Disability insurance is insurance that provides periodic income payments when income is interrupted or terminated because of disability resulting from sickness, injury, or dismemberment, or a combination of sickness, injury, or dismemberment.
Repealed or Renumbered
It is intended that certain insurance coverages may come within the definitions of two or more kinds of insurance as defined in this chapter, and the inclusion of coverage within one definition does not exclude it from the definition of another kind of insurance coverage if the coverage may be reasonably included.
Life insurance is insurance on human lives. The transaction of life insurance includes also the granting of endowment benefits, additional benefits for death or dismemberment by accident or accidental means, additional benefits for the insured's disability, and optional modes of settlement of proceeds of life insurance. Transaction of life insurance does not include workers' compensation insurance.
Repealed or Renumbered
Property insurance is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon the loss or damage, other than noncontractual legal liability for loss or damage. Property insurance does not include title insurance as defined in AS 21.66.480 .
Mortgage guaranty insurance includes insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument consisting of a lien or charge on real estate.
(a) Annuities means all agreements to make periodical payments if the making or continuance of all or some of a series of payments or the amount of a payment is dependent upon the continuance of human life, except payments made under AS 21.12.040 . The business of annuities is considered to include additional benefits operating to safeguard the contract from lapse, or to provide a special surrender value, or special benefit, or annuity, in the event of the total and permanent disability of the holder.
(b) Annuity contract means a contract providing for an annuity as defined in (a) of this section.
(a) A nondomestic admitted insurer may not carry out an agreement of assumption reinsurance with a nonadmitted insurer that would transfer Alaska policyholders unless
(1) the nonadmitted insurer applies for and obtains a certificate of authority from the director; or
(2) the admitted insurer files the assumption agreement with the director and obtains approval to apply the assumption agreement to Alaska policies or certificates.
(b) The director shall approve an assumption agreement involving the assumption of Alaska insurance business by a nonadmitted insurer if
(1) the ceding insurer is in supervision, conservation, or liquidation and the assuming insurer is in good standing in its state of domicile; or
(2) approval would be in the public interest of the Alaska policyholders.
Commercial insurance is any line of property insurance, as defined in AS 21.12.060 , or casualty insurance, as defined in AS 21.12.070 , that is for business and professional interests, whether for profit, nonprofit, or public in nature. For purposes of filing rates under AS 21.39.040 and forms under AS 21.42.120 , commercial insurance does not include workers' compensation insurance.
(a) Health insurance is insurance of human beings (1) against bodily injury, disablement, or death by accident or accidental means; (2) against the resulting expenses of the injury, disablement, or death; (3) against disablement or expense resulting from sickness or childbirth; (4) against expense incurred in prevention of sickness; (5) for dental care; and (6) including every insurance that applies to injury, disablement, or death. Transaction of health insurance includes disability insurance and stop-loss insurance but does not include workers' compensation insurance. Health care insurance described in (b) of this section is a type of health insurance under this subsection.
(b) Health care insurance means that part of health insurance that provides benefits for medical care whether provided directly, through reimbursement, or other method.
(c) In this section, 'stop-loss insurance' means insurance purchased by a self-insured employer to cover benefits the employer incurs in excess of a preset limit.
Surety insurance includes
(1) fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust;
(2) insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship;
(3) insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including loss while being transported in armored motor vehicles or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to an insured's premises or to the furnishings, fixtures, equipment, safes, and vaults on an insured's premises caused by burglary, robbery, theft, vandalism, or malicious mischief, or attempted burglary, robbery, theft, vandalism, or malicious mischief.
(a) An insurer may not retain a risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding 10 percent of its surplus to policyholders.
(b) In this section a 'subject of insurance' as to insurance against fire and hazards other than windstorm, earthquake, and other catastrophe hazards, includes all properties insured by the same insurer that are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of the hazard insured against.
(c) Reinsurance ceded as authorized by AS 21.12.020 shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by an established incorporated cosurety and the value of a security deposited, pledged or held subject to the surety's consent and for the surety's protection.
(d) As to alien insurers, this section relates only to risks and surplus to policyholders of the insurer's United States branch.
(e) In this section 'surplus to policyholders' in addition to the insurer's capital and surplus includes any voluntary reserves that are not required under law, and are determined from the last sworn statement of the insurer on file with the director, or by the last report of examination of the insurer, whichever is more recent at time of assumption of risk.
(f) This section does not apply to life or health insurance, annuities, title insurance, insurance of wet marine and transportation risks, workers' compensation insurance, employer's liability coverages, sprinklered risks, or to a policy or type of coverage in which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.
(a) 'Marine insurance' includes
(1) insurance against any and all kinds of loss or damage to
(A) vessels, craft, aircraft, cars, automobiles, and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to, or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment or while awaiting shipment or during delays, storage, transshipment, or reshipment incident thereto, including marine builder's risks and all personal property floater risks;
(B) a person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance, or use of the subject matter of the insurance (but not including life insurance or surety bonds or insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance, or use of automobiles);
(C) precious stones, jewels, jewelry, gold, silver, and other precious metals, whether used in business or trade or otherwise and whether in the course of transportation or otherwise;
(D) bridges, tunnels, and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion are the only hazards to be covered; piers, wharves, docks and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion; other aids to navigation and transportation, including dry docks and marine railways, against all risks;
(2) 'marine protection and indemnity insurance', meaning insurance against, or against legal liability of the insured for loss, damage, or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of a vessel, craft, or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness, or death or for loss of or damage to the property of another person.
(b) For the purposes of this title 'wet marine and transportation' insurance is that part of marine insurance that includes only
(1) insurance upon vessels, crafts, hulls and of interests in or with relation to vessels, crafts, and hulls;
(2) insurance of marine builder's risks, marine war risks and contracts of marine protection and indemnity insurance;
(3) insurance of freights and disbursements pertaining to a subject of insurance coming within this section; and
(4) insurance of personal property and interests in personal property, in the course of exportation from or importation into any country, and in the course of transportation coastwise or on inland waters, including transportation by land, water, or air from point of origin to final destination, in respect to, appertaining to, or in connection with, any and all risks or perils of navigation, transit, or transportation, and while being prepared for and while awaiting shipment, and during delays, storage, transshipment, or reshipment incident thereto.
(a) Casualty insurance includes
(1) vehicle insurance: insurance against loss of or damage to a land vehicle or aircraft or a draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability, or expense resulting from or incidental to ownership, maintenance, or use of the vehicle, aircraft, or animal; and provision for medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability to the insured, if issued as an incidental coverage with or supplemental to insurance on the vehicle, aircraft, or animal;
(2) liability insurance: insurance against legal liability for the death, injury or disability of a human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, if issued as an incidental coverage with or supplemental to liability insurance;
(3) workers' compensation and employer's liability: insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees;
(4) burglary and theft: insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal, or concealment, or from an attempt at any of the foregoing; including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to money, coins, bullion, securities, notes, drafts, acceptances, or other valuable papers and documents, resulting from any cause;
(5) personal property floater: insurance upon personal effects against loss or damage from any cause under a personal property floater;
(6) glass: insurance against loss or damage to glass, including its lettering, ornamentation, and fittings;
(7) boiler and machinery: insurance against any liability and loss or damage to property or interest resulting from accident to or explosions of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured;
(8) leakage and fire extinguishing equipment: insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes or containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to the sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus;
(9) credit: insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured;
(10) malpractice: insurance against legal liability of the insured, and against loss, damage, or expense incidental to a claim of liability, and including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury or disablement of a person, or arising out of damage to the economic interest of a person, as the result of negligence in rendering expert, fiduciary, or professional service;
(11) elevator: insurance against loss of or damage to any property of the insured, resulting from the ownership, maintenance, or use of elevators, except loss or damage by fire, and to make inspection of and issue certificates of inspection on elevators;
(12) livestock: insurance against loss or damage to livestock, and services of a veterinary for the animals;
(13) entertainments: insurance indemnifying the producer of a motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation due to death, accidental injury, or sickness of performers, participants, directors, or other principals;
(14) miscellaneous: insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within another kind of insurance as defined in this chapter, if the insurance is not disapproved by the director as being contrary to law or public policy.
(b) The provision of medical, hospital, surgical, and funeral benefits, and of coverage against accidental death or injury, as incidental to and part of other insurance defined in (a)(1), (2), (4), and (10) of this section, shall for all purposes be considered to be the same kind of insurance to which it is incidental, and is not subject to provisions of this title applicable to life or health insurance.
(a) Credit for reinsurance transactions shall be allowed a domestic ceding insurer as either an asset or a deduction from liability on account of reinsurance ceded only with respect to cessions of a kind or class of business that the assuming insurer is licensed or permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance and only if the reinsurance is ceded to an
(1) assuming insurer that is licensed to transact insurance or reinsurance in this state;
(2) assuming insurer that is accredited as a reinsurer in this state; an accredited reinsurer is one that
(A) files evidence of submission to this state's jurisdiction, submits to this state's authority to examine its books and records under AS 21.06.120 , is licensed to transact insurance or reinsurance in at least one state that is accredited by the National Association of Insurance Commissioners, or, in the case of a United States branch of an alien admitted insurer, is entered through and licensed to transact insurance or reinsurance in at least one state that is accredited by the National Association of Insurance Commissioners;
(B) maintains at least $20,000,000 in policyholder surplus and whose accreditation has not been denied by the director within 90 days after application to the director, or maintains less than $20,000,000 in policyholder surplus and whose application for accreditation has been approved by the director; and
(C) files annually with the director a copy of the reinsurer's annual financial statement filed with the insurance department of the reinsurer's state of domicile or state of entry and a copy of the reinsurer's most recent audited financial statement;
(3) assuming insurer that is domiciled in a state, or, in the case of a United States branch of an alien assuming insurer, is entered through a state accredited by the National Association of Insurance Commissioners that employs standards regarding credit for reinsurance ceded substantially similar to those applicable under (1) and (2) of this subsection, the assuming insurer maintains a policyholder surplus of at least $20,000,000, and the assuming insurer submits to the authority of this state to examine its books and records; the surplus requirements in this paragraph do not apply to reinsurance ceded and assumed under a pooling arrangement among insurers in the same holding company system;
(4) assuming alien insurer that
(A) maintains a trust fund in a qualified United States financial institution for the payment of the valid claims of its United States policyholders and ceding insurers, and their assigns and successors in interest, that conforms to the following requirements:
(i) the trust and each amendment to the trust shall be established in a form approved by the insurance supervisory official of the state where the trust is domiciled or the insurance supervisory official of another state who, under the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust; the form of the trust and each trust amendment shall be filed with the insurance supervisory official of every state in which the beneficiaries of the trust are domiciled; the trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States; the trust shall vest legal title to its assets in the trustees of the trust for its United States policyholders and ceding insurers, their assigns, and successors in interest; the trust and the assuming insurer are subject to examination as determined by the director, and the assuming insurer shall submit to examination of its books and records by the director and bear the expense of examination; the trust must remain in effect for so long as the assuming insurer has outstanding liabilities due under the reinsurance agreements subject to the trust;
(ii) on or before March 1 of each year the trustees shall report in writing to the director on the balance of the trust and list the trust's investments at the end of the preceding year, and shall certify the date of termination of the trust, if so planned, or certify that the trust does not expire before the following December 31;
(iii) in the case of a single assuming insurer, the trust shall consist of trust money representing the assuming insurer's liabilities attributable to business written in the United States and, in addition, include a trust surplus of not less than $20,000,000; the single assuming insurer shall make available to the director an annual certification of the insurer's solvency by an independent certified public accountant or an accountant holding a substantially equivalent designation as determined by the director;
(iv) in the case of a group, including incorporated and individual unincorporated insurers, the trust shall consist of trust money representing the group's liabilities attributable to business ceded by the United States domiciled ceding insurers and, in addition, include a trust surplus not less than $100,000,000 held jointly for the benefit of the United States domiciled ceding insurers or any member of the group for all years of account; the incorporated members of the group may not be engaged in any business other than underwriting as a member of the group and are subject to the same level of solvency regulation and control by the group's domiciliary regulator as are the unincorporated members; within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall make available to the director an annual certification of the solvency of each insurer by the group's domiciliary regulator or, if the certification is unavailable, financial statements, prepared by an independent certified public accountant, or an accountant holding a substantially equivalent designation as determined by the director, for each underwriter member of the group;
(v) in the case of a group of incorporated insurers under common administration that complies with the reporting requirements contained in (ii) of this subparagraph, that has continuously transacted an insurance business outside the United States for at least three years immediately before making application for accreditation, that submits to this state's authority to examine its books and records and bears the expense of the examination, and that has aggregate policyholders' surplus of $10,000,000,000, the trust shall be in an amount equal to the group's several liabilities attributable to business ceded by United States domiciled ceding insurers to a member of the group under reinsurance contracts issued in the name of the group, and the group shall maintain a joint trustee surplus, of which $100,000,000 shall be held jointly for the benefit of United States domiciled ceding insurers of a member of the group as additional security for the group's liabilities, and, within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, each member of the group shall make available to the director an annual certification of the underwriter member's solvency by the member's domiciliary regulator and financial statement of each underwriter member prepared by its independent certified public accountant, or an accountant holding a substantially equivalent designation as determined by the director; and
(B) reports annually to the director information substantially the same as that required to be reported on the National Association of Insurance Commissioners' annual statement form by licensed insurers to enable the director to determine the sufficiency of the trust fund;
(5) assuming insurer that does not meet the requirements of (1) - (4) of this subsection, but only with respect to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.
(b) If the assuming insurer is not licensed or accredited to transact insurance or reinsurance in this state, the credit permitted by (a)(1) - (4) of this section may not be allowed unless the assuming insurer agrees in the reinsurance agreements
(1) that in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of a court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction and will abide by the final decision of the court or of an appellate court in the event of an appeal; this provision is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if such an obligation is created in the reinsurance agreement; and
(2) to designate the director or an attorney resident in the United States as its true and lawful attorney upon whom may be served lawful process in an action, suit, or proceeding instituted by or on behalf of the ceding insurer.
(c) A reduction from liability, for reinsurance ceded to an assuming insurer not meeting the requirements of (a) of this section, shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be equal to the amount of money held by or on behalf of the ceding insurer, including money held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations under it, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer, or, in the case of a trust, held in a qualified United States financial institution. The security must be in the form of
(2) securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners that qualify as admitted assets under AS 21.21;
(3) clean, irrevocable, unconditional letters of credit that contain an evergreen clause issued or confirmed by a qualified United States financial institution not later than December 31 in the year for which filing is made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of the ceding insurer's annual statement; letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever occurs first; or
(4) other security acceptable to and approved in advance by the director.
(d) Notwithstanding the other provisions of this section, credit may not be allowed a domestic ceding insurer unless the reinsurance contract provides for payment by the assuming insurer on the basis of the liability of the ceding domestic insurer under the insurance contracts reinsured without diminution because of the insolvency of the ceding domestic insurer.
(e) Upon request of the director, an insurer shall promptly inform the director, in writing, of the cancellation or other material change in any of its reinsurance contracts or arrangements.
(f) In this section, 'qualified United States financial institution' means an institution that,
(1) for the purposes of (c)(3) of this section,
(A) is organized or, in the case of a United States office of a foreign banking organization, is licensed under the laws of the United States or a state of the United States;
(B) is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and
(C) has been determined by either the director or the Securities Valuation Office of the National Association of Insurance Commissioners to meet the standards of financial condition and standing that are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit are acceptable to the director;
(2) for the purposes of the provisions of this section other than (c)(3) of this section, an institution that
(A) is organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or a state of the United States, and has been granted authority to operate with fiduciary powers; and
(B) is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies.
(g) An insurer may receive credit for reinsurance transactions if the reinsurance agreement meets all applicable requirements established by the director.
(h) A domestic ceding insurer may not be allowed credit if the assuming insurer's accreditation has been revoked by the director.
(i) In this section, a 'reinsurance transaction' means a transaction stemming from a contract by which the assuming insurer agrees to indemnify the ceding insurer in whole or in part against liability or losses that the ceding insurer might incur under a separate contract of insurance with its insured.