02/05/1998 01:40 PM Senate L&C

          SB 158 - INSURANCE CHANGES FOR DR. LIC REVOC.                        
                                                                               
CHAIRMAN LEMAN announced SB 158 to be up for consideration.                    
                                                                               
MR. JOE AMBROSE, Aide to Senator Taylor, sponsor, said they have a             
proposed committee substitute.  He explained that the original bill            
applied to all the violations that are subject to the "use it and              
lose it" law; the committee substitute applies only to a "minor                
consuming."  In other words they have narrowed the scope of the                
legislation.                                                                   
                                                                               
SENATOR MACKIE moved to adopt CSSB 158 version H.  There were no               
objections and it was so ordered.                                              
                                                                               
MR. AMBROSE said because the law results in the suspension or                  
revocation of a minor's drivers license, insurance rates for both              
the minor and his parents increase if coverage is offered at all.              
SB 158 is intended to correct the situation by prohibiting an                  
insurer from exercising its right to cancel a policy or raise rates            
based solely on a license suspension for a minor consuming.                    
                                                                               
MS. JUANITA HENSLEY, Chief, Driver Services, testified when this               
bill was passed three years ago the legislature did not want to                
penalize these individuals with SR 22, high risk insurance.  The               
use it or lose it law was intended to be remedial, not punitive.               
Since it did not involve a motor vehicle, SR 22 should not be                  
required.  The legislature agreed and that was put in Title 28.                
Since then it has been found that insurance companies have been                
charging surcharges to families who have minors whose licenses are             
revoked under the use it/lose it law.  She has had several                     
complaints.  In some cases the insurance industry is requiring                 
clients to either exclude the minor from the policy and cancel the             
driver's license until the 18th birthday or to pay increased the               
premiums so the family can't afford insurance any more.  This is               
not the intent of the legislation.                                             
                                                                               
MS. SARAH MCNARE GROVE, Insurance Analyst, Division of Insurance,              
said they support SB 158 because they have also received complaints            
from parents who say their insurance rates have gone up because                
their kids have had their license revoked for an administrative                
reason.                                                                        
                                                                               
MR. JOHN GEORGE, National Association of Independent Insurers, said            
that an underage driver, even though he is not drinking, is using              
bad judgement by drinking at all.  The fact that they drink while              
not driving might just mean that they haven't been caught drinking             
and driving.  Their basic opposition with the bill is that                     
insurance companies are very competitive and some companies may                
choose this as a rating criteria and this is a competitive                     
difference.  All companies resist what they may and may not use by             
the legislature.  All rates have to be approveD by the Division of             
Insurance and in the rating plan you list the things that will be              
penalized and they will be approved or disapproved.  The fact that             
the Division of Insurance supports the bill implies to him that if             
they make a filing and used  an administrative revocation for the              
reason for increasing or denying coverage, the Division would deny             
that.                                                                          
                                                                               
CHAIRMAN LEMAN asked if there was a substantial cost to the                    
insurance company for the reinstatement of an administrative                   
revocation of a license that this bill would prevent the collection            
of.                                                                            
                                                                               
MR. GEORGE replied that he didn't think there would be a great                 
cost.  It is interesting, though, if a license is under suspension,            
there is no reason that the individual should be included under the            
insurance policy because they would be driving without a license.              
He thought the real concern would be when they got their license               
back.                                                                          
                                                                               
CHAIRMAN LEMAN asked if these revocations are only from the minor              
consuming or the minor in the presence of other minors consuming.              
                                                                               
Number 495                                                                     
                                                                               
MS. HENSLEY said it could relate to minors who are at a party, but             
who aren't consuming, but because they are within an arms-reach of             
alcohol they can be charged; and their license will be revoked.                
                                                                               
MR. GEORGE asked if they were talking of ages up to 18.                        
                                                                               
MS. HENSLEY replied up through 21.                                             
                                                                               
SENATOR MACKIE said he voted for the legislation being discussed               
and it was designed to serve as a deterrent for minors to consume;             
and not designed as a way to increase insurance rates.  This is the            
issue.                                                                         
                                                                               
MR. GEORGE said he didn't have an opinion, but he didn't disagree              
necessarily.                                                                   
                                                                               
Number 462                                                                     
                                                                               
SENATOR MILLER said he didn't see a great administrative cost to an            
insurance company to add or subtract an individual's name from an              
existing policy, because 99.9 percent of these are going to be on              
parent's policies vs. and individual child's policy.                           
                                                                               
CHAIRMAN LEMAN said he wanted to hold this bill and take it up at              
the next meeting.