Legislature(2013 - 2014)BELTZ 105 (TSBldg)
04/18/2014 07:30 AM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB206 | |
| HB28 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 206 | TELECONFERENCED | |
| + | HB 28 | TELECONFERENCED | |
HB 206-MOTOR VEHICLE SERVICE CONTRACTS
7:35:09 AM
CHAIR DUNLEAVY announced the consideration of HB 206."An Act
relating to motor vehicle service contracts; exempting motor
vehicle service contracts from regulation as insurance; and
providing for an effective date." He noted that this was the
first hearing and there was a work draft committee substitute
(CS), Version P
7:35:19 AM
SENATOR MICCICHE moved to adopt the work draft Senate CS for HB
206, labeled 28-LS0501\P, as the working document.
CHAIR DUNLEAVY objected for discussion purposes.
STEVE RICCI, Aide, Senate Labor and Commerce Standing Committee,
introduced the Senate CS for HB 206. He explained that the CS
clarifies the language in service agreements, focusing on the
replacement of fluids, oil filters, and replacement parts during
regular motor vehicle maintenance. The CS also provides
clarifying language about undercoating. He deferred technical
questions to Stephen McDaniel.
7:36:21 AM
CHAIR DUNLEAVY removed his objection.
7:36:32 AM
STEPHEN MCDANIEL, Assistant Executive Director, Service Contract
Industry Council (SCIC), Tallahassee, Florida, said that SCIS is
a national trade association that represents the service
contract industry before regulators and legislators. He
explained that HB 206 is based on a model that was adopted by
the NAIC in the early 1980s and is consistent with the national
trend for the regulation of this product. HB 206 will provide a
manner of doing business in Alaska that is consistent with how
service contract businesses are treated in a majority of the
country.
CHAIR DUNLEAVY asked him to describe what the bill does.
MR. MCDANIEL explained that the legislation establishes a
regulatory framework for offering motor vehicle service
contracts in Alaska. Anyone providing these products must
register with the Division of Insurance and demonstrate
financial responsibility to ensure that Alaskan consumers are
protected when they purchase the products. The bill also
establishes something like a consumer bill of rights so that the
service contracts have disclosures to ensure that consumers may
cancel the contracts at any time and receive pro rate refunds.
The Division of Insurance has enforcement authority over the
industry.
7:38:22 AM
SENATOR OLSON asked what problems or complaints the bill is
intended to rectify.
MR. MCDANIEL replied he didn't know that there have been
complaints, but the bill allows the industry to do business with
some regulatory certainty in the state by registering and
complying with requirements similar to those found in other
states.
SENATOR OLSON again asked what kind of direct consumer
complaints the bill rectifies, and expressed doubt about the
need for the law.
MR. MCDANIEL explained that this law protects Alaska consumers
who purchase these products. It ensures that providers adhere to
the promises they make in these contracts by requiring the
providers to carry insurance that backs their obligations. It
also outlines the types of coverage that could be offered within
a service contract in Alaska.
SENATOR OLSON asked for confirmation that the bill is not
responding to any complaints that have been made in the state of
Alaska.
MR. MCDANIEL deferred the question to the Division of Insurance.
CHAIR DUNLEAVY asked Mr. Hester if the Department of Commerce,
Community and Economic Development (DCCED) had a position on the
bill.
7:40:56 AM
MARTY HESTER, Deputy Director, Division of Insurance, Department
of Commerce, Community and Economic Development (DCCED), advised
that the division has worked on this legislation for years to
allow the industry to offer the products they've wanted to offer
while ensuring that Alaska consumers have the protections they
need. The division believes that HB 206 meets this goal.
SENATOR OLSON asked if Alaska law is unclear with regard to
motor vehicle service contracts.
MR. HESTER replied the law isn't unclear but the different types
of products that different companies offer does create a clarity
issue. HB 206 would address the issue by providing the
regulatory structure for the products to be similar in nature,
by establishing the financial responsibilities of the contract
providers, and by allowing the division to oversee the consumer
protection aspects.
SENATOR OLSON commented that he doesn't want somebody who isn't
from Alaska dictating what happens in Alaska.
CHAIR DUNLEAVY opened and closed public testimony. Finding no
further questions or comments, he solicited a motion.
7:43:32 AM
SENATOR MICCICHE moved to report HB 206, Version P, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR DUNLEAVY announced that without objection, SCS CSHB
206(L&C) moved from the Senate Labor and Commerce Standing
Committee.