HB 175-ELECTRONIC POSTING OF INSURANCE POLICIES  3:25:11 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 175, "An Act allowing, under certain conditions, a property or casualty insurer to provide policies and endorsements to an insured by posting the policies and endorsements on the insurer's Internet website." 3:25:27 PM KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State Legislature, stated that HB 175, sponsored by the House Labor and Commerce Standing Committee, would permit insurers to provide standard property and casualty insurance policies and endorsements to those insured by posting the policies and endorsements on the insurer's website. Current law requires companies to mail or deliver policies in all 50 states. The bill would add posting as a means of access to policies and endorsements. Posting property and casualty insurance policies on insurer's websites will allow insurers to dramatically reduce the number of bulky policy contracts and endorsements they mail to customers each year while improving the accessibility and usefulness of the documents. He referred to an example of an insurance policy in members' packets from Progressive Insurance. Again, the documents are typically lengthy ones so posting represents a direct savings to the consumer and the company. The intent of the bill is to post policies that contain no personally identifiable information and are filed and approved before use. Further, public posting to the website will pose no privacy risk to insureds or any competitive risk to insurers and are strictly policy and endorsement documents. Market research shows consumers often do not read the entire documents, but instead thumb through the document or read a page or two. The website access to lengthy documents such as these is not uncommon, since consumers often receive software licenses or other agreements on-line when purchasing software or other items. 3:27:59 PM MR. JACKSON said some people, including his mother, would not use website technology. Thus, a paper copy is available to those who so desire. He pointed out the documents would be searchable and paper contracts will remain available to consumers. The U.S. Postal Service has increased postage five times since 2006 and this bill is designed to help alleviate some of the postage costs, as well. 3:28:41 PM REPRESENTATIVE HERRON asked if those opposed to this bill would likely be the U.S. Post Service and the paper supply companies. MR. JACKSON responded that no one has contacted the sponsor in opposition to the bill. CHAIR OLSON recalled this is an opt-in program. MR. JACKSON agreed that this bill merely would authorize companies to post the documents on their website since the general policies do not contain any personally identifiable information and thereby anyone who wished to could access the policy via the website. 3:30:34 PM REPRESENTATIVE REINBOLD moved to adopt the proposed committee substitute (CS) for HB 175, labeled 28-LS0327\O, Bailey, 3/22/13, as the working document. CHAIR OLSON objected for purpose of discussion. 3:31:11 PM MR. JACKSON, referring to page 1, line 7, pointed out that the language "provide a policy or endorsement" is inserted to indicate specifically what will be posted is the policy or endorsement. The second change on page 1, line 11, would insert the language "or endorsement," for consistency purposes. Similar changes are made on page 2, lines 1-2, where the language "and endorsements," is inserted and on page 2, line 5, after policy, the language "and endorsements" is inserted. CHAIR OLSON removed his objection. There being no further objection, Version O was before the committee. 3:32:44 PM JOSH ZIELASKIESWISC, Attorney, Progressive Insurance, stated his primary focus is e-commerce. He explained that his chief executive officer visited the Progressive Insurance mailing center and observed numerous boxes of policy contracts awaiting mailing. He related the Progressive Insurance policy is 35 pages in length, which is on the short side for policies. The CEO subsequently tasked him to figure out how to limit mailing out so many policies. The company has conducted product testing and typically the outcome is that policies are thrown out since the policyholders are typically interested in their identification cards and their declarations page since these items contain the information on deductibles, vehicles, and drivers covered under the specific policy. MR. ZIELASKIESWISC outlined the goal of HB 175, which is first, to dramatically reduce the number of paper property and casualty insurance contracts and endorsements printed and mailed each year. Next, the company would like to provide property and casualty insurance contracts and endorsements on a publicly available website for existing and potential insureds to review, save and print whenever they like. Thus, Progressive Insurance would like to post their policies on a publicly available website so people can read the policies and perhaps compare them to other policies. He said one of the added consumer benefits would be to allow comparison. In fact, consumer groups have asked for more openness and transparency between carriers. Additionally, to assist policyholders, each form they purchase will be itemized on their declarations page or issued along with it. Finally, the goal of HB 175 would be to provide simple mechanisms for insureds to access their documents and allow them to request paper copies free of charge. MR. ZIELASKIESWISC stated that even when people buy insurance they typically do not see the printed terms of the contract until the insurance company mails the polices to the policyholders. This bill would further benefit consumers since it allows insurers to fine-tune their efficiencies, which can lower premium costs. Further, the policies and endorsements will be available on demand. Typically, people are not too worried about their policies until they have an accident and want to check specific coverage and exclusions. Rather than necessitate calling an insurance company to ask for a policy or search for it, the policyholders could check on the company's website. 3:38:12 PM MR. ZIELASKIESWISC reiterated the benefits. Additionally, there are green considerations and eliminating these saves natural resources and printing, as well as postage costs. The electronic version is searchable in a PDF, consumers can search and find specific sections within the policy. The policies are typically printed using a 10 or 12 point font; however, the online version can be increased in size for readability. Further, this bill is good for insurance companies, too, for many of the same reasons that the bill is good for consumers. 3:40:17 PM MR. ZIELASKIESWISC related that insurance laws typically lag behind the rest of the financial services. The changes in HB 175 can help modernize insurance laws to bring them in line with the rest of the financial services. He predicted laws like this could also allow more insurance carriers to engage in commerce. He reported that similar changes have been passed in Virginia and Michigan. Additionally, other states are considering similar bills in Arizona, Illinois, Missouri, Kansas, Texas, Florida, Idaho, Ohio, Oregon, Alabama, Colorado, Minnesota, Oklahoma, and Pennsylvania. 3:42:38 PM REPRESENTATIVE JOSEPHSON asked whether the amendment labeled "O.1" has been discussed. MR. JACKSON responded it has not yet been offered. 3:42:45 PM REPRESENTATIVE SADDLER asked whether people could inadvertently change their policy or if this relates to elections that the policyholders have previously elected. MR. ZIELASKIESWISC agreed it only applies to what the policyholders have elected to purchase. The items they purchased will be itemized on their declaration page, but policyholders cannot change their policies inadvertently. 3:44:02 PM REPRESENTATIVE REINBOLD moved to adopt Amendment 1, labeled 28- LS0327\O.1, Bailey, 3/27/13, to HB 175, which read: Page 1, line 2: Delete "and" in both places Insert "or" in both places Page 1, line 9: Delete "personal" Page 2, line 1, following "policy": Delete "and" Insert "or [AND]" Page 2, line 3: Delete "and" Insert "or [AND]" Page 2, line 10, following "policy": Insert "or endorsement" Page 2, line 12, following "policy": Insert "or endorsement" Page 2, line 13, following "policy": Insert "or endorsement" Page 2, line 18: Delete "endorsements" Insert "endorsement without the insured paying a  fee [ENDORSEMENTS]" Page 2, line 19: Delete "endorsements" Insert "endorsement [ENDORSEMENTS]" CHAIR OLSON objected for purpose of discussion. MR. JACKSON explained that Amendment 1 contains a number of technical changes. He referred to the language "policy and endorsement" which he said is the preferred language for consistency. He then referred to one substantive change on page 2, line 18, of Amendment 1, which would add language "endorsement without the insured paying a fee" to ensure that no one would be required to pay for a paper copy of his/her policy or endorsement. 3:46:40 PM REPRESENTATIVE CHENAULT asked whether page 2, line 18, attaches a fee if a person requests a copy of his/her policy. MR. JACKSON answered no, that a person could obtain a copy without paying an additional fee to ensure policyholders are not charged a fee for a printed copy of their policy. CHAIR OLSON [withdrew is objection] and upon determining there were no further objections, announced that Amendment 1 was adopted. 3:47:34 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 175. 3:47:54 PM REPRESENTATIVE CHENAULT asked if anyone has addressed concerns by the Alaska State Troopers or police associations in terms of drivers using electronic insurance policies. He understood that officers do not want the driver to accompany them to their police cars for safety reasons; however, some concern has also been expressed that if an officer were to take the phone to the police vehicle, the driver might suggest calls were made using the phone during the time it was in the officer's possession. 3:49:09 PM MR. ZIELASKIESWISC stated that it seemed more like an identification issue than a policy contract or endorsement issue since people do not typically bring their policy contracts with them in their vehicles and instead will have identification cards in their glove box. The policy cards would be mailed or e-mailed to them, in whichever manner they have elected to receive them, he said. 3:50:00 PM REPRESENTATIVE CHENAULT related a scenario in which advertising shows a cartoon character handing a phone to an officer in response to a request for proof of insurance. He surmised the only reason for an electronic version would be if the person was in a position in which he/she did not have his/her insurance card in his vehicle. He also recalled some discussion about police not wanting to take the phone device. 3:51:04 PM CHAIR OLSON answered that in Alaska, the vehicle insurance is required to physically be in the vehicle as a paper document. CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 175. REPRESENTATIVE REINBOLD moved to report HB 175, labeled 28- LS0327\O, Bailey, 3/22/13, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 175(L&C) was reported from the House Labor and Commerce Standing Committee.