02/22/1994 03:00 PM House L&C

  HB 403 - AUTOMOTIVE LIABILITY INSURANCE COVERAGE                             
                                                                               
  CHAIRMAN HUDSON brought up HB 403 and invited testimony.                     
                                                                               
  Number 087                                                                   
                                                                               
  HOWARD JAEGAR, Shattuck and Grummett, Alaska Independent                     
  Insurance Agents and Brokers, testified in favor of HB 403.                  
  Mr. Jaegar stated that HB 403 is important for competition                   
  in the state.  As pointed out in one of the letters in the                   
  committee packet, there are companies that come into the                     
  state, and because they write either youthful operators or                   
  impaired drivers, they only want to the state required                       
  limits of liability.  State law, however, requires them to                   
  go further and offer the $1,000,000.00 to $2,000,000.00                      
  uninsured/underinsured motorists limits.  Very few people in                 
  Alaska are buying this type of insurance.                                    
                                                                               
  MR. JAEGAR believes there are better ways to protect                         
  yourself than buying this type of insurance.  The Alaska                     
  Independent Insurance Agents and Brokers support HB 403                      
  because it allows people to still buy the higher liability                   
  limits.                                                                      
                                                                               
  MR. JAEGAR noted that Alaska has the highest mandatory auto                  
  insurance in the United States.  He added that if you add to                 
  that the cost of uninsured motorists, the price to the                       
  consumer goes up.                                                            
                                                                               
  MR. JAEGAR noted that a lot of youthful drivers don't want                   
  to buy uninsured motorists insurance and according to the                    
  present law, it's their option.                                              
                                                                               
  JOHN GEORGE, Lobbyist, National Association of Independent                   
  Insurers, testified in support of HB 403.  Mr. George said,                  
  when he was the Director of the Division of Insurance and                    
  the legislature changed the law, the state lost a number of                  
  insurance companies, because they were small practices                       
  writing offbeat insurance and couldn't afford the                            
  reinsurance necessary to cover one or two million dollars of                 
  underinsured or uninsured motorists coverage.                                
                                                                               
  MR. GEORGE added his clients believe that coverage ought to                  
  be  offered under the golden rule theory, "do unto others as                 
  you would have them do unto you.  If you buy high limits to                  
  protect them, then you ought to be able to make sure you get                 
  the same limit as if they had bought the coverage."                          
                                                                               
  MR. GEORGE stated that his organization does support HB 403,                 
  but wanted to make the point that it should support the                      
  offer of the limits of liability for underinsured/uninsured                  
  motorists that consumers buy for third party liability.  He                  
  added that would happen under HB 403.                                        
                                                                               
  Number 261                                                                   
                                                                               
  REP. PORTER moved that HB 403 be passed out of committee                     
  with individual recommendations and two fiscal notes.                        
                                                                               
  CHAIRMAN HUDSON adjourned the meeting at 4:13 p.m.