Senate Finance hears omnibus insurance bill; Division of Insurance estimates $110,000 in annual revenue

Senate Bill 132, an omnibus insurance bill requested by the Division of Insurance, received a first hearing before the Senate Finance Committee on May 5. Senator Jesse Bjorkman introduced the measure; Lori Wing-Heier, director of the Division of Insurance, testified and outlined technical corrections, conformity to NAIC model laws and several consumer-facing changes. Senator Keel summarized a fiscal note estimating roughly $110,000 in net increased revenue per year from tax changes and licensing updates.

Wing-Heier told the committee the bill updates Title 21 to align Alaska law with National Association of Insurance Commissioners (NAIC) model laws and financial accreditation standards. “Most importantly in my mind, that constituents and working folks who buy insurance policies, that they actually are compensated for losses when they have claims,” Wing-Heier said, describing the bill’s consumer-protection rationale.

Key provisions Wing-Heier highlighted include: technical drafting cleanups; updates to licensing reciprocity and allowing an independent adjuster to designate Alaska as a home state when appropriate; changes intended to strengthen HMO statutory provisions; extending consumer notice of policy cancellation from 45 to 60 days; clarifying depreciation rules in residential property claims so that labor is not depreciated in an actual cash-value policy unless a consumer elects a clearly disclosed endorsement; and reinstating owner-controlled insurance programs (OCIPs) for large defined construction sites (a threshold discussed at $50,000,000, with a lowered $25,000,000 threshold for certain multi-residential projects).

Wing-Heier said the change to the wet marine and transportation insurance tax treatment would allow the state to capture premium-tax revenue currently lost when ceding premiums flow to foreign entities that are not authorized to do business in Alaska; she presented estimated additional revenue figures for recent years (about $112,000 in 2022, $85,000 in 2023 and $113,000 in 2024) and projected a net positive of roughly $110,000 annually after offsetting modest decreases in filing-fee revenue.

Committee members asked questions about specific provisions. Senator Keel asked whether the bill differentiates penalties for late filings versus incorrect filings; Wing-Heier said the bill does include different structures and that simplification was possible but not included in the current draft. Keel also asked whether the labor-depreciation language would affect first-time homebuyers; Wing-Heier replied that the provision would not change coverage for a first-time buyer purchasing a new policy but does require clearer disclosure when labor depreciation applies. Senator Gill asked whether the notice of the consumer’s election would be buried in paperwork; Wing-Heier said it would be a specific callout.

Invited testimony concluded with no public testimony offered. Senator Keel reviewed the Division of Insurance fiscal note (OMB component 354) that estimates roughly $110,000 in net revenue per year from the combined changes. Senator Bjorkman offered no closing comments and the committee set the bill aside for further consideration.