Regulate the insurance industry to protect Alaskan consumers.
- Life & Health
- Consumer Services
|Mission Results||Core Services|
|Mission Results||Core Services|
|A: Result - Insurance companies and persons transacting insurance comply with Alaska laws and are financially solvent.|
|A1: Core Service - Licensing|
Target #1: 80 percent of insurance company applications processed and licenses issued within 60 days.
Analysis of results and challenges: The division processed 16 insurance company licensing applications for certificate of authority in FY2020; and 81% (13) were processed within 60 days. Applications were completed in 33 days on average.
The review of applications from new insurance companies seeking to do business in Alaska is an important responsibility for the financial section. Completing the approval process for these applications in a timely manner fosters a competitive market and insurance options for Alaskan consumers.
Target #2: Producer applications processed within 10 days.
Analysis of results and challenges: The Division of Insurance continues to show proficiency in processing producer applications. In FY2020, the average application processing time was 5.4 days, and the licensing staff processed 48,329 applications.
|A2: Core Service - Compliance|
Target #1: 100 percent of financial examinations of domestic insurance companies are completed every three years.
Analysis of results and challenges: The examination of domestic insurance companies for solvency and statutory compliance, at least every three calendar years, is a division priority. The Alaska examination cycle requirement also satisfies accreditation standards established by the National Association of Insurance Commissioners (NAIC) for multi-state domestic companies. Conducting examinations is a critically important function of the division, helping to ensure financial solvency and the ability of insurance company to pay claims.
Two full-scope examinations of domestic insurers were slated for completion in FY2020: Umialik Insurance Company (UIC) and Tongass Timber Trust. Both examinations were complete by the statutory deadline of June 30, 2020 and within the NAIC's 18-month accreditation guidelines. UIC is part of the Western National Insurance Group (WNIG) holding company system domiciled in Minnesota. UIC's examination only covered a two-year period, rather than three-year, to align with the next coordinated examination of WNIG for YE 2022.
The division also monitors the financial solvency of domestic insurers through quarterly and annual financial statements, annual audited financial statements, actuarial opinions, and other financial filings. All financial statements and filings are reviewed and analyzed in a timely manner. The division communicates regularly with all domestic companies regarding examinations, financial analyses, and other regulatory matters.
Target #2: Perform market conduct examinations, analyses, and investigations in order to resolve compliance and market conduct and access issues.
Analysis of results and challenges: Market conduct examinations, analyses, and investigations are used to assess compliance with the law, identify best practices, and correct behavior. In FY2020, the division performed 38 market regulatory activities.
The Division of Insurance performs its own market conduct examinations and participates in multi-state examinations, which are collaborative examinations among jurisdictions. Examinations range from review of sales materials and advertising content and practices to use of approved rates, forms, and claims practices, to the use of agent training. The process may involve checking publicly available information, information companies provide to the National Association of Insurance Commissioners or other state governments, direct communication with the company or other states, and onsite visits, including review of documents and creation of reports.
Market regulation is expanding beyond using market conduct examinations as the primary method of resolving market conduct issues. Beginning in FY2012, the division began collecting data on other types of market regulatory activities in addition to market conduct examinations. The high number of activities in FY2013 was in response to Bulletin B12-02, which required insurers to submit information on associations to validate that the associations are eligible for group insurance under Alaska law.
Premium Tax Audits are a targeted market conduct examination performed on surplus lines brokers. The issues reviewed are their filing of quarterly reports and the subsequent payment of premium taxes and filing fees as well as diligent search efforts, disclosure and notification requirements for using a non-admitted insurer, and prompt delivery of material facts to insured. There were four premium tax audits completed in FY2020. These examinations were incorporated into the chart for the first time in FY2019.
|A3: Core Service - Investigations|
Target #1: 75 percent of investigations and consumer complaint cases approved by the director are completed within one year.
Analysis of results and challenges: In FY2020, the investigation unit initiated 61 cases and closed 55 cases (including cases from prior years) for a closure rate of 90%. Since FY2010, the unit has closed 95% of its cases. In FY2020, consumer services opened 191 complaint cases and closed 179 cases (including cases from prior years) for a closure rate of 94%. Consumer services also processed 50 External Healthcare Reviews with a 100% closure rate.
In FY2020, consumer services and the investigation unit successfully pursued consumer protection cases. The efforts resulted in consumer services recovering through the complaint filing process $1,143,170 for Alaskan consumers. The investigation unit made $447,860 in monetary recoveries primarily involving annuity misrepresentation fraud against elderly consumers and $353,750 for the State of Alaska involving bail bond forfeiture judgements. The investigation unit and consumer services consider the investigation of producer misrepresentation a priority because of the potential harm this type of fraud represents for Alaska consumers.
The investigation unit in FY2020 successfully pursued cases for criminal prosecution, resulting in six convictions in Alaska District Court, the submission to the Department of Law of 11 cases for prosecution and 20 Warning Letters.
The consumer services section actively monitors consumer complaints for problematic market conduct trends. In FY2020, consumer services responded to more than 1400 consumer inquiries, Complaints and External Healthcare Reviews.
|B: Result - Competitive, up-to-date insurance products are available to Alaskan consumers.|
Target #1: 70 percent of rate and policy form filing approvals completed within 30 days.
Analysis of results and challenges: In FY2020, 62% of all filings were completed within 30 days. Filings were completed within 30 days 57.3% in FY2020 of life/health filings and FY2020 64.2% of property/casualty filings.
The complexity of insurance products available today and the time required to review and approve these products have significant impacts on staff specialists. Greater numbers of confidentiality requests extended response times.
The division aims to respond to a filing or filing objection within 30 days for 90% of filings. The division's first action, either approving the filing or sending an objection letter, occurred within 30 days 95.4% in FY2020 of all filings. The first action occurred within 30 days for 91% in FY2020 of life/health filings and 97.4% in FY2020 of property/casualty filings.
When the division requests additional information or changes to a rate or form filing, an insurer has 30 days to respond, and the filing is disapproved for use until adequate amendments have been made.
|B1: Core Service - Life & Health|
Target #1: The top five insurers share 65 percent or less of the property and casualty market.
Analysis of results and challenges: No undue concentration exists in the property and casualty markets. The current market share percentage of the top five insurers is indicative of a competitive insurance market. The division met their target that the top five insurers control no more than 65 percent of the property and casualty market. The top five insurers controlled only 29.9% in FY2020 of the market.
|B2: Core Service - Consumer Services|
Target #1: Identify and provide needed consumer resources on emerging and general insurance-related topics.
Analysis of results and challenges: The focus continues to be providing consumer content through Insurance.Alaska.Gov. Considering the COVID-19 pandemic, the division issued press releases and bulletins to provide consumer guidance on a variety of topics such as telehealth and business interruption insurance. The Consumers page on the Division website has received many updates including, an updated Auto Insurance Guide, a Workers Compensation Guide as well as Air Ambulance Service content. The Division's Post-Disaster Claims Guide was also distributed to the Alaska Red Cross offices. External Review and Complaint applications have been streamlined to better assist consumers. The Division also provided content for the department social media page concerning Life Insurance Awareness month.
Target #2: Six outreach programs conducted annually.
Analysis of results and challenges: In FY2020, the Director spoke at events hosted by advisory committees and various insurance associations, as well as at other professional stakeholder groups. Notably, the Director spoke at the Alaska Independent Insurance Agents and Brokers Conference, the National Association of Insurance and Financial Advisors Annual Symposium and discussed the Alaska Reinsurance Program on KTVA in Anchorage. Division staff also participated in Centers for Medicare and Medicaid 1332 waiver forums, as well as community outreach events. These meetings gave the division the opportunity to educate and inform stakeholders about recent trends and events while reinforcing the division's priorities and vision for the future. They also gave division personnel the opportunity to receive feedback from stakeholders about how the division is doing and what stakeholders believe are the important issues affecting the insurance industry in Alaska.
Current as of December 2, 2020