(JUNEAU)- The Alaska House of Representatives unanimously approved House Bill 120 by a vote of 34 to zero on Tuesday. Sponsored by Majority Leader John Coghil Jr. (R-North Pole), HB 120 exempts service contracts from regulation under Title 21 insurance statutes. Coghill said an ambiguity in the law needed to be clarified.

"Service contracts are important to Alaskan consumers," Coghill said. "To keep these contracts available, manufacturers must be assured that Alaska's laws do not over-regulate these agreements and discourage local repair shops and retail subsidiaries from offering them."

HB 120 exempts service contracts from Alaska's insurance statutes without requiring more government for regulation overview. Service contracts cover repair and replacement from a faulty part or predictable wear and tear. Insurance provides repair or replacement after unpredictable perils such as fire, earthquake, or flood. Under HB 120, vendors of motor vehicle service contracts or home appliance warranties do not have to be licensed to sell insurance; however, the Division of Insurance will continue to collect premium taxes on those contracts.

"HB 120 guarantees that consumers have easy access to service contracts through local sources, and, at the same time, avoids creating a whole new set of laws for the state to regulate," Coghill said.

HB 120 moves to the Senate.

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