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Gov. Murkowski Signs Credit Scoring Bill, 2 Others


August 07, 2003

Juneau - Governor Frank Murkowski on Wednesday signed into law SB 13, by Anchorage Senator John Cowdery and Juneau Senator Kim Elton, which prohibits the use of credit ratings by insurance companies to determine premiums or deny coverage unless the scoring models are filed with the Division of Insurance.

The bill provides a significant level of consumer protection by prohibiting the use of credit scoring as the sole reason for a company's decision, and requiring disclosure that credit information will be used. The law also provides an opportunity for a consumer to request reconsideration of any adverse action and restricts the use of credit history that is negatively impacted by a spouse who is a party to a divorce.

"The use of credit in insurance rating and underwriting has received national attention and is being debated in many states," Murkowski said. "The challenge has been to find a compromise between those who wish to ban the use of credit scoring as a means of protecting the public and those who feel that prohibiting the use of what is a valid indicator of losses could have a negative impact on the insurance marketplace. We believe this bill strikes that balance."

By allowing a restricted use of credit scoring and providing consumer protection, the bill is a product of significant work and negotiated compromise by legislators, individuals from the insurance industry and the division of insurance.

Murkowski also signed SB 128, also by Cowdery, which amends the fee structure for common carriers, such as airlines, vehicles, boats, or railroad buffet cars that hold multiple liquor licenses to reduce their cost of service.

At present, Alaska Airlines would be the largest license holder affected by the change in the law, as the company currently has 110 liquor licenses at $700 per biennial license. Biennial fees for common carriers, other than airlines, would change from $700 for each license to $1,000 for the first 10 licenses and $100 for each additional license over 10. Biennial fees for airlines would be either the fees established for other common carriers or $2,000 per community served. The increase from $700 to $1000 was included to help offset the loss of revenue to the state.

"This bill will be a benefit to all common carriers, but especially for airlines that offer services between Alaskan communities," Murkowski said. "It is my understanding that the current law was a deterrent for new airlines to offer services in Alaska because of the requirement to pay a full license fee for every aircraft in their entire fleet, even if that aircraft does not serve Alaska. This bill reduces that deterrent."

The Governor also signed HB 232, by Homer Rep. Paul Seaton, adds the Homer Mercury classic to the list of authorized games of chance that include the Nenana Ice Classic, the King Salmon Classic, the Canned Salmon Classic, and the Goose Classic.

Prize money would be awarded to the individual with the closest guess of the temperature on a specified date in the spring and fall. The Kenai Peninsula Boys and Girls Club will operate the Mercury Classic.


Source of News Release:

Office of the Governor
Web Site


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