Legislature(1997 - 1998)
02/26/1997 01:10 PM House TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 95 - MOTOR VEHICLE INSURANCE & LICENSING Number 1992 CHAIRMAN WILLIAMS stated that the next order of business is HB 95, "An Act relating to motor vehicle registration, licensing, and insurance; and providing for an effective date." He stated that the bill was amended at the last meeting. REPRESENTATIVE MASEK asked which version of the bill the committee was working from. Number 2019 JUANITA HENSLEY, Chief Driver Services, Office of the Commissioner, Department of Public Safety, stated that the committee was working from the original draft of the bill, Version E, with two amendments 1 and 2. Amendment 1 failed and Amendment 2 was adopted. Number 2035 REPRESENTATIVE AL KOOKESH asked if under the exemption for insurance, other than being a self insurer, is the exemption on page 3, off road system. Number 2050 MS. HENSLEY replied, "Yes, that it is anyone that is determined by the Department of Transportation and Public Facilities studies that have fewer then 499 daily traffic." She stated that there are those that have the off systems drivers license that are exempt from this. Number 2068 REPRESENTATIVE MASEK stated that page 2, Section D, line 5 through 8, if an insurance company did not put forth the required paperwork could they be suspended or lose their license. Number 2140 MS. HENSLEY stated that this is placed through the Division of Insurance Statutes and it would be the reporting requirements and the Division of Insurance Requirements. She stated if the division found that a person was not following the intent of the law by providing the information to the Department of Public Safety, then the provisions of existing law would step in. Number 2194 REPRESENTATIVE MASEK asked that it seems that statute already requires drivers to carry insurance in the state. Number 2225 MS. HENSLEY stated that it is mandatory that everyone certify their vehicle, at the time they are registering their vehicle, that the vehicle meets the limits of liability under Alaska Statute, Title 28, Chapter 22. She stated that the division does not require proof to be shown, it is a self certification program. The only time that a person is required to submit proof that the vehicle is insured is after the fact of an accident, resulting in damages greater that $501. She stated that they have 15 days from the date of the accident to submit proof that the vehicle is insured. She stated that what they are doing in the bill, is at the time of registration the insurance will be verified though the electronic media. REPRESENTATIVE MASEK stated that since there is already a law why not go after the offenders. We need to enforce the laws that are on the books rather than make the insurance companies more accountable. Number 2268 MS. HENSLEY stated that the provision does go after the individuals if they are involved in an accident and do not submit the proof that they are insured, the Division of Motor Vehicles suspends the uninsured driver's license regardless of fault. She stated that the bill allows the department to electronically verify that the person was insured on the spot, eliminating paperwork. Number 2278 REPRESENTATIVE MASEK stated that on page 1, Section 1, line 7, of the bill, regarding the monthly reporting, it seems like it is going after the private sector. She stated maybe it should be reported at the time the insurance is purchased. She stated it is putting a bigger burden on the industry rather than having the agencies do the job. Number 2353 MS. HENSLEY stated that the division updates changes monthly and the insurance industry already has an electronic medium. She stated that all the large insurance companies are on the electronic database. She stated that the division will have access to the database and will eliminate having to get the information through paper shuffling. It will benefit the way the division does business. She stated that last year, the division eliminated four positions from the budget. TAPE 97-12, SIDE B Number 007 MS. HENSLEY stated that enacting an electronic verification program, will allow the financial responsibility program to be reinstated. Number 034 REPRESENTATIVE COWDERY stated that there is very little proof required at present to show that a driver is insured. Number 055 MS. HENSLEY stated that is correct. Number 077 REPRESENTATIVE COWDERY stated that after an accident the only thing that can be done is to take the license away. He stated that the bill enforces that existing law to a higher degree. Number 116 REPRESENTATIVE HUDSON asked if the lists are able to become public. Number 132 MS. HENSLEY replied that page 5, lines 10 through 12 stated that database companies can't disclose information on the file. Number 156 REPRESENTATIVE HUDSON asked that if there is anything in the bill that addresses out of state insurers being on the line to easily report in every 30 days. Number 179 MS. HENSLEY stated that if they are licensed to do business in the state of Alaska, they have to be approved by the Division of Insurance and they would be required to report to the database company. Number 206 REPRESENTATIVE SANDERS asked if Ms. Hensley said that they are going to eliminate four people if this goes through. Number 220 MS. HENSLEY replied no, the division eliminated four people last year and lost a whole program. She stated that what they wanted to do is free up people that are doing the paper shuffling to reinstate the program. Number 263 REPRESENTATIVE HUDSON stated that we are adding an additional cost to the industries. He stated that the bill appealed to him because of the possibility that the uninsured motorist could be eliminated and decrease the liability that all of the insured motorists have. Number 330 MS. HENSLEY stated that there are those individuals who are never going to have insurance but this will cut the uninsured motorists quite drastically. She stated that the one state that has this law has cut their uninsured motorists by half. Number 367 MICHAEL LESSMEIER, Attorney, State Farm Insurance, stated that everytime the legislature passes a bill that raises the cost of doing business, the cost has to be passed onto the customers. He stated that the problem that is trying to be solved is one of uninsured drivers, who usually can't afford insurance to begin with and by making the product more expensive, will not solve the problem. He stated that when the company does better than the loss experienced, money is given back. In 1987 and 1988 State Farm Insurance issued a 20 percent premium refund. He stated that the issue is enforcement. If the bill is passed without anymore enforcement mechanisms in it, it will not affect the number of uninsured drivers. He stated that proof of insurance at the time of registration would not cost the industry or the policy holders any additional money. He also suggested that when stopped for a traffic violation proof of insurance should also be checked. MR. LESSMEIER stated that there ought to be an independent audit of the situation to see if it is working. He stated that confidentiality could be a problem. He urged a need for caution, with the bill. He stated that insurance companies may be set up electronically but they are not set up to transfer information. Number 683 REPRESENTATIVE ELTON stated that the bill will add efficiencies to the agency operation and may lead to reinstatement of a program that could benefit the insurance industries. Number 717 MR. LESSMEIER stated that not all insurance companies are computerized. He stated that the Motor Vehicle Safety Responsibility Act should be separate from the bill, he stated that a new computer system will result in time to make it operational. He stated that the legislature should give the division funding to reinstate the act. Number 790 REPRESENTATIVE MASEK asked if any insurance companies have the database set up. Number 813 MR. LESSMEIER replied that he didn't believe so. Number 830 REPRESENTATIVE COWDERY made a motion to move CSHB 95(TRA) out of the House Transportation Standing Committee. Number 841 REPRESENTATIVE MASEK objected for purpose of discussion. She stated that she would like to offer an amendment to page 1, Section 1, line 7, to change each calendar month to "an insurer that issues an automobile liability insurance policy in this state shall within fifteen days of the policy inception date or cancellation, report to the Department of Public Safety a record of each motor vehicle insurance policy issued by the insurer." Number 888 CHAIRMAN WILLIAMS stated that he will accept that amendment at this time, but from here on out he will not accept an amendment that is brought before the committee at the time there is a meeting. He stated that he would appreciate getting the amendments a day before as members expect the bill to be before them a day before. Number 915 CHAIRMAN WILLIAMS objected to the amendment. Number 924 REPRESENTATIVE MASEK stated that basically what the amendment would do is instead of having the insurance company comply every month it would give them the opportunity to provide the information within 15 days of the policy inception date or cancellation date to the Department of Public Safety. Number 957 KRISTY TIBBLES, Legislative Secretary to Representative Joe Green, stated that Representative Green would prefer not to have the amendment in the bill, although he is not entirely opposed. She stated that monthly reporting would be more accurate. Number 1000 CHAIRMAN WILLIAMS stated that there are two motions on the floor he asked that the motion to move the bill be withdrawn. REPRESENTATIVE COWDERY withdrew the motion to move CSHB 95(TRA). Number 1012 REPRESENTATIVE ELTON stated that instead of turning over the whole database monthly, the insurer would only be required to provide notice of new policies that are written or provide notice of policies that were expired and not renewed. He asked what would be less of a burden on the industry, doing these as they occur within fifteen days or each month. Number 1061 MS. TIBBLES responded that it appears for large insurance companies it would be less of a burden to report monthly, however for smaller companies it is easier to report as they receive the cancellations. Number 1108 CHAIRMAN WILLIAMS asked for a roll call vote on Amendment 3. Representatives Elton, Sanders, Hudson, Kookesh, Cowdery, Masek voted in favor of Amendment 3. Chairman Williams voted against Amendment 3. Amendment 3 passed. Number 1120 REPRESENTATIVE COWDERY made a motion to move CSHB 95(TRA) as amended, with the attached fiscal note and individual recommendations. Number 1133 CHAIRMAN WILLIAMS asked if there was any objections. Hearing none, CSHB 95(TRA) was moved out of the House Transportation Standing Committee.
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