Credit-based Score Legislation Dies as Alaska Legislature Adjourns

Skirmishing over credit-based insurance scores occupied much of the attention of the 2002 Alaska legislative session that ended last week with legislators failing to come to any agreement on the issue. The Legislature then went into a special session on the state budget, but insurance issues are not expected to arise there.

“The stalemate that resulted in no insurance-score legislation being passed is a definite plus for Alaska consumers,” National Association of Independent Insurers (NAII) Northwest Regional Manager Michael Harrold commented. “Using insurance scores enables insurers to set rates that more closely reflects the risks involved, which results in lower premiums for most consumers.

“Legislation considered in this session, House Bill 395 and Senate Bill 320, would have restricted the use of insurance scores and thus undermined their effectiveness, denying most consumers the lower rates to which they are entitled.”

When the legislation appeared to become bogged down, State Sen. Kim Elton (D-Juneau) asked the state attorney general and director of insurance to conduct a “probe” of insurers’ use of insurance scores. Insurance director Robert Lohr has indicated he will do so.

“With so much attention focused on credit scoring this session, other insurance bills and issues either took a back seat or simply never got off the ground,” Harrold said. “One issue that never took off was SB 348, which would have placed restrictions on the use of competitive auto crash parts.” SB 348 was sponsored by Sen. John Cowdery, R-Anchorage, who also was a major force behind the insurance score legislation.

“A major insurer priority that failed to gain traction was SB 327, which would have provided a legislative fix to several detrimental Alaska Supreme Court decisions,” Harrold remarked. One of those decisions held that personal umbrella policies are auto liability policies, and therefore must include an offer of uninsured/underinsured motorist (UM/UIM) insurance, and are subject to attorney fees and prejudgment interest. The other held that UM/UIM coverage includes coverage for punitive damages if punitive damages are not excluded under the pertinent liability insurance policy.

Another bill pushed by the insurance industry that never got off the ground was SB 229, an insurer self-evaluative privilege measure. The bill would have preserved the confidentiality of self-audits insurers perform to ensure they are in compliance with state laws and regulations.

The Insurance Division’s omnibus bill, HB 246, passed in the final days of the session after NAII and other insurance interests succeeded in defeating harmful amendments that had been attached to it. As passed, the bill includes provisions that address confidentiality of records, certificates of authority, fees related to late payment of premium taxes, surplus lines, consumer credit insurance and the state’s guaranty fund (assessments, percentages and rates, and surcharge rates).

Other bills of interest to insurers that passed include:

HB 4, which expands the use of ‘therapeutic courts’ for offenders charged with drunken driving and modifies existing laws on impoundment of vehicles and forfeiture of driving privileges.

HB 274, which provides that an employee in a workers’ compensation claim shall submit to an examination by a physician or surgeon authorized to practice medicine under the laws of the jurisdiction in which the examination occurs, as opposed to where the physician resides, which is the law now.

SB 222, which requires slow drivers on two-way roadways outside urban areas to pull over if they are holding up more than five other vehicles. Among bills that failed to pass are:

HB 68, providing that taxi drivers would not be liable for personal injury, death or property damages if driving a drunk’s car home after an accident, as long as gross negligence or reckless or intentional misconduct was not involved.

HB 271, limiting the amount of punitive damages recoverable in an action arising out of an aviation accident according to how many employees the owner or operator had in the state.

Topics Carriers Legislation Alaska