Legislature(2007 - 2008)BELTZ 211
03/06/2007 01:30 PM LABOR & COMMERCE
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* first hearing in first committee of referral
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SB 68-MOTOR VEHICLE INSURANCE CHAIR ELLIS announced SB 68 to be up for consideration. He asked the sponsor to walk the committee through the new proposed committee substitute (CS). 1:57:56 PM SENATOR FRENCH, sponsor of SB 68, said a new CS was identified as version L. He said it narrows Section 5 by specifying that the department shall adopt an online system for verifying mandatory insurance. The previous version had language that allowed for any type of electronic verification. Research and discussion with knowledgeable folks found that the online method is the most widely supported. Proof of insurance is still in the bill when registering and reregistering a vehicle as well as the provision allowing municipalities to impound vehicles that don't have insurance. He stated: The bill is written to provide an event-based verification system for insurance and that means the state shall verify that you have mandatory insurance during points of contact. A point of contact, for example, is when you go to see DMV to register your car or when a peace officer runs your plate. He said the packet includes a report from an industry group known as the Insurance Industry Committee on Motor Vehicle Administration (IICMVA). It concludes that this nationwide regulatory body supports an event-based online verification system. These systems and methods have garnered industry support because they are compatible with industry computer programs. Also included in the packet is information on VeriSol, an existing company that provides this service. The DMV brought it to his attention as a method being adopted by other states. It was designed by insurance industry folks in a way that makes data integration simple and efficient. VeriSol is currently being implemented by Wyoming, Texas, Florida and Oklahoma. It sounds as though the amount of work involved with starting up a VeriSol system involved hours and not a massive overhaul. 1:59:04 PM SENATOR HOFFMAN asked how soon an uninsured person has to get the insurance if they are identified as not having insurance by a police officer. SENATOR FRENCH replied the way the bill is currently written, a police officer can impound a car if one has no insurance. It's up to the police officer to let the person go home on a promise of getting insurance or impounding the car to force the issue - depending on the circumstances. 1:59:53 PM DUANE BANNOCK, Director, Division of Motor Vehicles, Department of Administration (DOA), deferred to Karey Hennings to comment on the proposed CS. KAREY HENNINGS, Manager, Driver Licensing, Division of Motor Vehicles, Department of Administration (DOA), said the CS "is right in line with what the division would like to see." SENATOR BUNDE noted the new fiscal note of $290,000 a year and asked if that was the projected cost of implementing the bill. MR. BANNOCK explained that he used a formula that a couple of other states have used for determining the cost of an online verification program - using the number of vehicles in Alaska. 2:02:02 PM SENATOR BUNDE asked how it would work in reality if a policeman could stop someone and finds he doesn't have insurance and it's his responsibility to decide whether to impound the vehicle or not. CAPTAIN BILL MILLER, Anchorage Police Department, responded that it is easier for him to give directions in absolutes, but an officer has the good judgment to make such a call in the field. 2:04:45 PM SENATOR HOFFMAN asked if there are impoundment areas in Kotzebue and Nome. CAPTAIN MILLER replied that he didn't know and he hadn't talked to police officers from that area on this issue. SENATOR FRENCH pointed out that in this far-flung state it's a good idea to begin to move in the direction of computerization and this is a step in that direction. This measure would make it easier for officers to have a way to verify whether folks have insurance on their cars. SENATOR BUNDE asked if insurance companies have to do more work because of the uninsured drivers and therefore this would impact insurance rates for the good drivers. JEFFERY TROUTT, Deputy Director, Division of Insurance, Department of Commerce, Community & Economic Development, said he didn't know, but promised to get him information on it. He said the true expert on this is Sarah McNair Grove and she was at a conference. 2:07:51 PM SENATOR STEVENS asked how dependable online insurance verification is. MR. TROUTT replied it is being used in other states, but it has some problems. "I'm sure it's one of those things - it's only as good as the data that they have...for keeping a real time data base. The technology continues to get better." CHAIR ELLIS asked him to get that information. SENATOR STEVENS moved to adopt CS for SB 68, version L. There were no objections and it was so ordered. 2:10:15 PM CHAIR ELLIS asked the sponsor to pitch his bill again. SENATOR FRENCH went to the bad data issue and said it's important to keep on the proof of insurance card provision on the books in case of a computer malfunction. The issue is if the department is ready at this point to move forward to a whole new system. SENATOR STEVENS said he felt it makes sense to keep the cards as a transition measure. SENATOR FRENCH concurred. CHAIR ELLIS asked if the committee wanted to act today. SENATOR DAVIS moved to pass CSSB 68(L&C), version L, from committee with individual recommendations. SENATOR BUNDE objected. He thought it would be expensive for the state to implement and it could raise insurance rates for the apparent gain. He thought if this bill were law, it would encourage companies to insure on a monthly basis. 2:18:36 PM SENATOR STEVENS said by law he has to carry the proof of insurance card in his car and asked what if he is stopped and the computer indicates he is insured, but he has forgotten to put the card in his car. SENATOR FRENCH replied that the bill is written so that either form of proof is sufficient. SENATOR BUNDE said he thought the police officer would believe the computer over a card. 2:20:22 PM A roll call vote was taken. Senators Hoffman, Davis, Stevens and Ellis voted yea; Senator Bunde voted nay; and CSSB 68(L&C) passed from committee.