HB 78 — An Act relating to insurance; relating to an insurer's corporate governance; relating to insurance holding companies and insurance company holding systems; amending Rule 26, Alaska Rules of Civil Procedure, and Rules 402 and 501, Alaska Rules of Evidence; and providing for an effective date.

and 2521 (2) issue ordersorders. necessary to implement the provisions.

2622 Sec.

21.09.430.21.09.336.

(a) An 2723 insurer or insurance group may have discretion in responding to a corporate 2824 governance annual disclosure inquiry if the insurer's or insurance group's disclosure 2925 contains the material necessary for the director to gain an understanding of the 3026 insurer's or insurance group's corporate governance structure, policies, and practices.

3127 The director may request additional information the director determines necessary for 28 the director to have a clear understanding of the insurer's or insurance group's 0229 corporate governance policies, reporting or information system, or controls 0330 implementing those policies.

0431 (b) AnThe insurer or insurance group shall prepare athe corporate governance annual 05 disclosure consistent with regulations adopted by the director under 02 AS 21.09.420.21.09.334.

An 06 insurer or insurance group shall maintain documents and supporting 03 information used 07 in preparing the insurer's or insurance group's disclosure and shall 04 make the 08 documents and supporting information available upon examination or 05 request ofby the 09 director.

1006 Sec.

21.09.440.21.09.338.

Documents, materials, or other information, 1107 including a corporate governance annual disclosure, in the possession or control of the 1208 division that are obtained by, created by, or disclosed to the director or any person 1309 under AS 21.09.40021.09.330 - 21.09.46021.09.349 are confidential and subject to the provisions of 1410 AS 21.06.060.

1511 Sec.

21.09.450.21.09.340.

Agreements with National Association of Insurance 16 Commissioners and 12 third-party consultants.

(a) The director may retain, at the 17 insurer's or insurance 13 group's expense, and as consistent with this section, third-party 18 consultants, including attorneys, actuaries, accountants, 14 and other experts not 19 otherwise a part of the director's staff,staff as may be reasonably 15 necessary to assist the 20 director in reviewing the insurer's or insurance group's 16 corporate governance annual 21 disclosure and related information or the insurer's or 17 insurance group's compliance 22 with AS 21.09.40021.09.330 - 21.09.460.21.09.349.

2318 (b) A person retained under (a) of this section isshall be under the direction and 2419 control of the director and actsshall act in a purely advisory capacity.

2520 (c) AsThe partNational Association of theInsurance retentionCommissioners process,and a third-party consultant21 mustconsultants verifyshall tobe thesubject 26 director in writing, with notice to the insurersame or insurance group, that the consultant is 27 free of a conflict of interest, has internal procedures in place to monitor compliance 28 with a conflict, and will comply with the confidentiality standards and requirements 29as under22 ASthe 21.09.400director. - 21.09.460.

3023 (d) AAs writtenpart agreementof withthe retention process, a third-party consultant shall verify to the National24 Associationdirector ofin Insurancewriting, 31with Commissioners,notice ato third-partythe consultant,insurer or both,insurance governinggroup, sharingthat andit useis free of informationa provided25 underconflict ASof 21.09.400interest, -that 21.09.460it musthas containinternal theprocedures followingin 02place provisionsto andmonitor expresslycompliance requirewith the26 writtena consentconflict, ofand thethat insurerit orshall insurancecomply groupwith 03the beforeconfidentiality makingstandards informationand requirements 27 under AS 21.09.40021.09.330 - 21.09.46021.09.342. public:

0428 (1)(e) aA provisionwritten statingagreement thatwith the National Association of Insurance 0529 CommissionersCommissioners, anda third-party consultantsconsultant, areor subjectboth, togoverning thesharing sameand confidentialityuse 06of standards30 information provided under AS 21.09.330 - 21.09.342 must contain all of the 31 following provisions and requirementsexpressly asrequire the directorwritten underconsent ASof 21.22.120the andinsurer anyor otherinsurance relevantgroup 07before law;making public information under AS 21.09.330 - 21.09.342:

0802 (2)(1) specific procedures and protocols for maintaining the 0903 confidentiality and security of information related to corporate governance annual 10disclosure-related disclosures04 thatinformation is shared with the National Association of Insurance Commissioners 11 or thea 05 third-party consultant under AS 21.09.40021.09.330 - 21.09.460;21.09.342;

1206 (3)(2) procedures and protocols thatfor ensuresharing by the National Association of 1307 Insurance Commissioners shares only with other state regulators from states in which 14 the 08 insurer or insurance group has domiciled insurers;

the agreement must provide that 15 the 09 recipient agrees in writing to maintain the confidentiality of the documents,corporate 16governance 10 annual disclosure-related documents, materials, or other information related to corporate governance annual disclosures and 17 has verified 11 in writing the legal authority to maintain confidentiality;

1812 (4)(3) a provision specifying that ownership of informationthe related to 19 corporate governance 13 annual disclosuresdisclosure-related thatinformation is shared with the National Association 20 of 14 Insurance Commissioners or a third-party consultant remains with the division, and 2115 the use of the information by the National Association of Insurance CommissionersCommissioner's or 22third-party theconsultant's third-partyuse consultant16 of the information is subject to the direction of the director;

2317 (5)(4) a provision that prohibits the National Association of Insurance 2418 Commissioners or thea third-party consultant from storing the information shared under 2519 AS 21.09.40021.09.330 - 21.09.46021.09.342 in a permanent database after the underlying analysis is 2620 completed;

2721 (6)(5) a provision requiring the National Association of Insurance 2822 Commissioners or thea third-party consultant to provide prompt notice to the director 29 and 23 to the insurer or insurance group regarding any subpoena, request for disclosure, or 3024 request for production of information related to the insurer's or insurance group's 31 corporate governance 25 annual disclosure;disclosure-related information;

(7)26 (6) a requirement that the National Association of Insurance 0227 Commissioners or thea third-party consultant consent to intervention by an insurer or 0328 insurance group in any judicial or administrative action in which the National 0429 Association of Insurance Commissioners or thea third-party consultant may be required 0530 to disclose confidential information about the insurer or insurance group shared with 0631 the National Association of Insurance Commissioners or thea third-party consultant 07 under AS 21.09.40021.09.330 -– 21.09.460.21.09.342.

0802 Sec.

21.09.460.21.09.342.

EachAn insurer or insurance group shall pay $1,000 for 03 each day anthe insurer or insurance group fails, 09 without just cause, to file the corporate 04 governance annual disclosure inwithin the time 10 required under AS 21.09.410(a),21.09.332(a), the insurer or insurance group shall pay $1,000, not 11 to 05 exceed $365,000.

The director may reduce the penalty under this section if the 12 insurer 06 or insurance group demonstrates to the director that the imposition of the 13 penalty is a 07 financial hardship to the insurer or insurance group.

1408 * Sec.

1509 (a) Transactions involving a domestic insurer and a person in its insurance 1610 holding company system, including amendments or modifications of affiliate 1711 agreements previously filed under AS 21.22.080 that are subject to a materiality 1812 standard in (1) - (7) of this subsection, may not be entered into unless the insurer has 1913 notified the director in writing of the insurer's intention to enter into the transaction at 2014 least 30 days before the transaction, or a shorter period if allowed by the director, and 2115 the director has not disapproved the transaction within the required notice period.

The 2216 notice of amendments or modifications must include the reasons for the change and 2317 the financial effect on the domestic insurer.

A domestic insurer shall provide to the 2418 director notice, within 30 days after a termination of a previously filed agreement, for 2519 determination of the type of filing required, if any.

The requirements in this section 2620 apply to the following transactions:

2721 (1) a sale, purchase, exchange, loan or extension of credit, or 2822 investment, provided the transaction is equal to or exceeds 2923 (A) with respect to insurers other than life insurers, the lesser of 3024 three percent of the insurer's admitted assets or 25 percent of surplus that 3125 pertains to policyholders, as of December 31 of the previous calendar year [IN 26 WHICH THE TRANSACTION TOOK PLACE];

or 0227 (B) with respect to life insurers, three percent of the insurer's 0328 admitted assets as of December 31 of the previous calendar year [IN WHICH 0429 THE TRANSACTION TOOK PLACE];

0530 (2) a loan or extension of credit to a person who is not an affiliate, 0631 where the insurer makes loans or extensions of credit with the agreement or 07 understanding that the proceeds of the transaction, in whole or in substantial part, are 0802 to be used to make a loan or extension of credit to, purchase an asset of, or make an 0903 investment in an affiliate of the insurer making the loan or extension of credit, 1004 provided the transaction is equal to or exceeds 1105 (A) with respect to insurers other than life insurers, the lesser of 1206 three percent of the insurer's admitted assets or 25 percent of surplus that 1307 pertains to policyholder surplus, as of December 31 of the previous calendar 1408 year [IN WHICH THE TRANSACTION TOOK PLACE];

or 1509 (B) with respect to life insurers, three percent of the insurer's 1610 admitted assets as of December 31 of the previous calendar year [IN WHICH 1711 THE TRANSACTION TOOK PLACE];

1812 (3) a reinsurance agreement or modification, including 1913 (A) a reinsurance pooling agreement;

2014 (B) an agreement in which the reinsurance premium or change 2115 in the insurer's liabilities, or the projected reinsurance premium or a change in 2216 the insurer's liabilities in any of the three years after entering into the 2317 agreement or modification, equals or exceeds five percent of surplus that 2418 pertains to policyholders as of December 31 of the previous calendar year [IN 2519 WHICH THE TRANSACTION TOOK PLACE], including an agreement that 2620 may require as consideration the transfer of assets from an insurer to a 2721 nonaffiliate if an agreement or understanding exists between the insurer and 2822 nonaffiliate that a portion of the assets will be transferred to one or more 2923 affiliates of the insurer;

3024 (4) a management agreement, service contract, tax allocation 3125 agreement, guarantee, or cost-sharing arrangement;

26 (5) a material transaction specified by regulation that the director 0227 determines may adversely affect the interests of the insurer's policyholders;

0328 (6) a guarantee if made by a domestic insurer, except that a guarantee 0429 that is quantifiable as to amount is not subject to the notice requirements of this 0530 subsection unless it exceeds the lesser of one-half of one percent of the insurer's 0631 admitted assets or 10 percent of surplus that pertains to policyholders as of 07 December 31 of the previous calendar year [IN WHICH THE TRANSACTION 0802 TOOK PLACE];

a guarantee that is not quantifiable as to amount is subject to the 0903 notice requirements of this subsection;

and 1004 (7) a direct or an indirect acquisition or investment in a person that 1105 controls an insurer or in an affiliate of the insurer in an amount that, together with the 1206 person'sperson’s present holdings in the investment, exceeds two and one-half percent of 1307 surplus that pertains to policyholders;

direct or indirect acquisitions or investments in 1408 subsidiaries authorized under this title or regulations adopted by the director or in 1509 nonsubsidiary insurance affiliates that are subject to the provisions of this chapter are 1610 exempt from this requirement.

1711 * Sec.

AS 21.22 is amended by adding a new section to read:

18 Sec.

21.22.117.

Group-wide supervision of internationally active insurance 19 groups.

(a) The director may act as the group-wide supervisor for an internationally 20 active insurance group in accordance with this section.

However, the director may 21 acknowledge another regulatory official as the group-wide supervisor if the 22 internationally active insurance group 23 (1) does not have substantial operations in the United States;

24 (2) has substantial insurance operations in the United States but not in 25 this state;

or 26 (3) has substantial insurance operations in the United States and this 27 state, but the director has determined under (b) or (f) of this section that the other 28 regulatory official is the appropriate group-wide supervisor;

an insurance holding 29 company system that does not otherwise qualify as an internationally active insurance 30 group may request that the director make a determination or acknowledgment of a 31 group-wide supervisor under this section.

(b) In cooperation with other state, federal, and international regulatory 02 agencies, the director shall identify a single group-wide supervisor for an 03 internationally active insurance group.

The director may determine that the director is 04 the appropriate group-wide supervisor for an internationally active insurance group 05 that conducts substantial insurance operations concentrated in this state.

However, the 06 director may acknowledge that a regulatory official from another jurisdiction is the 07 appropriate group-wide supervisor for the internationally active insurance group.

The 08 director shall consider the following factors when making a determination or 09 acknowledgment under this subsection:

10 (1) the place of domicile of the insurers within the internationally 11 active insurance group that hold the largest share of the group's written premiums, 12 assets, or liabilities;

13 (2) the place of domicile of the top-tiered insurer or insurers in the 14 insurance holding company system of the internationally active insurance group;

15 (3) the location of the executive offices or largest operational offices of 16 the internationally active insurance group;

17 (4) whether another regulatory official is acting or is seeking to act as 18 the group-wide supervisor under a regulatory system that the director determines to be 19 (A) substantially similar to the system of regulation provided 20 under the laws of this state;

or 21 (B) otherwise sufficient in terms of providing for group-wide 22 supervision, enterprise risk analysis, and cooperation with other regulatory 23 officials;

and 24 (5) whether another regulatory official acting or seeking to act as the 25 group-wide supervisor provides the director with reasonably reciprocal recognition 26 and cooperation;

a regulatory official identified under this section as the group-wide 27 supervisor may determine that it is appropriate to acknowledge another supervisor to 28 serve as the group-wide supervisor;

the regulatory official shall consider the factors 29 listed in this subsection when making an acknowledgment under this subsection, and 30 shall make the acknowledgment in cooperation with, and subject to, the 31 acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group and in consultation with the 02 internationally active insurance group.

03 (c) Notwithstanding any other provision of law, when another regulatory 04 official is acting as the group-wide supervisor of an internationally active insurance 05 group, the director shall acknowledge that regulatory official as the group-wide 06 supervisor.

However, the director shall make a determination or acknowledgment of 07 the appropriate group-wide supervisor for the internationally active insurance group 08 under (b) of this section in the event of a material change in the internationally active 09 insurance group that results in 10 (1) the internationally active insurance group's insurers domiciled in 11 this state holding the largest share of the group's premiums, assets, or liabilities;

or 12 (2) this state being the place of domicile of the top-tiered insurer or 13 insurers in the insurance holding company system of the internationally active 14 insurance group.

15 (d) Under AS 21.22.110, the director may collect from an insurer registered 16 under AS 21.22.060 the information necessary to determine whether the director may 17 act as the group-wide supervisor of an internationally active insurance group or if the 18 director may acknowledge another regulatory official to act as the group-wide 19 supervisor.

Before issuing a determination that an internationally active insurance 20 group is subject to group-wide supervision, the director shall notify the insurer 21 registered under AS 21.22.060 and the ultimate controlling person within the 22 internationally active insurance group.

Upon notification, the internationally active 23 insurance group has a minimum of 30 days to provide the director with additional 24 information pertinent to the pending determination.

The director may publish on the 25 division's Internet website the identity of internationally active insurance groups that 26 the director has determined are subject to group-wide supervision by the director.

27 (e) If the director is the group-wide supervisor for an internationally active 28 insurance group, the director may 29 (1) assess the enterprise risks in the internationally active insurance 30 group to ensure 31 (A) the material financial condition and liquidity risks to members of the internationally active insurance group that are engaged in the 02 business of insurance are identified by management;

and 03 (B) reasonable and effective mitigation measures are in place;

04 (2) request from a member of an internationally active insurance group 05 subject to the director's supervision information necessary and appropriate to assess 06 enterprise risk, including information about the members of the internationally active 07 insurance group regarding 08 (A) governance, risk assessment, and management;

09 (B) capital adequacy;

and 10 (C) material intercompany transactions;

11 (3) coordinate and, through the authority of the regulatory officials of 12 the jurisdictions where members of the internationally active insurance group are 13 domiciled, compel development and implementation of reasonable measures designed 14 to ensure that the internationally active insurance group is able to timely recognize and 15 mitigate enterprise risks to members of the internationally active insurance group that 16 are engaged in the business of insurance;

17 (4) communicate with other state, federal, and international regulatory 18 agencies for members in the internationally active insurance group and share relevant 19 information subject to the confidentiality provisions under AS 21.22.120, through 20 supervisory colleges under AS 21.22.115 or otherwise;

21 (5) enter into agreements with, or obtain documentation from, an 22 insurer registered under AS 21.22.060, a member of the internationally active 23 insurance group, or a state, federal, or international regulatory agency for members of 24 the internationally active insurance group, providing the basis for, or otherwise 25 clarifying, the director's role as group-wide supervisor, including provisions for 26 resolving disputes with other regulatory officials;

the agreements or documentation 27 may not serve as evidence in a proceeding against an insurer or person in an insurance 28 holding company system not domiciled or incorporated in this state or doing business 29 in this state or is otherwise subject to jurisdiction in this state;

and 30 (6) perform other group-wide supervision activities, consistent with the 31 authorities and purposes set out in this subsection.

(f) If the director acknowledges that another regulatory official from a 02 jurisdiction that is not accredited by the National Association of Insurance 03 Commissioners is the group-wide supervisor, the director may reasonably cooperate, 04 through supervisory colleges or otherwise, with group-wide supervision undertaken by 05 the group-wide supervisor under the following conditions:

06 (1) the director's cooperation is in compliance with the laws of this 07 state;

and 08 (2) the regulatory official acknowledged as the group-wide supervisor 09 recognizes and cooperates with the director's activities as a group-wide supervisor for 10 other internationally active insurance groups, where applicable;

if recognition and 11 cooperation is not reasonably reciprocal, the director may refuse recognition and 12 cooperation.

13 (g) The director may enter into agreements with, or obtain documentation 14 from, an insurer registered under AS 21.22.060, an affiliate of the insurer, or other 15 state, federal, and international regulatory agencies for members of the internationally 16 active insurance group, that provide the basis for, or otherwise clarify, a regulatory 17 official's role as group-wide supervisor.

18 (h) A registered insurer subject to this section is liable for and shall pay the 19 reasonable expenses of the director's participation in the administration of this section, 20 including the engagement of attorneys, actuaries, and other professionals, and all 21 reasonable travel expenses.

22 * Sec.

4.

2312 (a) All information, documents, holding company analyses, insurer profile 2413 summaries, and copies of the information and documents obtained by or disclosed to 2514 the director or any other person in the course of an examination or investigation made 2615 under AS 21.22.110 and all information reported under AS 21.22.020(b), 21.22.060, 2716 [AND] 21.22.085 - 21.22.105, and 21.22.11721.22.177 and all preacquisition notification 2817 information received under AS 21.22.065 shall be given confidential treatment under 2918 AS 21.06.060.

However, if the director, after giving the insurer and its affiliates who 3019 would be affected by publication of the information notice and opportunity to be 3120 heard, determines that the interests of policyholders, shareholders, or the public will be 21 served by the publication of the information, the director may publish all or part of the 0222 information in the manner the director considers appropriate.

03 * Sec.

5.

AS 21.22.120 is amended by adding new subsections to read:

04 (c) The director or a person who receives documents, materials, or other 05 information while acting under the authority of the director or with whom documents, 06 materials, or other information are shared under this chapter may not be permitted or 07 required to testify in any private civil action concerning confidential documents, 08 materials, or information subject to (a) of this section.

09 (d) The sharing of information by the director under this chapter does not 10 constitute a delegation of regulatory authority or rulemaking.

The director is solely 11 responsible for the administration, execution, and enforcement of this chapter.

12 (e) A waiver of an applicable privilege or claim of confidentiality in the 13 documents, materials, or information under (a) of this section may not be given as a 14 result of disclosure to the director under this section or as a result of sharing as 15 authorized under (b) of this section.

16 (f) Documents, materials, or other information in the possession or control of 17 the National Association of Insurance Commissioners under this chapter 18 (1) are confidential by law;

19 (2) are not subject to 20 (A) AS 40.25.110 - 40.25.220;

21 (B) subpoena;

or 22 (C) discovery or admissible in evidence in any private action.

4.

AS 21.22.120 is amended by adding new subsections to read:

24 (c) The director or any person who received documents, materials, or other 25 information while acting under the authority of the director or with whom such 26 documents, materials, or other information are shared under AS 21.22 may not be 27 permitted or required to testify in any private civil action concerning any confidential 28 documents, materials, or information subject to (a) of this section.

29 (d) The sharing of information by the director under AS 21.22 shall not 30 constitute a delegation of regulatory authority or rulemaking.

The director is solely 31 responsible for the administration, execution, and enforcement of this chapter.

(e) A waiver of any applicable privilege or claim of confidentiality in the 02 documents, materials, or information may not be given as a result of disclosure to the 03 director under this section or as a result of sharing as authorized under (b) of this 04 section.

05 (f) Documents, materials, or other information in the possession or control of 06 the National Association of Insurance Commissioners under AS 21.22 07 (A) shall be confidential by law;

08 (B) are not subject to 09 (i) AS 40.25.110 – 40.25.220;

10 (ii) subpoena;

or 11 (iii) discovery or admissible in evidence in any private 12 action.

13 * Sec.

5.

AS 21.22 is amended by adding a new section to read:

14 Sec.

21.22.177.

Group-wide supervision of internationally active insurance 15 groups.

(a) The director may act as the group-wide supervisor for an internationally 16 active insurance group in accordance with this section.

However, the director may 17 otherwise acknowledge another regulatory official as the group-wide supervisor where 18 the internationally active insurance group 19 (1) does not have substantial operations in the United States;

20 (2) has substantial insurance operations in the United States but not in 21 this state;

or 22 (3) has substantial insurance operations in the United States and this 23 state, but the director has determined under (b) and (f) of this section that the other 24 regulatory official is the appropriate group-wide supervisor;

an insurance holding 25 company system that does not otherwise qualify as an internationally active insurance 26 group may request that the director make a determination or acknowledgement as to a 27 group-wide supervisor under this section.

28 (b) In cooperation with other state, federal, and international regulatory 29 agencies, the director shall identify a single group-wide supervisor for an 30 internationally active insurance group.

The director may determine that the director is 31 the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state.

However, the 02 director may acknowledge that a regulatory official from another jurisdiction is the 03 appropriate group-wide supervisor for the internationally active insurance group.

The 04 director shall consider the following factors when making a determination or 05 acknowledgement under this subsection:

06 (1) the place of domicile of the insurers within the internationally 07 active insurance group that hold the largest share of the group's written premiums.

08 assets, or liabilities;

09 (2) the place of domicile or the top-tiered insurer or insurers in the 10 insurance holding company system of the internationally active insurance group;

11 (3) the location of the executive offices or largest operational offices of 12 the internationally active insurance group;

13 (4) whether another regulatory official is acting or is seeking to act as 14 the group-wide supervisor under a regulatory system that the director determines to be 15 (A) substantially similar to the system of regulation provided 16 under the laws of this state;

or 17 (B) otherwise sufficient in terms of providing for group-wide 18 supervision, enterprise risk analysis, and cooperation with other regulatory 19 officials;

and 20 (5) whether another regulatory official acting or seeking to act as the 21 group-wide supervisor provides the director with reasonably reciprocal recognition 22 and cooperation;

however, a regulatory official identified under this section as the 23 group-wide supervisor may determine that it is appropriate to acknowledge another 24 supervisor to serve as the group-wide supervisor;

the acknowledgement of the group- 25 wide supervisor shall be made after consideration of the factors listed in this 26 subsection, and shall be made in cooperation with, and subject to, the 27 acknowledgement of other regulatory officials involved with supervision of members 28 of the internationally active insurance group and in consultation with the 29 internationally active insurance group.

30 (c) Notwithstanding any other provision of law, when another regulatory 31 official is acting as the group-wide supervisor of an internationally active insurance group, the director shall acknowledge that regulatory official as the group-wide 02 supervisor.

However, the director shall make a determination or acknowledgement as 03 to the appropriate group-wide supervisor for the internationally active insurance group 04 under (b) of this section in the event of a material change in the internationally active 05 insurance group that results in 06 (1) the internationally active insurance group's insurers domiciled in 07 this state holding the largest share of the group's premiums, assets, or liabilities;

or 08 (2) this state being the place of domicile of the top-tiered insurer or 09 insurers in the holding company system of the internationally active insurance group.

10 (d) The director, under AS 21.22.110, may collect from an insurer registered 11 under AS 21.22.060 all information necessary to determine whether the director may 12 act as the group-wide supervisor of an internationally active insurance group or if the 13 director may acknowledge another regulatory official to act as the group-wide 14 supervisor.

Before issuing a determination that an internationally active insurance 15 group is subject to group-wide supervision, the director shall notify the insurer 16 registered under AS 21.22.060 and the ultimate controlling person within the 17 internationally active insurance group.

The internationally-active insurance group shall 18 have not less than 30 days to provide the director with additional information pertinent 19 to the pending determination.

The director may publish on the division's Internet 20 website the identity of internationally active insurance groups that the director has 21 determined are subject to group-wide supervision by the director.

22 (e) If the director is the group-wide supervisor for an internationally active 23 insurance group, the director may 24 (1) assess the enterprise risks within the internationally active 25 insurance group to ensure 26 (A) the material financial condition and liquidity risks to 27 members of the internationally active insurance group that are engaged in the 28 business of insurance are identified by management;

and 29 (B) reasonable and effective mitigation measures are in place;

30 (2) request from a member of an internationally active insurance group 31 subject to the director's supervision, information necessary and appropriate to assess enterprise risk, including information about the members of the internationally active 02 insurance group regarding 03 (A) governance, risk assessment, and management;

04 (B) capital adequacy;

and 05 (C) material intercompany transactions;

06 (3) coordinate and, through the authority of the regulatory officials of 07 the jurisdictions where members of the internationally active insurance group are 08 domiciled, compel development and implementation of reasonable measures designed 09 to ensure that the internationally active insurance group is able to timely recognize and 10 mitigate enterprise risks to members of the internationally active insurance group that 11 are engaged in the business of insurance;

12 (4) communicate with other state, federal, and international regulatory 13 agencies for members within the internationally-active insurance group and share 14 relevant information subject to the confidentiality provisions under AS 21.22.120, 15 through supervisory colleges under AS 21.22.115 or otherwise;

16 (5) enter into agreements with, or obtain documentation from, an 17 insurer registered under AS 21.22.060, a member of the internationally active 18 insurance group, or a state, federal, and international regulatory agency for members 19 of the internationally active insurance group, providing the basis for, or otherwise 20 clarifying, the director's role as group-wide supervisor, including provisions for 21 resolving disputes with other regulatory officials;

the agreements or documentation 22 may not serve as evidence in a proceeding against an insurer or person within an 23 insurance holding company system not domiciled or incorporated in this state or doing 24 business in this state or is otherwise subject to jurisdiction in this state;

and 25 (6) perform other group-wide supervision activities, consistent with the 26 authorities and purposes set out in this subsection.

27 (f) If the director acknowledges that another regulatory official from a 28 jurisdiction that is not accredited by the National Association of Insurance 29 Commissioners is the group-wide supervisor, the director is authorized to reasonably 30 cooperate, thorough supervisory colleges or otherwise, with group-wide supervision 31 undertaken by the group-wide supervisor, if (1) the director's cooperation is in compliance with the laws of this 02 state;

and 03 (2) the regulatory official acknowledged as the group-wide supervisor 04 also recognizes and cooperates with the director's activities as a group-wide supervisor 05 for other internationally active insurance groups where applicable;

where such 06 recognition and cooperation is not reasonably reciprocal, the director may refuse 07 recognition and cooperation.

08 (g) The director may enter into agreements with, or obtain documentation 09 from, an insurer registered under AS 21.22.060, an affiliate of the insurer, or other 10 state, federal, and international regulatory agencies for members of the internationally 11 active insurance group, that provide the basis for, or otherwise clarify, a regulatory 12 official's role as group-wide supervisor.

13 (h) A registered insurer subject to this section shall be liable for and shall pay 14 the reasonable expenses of the director's participation in the administration of this 15 section, including the engagement of attorneys, actuaries, and other professionals, and 16 all reasonable travel expenses.

17 * Sec.

2418 (17) "group-wide supervisor" means the regulatory official authorized 2519 to engage in conducting and coordinating group-wide supervision activities who is 2620 determined or acknowledged by the director under AS 21.22.117 to have sufficient 2721 significant contacts with the internationally active insurance group;

2822 (18) "internationally active insurance group" means an insurance 2923 holding company system that includes an insurer registered under AS 21.22.060 and 3024 that meets the following criteria:

3125 (A) insurers that are part of the insurance holding company 26 system that write premiums in at least three countries;

0227 (B) the percentage of gross premiums written outside the 0328 United States is at least 10 percent of the insurance holding company system's total 0429 gross written premiums;

and 0530 (C) based on a three-year rolling average, the total assets of the 0631 insurance holding company system are at least $50,000,000,000 or the total gross 07 written premiums of the insurance holding company system are at least 0802 $10,000,000,000.

0903 * Sec.

ASThe 21.97uncodified law of the State of Alaska is amended by adding a new section to 04 read:

1005 Sec.TRANSITION:

21.97.030.REGULATIONS.

MaterialThe incorporateddirector of the division of insurance may adopt 06 regulations necessary to implement the changes made by reference.this Act.

The directorregulations maytake adopteffect 1107 aunder regulationAS that44.62 incorporates(Administrative byProcedure referenceAct), thebut Financialnot Analysisbefore Handbookthe publishedeffective 12date byof the National08 Associationrelevant provisions of Insurancethis Commissioners.Act.

Under09 AS* 44.62.245(a)(2),Sec. 13 in adopting or amending a regulation that incorporates the Financial Analysis 14 Handbook published by the National Association of Insurance Commissioners, the 15 director may incorporate future amended versions of the Financial Analysis Handbook 16 published by the National Association of Insurance Commissioners.

17 * Sec.

The uncodified law of the State of Alaska is amended by adding a new section to 18 read:

19 INDIRECT COURT RULE AMENDMENT.

The provisions of secs.

3 and 5 of this 20 Act have the effect of changing the following court rules in the manner specified:

21 (1) Rule 26, Alaska Rules of Civil Procedure, by prohibiting discovery of 22 evidence in the possession or control of the National Association of Insurance Commissioners 23 relating to insurance holding companies and insurance holding company systems;

24 (2) Rules 402, 409, and 501, Alaska Rules of Evidence, by 25 (A) creating a new privilege relating to insurance holding companies 26 and insurance holding company systems that would prevent a person from being 27 permitted or compelled to testify about confidential documents, materials, or 28 information in a private civil action;

and 29 (B) precluding admissibility of evidence 30 (i) in a private action, of documents, materials, or other 31 information in the possession or control of the National Association of Insurance Commissioners relating to insurance holding companies and 02 insurance holding company systems;

and 03 (ii) in a proceeding against certain insurers or persons in an 04 insurance holding company system, of agreements or documentation relating 05 to insurance holding companies and insurance holding company systems.

06 * Sec.

9.

The uncodified law of the State of Alaska is amended by adding a new section to 07 read:

08 CONDITIONAL EFFECT.

AS 21.22.117(e)(5), enacted by sec.

3 of this Act, and 09 AS 21.22.120(c) and (f), enacted by sec.

5 of this Act, take effect only if secs.

3 and 5 of this 10 Act receive the two-thirds majority vote of each house required by art.

IV, sec.

15, 11 Constitution of the State of Alaska.

12 * Sec.

10.