Maritime Injury Law BlogEmpowering Alaska Fishermen Through Insurance Cooperatives
House Bill 116 is currently under consideration by the Alaska State Senate, representing a potential turning point for the state’s commercial fishing industry. This legislation would authorize Alaskan fishermen to form their own insurance cooperatives, which would lower operating costs and ensure the financial stability of smaller operators facing increasingly difficult economic conditions. Having passed the House unanimously, the bill is now before the Senate, with a strong possibility of enactment this session.
The bill originated from the Joint Legislative Task Force Evaluating Alaska’s Seafood Industry, which analyzed and identified growing financial strains on commercial fishermen. As Representative Louise Stutes, R-Kodiak, and Senate President Gary Stevens have emphasized, the combination of record-high operating costs and record-low fishing market prices calls for innovative solutions to support this vital sector of Alaska’s economy.
The primary concern driving this legislation is the increasing cost and decreasing availability of traditional insurance for fishing vessels. Underwriters are reportedly increasing premiums and becoming more selective with their customers. This has created a significant barrier for many independent fishermen seeking insurance. By enabling fishermen to collectively pool their resources, they can create a larger, potentially lower-risk insurance pool, theoretically leading to more attractive rates and greater access to coverage.
The proposed legislation would exempt these insurance cooperatives from the stringent regulations of the state’s insurance code when paying claims related to liability or vessel damage. This unique aspect is based on the expectation that the cooperatives themselves will ensure responsible management and financial stability. Lori Wing-Heier, Director of the Alaska Division of Insurance, has expressed confidence in this self-governance model, referring to the successful insurance pool operated by the Prince William Sound purse seiners as a precedent.
Wing-Heier expects that any new insurance cooperative will practice due diligence in assessing risks and establish appropriate rates to maintain solvency. The proposed entity would likely be structured with an executive director and a board of directors who would be responsible for overseeing the cooperative’s operations and finances. House Bill 116 draws from other successful insurance co-op models used by Washington State fishermen and Alaska municipal governments.
There are many potential benefits to House Bill 116. Lower insurance costs could significantly alleviate the financial burden for individual fishermen, particularly smaller operators who are often most vulnerable to fluctuating market prices and rising expenses. As Representative Stutes noted, the bill provides fishermen with “the tools to build a sustainable insurance model that puts Alaska’s fishermen first,” addressing the challenges of rising premiums and fewer insurance options.
House Bill 116 cleared the House last week, then went to the Senate Rules Committee on Monday, May 12, 2025. As it reaches the Senate floor, further debate is anticipated. Given the clear need for solutions to the insurance crisis facing Alaska’s commercial fishermen, stakeholders are optimistic that House Bill 116 will be enacted, marking a significant step towards promoting greater financial stability, sustainability, and resilience within Alaska’s commercial fishing industry.