Legislature(2007 - 2008)BELTZ 211

03/06/2007 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Bills Previously Heard/Scheduled
Moved CSSB 84(L&C) Out of Committee
Moved CSSB 68(L&C) Out of Committee
                 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                                                               
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                                                               
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.                                                                                                          

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