SB 157-CANCEL INSUR. ON CERTAIN VACANT PROPERTY                                                                     
                                                                                                                              
                                                                                                                                
4:38:55 PM                                                                                                                    
CHAIR OLSON announced the consideration of SB 157.                                                                              
                                                                                                                                
4:39:19 PM                                                                                                                    
DANA OWEN, Aide, Senate Labor  and Commerce Committee, sponsor of                                                               
SB 157,  explained that the  purpose of  the bill was  to correct                                                               
what some  insurance companies  believe is  a shortcoming  in the                                                               
statute. This  amendment would clarify that  an insurance company                                                               
is  able to  cancel  an  insurance policy  if  the  risk that  is                                                               
insured against increases.                                                                                                      
                                                                                                                                
The  Labor  and  Commerce  Committee  deleted  the  reference  to                                                               
"unoccupied"  property  because  so  many  Alaskans  leave  their                                                               
dwellings for long periods. The new  language on page 2, lines 6-                                                               
9, [which amends AS 21.36.210(f)]  adds the following reason that                                                               
an insurer may cancel a policy of personal insurance:                                                                           
                                                                                                                                
          (6) vacancy of the insured property that                                                                              
     increases a hazard insured  against; in this paragraph,                                                                    
     "vacancy" means  entire abandonment of the  property by                                                                    
     the insured and the  property does not contain contents                                                                    
     of substantial utility.                                                                                                    
                                                                                                                                
CHAIR OLSON questioned the urgency of the bill.                                                                                 
                                                                                                                                
MR. OWEN responded that insurance  companies saw the ambiguity in                                                               
the statutes and wanted clarification.                                                                                          
                                                                                                                                
SENATOR WAGONER commented  on the downturn in  the Alaska economy                                                               
in 1980s  when people  dropped their  keys at  the bank  and left                                                               
their homes  full of items  that were of substantial  utility. He                                                               
said  he understood  the  concern,  but had  a  problem with  the                                                               
language.                                                                                                                       
                                                                                                                                
4:46:22 PM                                                                                                                    
SHELDON WINTERS,  Lobbyist, State  Farm Insurance, said  he would                                                               
address previous  questions. He agreed with  Senator Wagoner that                                                               
the language  in the CS was  very restrictive, but it  was better                                                               
than  the current  statute.  With regard  to  the question  about                                                               
urgency,  he said  this is  an  effort to  keep rates  as low  as                                                               
possible. All other states have  adopted a similar provision with                                                               
no opposition.                                                                                                                  
                                                                                                                                
SENATOR MENARD  confirmed that the  Labor and  Commerce Committee                                                               
deliberated on the language.                                                                                                    
                                                                                                                                
CHAIR OLSON announced he would hold SB 157 in committee.