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Committee hears Division of Insurance concerns on OSIPs in omnibus insurance bill SB132; bill set aside pending amendments
Summary
Senate Bill 132, an omnibus insurance update to Title 21, was set aside after the Division of Insurance outlined concerns with proposed changes to owner‑ or contractor‑controlled insurance programs (OSIPs) for multi‑residential projects, specifically that a $5 million project threshold may be too low.
Senate Bill 132, an omnibus bill to update Alaska’s Title 21 insurance statutes, was discussed in the Senate Labor and Commerce Committee on April 2 and set aside while lawmakers await two technical amendments.
Conrad Jackson, staff to Senator Bjorkman, summarized SB132 as an update to "refresh" Title 21 language to conform to model code changes and federal references. The Division of Insurance’s director, Laurie Wing Hyre, explained a central issue raised by members and stakeholders: how owner‑ or contractor‑controlled insurance programs (OSIPs or CCIPs) should be applied to multi‑residential construction projects.
Director Wing Hyre described OSIPs as policies purchased by the owner or contractor that cover all contractors and subcontractors on a construction site — covering workers' compensation and general liability during multi‑year construction projects — and said they are commonly used on very large projects. She said the division sees some merit in allowing OSIPs for multi‑residential projects but expressed concern that the $5,000,000 project‑value threshold being circulated as an amendment "is probably too low." Wing Hyre explained that a low threshold could remove premium from the broader insurance market and make small accounts less attractive to insurers, warning of market skew effects if many projects moved into OSIPs.
Committee Chair Senator Bjorkman closed public testimony for SB132 after no members of the public came forward to speak. The committee set SB132 aside pending the two amendments the chair said would address minor issues.
