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2006 Legislative Agenda

Contact: Ragan Ingram, Assistant Commissioner

334-241-4146

1/9/2006

LICENSURE REFORM (SB 251 - Sen. Steve French / HB 227 - Rep. Warren Beck)
Historically, the renewal period for insurance producers, service representatives and adjusters has been annual. This bill will change the renewal period to biennial. The legislation also changes the continuing education requirement to 24 hours over two years instead of 12 hours over one year. The legislation also mandates that licensees take three hours of courses in producer ethics or business practices.

PRE-NEED AMENDMENTS (HB 405 - Rep. Eric Major)
Since assuming regulatory authority over Pre-Need funeral and cemetery contracts, the Department has determined that there are several gaps in the law in terms of consumer protection. Primarily, the legislation would create a “guaranty fund” type of mechanism to pay claims against insolvent pre-need providers. It would also create an investigative fund so that the Department can more aggressively seek out bad actors. It would also tighten requirements regarding the trusting of pre-need funds to further protect Alabama’s citizens’ investments.

INSURANCE REGULATION INTERSTATE COMPACT (SB 228 - Sen. Larry Means / HB 174 - Rep. James Buskey)
To ensure the future of state-based insurance regulation, the National Association of Insurance Commissioners has proposed an Interstate Compact, which has been adopted by nine states to streamline the approval of life, disability, long-term care and annuity products in the Compact member states. The Compact will be fully operational once 26 states or states representing 40 percent of the market have adopted the legislation. The legislation benefits consumers and companies by allowing newer, more competitive products into the market on a timely basis. Alabama has been a leader in the development of this compact. Commissioner Bell serves as chair of the NAIC committee that is developing the standards for the products. If this legislation is not enacted, then those who wish to strip the regulation of insurance from states to the federal government will gain momentum. This bill has passed the House three times.

LIFE INSURANCE 10-DAY “FREE LOOK” (HB 111 - Rep. Demetrius Newton)
This legislation would provide a 10-day period for consumers who have just purchased life insurance to review the policy, and cancel without financial penalty, if they so desire. Alabama is one of a handful of states without a “free look” period law.

HIPAA AMENDMENTS (SB 70 - Sen. Larry Means)
Non-controversial, technical amendments to bring Alabama's insurance laws into compliance with federal HIPAA regulations. This bill has passed the House several times and has bogged down in the Senate.

CAPTIVE INSURERS ACT (SB 305 - Sen. Bradley Byrne / HB 422 - Rep. Steve McMillan)
Provides for the creation and regulation of a special type of insurance company which primarily insures the risks of the company's owner or owners, thus providing another alternative to "self-insurance."  Adoption of this act was recommended in 2005 by the Hurricane Insurance Issues Task Force.

Other Bills affecting ALDOI
• Insurance Fraud – Agents associations taking lead on this bill, negotiating with companies and Alabama Trial Lawyers Association. This bill would create the specific crime of insurance fraud, and give the Department greater powers to combat fraud.

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