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.