall file an annual statement with the director under AS 21.09.200 and shall provide a copy to the commissioner of health. The annual statement shall be verified by at least two principal officers of the organization. The director may require additional reports that are reasonably necessary and appropriate in order for the director or the commissioner of health to carry out the duties prescribed by this chapter. (b) The director may require a health maintenance organization to file quarterly financial statements. If quarterly financial statements are required, the statements must follow for a given quarter the reporting specified in the quarterly financial statement blank form and instructions most recently approved by the National Association of Insurance Commissioners. (c) A filing under this section is subject to AS 21.09.200 and 21.09.205.
A health maintenance organization shall promptly notify its enrollees of a material change in its operation that would directly affect the enrollees.
(a) A health maintenance organization shall establish and maintain a complaint system to provide reasonable procedures for the resolution of written complaints initiated by its enrollees. A complaint system must provide a procedure for forwarding to the commissioner of health a duplicate copy of a complaint relating to patient care or facility operation. (b) A health maintenance organization shall annually, on or before March 1, submit to the director, in a form prescribed by the director, a report covering the preceding calendar year. The health maintenance organization shall provide a copy of this report to the commissioner of health. The report submitted under this subsection must include (1) a description of the procedures used in its complaint system; (2) the total number of complaints handled through its complaint system and a compilation of the causes underlying the complaints filed; and (3) the number, amount, and disposition of malpractice claims made by an enrollee that were settled during the year by the health maintenance organization; information concerning malpractice claims shall be held confidential by the director and by the commissioner of health, and is not subject to public disclosure. (c) The director or the commissioner of health may, at any time during normal business hours, examine the complaint system in any place of business of the health maintenance organization in order to determine compliance with this section.
If a health maintenance organization determines that an enrollee has received health care services that the enrollee is not entitled to receive under the terms of the health maintenance agreement, the organization may not recover an amount above the actual cost of providing the health care service. This section does not apply if the enrollee gave or withheld information to the health maintenance organization with the intent to mislead or misinform the organization as to the enrollee's right to receive the health care services.
A person who enters into a health maintenance agreement may return the agreement to the health maintenance organization or the agent from whom it was purchased within 10 days of the delivery of the agreement to the person if the person is not satisfied for any reason. Upon return of the agreement, the health maintenance organization shall promptly refund the fee paid for the agreement. Notice of the substance of this section must be printed on the face of the agreement.
With the exception of investments made under AS 21.86.030, a health maintenance organization's money may only be invested as allowed by AS 21.21 for the investment of legal reserves of a life insurer.
(a) Except as otherwise provided in this section, a health maintenance organization shall deposit with the director, or with an organization or trustee acceptable to the director through which a custodial or controlled account is used, cash, securities, or a combination of these or other means acceptable to the director in the manner and amount required by this section. (b) Except as provided in (d) and (e) of this section, the deposit amount for a health maintenance organization that begins operation after June 8, 1990 is the greater of 10 percent of its estimated expenditures for health care services for its first year of operation, twice its estimated average monthly uncovered expenditures for its first year of operation, or $250,000. Except as provided in (d) and (e) of this section, at the beginning of each succeeding year of operation, the organization shall deposit with the director, or organization or trustee, cash, securities, or a combination of these or other means acceptable to the director in an amount equal to four percent of its estimated annual uncovered expenditures for that year. Each year's estimate, after the first year of operation, shall reasonably reflect the prior year's operating experience and delivery arrangements. (c) Except as provided in (d) and (e) of this section, a health maintenance organization that is in operation on June 8, 1990 shall, on the first day of its fiscal year beginning six months or more after June 8, 1990, make a deposit equal to the greater of one percent of the preceding 12 months' uncovered expenditures or $250,000. The organization shall, at the beginning of its second fiscal year after June 8, 1990, deposit an amount equal to two percent of the organization's estimated annual uncovered expenditures for that year. At the beginning of its third fiscal year, the organization shall deposit an amount equal to three percent of its estimated annual uncovered expenditures for that year. At the beginning of the fourth fiscal year and subsequent years, the organization shall deposit an amount equal to four percent of its estimated annual uncovered expenditures for that year. Each year's estimate, after the first year of operation, must reasonably reflect the prior year's operating experience and delivery arrangements. (d) The director may waive the deposit requirements in (b) and (c) of this section if the director is satisfied that (1) the organization has sufficient net worth and an adequate history of generating net income to assure its financial viability for the next year; (2) the organization's performance and obligations are guaranteed by another organization that has sufficient net worth and an adequate history of generating net income; or (3) the assets of the organization, or its contracts with insurers, hospital or medical service corporations, governments, or other organizations, are reasonably sufficient to assure the performance of its obligations. (e) The annual deposit requirements of (b) and (c) of this section do not apply if (1) a health maintenance organization has achieved a net worth, not including land, buildings, and equipment, of at least $1,000,000 or has achieved a net worth, including land, buildings, and equipment, of at least $5,000,000; (2) the total amount of the health maintenance organization's accumulated deposit is equal to 25 percent of its estimated annual uncovered expenditures for the next calendar year, or is equal to the capital and surplus requirements for the formation for admittance of a health insurer in this state, whichever is less; (3) a health maintenance organization has a guaranteeing organization that (A) does not sponsor any other health maintenance organization; and (B) has been in operation for at least (i) five years and has a net worth, not including land, buildings, and equipment, of at least $1,000,000; or (ii) 10 years and has a net worth, including land, buildings, and equipment, of at least $5,000,000; or (4) a health maintenance organization has a guaranteeing organization that sponsors more than one health maintenance organization and that (A) has been in operation for at least (i) five years and has a net worth that is at least that required by (3)(B)(i) of this subsection multiplied by a number equal to the number of organizations sponsored; or (ii) 10 years and has a net worth that is at least that required by (3)(B)(ii) of this subsection multiplied by a number equal to the number of organizations sponsored; or (B) has, for each organization sponsored, a net worth at least equal to the capital and surplus requirement for a health insurer. (f) All deposit income belongs to the depositing health maintenance organization, and shall be paid to it as it becomes available. A health maintenance organization that has made a deposit of securities may withdraw that deposit, or any part of it, after making a substitute deposit of cash, securities, or a combination of these or other means of equal amount and value. Substitution of securities must have prior approval by the director. (g) In a year in which an annual deposit is not required of a health maintenance organization under this section, at the organization's request the director shall reduce the required, previously accumulated deposit by $100,000 for each $250,000 of net worth in excess of the amount that allows the organization not to make the annual deposit. If the amount of an organization's net worth is reduced to less than the amount that allowed a reduction in accumulated deposit, the organization shall immediately redeposit $100,000 for each $250,000 of reduction in net worth, except that the total deposit need not exceed the maximum required under this section. (h) A health maintenance organization that obtains a certificate of authority shall have and maintain a capital account of at least $100,000 in addition to deposit requirements under this section. The capital account must equal at least $100,000 after deducting accrued liabilities, and must be in the form of cash, securities, or a combination of these or other means acceptable to the director.
(a) A health maintenance organization or a representative of a health maintenance organization may not cause or knowingly permit a person to provide, on behalf of the health maintenance organization, health care services that the person is not licensed to provide. (b) A health maintenance organization, or a representative of a health maintenance organization, may not cause or knowingly permit the use of advertising that is untrue or misleading, solicitation that is untrue or misleading, or a form of evidence of coverage that is deceptive. For purposes of this chapter, (1) a statement or item of information is considered to be untrue if it does not conform to fact in any respect that is or might be significant to an enrollee of, or person considering enrollment with, a health maintenance organization; (2) a statement or item of information is considered to be misleading, whether or not it is untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information might be understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating a benefit or advantage or the absence of an exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a health maintenance organization if the benefit or advantage or absence of limitation, exclusion, or disadvantage does not exist; (3) an evidence of coverage is considered to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as to language, might cause a reasonable person, not possessing special knowledge regarding health maintenance organizations or an evidence of coverage, to expect benefits, services, charges, or other advantages that the evidence of coverage does not provide or that the health maintenance organization issuing the evidence of coverage does not regularly make available for an enrollee covered under the evidence of coverage. (c) AS 21.36 applies to health maintenance organizations and to an evidence of coverage except to the extent that the director determines that the nature of health maintenance organizations and the evidence of coverage renders that chapter clearly inappropriate. (d) A health maintenance organization may not cancel or refuse to review an enrollee, except for (1) reasons stated in the organization's regulations applicable to all enrollees; (2) failure to pay the charge for the enrollee's coverage; or (3) other reasons adopted by the director by regulation. (e) Unless it is licensed as an insurer, a health maintenance organization may not refer to itself as an insurer or use a name deceptively similar to the name or description of an insurance or surety corporation doing business in the state. (f) A person may not use the phrase health maintenance organization or HMO in the course of the person's operations unless the person possesses a valid certificate of authority issued under this chapter. (g) A health maintenance organization that offers, renews, issues for delivery, or delivers in this state a health care insurance plan in the group market that does not impose a preexisting condition exclusion with respect to a particular coverage option under the plan may impose an affiliation period for that coverage option only if the affiliation period (1) is applied uniformly without regard to a health status factor; (2) does not exceed two months for new enrollees and three months for late enrollees; (3) begins on the enrollment date; and (4) runs concurrently with any waiting period under the plan. (h) A health maintenance organization may use a method other than a preexisting condition exclusion or an affiliation period to lessen the risk of adverse selection only with prior written approval of the director. (i) A health maintenance organization, including a health maintenance organization operating a managed care plan, or a representative of a health maintenance organization may not cause, request, or knowingly permit (1) the imposition of limits regarding (A) criticism by a health care provider of health care services provided by the health maintenance organization; or (B) written or oral communications between a health care provider and an enrollee regarding health care services; (2) the employment of a health care provider to be terminated unless the provider receives written notice of the cause for the termination before being terminated; (3) denial of health care coverage for an enrollee unless the enrollee has been examined by at least two physicians; or (4) financial incentives to be given or offered to a provider for denying or delaying health care services. (j) A utilization review decision to deny, reduce, or terminate a health care benefit or to deny payment for a health care service because that service is not medically necessary may only be made by a health care provider trained in that specialty or subspecialty and licensed to practice in this state after consultation with the covered person's health care provider.
(a) The director may adopt regulations necessary to provide for the licensing of health maintenance organization agents. (b) The director may, by regulation, exempt certain classes of persons from the requirement of obtaining an agent license if (1) the function the class performs does not require special competence or trustworthiness, or the regulatory surveillance made possible by licensing; or (2) other existing safeguards make regulation through licensing unnecessary.
(a) An insurer licensed in this state, or a hospital or medical service corporation authorized to do business in this state, may, either directly or through a subsidiary or affiliate, organize and operate a health maintenance organization under the provisions of this chapter. Two or more insurance companies, hospitals or medical service corporations, or subsidiaries or affiliates of them, may jointly organize and operate a health maintenance organization. The business of insurance is considered to include providing health care by a health maintenance organization owned or operated by an insurer or subsidiary of an insurer. (b) An insurer or hospital or medical service corporation may contract with a health maintenance organization to provide insurance or similar protection against the cost of care provided through a health maintenance organization and to provide coverage in the event of the failure of the health maintenance organization to meet its obligations. The enrollees of a health maintenance organization constitute a permissible group under this title. Under a contract authorized by this subsection, the insurer or hospital or medical service corporation may make benefit payments to health maintenance organizations for health care services rendered by providers.
(a) The director shall examine the affairs and transactions of a health maintenance organization in the same manner as prescribed for an insurer in AS 21.06.140 - 21.06.180. (b) As often as is reasonably necessary for the protection of the interests of the people of the state, but at least once every three years, the director shall require submission of an independent review of the quality of care provided by a health maintenance organization either directly or indirectly through contract, agreement, or other arrangement for provisions of health care services to enrollees of the health maintenance organization. The review required under this subsection shall be done by a review organization approved by the Department of Health and shall be done under regulations adopted by that department. The health maintenance organization shall pay the cost of the review.
(a) After compliance with AS 21.86.200, the director may suspend or revoke a certificate of authority issued to a health maintenance organization under this chapter if (1) the health maintenance organization is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in other information submitted under AS 21.86.010 or 21.86.020; (2) the health maintenance organization issues an evidence of coverage, or uses a schedule of charges for health care services, that does not comply with the requirements of AS 21.86.070; (3) the health maintenance organization does not provide or arrange for the provision of basic health care services; (4) the health maintenance organization is not in compliance with state and federal statutes and regulations as required under AS 21.86.010(b)(12), or is unable to fulfill its obligations to furnish health care services; (5) the health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees; (6) the health maintenance organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under AS 21.86.040; (7) the health maintenance organization has failed to implement the complaint system required by AS 21.86.100 in a reasonable manner to resolve valid complaints; (8) the health maintenance organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner; (9) the continued operation of the health maintenance organization would be hazardous to its enrollees; (10) the health maintenance organization has otherwise failed substantially to comply with this chapter. (b) If the certificate of authority of a health maintenance organization is suspended, the health maintenance organization may not, during the period of the suspension, enroll additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and may not engage in advertising or solicitation. The director may, by written order, specify limitations in the operation of the organization during the period of suspension as the director finds to be in the best interests of enrollees. (c) If the certificate of authority of a health maintenance organization is revoked, the organization shall, immediately following the effective date of the order of revocation, proceed to wind up its affairs, and may not conduct further business except that essential to the orderly conclusion of the affairs of the organization. The organization may not engage in further advertising or solicitation. The director may, by written order, permit continued operation of the organization as the director finds to be in the best interest of enrollees, so that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.
(a) If the director has reason to believe that grounds for the denial, suspension, or revocation of a certificate of authority exist, the director shall notify the applicant or the health maintenance organization in writing, specifically stating the grounds for denial, suspension, or revocation. A person aggrieved by a decision of the director regarding denial, suspension, or revocation of a certificate of authority may request a hearing under AS 21.06.180. If a hearing is requested, it shall be held under the procedures in AS 21.06.170 - 21.06.220, except that AS 21.06.190 does not apply in the case of a hearing regarding denial of a certificate. (b) After a hearing under (a) of this section, or upon the failure of an applicant or health maintenance organization to appear at such a hearing, the director shall make written findings and issue an order, that shall be mailed to the applicant or health maintenance organization and concurrently provided to the commissioner of health. An appeal of the director's order may be made in the manner provided by AS 21.06.230.
(a) A rehabilitation, liquidation, or conservation of a health maintenance organization is considered to be a rehabilitation, liquidation, or conservation of an insurer, and shall be conducted under AS 21.78. The director may apply to the superior court for an order directing the rehabilitation, liquidation, or conservation of a health maintenance organization upon one or more of the grounds contained in AS 21.78.040, 21.78.050, or 21.78.060, or if, in the director's opinion, the continued operation of the organization would be hazardous to either enrollees or to the people of the state. (b) Enrollees of a health maintenance organization have the same priority in the event of liquidation or rehabilitation as AS 21.78 provides to policyholders of an insurer. A claim made by a health care provider in a liquidation or rehabilitation that pertains to services provided to an enrollee, has the same priority as an enrollee if the provider agrees not to assert the claim against an enrollee and if any payment fully discharges the obligation of the enrollee.
The commissioner of health may adopt regulations necessary to carry out the commissioner's duties under this chapter. The director may adopt regulations necessary to carry out the director's duties under this chapter.
(a) A health maintenance organization shall pay fees to the director as provided under AS 21.06.250. (b) A health maintenance organization shall pay to the commissioner of health fees, as established in regulations adopted by the commissioner of health, that relate to the regulatory functions performed by that department under this chapter.
A health maintenance organization is taxed as provided under AS 21.09.210(b)(1), and shall file the report required of an authorized insurer under AS 21.09.210(a).
(a) Instead of, or in addition to, suspending or revoking a certificate of authority, the director may, in an order issued under AS 21.86.200, impose an administrative penalty in an amount not less than $1,000 nor more than $25,000 for each violation of an applicable provision of this chapter or a regulation adopted under this chapter. (b) The director may issue an order directing a health maintenance organization or a person representing a health maintenance organization to stop engaging in an act or practice that is in violation of this chapter or a regulation adopted under this chapter. Within five days after service of a stop order under this subsection, the respondent may request, in writing, a hearing on the question of whether the act or practice has occurred in violation of this chapter or a regulation adopted by the director. The hearing shall commence within 10 days after the written request for the hearing has been received by the director unless the respondent requests that the hearing take place at a later date and the director agrees to the later hearing date.
(a) Except as provided in AS 21.36, AS 21.42, AS 21.54, AS 21.56, AS 21.79, and in this chapter, this title does not apply to a health maintenance organization that obtains a certificate of authority under this chapter. This subsection does not apply to an insurer licensed under AS 21.09 or a hospital or medical service corporation licensed under AS 21.87 except with respect to its health maintenance organization activities authorized by and regulated under this chapter. (b) Solicitation of enrollees by a health maintenance organization that has obtained a certificate of authority or by its licensed agents or authorized employee representatives, may not be construed to violate a law of this state relating to solicitation or advertising by health care professionals. (c) A health maintenance organization that obtains a certificate of authority under this chapter is not considered to be practicing medicine, and is exempt from a law of this state relating to the practice of medicine. However, this subsection does not exempt a health care provider from a licensing requirement, or from another law of this state regarding providers.
Except for information described in AS 21.86.100(b)(3) and except for trade secrets, privileged, confidential commercial, or financial information as determined by the director, all applications, filings, and reports required under this chapter, including annual financial statements that are required under AS 21.86.080, are public documents.
In carrying out duties under this chapter, the commissioner of health may contract with qualified persons to make recommendations concerning the determinations required to be made by the commissioner. Recommendations made by a contractor may be accepted in full or in part by the commissioner of health.
(a) A person may not acquire control of the voting securities of a domestic health maintenance organization, if, after the consummation of the transaction, that person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of the health maintenance organization, or enter into an agreement to merge or consolidate with, or otherwise to acquire control of, a health maintenance organization. (b) Subsection (a) of this section does not apply to a person who at the time the offer, request, or invitation is made or the agreement is entered into, or before the acquisition of the securities if no offer or agreement is involved, has filed with the director and has sent to the health maintenance organization, information required by AS 21.22 and the offer, request, invitation, agreement, or acquisition has been approved by the director. Approval by the director under this subsection is governed by AS 21.22. (c) In this section, (1) acquire control of  means to make a tender for, make a request or invitation for tenders of, enter into an agreement to exchange securities for, or acquire in the open market or otherwise; (2) domestic means formed under the laws of this state.
(a) An employer in this state, whether public or private, that offers its employees a health benefit plan and employs 25 or more employees during any week of the calendar year, and an employee benefit fund in this state that offers its members any form of health benefit, shall make available to its employees or members the option to enroll in at least one health maintenance organization, holding a valid certificate of authority, that provides health care services in the geographic areas in which substantial numbers of the employees or members reside. If employees of the employer are members of a collective bargaining unit, the option of enrollment in a health maintenance organization shall first be submitted to the bargaining representative of the bargaining unit. If the option is approved by the bargaining representative, the option of enrollment shall then be made to each represented employee. (b) An employer in this state is not required to pay more for employee health benefits as a result of the application of this section than would be required if this section did not apply to the employer. If an employee chooses enrollment in a health maintenance organization, the employer is required to pay, on behalf of that employee, only an amount equal to the lesser of (1) the amount that would have to be paid to an insurer on behalf of its employees for substantially similar health benefits; or (2) the health maintenance organization's charge for coverage that is approved by the director under AS 21.86.070. (c) This section does not apply to an employer whose employees or members reside in an area where health care services are not provided by a health maintenance organization.
In this chapter, (1) affiliation period means a period of time under a contract with a health maintenance organization (A) that must expire before coverage becomes effective; (B) during which the health maintenance organization is not required to provide health care services or benefits; and (C) for which no premium is charged to the participant or beneficiary for coverage during the period; (2) agent means a person who is appointed by a health maintenance organization and who engages in solicitation of membership in the organization; agent does not include a person enrolling health maintenance organization members on behalf of an employer, a union, or other organization to whom a master subscriber contract has been issued, or an employee, who is not an independent contractor, of the health maintenance organization; (3) basic health care services means emergency care, inpatient hospital and physician care, and outpatient medical services, but does not include mental health services or services for alcohol or drug abuse; (4) beneficiary has the meaning given in AS 21.54.500; (5) enrollee means an individual who is enrolled in a health maintenance organization; (6) enrollment date has the meaning given in AS 21.54.500; (7) evidence of coverage means a certificate, agreement, or contract issued to an enrollee, setting out the coverage to which the enrollee is entitled; (8) group market has the meaning given in AS 21.54.500; (9) health care services means services for medical or dental care, or hospitalization, or services incident to the furnishing of that care or hospitalization, and includes services for the purpose of preventing, alleviating, curing, or healing human illness, injury, or physical disability; (10) health maintenance organization means a person that undertakes to provide or arrange for basic health care services to enrollees on a prepaid basis; (11) health status factor has the meaning given in AS 21.54.500; (12) participant has the meaning given in AS 21.54.500; (13) person has the meaning given in AS 01.10.060 and includes a joint venture; (14) preexisting condition exclusion has the meaning given in AS 21.54.500; (15) provider means a physician, hospital, or other person licensed or otherwise authorized in this state to furnish health care services; (16) uncovered expenditures means the costs of health care services that are covered by a health maintenance organization, but for which an enrollee would also be liable if the organization became insolvent; (17) waiting period has the meaning given in AS 21.54.500.
(a) This chapter applies to every individual, person, firm, corporation, association, or organization of any kind hereafter engaging or purporting to engage in the provision of all or part of a health care service as defined in AS 21.87.330, for its subscribers in exchange for periodic prepayments in identifiable amount by or as to the subscribers. (b) This chapter does not apply to (1) insurers or fraternal benefit societies authorized to transact the kind of insurance involved under other chapters of this title; (2) fraternal and other organizations exempted from AS 21.24; (3) health care services provided by an employer to employees and their dependents, with or without contribution to the costs thereof by the employees, through health care service facilities owned, employed, or controlled by the employers; (4) infrequent instances of prepayment by or for the patient direct to the physician or hospital for specific services thereafter rendered to the patient by the physician or hospital; (5) [Repealed,  3 ch 13 SLA 2014.] 
(a) It is the purpose of this chapter to regulate in the public interest the formation and operation of prepaid health care service organizations, in order that the services may be made available upon a basis of fair and equitable contracts through state-licensed nonprofit organizations meeting reasonable standards as to administration, reserves, and financial soundness. (b) This chapter shall be liberally interpreted to effectuate the purpose declared in (a) of this section.
A provision of this title does not apply to a health care service corporation unless contained or referred to in this chapter.
A person otherwise subject to this chapter may not engage or purport to engage in the provision of any part or all of a health care service for its subscribers in exchange for periodic prepayments in identifiable amount unless it is a service corporation incorporated under the laws of this state, and currently authorized as such a service corporation under a certificate of authority issued by the director under this chapter.
(a) A service corporation shall be formed as a nonprofit, nonstock medical service corporation, or hospital service corporation, or a combination medical and hospital service corporation, consistent with the applicable requirements of this chapter under the statutes of this state governing the formation of nonprofit, nonstock corporations in general. (b) Before the articles of incorporation of the proposed corporation formed after July 1, 1966, are filed with the commissioner of commerce, community, and economic development, they shall be submitted to the director, and the commissioner may not file the articles unless the director's approval is endorsed thereon. The director shall approve the articles unless the director finds that they do not comply with law. If not approved, the director shall return the proposed articles of incorporation to the incorporators together with a written statement of particulars of the reasons for nonapproval. (c) An amendment of the articles of incorporation of a service corporation may not be filed with the commissioner unless it is first submitted to and approved by the director, and bears the director's approval endorsed on it. The director shall approve the amendment unless the director finds that it was not lawfully adopted or that the articles of incorporation as amended would be unlawful. If not approved, the director shall return the proposed amendment to the corporation together with a written statement of the particulars of the reasons for nonapproval.
A service corporation may not have or use a corporate or business name that includes the words insurance, casualty, surety, health and accident, mutual, or other terms descriptive of an insurer or insurance business. A service corporation may not have or use a name so similar to that of another corporation transacting business in this state when the service corporation was formed that it would tend to confuse or mislead the public.
The director may not issue or permit to exist a certificate of authority to be or act as a service corporation to a corporation that does not fulfill the following qualifications: (1) it must be incorporated as provided in AS 21.87.050, as either a medical service corporation, or as a hospital service corporation, or as a combined medical and hospital service corporation; (2) it must intend to and actually conduct its business in good faith as a nonprofit corporation; (3) if a hospital service corporation, it must have in force at all times while so authorized, service agreements with participant hospitals located in the areas of the subscribers' residences, convenient as to location and sufficient as to capacity and facilities reasonably to furnish the hospital services provided or proposed to be provided by the corporation to its subscribers; (4) if a medical service corporation, it must have in force service agreements with participant providers located in the areas of the subscribers' residences convenient as to location and sufficient in numbers and facilities reasonably to furnish the medical and surgical services provided or proposed to be provided by the corporation to its subscribers; (5) if a newly formed corporation, it must possess sufficient available working funds to pay all reasonably anticipated cost of acquisition of new business and operating expenses, other than payment for hospital or medical services, for a period of not less than the six months following the date of issuance of the certificate of authority, if issued, or $100,000, whichever amount is greater; (6) it must fulfill all other applicable requirements of this chapter.
(a) Application for a certificate of authority to transact business as a service corporation shall be made to the director, on forms as prepared and furnished by the director and requiring the information relative to the applicant, its directors, officers, and affairs as the director may reasonably require consistent with this chapter. (b) The application shall be accompanied by the following documents that are not already on file with the director: (1) one copy of the applicant's articles of incorporation and of all amendments, certified by the commissioner; (2) one copy of the applicant's bylaws, certified by its corporate secretary; (3) if a medical service corporation, a copy of each form of service agreement entered into or proposed to be entered into with participant providers, together with a list showing the name, residence and office addresses, and date of execution of the service agreement by each participant provider; (4) if a hospital service corporation, a copy of each service agreement entered into with participant hospitals certified by the applicant's corporate secretary; (5) a copy of each form of subscribers' contract proposed to be offered; (6) a schedule of the rates proposed to be charged subscribers; (7) a financial statement of the applicant as of a date not more than 30 days before the filing of the application, showing among other things the amount of working funds available to the applicant, the source of the funds, and accompanied by a copy of the agreement under which the funds were contributed to or provided for the applicant; (8) a copy of any other relevant document reasonably requested by the director. (c) At the time of filing the application the applicant shall pay to the director an application fee and a fee for issuance of the certificate of authority set under AS 21.06.250.
(a) If, after the application for certificate of authority is completed, the director finds that the applicant is fully qualified for a certificate of authority in accordance with this chapter, and that the service agreements, subscribers contracts, schedule of rates are in compliance with the applicable provisions of this chapter, the director shall issue to the applicant a certificate of authority as a medical service corporation or as a hospital service corporation, or as a combined medical and hospital service corporation, as the case may be. (b) If the director does not so find, the director shall refuse to issue a certificate of authority and shall give the applicant written notice setting out the particulars of the reasons for the refusal, accompanied by return of the fee tendered for issuance of the certificate of authority. (c) The director shall either issue or refuse to issue the certificate of authority within a reasonable time after the filing and completion of application.
(a) A certificate of authority issued to a service corporation shall continue in force as long as the corporation is entitled to it under this chapter, and until suspended or revoked by the director or terminated at the request of the corporation; subject, however, to continuance of the certificate by the corporation each year by (1) payment, before June 30, of the continuation fee set under AS 21.06.250; (2) filing by the insurer of its annual statement for the preceding calendar year as required under AS 21.87.240. (b) If not continued by the service corporation, its certificate of authority shall expire at midnight on the June 30 following the failure of the insurer to continue it in force. The director shall promptly notify the insurer of the occurrence of a failure resulting in impending expiration of its certificate of authority.
(a) The director shall suspend or revoke the certificate of authority of a service corporation that the director finds, after a hearing, is no longer qualified under this chapter. (b) The director may after a hearing, suspend or revoke the certificate of authority for a violation by the service corporation of a provision of this chapter for which mandatory suspension or revocation is not required under (a) of this section, or on an applicable ground set out in AS 21.09.140 and 21.09.150. (c) A service corporation may not, while its certificate of authority is suspended or revoked, transact business as a service corporation other than that necessary and incidental to the discharge of its contracts and agreements outstanding on the day the suspension or revocation became effective. The corporation may not, after the revocation of its certificate of authority, solicit or issue new subscriber's contracts.
(a) A medical service corporation shall have the right to provide to its subscribers part or all of the following services and benefits only: (1) medical and surgical services furnished to the subscriber by participant providers; (2) indemnity in reasonable amount with respect to medical and surgical services furnished to the subscriber by nonparticipant providers, but subject to AS 21.87.070(4); (3) indemnity in reasonable amount with respect to hospital services furnished the subscriber while under the care and treatment of a participant provider or under the care and treatment of another provider upon referral by a participant provider; (4) indemnity in reasonable amount with respect to appliances, prosthetics, and similar devices and replacements, and ambulance, x-ray, physiotherapy, and similar services. (b) This section does not prohibit the corporation from acting as compensated servicing agent as to health care services to be provided by a public agency, or under agreements between other parties not solicited by the corporation.
(a) A hospital service corporation shall have the right to provide to its subscribers part or all of the following services and benefits only: (1) hospital services furnished to the subscriber by participant hospitals; (2) indemnity in a reasonable amount with respect to hospital services furnished to the subscriber by nonparticipant hospitals, but subject to AS 21.87.070(3); (3) indemnity in a reasonable amount for other health care services, as defined in AS 21.87.330. (b) This section does not prohibit the corporation from acting as compensated servicing agent as to health care services to be provided by a public agency, or under agreements between other parties not solicited by the corporation.
(a) A medical service corporation shall enter into service agreements with providers licensed by the state only. (b) Each service agreement shall require the participant providers to furnish to subscribers of the service corporation the medical or surgical services, or both, that are, under the subscriber's contract, to be furnished by participant providers. This obligation to furnish the service, as provided for in the subscriber's contract, shall be a direct obligation of the participant providers to the subscribers as well as to the service corporation. (c) Each service agreement shall further effectively provide in substance that (1) the participant provider shall be compensated for services rendered to a subscriber in accordance with terms contained in the agreement or attached to and made a part of the agreement and that the participant provider may not request or receive from the service corporation compensation for the services that is not in accord with the terms; (2) compensation for services may be prorated and settled under the circumstances and in the manner referred to in AS 21.87.300; (3) if the participant provider withdraws from the agreement, the withdrawal may not be effective as to a subscriber's contract in force on the date of the withdrawal until the termination of the subscriber's contract or the next anniversary of the subscriber's contract, whichever date is the earlier. (d) The proposed form of the service agreement shall be filed with the director and is subject to the approval of the director under AS 21.87.180.
(a) A hospital service corporation shall enter into service agreements with hospitals approved or licensed by the state only. (b) Each service agreement must require the participant hospital to furnish to subscribers of the service corporation the hospital services that are, under the subscriber's contract, to be furnished by participant hospitals; and this obligation to furnish the service, as provided for in the subscriber's contract, shall be a direct obligation of the participant hospitals to the subscribers as well as to the service corporation. (c) Each service agreement must further effectively in substance provide that (1) the participant hospitals shall be compensated for services rendered to a subscriber in accordance with terms contained in the agreement or attached to and made a part of the agreement and that the hospital may not request or receive from the service corporation compensation for the services that is not in accord with the terms; (2) compensation for services may be prorated and settled under the circumstances and in the manner referred to in AS 21.87.300; (3) if the participant hospital withdraws from the agreement, the withdrawal may not be effective as to a subscriber's contract in force on the date of the withdrawal until the termination of the subscriber's contract or the next anniversary of the subscriber's contract, whichever date is the earlier. (d) The service corporation shall terminate the service agreement of a particular participant hospital, in addition to other bases of termination provided for in the agreement, if it is determined that the hospital has knowingly charged or attempted to charge the service corporation for a service not actually rendered, or has knowingly violated a material provision of the service agreement. (e) The proposed form of a service agreement and of the standard riders and endorsements to it shall be filed with the director and are subject to the approval of the director under AS 21.87.180.
(a) Each subscriber's contract issued after July 1, 1966, by a service corporation constitutes a direct obligation of the participant providers or participant hospitals of the service corporation to render the medical or hospital services, as the case may be, as agreed to be rendered by the participants in the subscriber's contract. (b) Each subscriber's contract or certificate must in adequate detail set out provisions from which can be readily determined (1) the services to which the subscriber is entitled from participant providers or participant hospitals, as the case may be; (2) the benefits, if any, to which the subscriber is entitled on an indemnity basis, consistent with AS 21.87.120, 21.87.130 and the other provisions of this chapter; (3) the periodic subscription charge, rate, or fee payable by or to the subscriber; or, if not so expressed and the charge, rate, or fee is subject to change, the subscriber's contract must require that not less than 30 days' written notice of the new charge, rate, or fee shall be given to the subscriber or the remitting agent of the subscriber before the change is effective; (4) the date when the respective services and benefits become available to the subscriber, date of expiration of the contract, and the terms, if any, under which the contract may be continued or renewed; (5) all other terms and conditions of the agreement between the parties consistent with this chapter; (6) that the subscriber's contract and riders and endorsements thereon or thereto, together with application therefor, if any, signed by the subscriber, and identification issued to the subscriber, constitutes the entire contract between the parties. (c) A contract may not restrict the subscriber's right to free choice of provider or hospital, but must restrict benefits to be provided on a service basis to services rendered by participant providers and participant hospitals. (d) All exceptions and exclusions in the contract shall be printed and otherwise set out as prominently as the services or benefits to which they apply. (e) This title may not be construed to prohibit a service corporation from issuing contracts to groups of persons under a master contract. In this event, however, each subscriber covered under the master contract shall be issued an individual certificate that shall set out in adequate detail the provisions itemized in (b) of this section. (f) All proposed forms of subscriber's contracts shall be filed with the director and are subject to the approval of the director under AS 21.87.180.
(a) Each service agreement and subscriber's contract entered into or issued by a service corporation must provide for health care services of a substantial and broad character to be rendered to subscribers on a service basis by participant providers or participant hospitals. (b) The director may, after a hearing, by regulation establish certain minimums of service benefits to be provided consistent with (a) of this section.
(a) A service corporation may not issue or use a basic form of service agreement or subscriber's contract, or application, identification, supplement, or endorsement to be connected with the agreement or contract, until the form has been filed with and approved by the director. This provision does not apply to riders, endorsements, or other forms of unique character designed for and used with relation to a particular subject. (b) The director shall approve the form unless disapproved on one or more of the grounds set out in (c) of this section. If not approved or disapproved by order transmitted to the filing service corporation within 30 days after the date filed, the form shall be considered to have been approved. (c) The director shall disapprove a proposed form referred to in (a) of this section, that (1) is in any respect not in compliance with or in violation of law; (2) contains an inconsistent, ambiguous, or misleading clause, or exceptions and conditions that deceptively affect the services or benefits purported to be provided for in the general terms of the agreement or contract; (3) has any indication of its provisions which is misleading; or (4) is printed or otherwise reproduced in a manner that renders a provision of the form substantially illegible. (d) In an order of disapproval the director shall state the particulars of the grounds for disapproval. (e) A filing under this section is open to public inspection after the date the filing becomes effective.
(a) Subscription rates, fees, and payments to be charged by a service corporation to or on account of its subscribers may not be excessive, inadequate, or unfairly discriminatory; and rates of payments to be made to participant providers and participant hospitals for services rendered under a subscriber's contract, shall be fair and reasonable. (b) [Repealed,  94(a) ch 23 SLA 2011.]  (c) If the subscriber's contracts to be issued by the service corporation provide for indemnity benefits, where permitted under this chapter, the service corporation shall include in the rate, fee, or payment required of the subscriber an adequate additional charge for the indemnity benefit, and shall separately set out the amount of the additional charge in the schedule filed with the director.
In addition to the surplus fund provided for in AS 21.87.210, each service corporation shall establish and maintain unimpaired reserves and liabilities required under AS 21.18.050.
(a) Each service corporation shall set aside into a surplus fund an amount of money equal to not less than two percent of all sums hereafter received by it on account of subscriber's contracts, until the surplus fund amounts to not less than $50,000 if a medical service corporation or hospital service corporation, or $100,000 if a combination medical-hospital service corporation. (b) After the minimum surplus fund is established the service corporation may in like manner increase it to an amount not to exceed the total gross collections from subscribers during the immediately preceding seven months. (c) That portion of the surplus fund referred to in (a) of this section may be used by the service corporation by express appropriation by action of its board of directors solely if necessary to pay the additional health care costs and expenses under its contracts resulting from disease, epidemic or catastrophic occurrences in which numerous persons were injured in the same occurrence. (d) If the surplus fund is at any time depleted below the minimum amount required under (a) of this section, the service corporation shall replenish the fund by a resumption or continuance of allocations from subscribers' payments, as provided for original accumulation of the fund under (a) of this section, or by other reasonable means that may be approved by the director. (e) The director may adopt regulations that are necessary to assure that each service corporation maintains an adequate surplus fund.
(a) A service corporation shall invest and have invested its funds in the following investments only: (1) cash on deposit or in savings accounts in banks or trust companies in this state; (2) deposits in or shares of the savings and loan associations that are insured by an instrumentality of the United States government, and not in excess of the amount of the insurance in any one such institution; (3) public obligations, as provided under AS 21.21; (4) corporate obligations, as provided under AS 21.21; and (5) real estate for use as a home office, at a cost not exceeding 10 percent of the corporation's assets at the time of investment, unless a larger amount has been approved by the director. (b) AS 21.21 shall apply to the investments of service corporations, to the extent applicable, and for the purposes of the application a service corporation shall be considered to be an insurer. (c) The director may adopt regulations governing the extent to which the sections referred to in (b) of this section are applicable to a service corporation.
(a) Every service corporation shall establish and maintain complete and accurate records and accounts covering its transactions and affairs, in accordance with common and accepted principles and practices of insurance accounting and record keeping as applied to the business of the corporation. (b) Among other records, the corporation shall establish a separate record of each claim received for benefits under a subscriber's contract, whether the claim is for service or for indemnity. The claim record must contain information reasonably necessary for the determination of (1) the identity of the claimant; (2) the nature of the claim; (3) the probable amount to be paid by the corporation on account of the claim; (4) the amounts actually paid by the corporation on account of the claim.
(a) Each service corporation shall annually before March 2 file with the director a statement of its financial condition as at the preceding December 31. The statement must be in the form, and provide for the information relative to the corporation's affairs, that the director prescribes, consistent with this chapter. The statement shall be verified under oath by at least two of the corporation's principal administrative officers. (b) At the time of filing the statement, the corporation shall pay a fee set under AS 21.06.250.
Every service corporation shall be subject to examination by the director, with the same rights and powers and in the same manner as is provided in this title for the examination of insurers; and for the purposes thereof AS 21.06.120 - 21.06.180 shall, to the extent applicable, apply to such a corporation, which, for the purpose of the application shall be considered to be an insurer.
Every hospital and medical service corporation doing business under this chapter shall be taxed as provided in AS 21.09.210.
(a) A hospital service corporation and a medical service corporation may operate under joint management for the purpose of reducing operating costs. (b) Separate records and accounts shall be kept for each corporation, and the funds and assets of one may not be commingled with those of the other; except that funds received from a joint billing to subscribers may be deposited in a common bank account for purposes of collection, if the records of each corporation at all times show the amount of the funds belonging to each and if final distribution of the funds is made to each corporation within 30 days from receipt of payment of the joint billing.
(a) A service corporation may be formed as, or may by suitable amendment of its articles of incorporation become, a combined medical service and hospital service corporation. As to its medical services each combined service corporation shall fully comply with those provisions of this chapter especially applicable as to medical service corporations; and as to its hospital services the corporation shall fully comply with those provisions of this chapter especially applicable as to hospital service corporations. (b) Subject to (a) of this section, nothing in this chapter prohibits a combined service corporation from issuing subscriber's contracts providing for both medical services and hospital services.
A service corporation may not issue a subscriber's contract covering, or otherwise insure, an industrial injury or illness if health care service or indemnity benefits are provided by either federal or state law, or under the Alaska Workers' Compensation Act.
(a) At least once each year each service corporation shall make a special accounting, at which time any prorated settlements for bills submitted by participant providers or hospitals for services rendered during the preceding calendar year shall be adjusted, and any deficits made up on a uniform basis as to all participants to the extent of funds available. (b) Funds of the service corporation remaining after the annual accounting, and after adequate provision for all its liabilities and reserves, and for the surplus fund required under AS 21.87.210, may be used by the corporation, upon express authorization by its board of directors, for any of the following purposes: (1) to liquidate on a uniform and pro rata basis charges for services by participant providers or participant hospitals not paid in full upon the settlement of bills in previous years; (2) to pay off any part or the whole of an outstanding contribution of working capital to the corporation, the payment to be prorated on a uniform basis among all the outstanding contributions; or (3) to reduce the rates thereafter to be charged subscribers, or to expand the services or benefits thereafter to be provided under subscription contracts.
Each service corporation shall procure and maintain in force a fidelity bond or bonds, with authorized corporate surety, covering every officer or employee entrusted with the handling of its funds, in an amount, but not less than $5,000, that may be fixed by its board of directors.
In this chapter, (1) health care service means a service rendered to an individual for diagnosis, relief, or treatment of an injury, ailment, or bodily condition; (2) hospital service corporation means a service corporation that principally provides hospital services; (3) medical service corporation means a service corporation that principally provides medical or surgical services; (4) [Repealed,  60 ch 33 SLA 2016.] (5) participant hospital is one that has entered into a service agreement with a service corporation; (6) participant provider means a provider who has entered into a service agreement with a service corporation; (7) physician includes also surgeon; (8) provider means a physician, dentist, osteopath, optometrist, chiropractor, certified nurse midwife, or other licensed health care practitioner; (9) service agreement is a contract between a service corporation and a provider or hospital under which the provider or hospital agrees to render all or part of one or more health care services to subscribers of the service corporation; (10) service corporation means a corporation providing all or part of one or more health care services for subscribers in exchange for periodic prepayments in identifiable amount by or as to the subscribers; (11) subscriber's contract is that between the service corporation and its subscriber under which all or part of one or more health care services is to be rendered to or on behalf of the subscriber by a participant provider or hospital that has entered into a service agreement with the corporation covering the services.
In addition to the provisions contained or referred to previously in this chapter, the following chapters and provisions of this title also apply with respect to service corporations to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications of the express provisions, and, for the purposes of the application, the corporations shall be considered to be mutual insurers: (1) AS 21.03; (2) AS 21.06; (3) AS 21.07; (4) AS 21.09, except AS 21.09.090; (5) AS 21.18.010; (6) AS 21.18.030; (7) AS 21.18.040; (8) AS 21.18.080 - 21.18.086; (9) AS 21.36; (10) AS 21.42.110, 21.42.345 - 21.42.395; (11) AS 21.51.120 and 21.51.400; (12) AS 21.51.405; (13) AS 21.53; (14) AS 21.54; (15) AS 21.56; (16) AS 21.69.400; (17) AS 21.69.520; (18) AS 21.69.600, 21.69.620, and 21.69.630; (19) AS 21.78; (20) AS 21.79; (21) AS 21.96.060; (22) AS 21.97.
A health care service contractor registered to do business in this state on July 1, 1966, is entitled to be registered under this chapter, whether or not it meets the requirements of this chapter.
A governor, officer, or employee or former governor, officer, or employee of the corporation is not liable for civil damages or a criminal fine by reason of the person's act or omission as a governor, officer, or employee of the corporation, or by reason of the act or omission of the corporation, the board of governors, officers, or employees unless (1) the person acts with actual knowledge that the person was acting outside the scope of the person's authority, (2) at the time of the act or omission the person was acting or failing to act for a purpose which the person knew was not in the best interests of the corporation, or (3) with respect to a criminal act, the person had actual knowledge or should have known the person's act was unlawful. If a claim or action is brought against a person entitled to the protection of this section, the claim or action will be defended by the state, except that the person shall reimburse the state for the cost to the state of the person's defense if the provisions of (1), (2), or (3) of this section apply to the person.
If the company to which the assets and liabilities of the corporation are transferred does not write premiums for two consecutive years that total less than 35 percent of all premiums written in the state for physicians' medical malpractice insurance or does not write premiums for one calendar year that total less than 20 percent of all premiums written in the state for physicians' medical malpractice insurance, the company may carry forward and offset against the company's premium tax liability to the state the amount by which the aggregate claims paid on reinsurance assumed under the transfer exceeds aggregate reserves on the same business established at the date of the transfer of the assets and liabilities of the corporation.
In this chapter, corporation means the Medical Indemnity Corporation of Alaska.
A settlement made under a motor vehicle liability insurance policy of a claim against an insured arising under that policy from an accident or other event insured against for damage to or destruction of property owned by another person may not be construed as an admission of liability by the insured, or the insurer's recognition of that liability, with respect to any other claim arising from the same accident or event. The settlement shall be inadmissable in evidence in any legal action.
An insurer who provides workers' compensation insurance in this state shall establish and maintain a workplace safety rate reduction program, subject to the approval of the division.
(a) Insurers that write automobile insurance in the state may, notwithstanding any requirement under AS 28.20, exclude any and all coverage afforded under the policy issued to an owner or operator of a personal vehicle for any loss or injury that occurs while a driver is logged onto the digital network of a transportation network company or while a driver provides a prearranged ride. The right to exclude all coverage may apply to any coverage included in an automobile insurance policy, including (1) liability coverage for bodily injury and property damage; (2) uninsured and underinsured motorist coverage; (3) medical payments coverage; (4) comprehensive physical damage coverage; and (5) collision physical damage coverage. (b) Nothing in this section (1) implies or requires that a personal automobile insurance policy provide coverage while the driver (A) is logged onto the digital network of a transportation network company; (B) is engaged in a prearranged ride; or (C) otherwise uses a personal vehicle to transport passengers for compensation; (2) may be construed to require an insurer to use specific policy language or to refer to this section in order to exclude any and all coverage for any loss or injury that occurs while a driver (A) is logged onto the digital network of a transportation network company; or (B) provides a prearranged ride; or (3) precludes an insurer from providing coverage for the personal vehicle of a transportation network company driver if the insurer chooses to provide coverage by contract or endorsement. (c) Automobile insurers that exclude coverage under (a) of this section do not have a duty to defend or indemnify any claim expressly excluded under (a) of this section. Nothing in this section may be considered to invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in this state before the enactment of this section, that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public. (d) An automobile insurer that defends or indemnifies a claim against a driver that is excluded under the terms of the automobile insurer's policy shall have a right of contribution against other insurers that provide automobile insurance to the same driver in satisfaction of the coverage requirements of AS 28.23.050 at the time of loss. (e) In a claims coverage investigation, a transportation network company shall immediately provide, upon request by directly involved parties or any insurer of the transportation network company driver, if applicable, the precise times that a transportation network company driver logged onto and off of the digital network of a transportation network company in the 12-hour period immediately preceding and in the 12-hour period immediately following the accident. Insurers potentially providing coverage shall disclose, upon request of any insurer involved in the claim, the applicable coverages, exclusions, and limits provided under any automobile insurance maintained under AS 28.23.050. (f) In this section, digital network, driver, personal vehicle, prearranged ride, transportation network company, and transportation network company driver have the meanings given in AS 28.23.180.
(a) An automobile liability policy that insures an owner or operator of a motor vehicle against loss resulting from liability for bodily injury or death, or for property injury or destruction, or both, that is sold in the state, must contain limits in at least the amount prescribed for a motor vehicle liability policy in AS 28.20.440 or AS 28.22.101. (b) This section may not be construed to apply only to automobile liability policies obtained to satisfy a requirement of AS 28.20. (c) An insurance company offering automobile liability insurance in this state for bodily injury or death shall, initially and at each renewal, offer coverage prescribed in AS 28.20.440 and 28.20.445 or AS 28.22 for the protection of the persons insured under the policy who are legally entitled to recover damages for bodily injury or death from owners or operators of uninsured or underinsured motor vehicles. The limit written may not be less than the limit in AS 28.20.440 or AS 28.22.101. Coverage required to be offered under this section must include the following options: (1) policy limits equal to the limits voluntarily purchased to cover the liability of the person insured for bodily injury or death; coverage for punitive damages that might otherwise be recoverable from an uninsured or underinsured person is not required under this paragraph; (2) except when the coverage consists of motorcycle liability insurance, and except for a named insured required to file proof of financial responsibility under AS 28.20 or an applicant required to file proof of financial responsibility under AS 28.20, policy limits in the following amounts when these limits are greater than those offered under (1) of this subsection: (A) $100,000 because of bodily injury to or death of one person in one accident, and, subject to the same limit for one person, $300,000 because of bodily injury to or death of two or more persons in one accident; (B) $300,000 because of bodily injury to or death of one person in one accident, and, subject to the same limit for one person, $500,000 because of bodily injury to or death of two or more persons in one accident; (C) $500,000 because of bodily injury to or death of one person in one accident, and, subject to the same limit for one person, $500,000 because of bodily injury to or death of two or more persons in one accident; (D) $500,000 because of bodily injury to or death of one person in one accident, and, subject to the same limit for one person, $1,000,000 because of bodily injury to or death of two or more persons in one accident; (E) $1,000,000 because of bodily injury to or death of one person in one accident, and, subject to the same limit for one person, $2,000,000 because of bodily injury to or death of two or more persons in one accident; (3) other policy limits at the option of the insurer. (d) An insurance company offering automobile liability insurance in this state for injury to or destruction of property shall offer coverage prescribed in AS 28.20.440 and 28.20.445, or AS 28.22, with limits not less than those prescribed in AS 28.20.440 or AS 28.22.101, to cover the insured person's liability for injury to or destruction of property, for the protection of the persons insured under the policy who are legally entitled to recover damages for injury to or destruction of the covered motor vehicle from owners or operators of uninsured or underinsured motor vehicles. (e) The coverage required under (c) and (d) of this section may be waived in writing by the insured in whole or in part. After selection of the limits by the insured or the exercise of the option to waive the coverage in whole or in part, the insurer is not required to notify any policy holder in any renewal, supplemental, or replacement policy, as to the availability of the coverage or optional limits, and the waived coverage may not be included in any renewal, supplemental, or replacement policy. The insured may, at any time, make a written request for additional coverage or coverage more extensive than that provided on a prior policy. (f) An automobile liability insurance policy must provide (1) that all expenses and fees, not including counsel fees or adjuster fees, incurred because of arbitration or mediation shall be paid as determined by the arbitrator; (2) liability coverage in the amount set out in AS 28.22.101(d) for motor vehicles rented in the United States or Canada by a person insured under the policy; (3) physical damage coverage for motor vehicles rented in the United States or Canada, if the policy provides physical damage coverage; if the insured declines physical damage coverage, the insurer shall offer physical damage coverage for rented vehicles; (4) that payments from applicable coverage provided under (2) and (3) of this subsection will be made in the following order of priority: (A) from a policy or coverage purchased by the operator from the person who has the vehicle available for rent; (B) from a policy or coverage covering the operator of a rented vehicle but not purchased from the person who has the vehicle available for rent; and (C) from a policy or coverage of the person who has the vehicle available for rent. (g) An insurance company offering automobile liability insurance in this state shall offer a short term policy valid for no more than seven days. The coverage available for the short term policy must be comparable to coverage available for longer term policies. The provisions of AS 21.36.210 - 21.36.310 do not apply to short term policies issued under this subsection. (h) The selection, rejection, or exercise of the option not to purchase, by a named insured or an applicant, shall be valid for all insureds under the policy. (i) In this section, automobile liability insurance does not include coverage provided only on an excess or umbrella basis.
(a) An insurer shall provide an appropriate reduction in the premium charged for a personal motor vehicle liability insurance policy when the principal operator of the motor vehicle covered by the insurance policy (1) is 55 years of age or older; (2) at renewal requests the insurer to provide the reduction; (3) has had no chargeable accidents as set by established underwriting guidelines in use by the insurer or moving motor vehicle citations within three years preceding the request for the discount; (4) provides the insurer with proof satisfactory to the director that the operator has within the three years before requesting the reduction taken and successfully completed a motor vehicle accident prevention course approved by the Department of Administration under AS 28.05.035; and (5) did not take and complete the accident prevention course described in (4) of this subsection as a result of an order or sentence imposed by a court. (b) An insurer may cancel a rate reduction provided under (a) of this section if during the policy period the principal operator of the insured motor vehicle is (1) involved in an accident caused by the operator; or (2) convicted of a moving traffic violation. (c) The reduced rate provided for an operator under (a) of this section may not extend beyond three years after the last day of the operator's most recently successfully completed motor vehicle accident prevention course described in (a)(4) of this section. (d) The director shall establish by regulation the manner in which insurers inform applicants and insureds of the rate reduction available under this section. An insurer shall inform applicants and insureds as required by this subsection.
Unless another form of payment is agreed to by the policyholder or beneficiary, an insurance company doing business in this state may not pay a judgment or settlement of a claim in this state for a loss incurred in this state with an instrument other than a negotiable bank check payable on demand and bearing even date with the date of writing or by electronic funds transfer.
A motor vehicle or similar policy, a policy providing property coverage, or any other policy providing first party property, casualty, or inland marine coverage, issued or delivered in this state, must include an appraisal clause providing a contractual means to resolve a dispute between the insured and the insurer over the value of a covered first party loss for real property, personal property, business property, or similar risks. If the insured and the insurer fail to agree on the amount of a covered first party loss, either may make written demand upon the other to submit the dispute for appraisal. Within 10 days of the written demand, the insured and insurer must notify the other of the competent appraiser each has selected. The two appraisers will promptly choose a competent and impartial umpire. Not later than 15 days after the umpire has been chosen, unless the time period is extended by the umpire, each appraiser will separately state in writing the amount of the loss. If the appraisers submit a written report of agreement on the amount of the loss, the agreed amount will be binding upon the insured and insurer. If the appraisers fail to agree, the appraisers will promptly submit their differences to the umpire. A decision agreed to by one of the appraisers and the umpire will be binding upon the insured and insurer. All expenses and fees, not including counsel or adjuster fees, incurred because of the appraisal shall be paid as determined by the umpire. Except as specifically provided, nothing in this section is intended to or shall in any manner limit or restrict the rights of insureds or insurers or confer any rights to an insured or insurer.
(a) When an insurer has reason to believe that a fire loss in which it has an interest may have been caused by other than accidental means, it shall immediately supply a written report of that fact to the Department of Public Safety. (b) When requested in writing by an authorized agency, an insurer shall supply all available information relating to a particular fire loss to the agency. The information requested may include (1) insurance policy information pertaining to a fire loss under investigation and any application for the policy; (2) policy premium payment records; (3) a history of previous claims made by the insured; and (4) material relating to the investigation of the loss, including statements of a person who may have information about the loss and any proof of the loss. (c) Notification to the Department of Public Safety under (a) of this section does not relieve the insurer of the duty to respond to a request for information from an authorized agency under (b) of this section. (d) An authorized agency provided with information under (a) or (b) of this section may release the information to another authorized agency. (e) In (a)-(d) of this section, authorized agency means a fire department, a local or federal law enforcement agency responsible for the investigation of fires, the Department of Law, the state fire marshal, the United States attorney's office, and the Department of Public Safety. (f) An authorized agency shall share with the insurer all relevant information relating to an instance of suspected arson when (1) the Department of Law has determined that release of the information would not jeopardize the success of an ongoing investigation and that there are adequate safeguards to insure the confidentiality of the information; (2) the agency has completed its investigation and a decision not to prosecute has been made; or (3) criminal prosecution has been brought and the defendant has pled guilty, or the jury or other trier of fact has returned a verdict, and no appeal has been taken. (g) In (f) of this section, authorized agency means a fire department, a local law enforcement agency responsible for the investigation of fires, the Department of Law, the state fire marshal, and the Department of Public Safety. (h) A person is not civilly liable or subject to criminal prosecution for releasing information under this section unless the act constitutes a malicious attempt to injure an insured.
The director shall adopt regulations necessary to comply with the requirements of 42 U.S.C. 1395ss, and any amendments to that section or federal regulations pertaining to that section, so that the state may retain full authority to set certain standards for Medicare supplemental insurance.
(a) A taxpayer is allowed a credit against the tax due under AS 21.09.210 or AS 21.66.110 for contributions of cash or equipment accepted (1) for direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation or by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association; (2) for secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) for vocational education courses, programs, and facilities by a state-operated vocational technical education and training school; (4) for a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association; (5) for Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; and (6) for education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government. (b) The amount of the credit is 50 percent of contributions. (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used. (d) A contribution claimed as a credit under this section may not (1) be the basis for a credit claimed under another provision of this title; and (2) when combined with contributions that are the basis for credits taken during the taxpayer's tax year under AS 43.20.014, AS 43.55.019, AS 43.56.018, AS 43.65.018, AS 43.75.018, or AS 43.77.045, result in the total amount of credits exceeding $1,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $1,000,000 for the affiliated group; in this paragraph, affiliated group has the meaning given in AS 43.20.145. (e) The credit under this section may not reduce a person's tax liability under AS 21.09.210 or AS 21.66.110 to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year. (f) In this section, (1) school district means a borough school district, a city school district, a regional educational attendance area, or a state boarding school; (2) vocational education has the meaning given in AS 43.20.014.
(a) Notwithstanding any contrary provision of this title, the director may, by regulation or by order, provide for the electronic transaction of any information or written communication under this title. (b) An electronic transaction under this section must comply with AS 09.80.
(a) A risk retention group or a purchasing group formed under and in compliance with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act) shall register with the director and shall at all times transact business in compliance with federal law and with the laws of this state that are not preempted by federal law. (b) A risk retention group or a purchasing group shall apply for initial registration on forms prescribed by the director. Payment of a registration fee established under AS 21.06.250 shall be submitted with the application. (c) A risk retention group or a purchasing group may continue its registration if it is in compliance with federal law. Payment of an annual continuation fee established under AS 21.06.250 shall be submitted with the continuation application. (d) A risk retention group holding a valid certificate of authority as a domestic insurer or a purchasing group duly licensed under AS 21.27 as a resident licensee is not required to be additionally registered under this section. (e) In addition to any other penalty provided by law, a person that the director determines under AS 21.06.170 - 21.06.240 has violated a provision of this title relative to a risk retention group or a purchasing group is subject to a civil penalty of not more than $10,000 for a violation or, if the director determines that the person wilfully violated a provision of this title, a civil penalty of not more than $25,000 for a violation. (f) The director may adopt regulations on the operation and reporting requirements of a risk retention group that are not in conflict with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act).
(a) If an insurer has a duty to defend an insured under a policy of insurance and a conflict of interest arises that imposes a duty on the insurer to provide independent counsel to the insured, the insurer shall provide independent counsel to the insured unless the insured in writing waives the right to independent counsel. An insurance policy may contain a provision that provides a method of selecting independent counsel if the provision complies with this section. (b) For purposes of this section, the following do not constitute a conflict of interest: (1) a claim of punitive damages; (2) a claim of damages in excess of the policy limits; (3) claims or facts in a civil action for which the insurer denies coverage. (c) Notwithstanding (b) of this section, if the insurer reserves the insurer's rights on an issue for which coverage is denied, the insurer shall provide independent counsel to the insured as provided under (a) of this section. (d) If the insured selects independent counsel at the insurer's expense, the insurer may require that the independent counsel have at least four years of experience in civil litigation, including defense experience in the general subject area at issue in the civil action, and malpractice insurance. Unless otherwise provided in the insurance policy, the obligation of the insurer to pay the fee charged by the independent counsel is limited to the rate that is actually paid by the insurer to an attorney in the ordinary course of business in the defense of a similar civil action in the community in which the claim arose or is being defended. In providing independent counsel, the insurer is not responsible for the fees and costs of defending an allegation for which coverage is properly denied and shall be responsible only for the fees and costs to defend those allegations for which the insurer either reserves its position as to coverage or accepts coverage. The independent counsel shall keep detailed records allocating fees and costs accordingly. A dispute between the insurer and insured regarding attorney fees that is not resolved by the insurance policy or this section shall be resolved by arbitration under AS 09.43. (e) If the insured selects independent counsel at the insurer's expense, the independent counsel and the insured shall consult with the insurer on all matters relating to the civil action and shall disclose to the insurer in a timely manner all information relevant to the civil action, except information that is privileged and relevant to disputed coverage. A claim of privilege is subject to review in the appropriate court. Information disclosed by the independent counsel or the insured does not waive another party's right to assert privilege. (f) An insured may waive the right to select independent counsel by signing a statement that reads substantially as follows:I have been advised of my right to select independent counsel to represent me in this lawsuit and of my right under state law to have all reasonable expenses of an independent counsel paid by my insurer. I have also been advised that the Alaska Supreme Court has ruled that when an insurer defends an insured under a reservation of rights provision in an insurance policy, there are various conflicts of interest that arise between an insurer and an insured. I have considered this matter fully and at this time I am waiving my right to select independent counsel. I have authorized my insurer to select a defense counsel to represent me in this lawsuit. (g) If an insured selects independent counsel under this section, both the counsel representing the insurer and independent counsel representing the insured shall be allowed to participate in all aspects of the civil action. Counsel for the insurer and insured shall cooperate fully in exchanging information that is consistent with ethical and legal obligations to the insured. Nothing in this section relieves the insured of the duty to cooperate fully with the insurer as required by the terms of the insurance policy. (h) When an insured is represented by independent counsel, the insurer may settle directly with the plaintiff if the settlement includes all claims based upon the allegations for which the insurer previously reserved its position as to coverage or accepted coverage, regardless of whether the settlement extinguishes all claims against the insured.
(a) The director shall regulate the transaction of viatical settlement contracts for the protection of viators, insureds, and insurers. The authority of the director under this subsection extends to the regulation of transactions between a viator and a viatical settlement provider and between a viator and a person acting as an agent in viaticating a life insurance policy, while the authority of the commissioner extends to the regulation of viatical settlement investments as provided under AS 45.56. (b) A viatical settlement provider, representative, or broker must apply for a license with the director, submit information required by the director, and pay the required fee established under AS 21.06.250 with the application for licensure. A person may not act as or represent to be a viatical settlement provider, representative, or broker relative to a subject resident, located, or to be performed in this state unless licensed under this section. (c) Viatical settlement contract forms, viator and insured disclosure statements, and viatical settlement advertising materials must be filed by the viatical settlement provider, representative, or broker with the director and must be approved by the director. (d) The director may examine a licensed viatical settlement provider, representative, or broker, or an applicant for a viatical settlement provider, representative, or broker license. The cost of the examination shall be paid by the person examined under AS 21.06.160. (e) Except as may be required in the course of conduct of the division's responsibilities, a viatical settlement provider, representative, or broker may not disclose to another person the identity of the viator or insured of an insurance policy that is the subject of a viatical settlement contract. The viator may waive this prohibition against disclosure if the waiver is in writing and is signed by the viator. (f) The director may adopt regulations to implement this section, including standards for (1) viatical settlement provider, representative, and broker reporting requirements and records retention; (2) viator and insured privacy protection; (3) viatical settlement contract provisions, advertising materials, and filing requirements; (4) payments to viators or insureds, including evaluating the reasonableness of payments under a viatical settlement contract; (5) licensing requirements, including license qualification, disqualification, and renewal; (6) financial accountability of viatical settlement providers; (7) the relationship and responsibilities of insurers, viators, insureds, and viatical settlement providers, representatives, and brokers in the transaction of a viatical settlement contract; (8) viator, insured, and insurer protection, including full and fair disclosure setting out the manner and content of required disclosures and filing requirements; and (9) assessment of fees to cover the cost of regulating viatical settlement contracts, providers, representatives, and brokers. (g) A violation of this section or a regulation adopted under this section is an unfair trade practice and subject to penalty under AS 21.36. (h) In this section, (1) transaction means, with respect to viatical settlement contracts, (A) solicitation and inducement; (B) preliminary negotiations; (C) effectuation of a viatical settlement contract; (D) transaction of matters subsequent to the effectuation of the viatical settlement contract and arising out of it; (2) viatical settlement broker (A) means a person that, on behalf of a viator or insured and for a fee, commission, or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator or insured and one or more viatical settlement providers; (B) does not include a person acting as an attorney or accountant retained to represent a viator or insured and compensated by or at the direction of the viator or insured; (3) viatical settlement contract (A) means a written agreement between a viator or insured and a viatical settlement provider for the sale, assignment, transfer, devise, or bequest to the viatical settlement provider by the viator or insured of all or a portion of the death benefit or ownership of a life insurance policy for consideration that is less than the expected death benefit of the life insurance policy; (B) includes a contract for a loan or other financial transaction secured primarily by an individual or group life insurance policy; (C) does not include (i) a loan by a life insurance company under the terms of a life insurance contract; (ii) a loan secured by the cash value of a policy; (iii) the assignment of a life insurance policy as collateral for a loan to a bank, saving bank, savings and loan association, credit union, or other licensed lending institution; (iv) the exercise by the viator or insured of an accelerated benefits provision under the terms of the life insurance contract; or (v) the sale, assignment, transfer, devise, or bequest of a life insurance policy for less than the expected death benefit by a viator or insured to a friend or family member if the friend or family member does not enter into more than one agreement in a calendar year; (4) viatical settlement provider means a person, other than a viator or insured, that enters into a viatical settlement contract, including a person that (A) obtains financing for the purchase, acquisition, transfer, or other assignment of one or more viatical settlement contracts, viaticated policies, or interests in viatical settlement contracts or viaticated policies; or (B) sells, assigns, transfers, pledges, hypothecates, or disposes of one or more viatical settlement contracts, viaticated policies, or interests in viatical settlement contracts or viaticated policies; (5) viatical settlement representative (A) means a person that is an authorized agent of a viatical settlement provider or broker and that acts or aids in any manner in the transaction of a viatical settlement contract; (B) does not include (i) a person acting as an attorney or an accountant, or a person exercising a power of attorney granted by a viator or insured; or (ii) a person retained to represent a viator or insured and compensated by or at the direction of the viator or insured; (6) viaticated policy means a life insurance policy that has been acquired by a viatical settlement provider under a viatical settlement contract; (7) viator means the owner of a life insurance policy insuring the life of an individual who enters or seeks to enter into a viatical settlement contract.
The director may apply to the United States Secretary of Health and Human Services under 42 U.S.C. 18052 for a waiver of applicable provisions of P.L. 111-148 (Patient Protection and Affordable Care Act) with respect to health insurance coverage in the state for a plan year beginning on or after January 1, 2017. The director may implement a state plan meeting the waiver requirements in a manner consistent with state and federal law and as approved by the United States Secretary of Health and Human Services.
Upon request of a covered person who is receiving nonemergency health care services, a health care insurer shall provide a good faith estimate of the amount of the reasonably anticipated charges for treating the patient's specific condition under AS 18.23.400(g).
Provisions of this title relative to a particular kind of insurance or a particular type of insurer or to a particular matter prevail over provisions relating to insurance in general or insurers in general or to a particular matter in general.
A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have wilfully violated a provision of this title or a regulation adopted under it is subject to a civil penalty of not more than $25,000.
The director may adopt a regulation that incorporates by reference the Financial Analysis Handbook published by the National Association of Insurance Commissioners. Under AS 44.62.245(a)(2), in adopting or amending a regulation that incorporates the Financial Analysis Handbook published by the National Association of Insurance Commissioners, the director may incorporate future amended versions of the Financial Analysis Handbook published by the National Association of Insurance Commissioners.
In this title, unless the context requires otherwise, (1) admitted insurer means an authorized insurer; (2) agent means a person appointed by an insurer to solicit applications for insurance or annuities on its behalf, and if authorized to do so, to effectuate and countersign insurance contracts, except life or health insurance or annuities, and to collect premiums on insurance or annuities; (3) alien insurer means an insurer formed under the laws of a country other than the United States of America, its states, districts, territories, and commonwealths; (4) assumption reinsurance means a form of reinsurance that includes the transfer of all contractual obligations to the assuming insurer with no recourse to the ceding insurer; (5) attorney-in-fact means a person designated and appointed by the subscribers of a reciprocal insurer to act for and bind the subscribers in transactions relating to or arising out of the operations of a reciprocal insurer, subject to the limitations that may be lawfully provided; (6) authorized insurer means an insurer authorized by a certificate of authority issued by the director to transact insurance in this state; (7) bona fide association means an association (A) that has actively been in existence for at least five years; (B) that has been formed and maintained in good faith for purposes other than obtaining insurance; (C) for which insurance is not required to become a member of the association; (D) in which members of the association share a common enterprise or economic social affinity or relationship; (E) that does not condition membership in the association on a health status factor relating to an individual; (F) that makes insurance available to all members and dependents of members regardless of a health status factor in relation to the member or dependent; (G) in which an individual eligible for coverage is subject to uniformly applied standards of insurability as may be imposed by the insurer; (H) in which premiums for the group insurance policy are actuarially sound; (I) that does not offer an insurance policy to an individual other than in connection with a member of the association; and (J) that meets other requirements established by the director in regulations. (8) broker means a person who is not an agent of the insurer and who, on behalf of the insured, for compensation as an independent contractor by commission or fee, solicits, negotiates, or procures insurance or reinsurance or the renewal or continuance of insurance or reinsurance; or in any manner aids in the solicitation, negotiation, procurement, renewal, or continuance of insurance or reinsurance, for insureds or prospective insureds not including the broker; (9) certified financial statement means a financial statement upon which an independent certified public accountant, or an accountant holding a substantially equivalent designation as determined by the director, renders or disclaims an opinion after performance of an audit; (10) commissioner means the commissioner of commerce, community, and economic development; (11) court means superior court; (12) director means the director of the division of insurance; (13) division means the division of insurance, Department of Commerce, Community, and Economic Development; (14) domestic insurer means an insurer formed under the laws of this state; (15) evergreen clause means a contract clause that provides that the contract is automatically renewed unless notice to the contrary is given by one of the parties to the contract; (16) examiner means an individual or firm that has been authorized by the director to conduct an examination under this title; (17) facultative reinsurance means a contract of reinsurance for individual risks where the insurer retains the ability to accept or reject each risk offered by the ceding company; (18) firm means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity; (19) foreign insurer means an insurer formed under the laws of a jurisdiction other than this state and includes an alien insurer; (20) health discount plan means a card, program, device, arrangement, contract, or mechanism that purports to offer discounts or access to discounts on health care services or supplies and that is not insurance or that does not provide coverage for services or benefits regulated under AS 21.86 or AS 21.87; (21) impaired or impairment means that (A) an insurer's policyholder surplus is greater than zero but less than that required by AS 21.09.070 for the authority to transact the kinds of insurance being transacted; or (B) an insurer is being operated in a manner that has caused or might cause irreparable loss and injury to the insurer or to the public; (22) independent adjuster means a person who, for compensation as an independent contractor or as an employee of an independent contractor, for fee or commission, investigates and adjusts losses or claims arising under insurance contracts on behalf of an insurer; (23) independently procured insurance means insurance procured directly from a nonadmitted insurer directly by an insured, but does not include insurance lawfully procured through a surplus lines broker under AS 21.34; (24) industrial life insurance means that form of life insurance written under policies with a face amount of $1,000 or less, with the words industrial policy imprinted on the face as part of the descriptive matter, and under which premiums are payable monthly or more often; (25) insolvent or insolvency means that an insurer's policyholder surplus is less than or equal to zero; (26) insurance means a contract whereby one undertakes to indemnify another or pay or provide a specified or determinable amount or benefit upon determinable contingencies; (27) insurance producer has the meaning given in AS 21.27.990; (28) insurer includes a person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity; (29) licensee means a person or firm licensed as provided in AS 21.27; (30) managing general agent means a person who (A) manages all or part of the insurance business of an insurer, including the managing of a separate division, department, or underwriting office; and (B) acts as an agent for an insurer, whether known as a managing general agent, manager, or other similar term, who, with or without the authority, separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with the following activity related to the business produced, adjusts or pays claims over $10,000 a claim, or negotiates reinsurance on behalf of the insurer; (31) medical care means amounts paid for (A) diagnosis, care, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body; (B) transportation primarily for and essential to medical care described in (A) of this paragraph; and (C) insurance covering medical care described in (A) and (B) of this paragraph; (32) nonadmitted insurer means an unauthorized insurer; (33) person has the meaning given in AS 01.10.060 and includes an insurer, Lloyd's, fraternal benefit society, medical service, or hospital service plan as defined in AS 21.87, reciprocal or interinsurance exchange, syndicate, and any other legal entity engaged in the business of transacting insurance; (34) policy means the written contract of or written agreement for or effecting insurance, by whatever name called, and includes all clauses, riders, endorsements, and papers attached to it and a part of it; for a group, trust, association, or similar entity, policy also means a certificate or other evidence of insurance that establishes the written contract of or written agreement for or effecting insurance for an insured or other beneficiary of the entity; (35) policyholder surplus means (A) for a stock insurer, the sum of its capital, as represented by the aggregate par value to its outstanding capital stock, and its surplus, if any; (B) for a mutual insurer, its surplus, both basic guaranteed and additional, if any; (C) for an insurer other than a stock or mutual insurer, the net worth of the insurer, calculated as its recorded assets less its liabilities, as determined by the accounting criteria set out in this title; (36) premium means the consideration for insurance, by whatever name called, and by whatever method paid or collected, including an assessment, or membership, policy, survey, inspection, service or similar fee or charge made in consideration for an insurance contract; (37) reinsurance means an insurance transaction by which the assuming insurer agrees to indemnify the ceding insurer in whole or in part against liability or losses that the ceding insurer might incur under a separate contract of insurance with its insured; (38) reinsurance intermediary means a person who acts as a producer in soliciting, negotiating, or procuring the making of a reinsurance contract or binder on behalf of a ceding admitted insurer or acts as a producer in accepting a reinsurance contract or binder on behalf of an assuming admitted insurer; (39) reinsurance intermediary broker means a person who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding admitted insurer without the authority or power to bind reinsurance on behalf of the insurer; (40) reinsurance intermediary manager means a person including an insurer who has authority to bind or manage all or part of the assumed reinsurance business of an admitted reinsurer, including the management of a separate division, department, or underwriting office, and who acts as an agent for the reinsurer; (41) state means a state, District of Columbia, territory, commonwealth, or possession of the United States of America; (42) surplus lines broker means a person licensed under AS 21.27 to place insurance in this state or relative to a subject resident, located, or to be performed in this state with eligible surplus lines insurers under AS 21.34; (43) surplus lines insurance means any insurance in this state or relative to a subject resident, located, or to be performed in this state that is permitted under AS 21.34 to be placed through a surplus lines broker licensed under AS 21.27 with nonadmitted insurers eligible to accept insurance other than reinsurance, wet marine and transportation insurance, insurance independently procured, life insurance, and an annuity contract; (44) third-party administrator means a person who, for residents of this state, or for residents of another jurisdiction from a place of business in this state, performs administrative functions including claims administration and payment, marketing administrative functions, premium accounting, premium billing, coverage verification, underwriting authority, or certificate issuance in connection with life insurance, annuities, health insurance, or the provision of coverage for the cost of medical care; (45) transact, with respect to insurance or the provision of coverage for medical care, includes (A) solicitation and inducement; (B) preliminary negotiations; (C) effectuation of a contract of insurance or the provision of coverage for medical care; (D) transaction of matters subsequent to effectuation of the contract of insurance or the provision of coverage for medical care and arising out of it; (46) unauthorized insurer means an insurer not authorized to transact insurance in this state; (47) working day means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday of this state.