BULLETIN B 00-06
To: All Licensees, Insurance Companies, Hospital or Medical Service
Corporations, Fraternal Benefit Societies, Multiple Employee Welfare
Arrangements, and Health Maintenance Organizations Transacting Insurance
in the State of Alaska and Other Interested Parties
Re: Notice of Changes to Alaska Statutes Pertaining to Insurance Law
This bulletin outlines the major changes made to Alaska insurance laws
resulting from the 2000 session of the Alaska Legislature. Nine bills
affecting the insurance market were passed by the legislature and signed
into law by the Governor. This bulletin is informational in nature and
does not supersede or even constitute an official interpretation of the
statutory provisions in each of the bills. Please review each of the
bills carefully to assure your compliance with Alaska insurance law.
Contract changes necessary to comply with any statutory changes must be
filed with and approved by the division before the effective date of the
Legislation Containing Statutory Changes That May
Amendments to Insurance Contracts
SB 177 – Insurance Trade Practices: Effective January 1, 2001
SB 177 expands consumer protection to insurance policyholders by
amending the Unfair Trade Practices Act in AS 21.36. It makes two
significant changes to existing law:
- It gives the division authority to take corrective action against
a single unfair act under the Unfair Claims Settlement
Practices Act (AS 21.36.125). Before the effective date of the
SB 177 amendments, the division could not take corrective
action under the Act unless the insurer had engaged in an act or
practice with such frequency as to indicate a general business
- It adds a provision making it a violation for an insurer to deny
an insurance claim simply because a particular cause excluded from
insurance coverage is in the chain of events leading to a loss, if
the excluded cause is secondary to a covered dominant cause of the
HB 298 – Required Health Insurance Coverage for Diabetes: Effective
July 27, 2000
HB 298 amends AS 21.42 to require health care insurers that offer
health care insurance plans in the state to provide coverage for
outpatient medical nutrition therapy and self-management training or
education for diabetes, if prescribed by a health care provider. The
bill also requires that health care insurers provide coverage for the
cost of treating diabetes, including medication,
equipment, and supplies, if the health care insurance plan includes
coverage for pharmacy services. Definitions, restrictions, limitations,
and modifications pertaining to coverage of diabetes are also included.
HB 416 – Prostate Cancer Screening: Effective August 29, 2000
HB 416 amends the existing prostate cancer screening coverage
requirement in AS 21.42.395 to reduce the ages at which
annual prostate cancer screening tests must be covered under a health
care insurance plan.
HB 303 – Miscellaneous Insurance Provisions: Effective May 22,
2000, Except As Indicated
HB 303 amends Alaska law to
- allow the director to collect fees electronically.
- allow the director to adopt risk based capital instructions by
order after an open meeting.
- clarify and update current statutes to reflect the adoption of
revised national accounting standards that become effective
January 1, 2001; the changes to these statutes are also
effective January 1, 2001.
- correct drafting errors relating to this state’s 1997 adoption
of the Health Insurance Portability and Accountability Act of 1996.
- add the following federal health care insurance mandates:
- Mandated coverage for reconstructive surgery following a
mastectomy as required under the Women’s Health and Cancer Rights
Act of 1998. This mandate is added in AS 21.42.400. The federal
requirement became effective October 21, 1998.
- Guaranteed renewability of individual health care insurance
policies as required under the Health Insurance Portability and
Accountability Act of 1996. This mandate is added in
AS 21.51.400. The federal requirement became effective on
July 1, 1997.
6. clarify certain coverage and marketing provisions in
AS 21.56 relating to small employer health insurance coverage,
- An insurer may not include employees or dependents who have
similar existing coverage in determining whether a defined minimum
employee participation level is met.
- An insurer must offer a plan to a small employer that covers all
eligible employees. But after this initial offer, the insurer may
issue a health care insurance plan that covers only those employees
the employer selects to be covered under the plan.
- An insurer may not directly or indirectly encourage or instruct a
small employer to not file an application for coverage with it or to
seek coverage from another insurer because of group size.
- An insurer may not directly or indirectly enter into a contract,
agreement, or arrangement with a licensee that provides for or
results in compensation that varies based on group size.
HB 211 – Health Care Insurance: Managed Care Plans: Effective
January 1, 2001
HB 211 creates a new chapter (7) in Title 21 (Alaska Insurance Code)
to regulate managed care insurance plans. There are 6 major sections
covering managed care insurance plans:
- AS 21.07.010 requires certain provisions to be included in a
contract between a provider and a managed care entity, which is
defined to include an insurer, and specifically disallows certain
- AS 21.07.020 requires certain provisions to be included in a
contract between a managed care entity and the group, including
provisions establishing internal and external appeal processes.
- AS 21.07.030 requires that a managed care entity provide a
non-network provider option to enrollees with any additional cost
for such a provider to be paid by the enrollees.
- AS 21.07.040 states that an individual’s medical and financial
information is confidential unless the individual gives written
consent or the information is disclosed for certain stated purposes.
- AS 21.07.050-070 establish standards for an external health care
appeal process and the qualifications of an external appeal agency,
and limit the liability of an external appeal agency.
- AS 21.07.080 states that the chapter does not restrict or limit
the right of a managed care entity to include coverage for services
of a religious nonmedical provider.
HB 121 – Dental Care Insurance: Effective August 20, 2000
HB121 adds a new section to AS 21.42 that
- prevents an insurer from including in a health care contract a
prohibition against an insured’s free choice of a dentist or a
restriction against an insured’s right to receive full information
from a dentist regarding care or treatment options.
- requires that, in a health care contract that allows treatment
plan or utilization review by the insurer, the review must be
conducted by a dentist if a dental claim is denied.
- allows an insurer to reimburse an insured at a different rate when
the insured uses a non-network dentist, but requires that the
covered expense for a non-network dentist may not be less than that
for a network dentist.
- prohibits a dentist from waiving uncovered dental expenses for
which an insured has liability because the insured chose a
Other Adopted Legislation Affecting the Insurance
Market but Does Not Contain Provisions That Will Require
Amendments to Insurance Contracts
HB 398 – Life and Health Guaranty Association: Effective
September 4, 2000
HB 398 amends the Alaska Life and Health Guaranty Association (ALHGA)
statutes in AS 21.79. The amendments make Alaska law consistent
with the most recent National Association of Insurance Commissioners
model law. The amendments update and clarify numerous provisions,
including provisions relating to the treatment of guaranteed investment
contracts, other new products, and liability limits. A provision has
been added that allows the director to appoint two public members to the
ALHGA board of directors. In general, the changes give greater
flexibility to the association in handling an impaired or insolvent life
or health insurance company.
HB – 310 Alaska Insurance Guaranty Association: Effective August
HB 310 amends the Alaska Insurance Guaranty Association Act (AIGA)
statutes in AS 21.80. The amendments make Alaska law consistent
with the most recent National Association of Insurance Commissioners
model law as supported by the National Conference of Insurance Guaranty
Funds (NCIGF). Numerous provisions of existing law have been updated and
clarified by these amendments. A provision has been added that allows
the director to appoint two public members to the board of directors. In
general, the changes give greater flexibility to the association in
handling an impaired or insolvent property or casualty insurance
HB 190 – Viatical Settlements: Effective April 15, 2000
HB 190 gives the Division of Insurance the authority to regulate the
transaction of viatical settlement contracts for the protection of
viators, insureds, and insurers and the Division of Banking, Securities,
and Corporations the authority to regulate the transaction of viatical
settlement contracts primarily for the protection of investors. The
Division of Banking, Securities, and Corporations has adopted
regulations to implement this new law and the Division of Insurance is
in the process of developing regulations to implement the provisions of
this law, including licensing standards for viatical settlement
providers, representative, and brokers.
HB 380 – Insurer Tax Credit for Gifts to the Fire Standards
Council: Effective July 1, 2000
HB 380 gives an insurer premium tax credit if the insurer makes
contributions to the Alaska Fire Standards Council for fire services
programs. The premium tax credit is given on insurance premiums
collected for coverage that includes losses due to fire. The amount of
credit given is 50 percent of contributions up to $100,000 plus
100% of the next $100,000 of contributions up to 50 percent of the
insurers tax liability.
Copies of the bills outlined above are available through the State of
Alaska website at http://www.legis.state.ak.us/basis/start.asp.
If you have questions regarding the information provided in this
bulletin, please contact Katie Campbell at:
Alaska Division of Insurance
P.O. Box 110805
Juneau AK 99811-0805
(907) 465-4607 (phone)
(907) 465-3422 (fax)
DATE: August 25, 2000
Robert A. Lohr
Director of Insurance