Session: State Capitol, Room 30 Juneau, AK 99801-1182 Phone: (907) 465-3873 Fax: (907) 465-3922 Interim: PO Box 1441 Wrangell, AK 99929-1441 Phone: (907) 874-2318 Fax: (907) 874-3470 50 Front Street, Suite 203 Ketchikan, AK 99901 Phone: (907) 225-8088 Fax: (907) 225-0713

Sponsor Statement for SB 229
Insurer Self-Audit is Privileged

An Act relating to self-audits by insurers; amending Rule 402, Alaska Rules of Evidence; and providing for an effective date.

SB 229 encourages insurance companies to engage in a critical analysis of their operations to better assess their compliance with Alaska law and regulations. It accomplishes this important objective by ensuring that audits are disclosed only to the Division of Insurance.

This audit is voluntary and the privilege only applies to the people and work products of this voluntary activity. This does not change any of the existing rules as it applies to any examination conducted by the Alaska Division of Insurance. Absent the protections provided in this bill, companies are far less likely to conduct these self-audits to improve their operation and service to Alaskans.

Self-audits can also help the Division of Insurance improve its oversight of the industry. The Division can obtain audit records if they extend the confidentiality to the insurer as provided in this bill. This, in turn, allows the Division to more efficiently use their examination and enforcement authority to protect insurance consumers.

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