Legislature(2007 - 2008)BUTROVICH 205
03/27/2007 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB130 | |
| SB68 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 130 | ||
| = | SB 68 | ||
SB 68-MOTOR VEHICLE INSURANCE
CHAIR KOOKESH announced the consideration of SB 68. He asked for
a motion to adopt the committee substitute (CS).
1:53:18 PM
SENATOR COWDERY moved to adopt the proposed committee substitute
to SB 68, labeled 25-LS0342\N, Version N, as the working
document of the committee. There being no objection, the motion
carried.
CHAIR KOOKESH asked the sponsor to present the bill.
1:54:04 PM
SENATOR FRENCH explained that SB 68 will make it easier for
police to verify whether a driver does have insurance on their
car or not. 14 percent of Alaskan drivers are uninsured, but 28
percent of crashes involve an uninsured driver. Currently
there's no method for enforcing a mandatory insurance law; this
bill will make points of contact for verification. There will be
an online method, which has been shown to be effective, as well
as a provision that allows municipalities to impound uninsured
cars.
He pointed out that the committee substitute is the result of
many hours of work with industry representatives to make sure
that the bill is acceptable to everyone.
1:58:02 PM
SENATOR COWDERY asked if the Division of Motor Vehicles (DMV)
checks for insurance on a car.
SENATOR FRENCH replied that currently it's an honor system.
SENATOR COWDERY asked if the new system proposed by the bill
will make proving insurance mandatory.
SENATOR FRENCH replied that if the online system is adopted it
will make it much easier to prove insurance, and gave an example
of how people will show false proof of insurance.
SENATOR COWDERY asked if an amendment to exempt commercial
vehicles would be accepted.
SENATOR FRENCH said that he would; most states exempt commercial
vehicles from the online verification system because of the
relatively low risk of non-insurance.
SENATOR COWDERY asked where in the bill an amendment would best
fit.
SENATOR FRENCH replied that section five would be best.
SENATOR COWDERY made a motion to adopt a conceptual amendment to
SB 68, allowing for the exemption of commercial vehicles.
SENATOR WILKEN objected, and said what works for automobile
drivers should be good for commercial drivers.
SENATOR WIELECHOWSKI asked why commercial vehicles should be
exempted from the bill.
SENATOR FRENCH replied that the DMV said that virtually all
commercial vehicles carry insurance through the driver, and it's
not concerned about such drivers carrying insurance.
SENATOR WIELECHOWSKI asked if the bill creates some sort of
burden for commercial vehicles, and why they should be treated
differently.
SENATOR FRENCH replied that the DMV would have to answer the
question.
2:01:44 PM
MR. BANNOCK said that commercial vehicles would only be exempted
from electronic verification of insurance. Many commercially
owned vehicles are self insured and thus wouldn't be included in
the system; also, in the commercial category there are 50,000
vehicles in the state out of a total of 900,000 registered
vehicles, so clearly most vehicles are not commercial.
He added that he would prefer to use the language "vehicles
registered commercially" as opposed to "commercial vehicles";
rental car companies are self-insured commercial vehicles as
well.
SENATOR WIELECHOWSKI replied that he understood the difficulties
of including commercial vehicles in the online system, and asked
for the number of accidents involving uninsured commercial
vehicle.
MR. BANNOCK replied that he didn't have state data, but that
nationally, accidents and injuries involving commercial vehicles
compose less than 5 percent of the total, even including
situations where the commercial vehicle is not at fault.
2:05:33 PM
SENATOR WIELECHOWSKI asked for a summary of any burden incurred
by including commercial vehicles in the bill.
MR. BANNOCK replied that he didn't have a prepared answer, but
that self-insured vehicle information is not readily available
online.
SENATOR COWDERY asked how many drivers without insurance also do
not have a valid license.
MR. BANNOCK replied that he didn't have the number available.
SENATOR OLSON asked how often commercial vehicle accidents cause
the victims to go on social assistance due to injuries or
financial ramifications.
MR. BANNOCK said that he didn't have any related data.
SENATOR OLSON asked if the sponsor had such information.
SENATOR FRENCH said that he couldn't answer the question.
SENATOR OLSON asked how a person proves self-insurance.
MR. BANNOCK said that the matter is addressed in AS 28.10.
CHAIR KOOKESH asked for a suggestion for an appropriate place
for the conceptual amendment.
SENATOR FRENCH suggested language for the amendment, and that it
could be put in section five of the bill.
SENATOR WIELECHOWSKI asked if it was Chair Kookesh's intent to
move the bill that day.
CHAIR KOOKESH replied that he had intended to move the bill, but
that there seemed to be concern about the amendment.
SENATOR FRENCH said that the timeline was at the will of the
committee.
SENATOR OLSON said that commercial vehicles would be encumbered
by being included in the bill's online verification element.
CHAIR KOOKESH said that he didn't have the intention of keeping
the bill in committee.
SENATOR FRENCH commented that the bill does go to another
committee after leaving the Senate Transportation Standing
Committee.
CHAIR KOOKESH replied that he'd like to get the work done in the
current committee.
SENATOR FRENCH repeated the suggested language for the
conceptual amendment.
2:11:23 PM
CHAIR KOOKESH asked if there was further objection to the
amendment.
SENATOR WILKEN said that he maintained his objection.
There was a roll call vote, and Senators Cowdery, Olson,
Wielechowski, and Chair Kookesh voted yes; Senator Wilken voted
no. Therefore, the conceptual amendment to SB 68 passed 4:1.
2:12:21 PM
CHARLES PECCHIO, president of VeriSol Verification Solutions
Incorporated, said that the major issue with the approach to
verifying insurance is that proof can easily be forged or
misrepresented. There have been pilot programs done in several
states with the online approach, which performs real time
verifications; the accuracy is equivalent to calling the
insurance company on the phone. He explained that the existing
system isn't changing with the bill, just becoming more
effective.
He added that less than one half of one percent of commercial
vehicles are uninsured. Commercial vehicles will be included in
the program in the future.
2:17:21 PM
SENATOR COWDERY asked if insurance companies can legally give
out insurance information in response to public inquiry.
MR. PECCHIO replied that the insurance companies provide the
data directly to the state, and it is not made public.
SENATOR COWDERY asked how the situation of cancelled policies is
addressed.
MR. PECCHIO replied that the system can automatically check for
cancelled insurance, and it is updated on a daily basis.
SENATOR COWDERY asked for the cost of the program to the state.
MR. PECCHIO replied that the state would pay a monthly fee
ranging from 1 to 3 cents per vehicle per month.
2:19:54 PM
SENATOR WILKEN remarked that two states are starting full-on
online verification programs, and asked for any others that may
be using it.
MR. PECCHIO replied that Florida was the first state to use the
program, and Wyoming is currently in a pilot stage. Oklahoma and
Texas are getting the program started soon.
SENATOR WILKEN asked if there are any states that have been
operational for at least a year.
MR. PECCHIO replied that the specifications were released only a
year ago.
SENATOR WILKEN asked how the software would work in a
theoretical situation.
MR. PECCHIO explained how the software operates.
SENATOR WILKEN asked for clarification on the use of the
software.
MR. PECCHIO replied in explaining that there are several
different ways of researching a vehicle in the system.
2:24:25 PM
SENATOR WILKEN asked if an active and reliable internet
connection is needed at all times for the system to work
properly.
MR. PECCHIO replied that that was correct. The same sort of
technology is used with credit card verification software.
SENATOR WILKEN replied that many places in the state have uneven
internet access, and asked who else in America offers similar
software.
MR. PECCHIO replied that there are no competitors so far.
2:25:30 PM
SENATOR WIELECHOWSKI asked if the system has ever been hacked or
if any data has ever been lost.
MR. PECCHIO replied that the system has never been hacked, and
the company doesn't maintain any data itself.
2:26:09 PM
SENATOR FRENCH said that the bill includes language that allows
for proof of insurance such as a card, and that the internet
system is just an option. The department and individual officers
will have room for interpretation.
SENATOR OLSON said that some people are suspicious of
questionable or erroneous information, and he wants to make sure
that there won't be any harassment incurred by the bill.
SENATOR FRENCH said he shares the concern.
SENATOR OLSON asked if there's a way to lower premiums through
the action of the bill.
SENATOR FRENCH replied that the objective is to reduce the
number of uninsured drivers, and ideally premiums would be
reduced as a result.
SENATOR WILKEN cautioned against moving the bill too quickly, as
it's a huge policy call that could end badly; more opinions
should be solicited.
CHAIR KOOKESH said that he had previously let the bill sit in
committee for a week.
SENATOR FRENCH commented that he neither pushes nor pulls his
bills.
2:30:49 PM
TOM MCGRATH, representing himself, said that he has worked with
similar bills in the past, and asked the committee to consider
the bill, which is well-crafted. People who do not have
insurance are a costly liability. He related the impact of
uninsured drivers on his business, and encouraged the committee
to move the legislation forward.
2:33:31 PM
KENTON BRINE, Northwest Regional Manager of the Property
Casualty Insurers Association of America (PCIAA), said that he
thinks the bill is now headed in the right direction. He has
been working with Senator French and his aide to improve the
legislation, in the areas of the effective date and terms of use
of the program by the DMV.
He added that more specification should be added in terms of
access to the database. The PCIAA is also interested in the
forms of identifiers to be used; some companies don't provide
Vehicle Identification Numbers (VIN) in their insurance
policies.
He cautioned the committee that there is no perfect system for
getting uninsured drivers off the roads; any crackdown will work
for a certain amount of time, but not forever. Making insurance
as affordable as possible is perhaps the most effective way of
fixing the problem.
2:39:21 PM
SENATOR WIELECHOWSKI asked if the ideal effective date would be
in 2009.
MR. BRINE replied affirmatively.
SENATOR WIELECHOWSKI asked if the sponsor had any comment on the
effective date.
ALLISON BIASTOCK, aide to Senator French, said that the final
bill would include language pertaining to the effective date.
The DMV has said it would be ready earlier than 2009.
SENATOR WIELECHOWSKI asked if the effective date, as currently
written, would be 90 days from signing.
MS. BIASTOCK replied that the DMV would be able to get the
program up and running with the 90-day effective date.
SENATOR OLSON asked if the major difficulty would be getting the
technology in place.
MS. BIASTOCK replied that the program would be using the
existing computer system; it's a matter of getting the software.
SENATOR OLSON said that there's no reason to wait until 2009 to
put the program in place.
2:41:14 PM
CHAIR KOOKESH asked for the will of the committee.
SENATOR COWDERY motioned to report the committee substitute to
SB 68, as amended, from committee with individual
recommendations and accompanying fiscal notes. There being no
objection, CSSB 68(TRA) moved from the Senate Transportation
Committee.
CHAIR KOOKESH asked the sponsor to look at the amendment to make
sure the title would still be appropriate.
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