Legislature(2001 - 2002)

03/27/2001 01:30 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                SENATE LABOR & COMMERCE COMMITTEE                                                                             
                          March 27, 2001                                                                                        
                             1:30 pm                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Randy Phillips, Chair                                                                                                   
Senator Alan Austerman                                                                                                          
Senator John Torgerson                                                                                                          
Senator Bettye Davis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Loren Leman                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 150                                                                                                              
"An Act relating to insurance premiums for rental motor vehicles."                                                              
                                                                                                                                
     MOVED HB 150 OUT OF COMMITTEE                                                                                              
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
HB 150 - No previous action to consider.                                                                                        
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Amy Erickson                                                                                                                
Staff to Representative Murkowski                                                                                               
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on HB 150 for sponsor.                                                                          
                                                                                                                                
Ms. Deane Tesnar                                                                                                                
Division of Insurance                                                                                                           
Department of Community and Economic Development                                                                                
P.O. Box 110805                                                                                                                 
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Supported HB 150.                                                                                         
                                                                                                                                
Mr. Charlie Miller                                                                                                              
ANC Rental/Hertz                                                                                                                
P.O. Box 102286                                                                                                                 
Anchorage AK 99510                                                                                                              
POSITION STATEMENT: Supported HB 150.                                                                                         
                                                                                                                                
Mr. Charles Rubin                                                                                                               
Rubin and Firella LLT                                                                                                           
New York, NY                                                                                                                    
POSITION STATEMENT: Supported HB 150.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-13, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
          HB 150-INSURANCE PREMIUMS FOR RENTAL VEHICLES                                                                     
                                                                                                                              
CHAIRMAN RANDY PHILLIPS called the Senate Labor & Commerce                                                                    
Committee meeting to order at 1:30 pm. and announced HB 150 to be                                                               
up for consideration.                                                                                                           
                                                                                                                                
MS. AMY ERICKSON, Staff to Representative Murkowski, said:                                                                      
                                                                                                                                
     In 1999,  the legislature enacted  SB 87, which  required                                                                  
     the Division of Insurance to license motor vehicle rental                                                                  
     agencies  that  sell  insurance products  to  rental  car                                                                  
     customers.  After implementation,  it  became clear  that                                                                  
     while  this  requirement was  appropriate  for  full-time                                                                  
     producers, it  was not practical for the incidental  sale                                                                  
     of insurance products by rental car agencies.                                                                              
                                                                                                                                
     The funds generated  by premium insurance are  minimal in                                                                  
     relation  to  the  entire  rental  transaction,  but  the                                                                  
     current  statute requires that  each location maintain  a                                                                  
     trust  account and an  account for  premiums. Because  of                                                                  
     nominal  funds generated,  the statute  requiring  rental                                                                  
     agencies to maintain separate accounts is unnecessary and                                                                  
     impractical.  The statute does  not contain an  exemption                                                                  
     from  this  requirement  or  provide  discretion  by  the                                                                  
     director or enforcement of these requirements.                                                                             
                                                                                                                                
     HB  150  eliminates the  requirement  of  separate  trust                                                                  
     accounts   and  frees  rental   car  agencies  from   the                                                                  
     unnecessary  requirement  to hold  insurance premiums  in                                                                  
     separate trust accounts. Customers  will see no change in                                                                  
     how they buy add-on insurance products. The bill balances                                                                  
     protection   of  the  consumer   with  the  benefits   of                                                                  
     reasonable compliance.                                                                                                     
                                                                                                                                
MS. DEANE TESNER, Division of Insurance, supported HB 150.                                                                      
                                                                                                                                
MR. CHARLIE MILLER, ANC Rental and Hertz Rental Car Corporations,                                                               
supported HB 150. He said, "It is a good clean up measure for what                                                              
was intended in SB 87."                                                                                                         
                                                                                                                                
Number 500                                                                                                                      
                                                                                                                                
MR. CHARLES RUBIN, Rubin and Firella, LLT., said they are general                                                               
counsel for Alamo, National, Hertz, Avis and others. He supported                                                               
HB 150 saying it just cleaned up the intent of SB 87.                                                                           
                                                                                                                                
SENATOR TORGERSON moved to pass HB 150 from committee with                                                                      
individual recommendations with the accompanying $0 fiscal note.                                                                
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
CHAIRMAN PHILLIPS adjourned the meeting at 1:37 pm.                                                                             

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