05/05/1998 01:10 PM House JUD

CSSB 158(L&C) - INSURANCE CHANGES FOR DR. LIC REVOC.                           
                                                                               
Number 2159                                                                    
                                                                               
CHAIRMAN GREEN announced the next order of business to be CSSB
(L&C), "An Act relating to motor vehicle liability insurance                
covering a person who has had the person's driver's license revoked            
for possession or consumption of alcohol while under 21 years of               
age."                                                                          
                                                                               
RALPH BENNETT, Legislative Administrative Assistant to Senator                 
Robin Taylor, Alaska State Legislature, read the following sponsor             
statement into the record:                                                     
                                                                               
"Senate Bill 158 is an act relating to motor vehicle liability                 
insurance covering a person who has had the person's driver's                  
license revoked.  The 'use it or lose it' provisions of current                
statute have had an unintended consequence on several Alaskans.                
Minors who lose their drivers licenses for minor consuming offenses            
often find themselves and their families with increased insurance              
premiums and occasionally a policy cancellation.                               
                                                                               
"Senate Bill 158 would correct this situation by prohibiting an                
insurer from raising rates and/or canceling existing policies                  
solely for suspension of a minor's drivers license as a result of              
minor consuming, and very importantly that is where not involving              
driving.  This narrowly focused version for SB 158 does not address            
other offenses such as DWI, using false ID, or possession of                   
controlled substances.                                                         
                                                                               
"Section 1 adds language to the existing statute stating that AS               
21.36.210 (a) (2) does not apply to an administrative revocation as            
described in AS 21.89.027, the new section which begins on page 2              
of the bill.                                                                   
                                                                               
"AS 21.26.210 (a) specifies why an insurer may cancel a policy:                
nonpayment of premium or suspension or revocation of a drivers                 
license.                                                                       
                                                                               
"Section 2 is the operative section of the bill and adds a new                 
provision to state law. (a) says an insurer may not refuse to issue            
or renew motor vehicle liability insurance, cancel an existing                 
policy, deny a covered claim, or increase the premium only because             
of an administrative or court ordered suspension for minor                     
consuming.  (b) says that (a) does not prevent an insurer from                 
underwriting or rating a loss in the same manner as it would have              
had the suspension not occurred.                                               
                                                                               
"Section 3 says the bill would apply to policies issued or renewed             
on or after the effective date.  This would mean that policies                 
currently being charged a higher rate would have to be adjusted at             
the next renewal.                                                              
                                                                               
Number 2259                                                                    
                                                                               
REPRESENTATIVE ROKEBERG stated that this bill was heard in the                 
House Labor and Commerce Standing Committee and he is real pleased             
with this bill.                                                                
                                                                               
MICHAEL LESSMEIER, Lobbyist, State Farm Insurance, stated that he              
would reiterate what Representative Rokeberg said.  He stated that             
State Farm Insurance worked very closely with Mr. Bennett.  State              
Farm's concern was that sometimes non-driving behavior does carry              
over into driving behavior.  He stated that this bill achieves the             
purpose.                                                                       
                                                                               
Number 2316                                                                    
                                                                               
CHAIRMAN GREEN stated that they would hold the bill.                           
                                                                               
CSSB 158(L&C) - INSURANCE CHANGES FOR DR. LIC REVOC.                           
                                                                               
Number 0662                                                                    
                                                                               
CHAIRMAN GREEN stated that they would take up HCSCSSB 158(L&C)                 
again.                                                                         
                                                                               
REPRESENTATIVE BERKOWITZ made a motion to move HCSCSSB 158(L&C) out            
of committee with the attached fiscal notes and with individual                
recommendations.                                                               
                                                                               
CHAIRMAN GREEN asked of there was an objection.  Hearing none,                 
HCSCSSB 158(L&C) moved from the House Judiciary Standing Committee.