03/30/1994 09:07 AM Senate STA

 CHAIRMAN LEMAN brings up HB 402 (PROOF OF MOTOR VEHICLE INSURANCE)            
 as the next order of business before the Senate State Affairs                 
 Committee.  The chairman calls the first witness.                             
                                                                               
 Number 314                                                                    
                                                                               
 LINDA GIGUERE, Aide to Representative Hudson and the House Labor &            
 Commerce Committee, states HB 402 was introduced at the request of            
 the Alaska Independent Insurance Agents Association.  Ms. Giguere             
 reads the sponsor statement for HB 402.                                       
                                                                               
 CHAIRMAN LEMAN calls the next witness.                                        
                                                                               
 Number 349                                                                    
                                                                               
 HOWARD JAEGER, Shattuck & Grummett Insurance Agency, states HB 402            
 would correct a problem that has arisen with SR22 drivers, and                
 perhaps make it more economical and workable for the insurance                
 industry.                                                                     
                                                                               
 Number 355                                                                    
                                                                               
 SENATOR TAYLOR thinks the situation HB 402 attempts to solve is               
 good, and that HB 402 should not be passed.  Senator Taylor thinks            
 policies should cover drivers, not cars.                                      
                                                                               
 Number 367                                                                    
                                                                               
 MR. JAEGER responds he thinks the problem is, historically                    
 insurance has been sold on a per vehicle basis.                               
                                                                               
 SENATOR TAYLOR interjects that is so the insurance companies can              
 charge a person for a new policy every time.  Europe, Canada, and             
 Australia do not handle insurance in that manner.                             
                                                                               
 MR. JAEGER replies that if perhaps the whole industry were to                 
 change, that could be done.  It is done that way to so that                   
 agencies could figure out the amount of risk they were looking at             
 and how to arrive at an exposure of the potential for loss.                   
                                                                               
 SENATOR TAYLOR comments he thinks the insurance industry is                   
 currently utilizing two standards upon which to determine premiums            
 at this time.                                                                 
                                                                               
 MR. JAEGER says if a person is a preferred driver, that person will           
 be charged the same liability rate for a corvette or a chevette,              
 but would be charged different damage rates.                                  
                                                                               
 Number 404                                                                    
                                                                               
 CHAIRMAN LEMAN does not know if Mr. Jaeger's last comment is                  
 correct, because he is charged different liability rates on several           
 of his vehicles.  He shares some of Senator Taylor's concerns.                
                                                                               
 Number 418                                                                    
                                                                               
 SENATOR TAYLOR states he likes this bill.                                     
                                                                               
 SENATOR DONLEY says Senator Taylor cannot do what he wants to do              
 with HB 402 under the present title, because it addresses SR22                
 cases.                                                                        
                                                                               
 CHAIRMAN LEMAN calls the next witness.                                        
                                                                               
 Number 431                                                                    
                                                                               
 JOHN GEORGE, National Association of Independent Insurers says he             
 will try to answer some of the questions that have been asked                 
 today.  He believes there is one company that will write an                   
 operator policy, as opposed to a vehicle policy.  However, if a               
 person who has coverage on themselves loans their car to another              
 person, that car is not insured.  If the person who is loaned the             
 car has a traditional insurance policy, that would cover them while           
 driving any vehicle, so their coverage would cover the vehicle                
 borrowed from someone who had an operator's policy.  Traditionally,           
 though, insurance follows the vehicle.  Anyone driving that vehicle           
 is covered, unless of course, the vehicle was stolen.                         
                                                                               
 MR. GEORGE states that the problem the insurance companies have, is           
 they are required to file a form with the Division of Motor                   
 Vehicles, using DMV's wording, saying, "No matter what vehicle this           
 person is driving, he is covered."  So this person insures his 1956           
 volkswagen, and also drives an 18-wheeler, professionally.  So the            
 insurance company just insured the liability insurance on an 18-              
 wheeler if that person has an accident and does not have other                
 insurance.                                                                    
                                                                               
 SENATOR TAYLOR asks if he is covered while driving a rental car.              
                                                                               
 SENATOR DONLEY replies he is covered.                                         
                                                                               
 SENATOR DONLEY adds there is a huge other side to this story.  He             
 says he went to the house to testify on HB 402 and was not allowed            
 to testify and present the other side of the story.  He makes a               
 special request to the committee that if the bill is brought back             
 up in committee it be specifically listed in the committee                    
 schedule.  He would very much like the opportunity to present his             
 testimony to the Senate State Affairs Committee.                              
                                                                               
 Number 468                                                                    
                                                                               
 CHAIRMAN LEMAN says he will put it in the committee schedule at               
 least 24 hours in advance of the hearing, and will give Senator               
 Donley a call also.                                                           
                                                                               
 MS. GIGUERE notes that Senator Donley testified on HB 403 in the              
 House Labor & Commerce Committee.