SB 52-PORTABLE ELECTRONICS INSURANCE  1:33:53 PM CHAIR DUNLEAVY announced the consideration of SB 52 and asked for a motion to adopt the work draft committee substitute (CS). SENATOR MICCICHE moved to adopt CS for SB 52, labeled 28- LS0461\N, as the working document. CHAIR DUNLEAVY objection for discussion purposes. 1:34:35 PM SENATOR JOHN COGHILL, sponsor of SB 52, explained that the bill provides more nimble insurance for portable electronic devices and establishes a best practices rule for Alaska. He deferred the detailed explanation to his intern Kari Nore. 1:35:49 PM KARI NORE, Intern to Senator John Coghill, sponsor of SB 52 stated that this legislation seeks to bring structure to the electronics insurance market and protect consumers. She explained that homeowner's insurance does not necessarily cover the theft of a portable electronic device, like a laptop computer, from the homeowner's car or home. She offered to provide a sectional analysis of SB 52. CHAIR DUNLEAVY suggested she hit the major spots and the committee would ask questions. MS. NORE explained that a main point of the bill adds portable electronics insurance to the list of insurances that are not included under "service contract." Section 2 adds a new subsection [AS 21.03.021(g)] to clarify that Title 21 does not apply to a portable electronics manufacturer's warranty or extended warranty. Section 4 adds a new paragraph (8) [to AS 21.27.150(a)] to allow the director of insurance to issue a portable electronics limited producer license to a vendor that sells or offers portable electronics insurance. The license covers the vendor and employees for all locations in the state where the vendor sells the products. The employees do not have to be licensed as long as they are not compensated based on the sale of insurance, the vendor has a training program, and the vendor maintains a registry. 1:38:23 PM SENATOR MICCICHE summarized that a business like ACS or Radio Shack has the license to sell the insurance and employees of the business can sell under that license as long as their compensation isn't based on the sale of that insurance. MS. NORE agreed. She continued to explain that Section 5 defines portable electronics insurance, lists the materials that must be presented to the consumer in writing, defines the procedure for modification of the terms of the insurance, defines the procedures to terminate the insurance, and lists the types of devices that will be covered under portable electronics insurance. Section 6 provides an effective date of January 1, 2014 to allow the Division of Insurance time to complete installation of a new software program for data entry. This will prevent the bill from having a fiscal impact. 1:39:51 PM SENATOR MICCICHE described the legislation as timely, and noted that Alaska will be the 44th state to adopt this legislation. SENATOR OLSON questioned why the sponsor was bringing the legislation forward if there were no complaints. MS. NORE responded that the legislation was proactive and anticipated what could be a problem in the near future. SENATOR OLSON questioned the need to pass a law that addresses a problem that doesn't exist now and because technology changes so quickly, might not address an issue that arises in five or ten years. 1:41:15 PM RYNNIEVA MOSS, staff for Senator Coghill, said the sponsor has been convinced that portable electronic devices are creating a new industry in the insurance world and regulation is needed. Consumers need to know if they are receiving coverage when they purchase the produce or if they're paying for separate insurance coverage. Because of nuances in this industry, the sponsor feels regulation is justified. SENATOR OLSON asked if states that have similar legislation have had complaints from consumers. MS. MOSS acknowledged that she didn't know and emphasized that the intent is to protect the consumer. SENATOR MICCICHE commented that replacing electronic devices can be expensive and he would be interested in the product. CHAIR DUNLEAVY asked if evidence from other states indicates that in the future Alaska will need such a law and that the sponsor was being proactive. MS. NORE confirmed that the sponsor was preemptively introducing the legislation to ensure consumer protection in the future. 1:44:54 PM SENATOR OLSON asked what insurance companies think of this type of legislation. MS. NORE said she was not aware of any opposition to the bill. MS. MOSS highlighted that vendors of insurance have objected to the language on page 6, lines 10-16, because it requires additional recordkeeping and paperwork. She explained that the sponsor included the language to accommodate the division of insurance, but the current director has indicated that he would not object to removing the language. One company also raised concern with existing statutory language on page 2, line 9, relating to power surges. She said she wanted further clarification before deleting that language, because it addresses service contracts and the bill addresses portable electronics insurance. 1:46:59 PM BRET S. KOLB, Director, Division of Insurance, Department of Commerce, Community and Economic Development (DCCED) offered to answer questions. SENATOR OLSON asked if the department supported the bill. MR. KOLB answered that the department is supportive of SB 52. CHAIR DUNLEAVY asked if he sees any issues with the bill. MR. KOLB confirmed that he did not object to removing the language on page 6. The division has sufficient authority to provide needed protections so that language is redundant. CHAIR DUNLEAVY removed his objection, and version N was before the committee. He stated that he would hold SB 52 in committee for further consideration.