Juneau -- Wednesday, The Alaska Senate passed Senate Bill 177, sponsored by Senator Dave Donley. This legislation advances consumer protection in Alaska by allowing the Division of Insurance to regulate insurance related individual acts of unfair or deceptive trade practices. The Division of Insurance strongly supports Senate Bill 177.

"Unlike insurance regulators in other states the Alaska Division of Insurance does not currently have the jurisdiction to punish individual acts of unfair insurance claims practices. Alaskan insurance consumers have little or no protections unless a pattern of deceptive trade practices has developed," said Donley. "This lack of jurisdiction allows individual violations of the fair claims practices law by insurance companies. Insurers know that there is little enforcement to protect individual consumers in Alaska and that patterns of deceptive practices are difficult to prove." Donley further explained: With our current insurance premium tax, Alaskans already pay enough money to cover these new proposed consumer protection services.

Additionally, this legislation encourages 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 also affords consumers and injured parties more opportunity to pursue fair and equitable claims through arbitration. Insurers will sometimes require injured people to pay the costs of arbitration or mediation before the process begins, a practice that is already illegal under existing law for some claims. This measure would strengthen current law and prohibit such bad faith actions against all claimants.

SB 177 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. When multiple factors cause a loss to occur, and there is a secondary cause that is not covered by the policy, insurance companies can, under certain new court decisions, deny claims. Simply put, SB 177 ensures consumers get the insurance protection they pay for.

"Injured Alaskans and insurance consumers deserve 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 passed the Senate by a vote of 19 to 1. It now goes to the House for consideration.

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