Legislature(2017 - 2018)

2018-03-05 House Journal

Full Journal pdf

2018-03-05                     House Journal                      Page 2600
HB 401                                                                                                                        
HOUSE BILL NO. 401 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
     "An Act relating to insurance; relating to credit for reinsurance;                                                         
     insurance standard valuation; and providing for an effective date."                                                        
was read the first time and referred to the Labor & Commerce                                                                    
The following fiscal note(s) apply:                                                                                             
1.  Zero, Dept. of Commerce, Community, & Economic Development                                                                  

2018-03-05                     House Journal                      Page 2601
The Governor's transmittal letter dated March 1 follows:                                                                        
"Dear Speaker Edgmon:                                                                                                           
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill to bring the insurance code into                                                         
compliance with model laws adopted by the National Association of                                                               
Insurance Commissioners (NAIC). These changes will assist the state                                                             
in maintaining its accredited status with the NAIC and improve                                                                  
uniformity nationwide in the regulation of insurance.                                                                           
This bill makes changes to the insurance code relating to credit for                                                            
reinsurance (AS 21.12), and the standard valuation law (AS 21.18).                                                              
The bill also adds provisions granting the director the authority to                                                            
adopt regulations under this section, provides a process for the director                                                       
to certify an insurer as a reinsurer, imposes obligations on a ceding                                                           
insurer to report to the director when certain levels of reinsurance are                                                        
exceeded, and allows an assuming insurer that permanently stops                                                                 
underwriting new business to, subject to regulatory approval, reduce                                                            
the trusteed surplus of a trust that secures its business.                                                                      
The changes relating to credit for reinsurance are in Section 1 of the                                                          
bill; that section repeals and reenacts AS 21.12.020 relating to credit                                                         
for reinsurance to conform to the NAIC model law. The changes                                                                   
relating to standard valuation law are in Sections 2 - 11 of the bill. The                                                      
changes conform to the NAIC Standard Valuation Model Law. These                                                                 
changes are intended to allow life insurers to use "principle-based                                                             
reserves" instead of the formula-based reserves required under current                                                          
standard valuation law.                                                                                                         
By conforming to the changes to the NAIC model laws, our state's                                                                
insurance laws will be consistent with national standards that all states                                                       
are urged to adopt, and Alaska will maintain its accredited status.                                                             
I urge your prompt and favorable action on this measure.                                                                        
Bill Walker