Juneau - Tuesday, The Alaska House passed legislation advancing consumer protection in Alaska. Senate Bill 177, sponsored by Senator Dave Donley (R-Anchorage), allows the Division of Insurance to take corrective action on individual acts of unfair or deceptive trade practices by insurers, and strengthens consumer protection laws. The Division of Insurance strongly supports SB 177.

"Unlike insurance regulators in many other states, the Alaska Division of Insurance does not currently have the jurisdiction to act upon individual acts of unfair insurance claims practices," said Donley. "Alaskan insurance consumers have little or no protections unless a pattern of deceptive trade practices has developed. This lack of jurisdiction has in the past allowed individual violations of the fair claims practices law by insurance companies."

SB 177 provides the Division of Insurance the opportunity to order restitution or issue cease and desist orders for individual unfair or deceptive acts that result in loss or harm. Amazingly, the Division of Insurance never had the authority to do this under existing law. The legislation also contains safeguards to provide fairness to otherwise ethical and responsible insurers who do not show a pattern of misbehavior. The Director of the Division of Insurance will consider the amount of loss or harm caused by the violation before determining the correct sanction or penalty for a single act, and may also consider the promptness and completeness of the remedial action taken by the insurer to the consumer when they became aware of the violation.

Additional very important provisions in SB 177 prevent insurers from requiring injured Alaskans to pay the costs of arbitration or mediation before the process begins and also protects homeowners and other policyholders by ensuring that a claim is covered when a loss has more than one cause and the dominant cause is covered by the policy.

While giving the Division of Insurance more power to investigate charges against insurers, SB 177 also makes it easier for consumers and agents to come forward with information regarding an unfair act or practice by providing them with immunity from liability for defamation.

"SB 177 will provide injured Alaskans and insurance consumers better protection from insurance companies' unfair claims practices," said Donley. "This legislation gives increased protection to Alaskans and gives the Division of Insurance the authority to ensure they receive that protection."

SB 177 goes to the Governor for signature.

Attachments:

• Sponsor Statement

Broadcasters note: Audio comments are available on the Majority Actuality line, 1-800-478-6540
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