August 05, 2005
Alaska Governor Frank H. Murkowski signed into law House Bill 216, a bill to substantially modernize state regulatory oversight of the insurance industry in Alaska. The bill will change the way insurance companies receive authorization to implement revisions to insurance products and premiums.
HB216, sponsored by the House Labor and Commerce Committee, gives insurance companies the ability to more quickly change some rates while retaining the state's authority to oversee rate changes.
"This legislation allows companies to more vigorously market themselves to consumers with less government interference. We're confident that this will result in more competition and consequently lower insurance prices and more choices for Alaskans," Murkowski said.
Under current law, an insurance company must go through a lengthy pre-approval process to increase or lower rates. Under HB216, a "flex band" process is created to allow companies to react to market changes without unnecessary government oversight. A company wishing to make a rate change of 10 percent could file the change and begin using the new rate immediately. Proposed rate changes of more than 10 percent would require an evaluation by the state Department of Insurance.
"This legislation offers the industry latitude in changing rates and contracts without pre-approval from the Division of Insurance," said Linda Hall, director for the state Division of Insurance. "At the end of the day, all changes will still be scrutinized, ensuring protection for Alaskan consumers."
The Division of Insurance is responsible for regulation of all aspects of the insurance industry in the state. The mission of the division is to protect and serve Alaska by developing, interpreting and enforcing the insurance statutes and regulations, protecting and educating the Alaskan consumer and enhancing the insurance business environment.
The division licenses approximately 20,000 qualified individuals, firms, and insurance companies to market insurance in Alaska.
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