Legislation that would clear the way for commercial fishermen in Alaska to form their own insurance cooperatives, lowering costs to keep smaller operators solvent, is moving toward the state Senate floor, where it has a reasonable chance of passage in this session.
House Bill 116, which cleared the House last week, went to the Senate Rules Committee on Monday, May 12, after little discussion in the Senate Labor and Commerce Committee. The bill is sponsored by the House Special Committee on Fisheries at the request of the Joint Legislative Task Force Evaluating Alaska's seafood industry.
"With operating costs at an all-time high and fishing markets at an all-time low, House Bill 116 seeks to provide lower cost and easier access for Alaska's commercial fishing group," testified Matt Gruening, an aide to Rep. Louise Stutes, R-Kodiak, chair of Special Committee on Fisheries.
"Rising premiums and availability of insurance are a barrier to operating in Alaska's insurance industry. Underwriters have been raising premiums on individual vessels and are increasingly selective in which vessels they insure. Insurance pooling can attract a more attractive lower risk alternative for insuring individual fishing vessels as well as lower costs for our fishermen," he said.
The bill would let the insurance cooperatives pay claims from liability or damage to a vessel without having to be regulated under the state's insurance code.
"We expect the government board will police itself," testified Lori Wing-Heier, director of the Alaska Division of Insurance. "We have looked very closely at what has been happening with the Prince William Sound purse seiners and it has been successful.
"We expect that whoever forms this cooperative that they will do their due diligence and arrive at what they can insure and what they cannot and charge the correct rates so that the pool is solvent. They would have an executive director, and board of governors," she told the committee.
"I expect they would police themselves and be as successful as they are in the Seattle area."
