OMNIBUS INSURANCE BILL
Sponsored By: SENATE LABOR & COMMERCE
Became Law
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Bill Overview
Analyzed Economic Effects
31 provisions identified: 11 benefits, 6 costs, 14 mixed.
Big penalties if nonadmitted tax unpaid
If a nonadmitted insurer fails to pay the tax, you must pay it within 30 days after the director’s notice. If unpaid, you may owe a late fee of $1,000 or 10% of the tax (whichever is greater), interest of 1% per month from the original due date, and a penalty up to $100 per day or 25% of the tax (whichever is greater). For wet marine and transportation risks, a surplus lines broker may pay the tax for the insurer or the insured.
Fairer home claims and tougher penalties
Beginning January 1, 2026, home insurers cannot cut claim payments by depreciating labor costs. Any depreciation must be a separate, optional endorsement that lists what is depreciated and lowers your premium. The law adds labor‑depreciation offers and AS 21.07 violations to the list of unfair claim practices. Starting January 1, 2026, after a hearing the director can order restitution and fine up to $2,500 per violation or $25,000 for a general business practice, with interest.
Lower surcharges in assigned risk plans
Starting January 1, 2026, assigned risk policies may include a surcharge up to 25%, but not on the first $6,000 of yearly premium (up from $3,000). In short, the surcharge applies only to premium above $6,000 each policy year.
HMO emergency and referral protections
Starting January 1, 2026, HMOs must cover emergency screening and stabilization at in‑network cost‑sharing even if a non‑HMO provider treats you. After you are stable, the HMO may require transfer. If an HMO provider refers you for medically necessary care to an out‑of‑network provider, the HMO must cover it at in‑network cost‑sharing, unless an in‑network provider is available.
No‑cost breast and colon screening
Beginning January 1, 2026, Alaska health plans must cover mammograms, diagnostic breast exams, supplemental exams, biopsies, and related consultations with no deductibles, copays, or coinsurance. Plans may keep cost‑sharing only if needed to qualify as a high‑deductible HSA plan. Insurers must also cover colorectal cancer screening on the schedule in law and follow the latest American Cancer Society guidelines for people at average risk. Average‑risk screening has no cost‑sharing, and a follow‑up colonoscopy after a positive non‑colonoscopy test is covered. High‑risk screening frequency is set by your provider.
Patient choice and pharmacy manager limits
Starting January 1, 2026, your health insurer or its pharmacy benefits manager cannot block your choice of pharmacy or limit access to clinician‑given drugs. They cannot pay a network pharmacy less than an affiliate for the same service, use your pharmacy data to market to an affiliate, or use spread pricing. They cannot reverse and resubmit a claim after 90 days without written notice and a documented reason. The law defines a pharmacy benefits manager as a company that, for an insurer, contracts with pharmacies to process claims, pay for drugs or supplies, or manage a network.
Licensing and $20,000 fees for PBMs
Pharmacy benefit managers must be licensed to operate. Each day of unlicensed business is a separate violation and can bring civil penalties. The initial license fee is $20,000, and renewal every two years is $20,000. Applicants must name a compliance officer, disclose owners and disciplinary history, and submit two years of certified financials showing solvency and effective controls. Licensed PBMs must notify the director within 30 days of key changes, actions, or convictions, or risk license denial, suspension, or revocation.
New minimum interest for policy values
Beginning January 1, 2026, the minimum interest used to set nonforfeiture amounts equals the smaller of 3% or the five‑year Treasury rate minus 1.25%, but not below 0.15% per year. Contracts must say how and when the rate is set and if it can be reset later.
Limited use of nonadmitted health insurers
The director may allow health or disability insurance to be placed with a nonadmitted insurer if it is in the public interest and surplus lines rules are met. Rates must follow state rules, and brokers must file and keep required records. You cannot use nonadmitted placement just to get a lower premium or competitive edge.
More network choice and clear exceptions
If your plan only covers in‑network care, the insurer must offer a non‑network option when you first enroll. That option can have a higher deductible, copays, or premium if it costs more to cover. HMOs are excluded, and the rule does not apply if another policy already offers non‑network coverage. Insurers that use prior authorization and have different in‑network and out‑of‑network rules must put clear instructions on the prior auth form for asking a benefit‑level exception and must say if an approved claim will be processed as network or non‑network.
Life insurance oversight and guaranty limits
For life insurance, prosecutors can start a case within one year after an aggrieved party or required reporter discovers an offense, but not more than 20 years beyond the usual limit. Starting January 1, 2026, the director must approve issuance of a group life policy after reviewing information showing the group meets the law. Effective January 1, 2026, the guaranty association will not cover several listed policy parts and contracts, narrowing who gets protection if an insurer fails. The law also defines policyholder behavior for actuarial work and excludes death or illness events.
State can seek ACA rule waivers
Beginning January 1, 2026, the insurance director can apply for federal waivers of Affordable Care Act rules. If approved, the state can run a plan that follows the waiver terms. Actual effects depend on the waivers approved.
New rules for third-party administrators
Employees of admitted insurers acting within their job, and banks or lenders that only advance premiums and collect related debt, do not need a TPA license. People who only serve ERISA‑preempted benefit plans are exempt if they certify that status to the director by February 1 each year. A TPA does not need a managing general agent license if it is already licensed, or if it only adjusts claims and is licensed as an independent adjuster. The state may hold hearings, order penalties, deny or revoke licenses, and TPAs must file annual certifications by February 1. The director can immediately suspend a TPA license without notice if the TPA is insolvent, in receivership, or in an unsound condition that harms policyholders or the public.
TPA licenses, fees, and stronger contracts
Third‑party administrators must follow specific state licensing sections. The initial TPA license is $2,000, and renewal every two years is $2,000. TPAs must file quarterly lists on January 1, April 1, July 1, and October 1. Insurer–TPA contracts must be written and include termination for cause, accounting and reporting, fiduciary handling of funds, a cap on retained claims funds (no more than three months’ estimated claims), separate records, audit rights, limits on authority, and no commissions tied to savings. Insurers cannot use unlicensed TPAs.
Limits on OCIP/CCIP insurance use
Owner‑ or contractor‑controlled insurance can cover only property and casualty insurance for major construction projects. A major multi‑owner residential project must have at least 40 units, three or more owners, and cost $20 million or more. Some coverages, like builder’s risk and cargo insurance, and certain affiliate coverages, are excluded.
Clearer rules for out-of-state insurance
The law clarifies which state is the home state for multistate nonadmitted insurance: usually where a business has its main office or where a person lives, unless all risk is outside that state, in which case it is where the largest share of taxable premium is assigned. An alien insurer can be eligible if it files a certified annual statement within nine months of the period end. The meaning of wet marine and transportation insurance follows AS 21.12.090(b). Starting January 1, 2026, joint boards for municipalities and school districts can buy excess or catastrophic coverage from authorized insurers, certain qualified national risk pools, or through surplus lines to the extent Alaska brokers may use them.
45‑day notice before cancellation or nonrenewal
Insurers must give you at least 45 days’ written notice before canceling a health policy. Starting January 1, 2026, they must also give at least 45 days’ notice before not renewing a policy. If they give less notice, they cannot refuse renewal past the period you already paid for. An offer to move your policy to an affiliate is not treated as nonrenewal.
More notice before hikes or nonrenewal
Insurers can only choose not to renew a personal policy on its yearly anniversary. They must mail a nonrenewal notice at least 45 days before the policy ends. If your renewal premium rises by more than 10% (not due to more coverage) or your coverage is cut without your request, they must mail you and your agent at least 45 days’ notice. Insurers may not cancel or refuse to renew a property or business property policy only because you filed an aid‑only claim where no coverage applied and no benefit was paid. Beginning January 1, 2026, insurers must provide policies or endorsements by mail, email, or website within a reasonable time after issuance once you meet the insurer’s conditions.
No insurance bias against elected officials
Starting January 1, 2026, insurers may not refuse, cancel, limit, or raise prices only because someone is an elected official. Actions based on sound underwriting tied to expected losses, or required by law, are still allowed.
Stronger rules for health discount plans
Starting January 1, 2026, health discount plans must say in bold that they are not insurance, list the administrator’s contact, and make a local provider and discount list easy to get. You can cancel within 30 days and get a full refund except a small processing fee within 30 days. Sellers must register and renew plans as required by the director’s rules.
Insurers must aid medical assistance recovery
Insurers and PBMs must help the Department of Health recover medical assistance payments. They must provide coverage details on request, accept the state’s right to recover, and reply within 60 days to inquiries about claims filed within three years of service. The department must file its claim within three years of service and start enforcement within six years.
Stronger reserve rules for insurers
Insurers must use a principle‑based valuation to set reserves, with conservative assumptions and margins for uncertainty. They must keep governance and actuarial oversight, file an annual internal controls certification, and provide valuation reports on request. The valuation can include a formula piece as allowed by the valuation manual.
Motor vehicle service contracts need approval
Starting January 1, 2026, a company may not deliver or issue a motor vehicle service contract unless it files the contract with the Division of Insurance and gets the director’s approval. Any later change to an approved contract must also be filed and approved before use.
More reporting and fees for surplus lines brokers
Surplus lines brokers must file quarterly reports by March 1, June 1, September 1, and December 1. The filing fee is 1% of gross premium minus return premiums. If paid late, add $50 plus 2% of the filing fee per month, capped at $250 plus 10% of the filing fee. Incorrect payments get a penalty of 25% of the filing fee (at least $50, up to $1,000). The director can add up to $10,000 more and may suspend or revoke the license.
Less consumer voice on HMO boards
As of January 1, 2026, at least 25% of an HMO’s governing board must be consumer members, down from one‑third. This reduces enrollee representation in HMO governance.
Premium taxes for insurers and risk groups
Insurers must pay tax on premiums for Alaska risks. Most insurers pay 2.7%. Hospital and medical service corporations pay 6% (on gross premiums less claims paid). Wet marine and transportation insurers pay 0.75%. Taxes are paid at least annually and not more often than quarterly. Starting January 1, 2026, risk retention groups must file the insurer report and pay the applicable insurer tax.
Broader licensing rules for insurance work
People may not act as producers, managing general agents, reinsurance intermediaries, surplus lines brokers, third‑party administrators, pharmacy benefits managers, or independent adjusters without a state license. The director must issue licenses for listed lines of authority when requirements are met, and can issue nonresident licenses if the applicant is licensed and in good standing in their home state. Nonresident independent adjusters can pick a home state if their residence does not license adjusters. The law defines home‑state rules, who is an independent adjuster, and what counts as limited lines.
New education, reporting, and renewal rules
Firms must keep a lawful place of business, name a compliance officer, and provide documents the director requests. Licensees must complete at least 24 hours of approved education every two years, with up to eight hours carried over. Licensees must tell the director within 30 days when their address, name, phone, or compliance officer changes, and report administrative actions or criminal charges within 30 days with documents. If a license expires, you may not act; the director may reinstate it within two years if you still qualify and you pay renewal fees and a late penalty. The director sends expiration notices to your current email or mailing address. Beginning January 1, 2026, licensees under AS 21.59 must also report administrative actions and criminal prosecutions within 30 days. Some applicants have fewer application steps, including certain limited‑license applicants, people licensed here in the last year, and compliance officers for TPAs or PBMs. A compliance officer is the licensee responsible for a firm’s compliance. On January 1, 2026, several outdated insurance code subsections are repealed.
New rules for reinsurance credit
The director uses the NAIC list to decide reciprocal jurisdictions and can add or remove jurisdictions by regulation. The director publishes which assuming insurers are eligible and can suspend or revoke eligibility. If eligibility is limited, reinsurance credit is limited unless obligations are secured, and a court may require 100% security in rehabilitation or liquidation. The law also defines what counts as a reciprocal jurisdiction.
Stronger exams; companies pay exam costs
The director may examine insurers, TPAs, and PBMs as often as needed and can do joint exams with the NAIC. Examined companies must pay reasonable charges for exam time and actual out‑of‑pocket costs through the method the director specifies. The director can waive payment for some entities if payment would cause hardship.
Yearly audited report, hardship waivers
Insurers must file an audited financial report for the prior year by June 1, prepared by an independent CPA. The director can require an earlier filing with 90 days’ notice for good cause. An insurer may ask for an exemption if the audit would cause financial or organizational hardship, and can request a hearing within 15 days if denied.
Sponsors & Cosponsors
Sponsor
SENATE LABOR & COMMERCE
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
Actions Timeline
(S) EFFECTIVE DATE(S) OF LAW SEE CHAPTER
7/30/2025Senate(S) SIGNED INTO LAW 6/24 CHAPTER 17 SLA 25
7/30/2025Senate(S) MANIFEST ERROR(S)
7/30/2025Senate(S) 3:20 P.M. 6/23/25 TRANSMITTED TO GOVERNOR
7/30/2025Senate(S) EFFECTIVE DATE(S) SAME AS PASSAGE
5/19/2025Senate(S) CONCUR AM OF (H) Y20 N-
5/19/2025Senate(S) CONCUR MESSAGE READ AND TAKEN UP
5/19/2025Senate(H) VERSION: HCS CSSB 132(FIN) AM H
5/19/2025House(H) TRANSMITTED TO (S) AS AMENDED
5/19/2025House(H) EFFECTIVE DATE(S) SAME AS PASSAGE
5/19/2025House(H) PASSED Y40
5/19/2025House(H) READ THE THIRD TIME HCS CSSB 132(FIN) AM H
5/19/2025House(H) ADVANCED TO THIRD READING UC
5/19/2025House(H) AM NO 1 ADOPTED UC
5/19/2025House(H) FIN HCS ADOPTED UC
5/19/2025House(H) READ THE SECOND TIME
5/19/2025House(H) RULES TO CALENDAR 5/19/2025
5/19/2025House(H) FN2: (CED)
5/19/2025House(H) NR: BYNUM, TOMASZEWSKI, GALVIN, JOSEPHSON, SCHRAGE
5/19/2025House(H) DP: HANNAN, STAPP, JIMMIE, FOSTER
5/19/2025House(H) FIN RPT HCS(FIN) 4DP 5NR
5/19/2025House(H) Minutes (HFIN)
5/18/2025House(H) Moved HCS CSSB 132(FIN) Out of Committee -- Recessed to a Call of the Chair --
5/18/2025House(H) FINANCE at 12:00 PM ADAMS 519
5/18/2025HouseAudio/Video
5/18/2025House
Bill Text
Enrolled SB 132
5/19/2025
HCS CSSB 132(FIN)
5/19/2025
HCS CSSB 132(FIN) am H
5/19/2025
CSSB 132(FIN)
5/16/2025
CSSB 132(L&C)
4/7/2025
SB 132
3/14/2025