HB 67: "An Act relating to the practice of insurance redlining and to reports by insurers."

00 HOUSE BILL NO. 67                                                                                                       
01 "An Act relating to the practice of insurance redlining and to reports by                                               
02 insurers."                                                                                                              
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. PURPOSE.  The purpose of this act is to enact a comprehensive antiredlining                             
05 law with respect to  automobile, fire, homeowner's, commercial, and mortgage guarantee                                  
06 insurance.   It is also the purpose of this act that by discouraging redlining, the insurance                           
07 needs of  inner city  and low income communities of the state will be met.                                              
08    * Sec. 2.  AS 21.36 is amended by adding a new section to read:                                                      
09  Sec. 21.36.093.  INSURANCE REDLINING.  (a)  A property, casualty, or                                                  
10 surety insurer shall annually submit a disclosure report to the director containing the                                 
11 following:                                                                                                              
12   (1)  for each zip code in the state, the                                                                             
13   (A)  number and total earned premiums of its policies in force,                                                     
14 policies renewed, new policies written, policies cancelled, and policies not                                            
01 renewed;                                                                                                                
02   (B)  number of its agents, claims adjusters, and other employees                                                    
03 working;                                                                                                                
04   (C)  number of its offices maintained;                                                                              
05   (D)  number of its agents  and claims adjusters capable of                                                          
06 discussing insurance policies and claims in a language other than English, listed                                       
07 by the language spoken;                                                                                                 
08   (E)  the race or national origin, and sex of the insurer's                                                          
09 employees;                                                                                                              
10   (2) the total dollar amount of contracts awarded by the insurer to                                                   
11 businesses in the state and the total dollar amount of contracts awarded by the insurer                                 
12 to minority owned businesses with the state;                                                                            
13   (3)  a description of each program, including purpose, material terms,                                               
14 dollars committed, dollars spent, and manager responsible, designed to market                                           
15 insurance in the state to minority communities, inner city communities, or low income                                   
16 communities;                                                                                                            
17   (4)  the race or national origin, and sex, of each member of the insurer's                                           
18 board of directors, its officers, its management advisory groups, and its top 25                                        
19 executives, determined by gross total compensation received, including benefits, stock                                  
20 options, deferred compensation, and similar remunerations;                                                              
21   (5)  the total dollar amount of charitable contributions donated by the                                              
22 insurer to organizations in the state primarily serving low income, minority, or inner                                  
23 city persons, and the name and address of each organization and the amount donated;                                     
24   (6)  the total money that the insurer spent on advertising in low income                                             
25 communities in the state, and the total money that the insurer allocated for advertising                                
26 to African-Americans, Latinos, Asians, Alaska Natives, and inner city residents;                                        
27   (7)  the name, title, and address of the person with primary                                                         
28 responsibility for ensuring that the insurer does not redline against or otherwise                                      
29 discriminate against minority communities and inner city communities, and the specific                                  
30 budget amount allocated to that person for this particular purpose.                                                     
31  (b)  The disclosure report required by (a) of this section shall be transmitted                                       
01 to the director with a written verification, signed by the insurer's chief executive                                    
02 officer, attesting that the information contained in the report is true and correct.                                    
03  (c)  The director shall apportion the insurers writing each coverage into three                                       
04 groups consisting of the top, middle, and bottom insurers within each coverage ranked                                   
05 by direct written premium within the line of insurance.  Annually, the director shall                                   
06 select at random at least two insurers from each group and audit the disclosure reports                                 
07 required under (a) of this section.                                                                                     
08  (d)  An insurer that fails to file a verified disclosure report, or that wilfully                                     
09 falsifies material information in its report, is subject to a penalty as provided under                                 
10 AS 21.90.020.                                                                                                           
11  (e)  The director shall issue and distribute annually to the legislature, the                                         
12 governor, the mayors of cities, and the public a redlining insurance report.  The                                       
13 redlining insurance report required in this subsection must list those zip codes in the                                 
14 state that the director finds to be underserved by the insurance industry, list for each                                
15 coverage of each insurer the grade specified under (f) of this section, and include a                                   
16 narrative report of efforts by the director to end insurance redlining.                                                 
17  (f)  The director shall develop a grading system for each coverage, taking into                                       
18 account all information listed in this section.  Using this grading system, the director                                
19 shall assign a grade to each insurer for each coverage.  An insurer shall disclose to a                                 
20 person immediately upon request the grade assigned by the director under this                                           
21 subsection, and shall plainly and prominently disclose this grade to all policyholders                                  
22 in each billing statement, and to the public in each annual report.                                                     
23  (g)  The director shall develop, for each coverage, a redlining fine to be paid                                       
24 by those insurers in the bottom quartile of the grading system established under (f) of                                 
25 this section.  This fine shall cover all administrative or operational costs of this                                    
26 section.  An insurer shall pay the fine to the director within 30 days.  An insurer                                     
27 obligated to pay a redlining fine may not directly or indirectly charge to its                                          
28 policyholders an expense associated with complying with this section or a fine imposed                                  
29 under this section.                                                                                                     
30  (h)  The director shall award reasonable fees and expenses to a person who                                            
31 demonstrates that the person represents the interests of consumers, and that the person                                 
01 has made a substantial contribution as a whole to the adoption of an order, regulation,                                 
02 or decision by the director.  Reasonable fees shall be at the prevailing market billing                                 
03 rate of comparable private attorneys in the community, current at the time of                                           
04 application, and a multiplier shall be awarded when justified.  The award must include                                  
05 fees and expenses anticipated or paid in the proceeding and fees and expenses incurred                                  
06 in any judicial proceeding.                                                                                             
07  (i)  If an insurer or another party opposes an application for reasonable fees and                                    
08 expenses, the insurer or party shall file with its opposition a declaration setting out all                             
09 fees and costs anticipated or paid in the proceeding by the insurer or party, and the                                   
10 hourly rate of each attorney and expert.  In the event that the insurer or party fails to                               
11 include this declaration, the director shall disregard the opposition.