Session: State Capitol, Room 408 Juneau, AK 99801-1182 Phone: (907) 465-3783 Fax: (907) 465-2293 Subscribe to Newsletter District 14 and L & C Committee Info Interim: 716 W 4th Avenue, Suite 650 Anchorage, AK 99501-2133 Phone: (907) 269-0174 Fax: (907) 269-0177

Sponsor Statement for 150
Insurance Premiums for Rental Vehicles

An Act relating to insurance premiums for rental motor vehicles.

Released: February 28, 2001

House Bill 150 corrects the unintended consequence of Senate Bill 87 enacted in 1999, which requires motor vehicle rental companies to hold funds received from renters who purchase insurance products in separate trust accounts.

Senate Bill 87 gave the director of the Division of Insurance the authority to waive certain bond requirements but failed to do so for fiduciary accounts required of motor vehicle rental agencies. Because of the nominal revenues generated by the incidental sale of insurance, separate trust accounts are extremely impractical and logistically impossible for small rental companies-their primary business is vehicle rental, not insurance. House Bill 150 remedies the waiver omission for motor vehicle companies by eliminating the requirement that funds received be placed in separate fiduciary accounts.

The Division of Insurance and representatives of the rental car industry have worked in tandem to develop the language contained in House Bill 150. The parties agree that the measure corrects the unintended omission of account requirement waivers for motor vehicle rental agencies. I urge your favorable support.

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