SB 191-JOINT AVIATION INSURANCE ARRANGEMENTS                                                                     
                                                                                                                                
CHAIRMAN  TAYLOR  informed  participants   that  the  committee  has                                                            
already  held several  hearings on  this legislation.   He  proposed                                                            
Amendment 1,  and explained that it  provides further clarification                                                             
from the Division of Insurance.                                                                                                 
                                                                                                                                
SENATOR DONLEY  moved to adopt Amendment 1, which  reads as follows.                                                            
                                                                                                                                
                           AMENDMENT  1                                                                                     
                                                                                                                                
TO:  SB 191                                                                                                                     
                                                                                                                                
     Page 2, line 9                                                                                                             
                                                                                                                                
     Insert a new subsection (b) and re-letter accordingly:                                                                     
                                                                                                                                
     21.77.020  (b)  Before  the air carrier  signs the cooperative                                                             
     agreement,  the  Joint  Aviation  Insurance  Arrangement  shall                                                            
     notify  the air  carrier  in writing  that the  Joint  Aviation                                                            
     Insurance  Arrangement is  not licensed  in this state,  is not                                                            
     subject  to this state's supervision,  and in the event  of the                                                            
     insolvency of the  Joint Aviation Insurance Arrangement, losses                                                            
     will not  be covered under AS 21.80 (Alaska Insurance  Guaranty                                                            
     Association Act).                                                                                                          
                                                                                                                                
                                                                                                                                
CHAIRMAN  TAYLOR  announced  that  with  no  objection,  the  motion                                                            
carried.                                                                                                                        
                                                                                                                                
SENATOR ELLIS asked for clarification.                                                                                          
                                                                                                                                
CHAIRMAN  TAYLOR  said  Amendment  1  provides  additional  sidebars                                                            
because,  "Everybody's  worried  about these  guys  running off  and                                                            
being too thinly financed."                                                                                                     
                                                                                                                                
SENATOR ELLIS proposed Amendment 2, which reads as follows.                                                                     
                                                                                                                              
                             AMENDMENT 2                                                                                    
                                                                                                                                
TO:  SB 191                                                                                                                     
                                                                                                                                
Page 2, lines 5-9:                                                                                                              
         Delete all material and insert:                                                                                        
              "Sec. 21.77.020. Annual report. By October 1 of each                                                            
              year, the administrator of a joint insurance"                                                                     
                                                                                                                                
SENATOR ELLIS  said his intent  is to require  an annual report  and                                                            
that requiring annual reports  seem to be the prevailing attitude on                                                            
the floor today.  He noted  Amendment 2 would require this structure                                                            
to be under the review of the Division of Insurance.                                                                            
                                                                                                                                
CHAIRMAN TAYLOR  said he has no problem  requiring an annual  report                                                            
but he has a problem  with the first part. He therefore  objected to                                                            
Amendment 2 and explained:                                                                                                      
                                                                                                                                
     ...  what  it  does  is  today  it's  a  joint  insurance                                                                  
     arrangement,  which  is not under  the regulation  of  the                                                                 
     Division  of  Insurance,  like  the  pools  are  with  the                                                                 
     schools, and  the amendment would put them back  under the                                                                 
     division and  require an annual report.  And I'll  have to                                                                 
     object to that one.                                                                                                        
                                                                                                                                
SENATOR ELLIS noted the  committee heard testimony from the director                                                            
of the Division  of Insurance that  it would be a good idea  because                                                            
of the risk involved.   He said he supports what Chairman  Taylor is                                                            
trying to do but  he would feel more comfortable if  the Division of                                                            
Insurance had oversight.                                                                                                        
                                                                                                                                
CHAIRMAN TAYLOR stated:                                                                                                         
                                                                                                                                
     I appreciated  that.  My frustration  is if that were  the                                                                 
     case, they  could just form a reciprocal at this  time and                                                                 
     there's  been no  movement towards  that and  part of  the                                                                 
     difficulty  is the  extensive reporting  requirements  and                                                                 
     auditing  requirements, much  of which we've not put  back                                                                 
     into  the bill  or a  good portion  of it  we have,  which                                                                 
     further  will impinge on them  a bit.  Actually, the  JIAs                                                                 
     that  are working  on  the municipalities  in  the school                                                                  
     districts  have basically  a one  paragraph authorization                                                                  
     and they have done the things  they are doing because it's                                                                 
     good business to do it and  not because they were required                                                                 
     to.                                                                                                                        
                                                                                                                                
A roll call vote was taken.   The motion to adopt Amendment 2 failed                                                            
with  Senators  Cowdery,   Therriault,  Donley  and   Taylor  voting                                                            
against, and Senator Ellis voting in favor.                                                                                     
                                                                                                                                
SENATOR ELLIS  moved to adopt Amendment  3, which reads as  follows:                                                            
                                                                                                                                
                            AMENDMENT 3                                                                                     
                                                                                                                              
TO:  SB 191                                                                                                                     
                                                                                                                              
     Page 3, line 3l:                                                                                                           
                                                                                                                                
         Delete "$250,000"                                                                                                      
                                                                                                                                
         Insert "$500,000"                                                                                                      
                                                                                                                                
He said the  doubled amount would  provide a more adequate  level of                                                            
capitalization. The director  of the Division of Insurance testified                                                            
that $250,000 was inadequate.                                                                                                   
                                                                                                                                
CHAIRMAN TAYLOR  said he believes Amendment 3 is fair  and he has no                                                            
objection  to it. With  no other  objection to  Amendment 3,  it was                                                            
adopted.                                                                                                                        
                                                                                                                                
SENATOR DONLEY  moved CSSB 191(JUD)  from committee with  individual                                                            
recommendations. There being no objection, the motion carried.