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Progressive Insurance Co. v. Simmons (2/20/98), 953 P 2d 510


     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 


PROGRESSIVE INSURANCE CO.,    )
                              )    Supreme Court No. S-7617
             Appellant,       )
                              )    Superior Court No.
     v.                       )    3AN-93-05833 CI
                              )
MARIE SIMMONS as Mother of    )    O P I N I O N
TEISHA SIMMONS and STATE OF   )
ALASKA, DIVISION OF MEDICAL   )
ASSISTANCE,                   )
                              )
             Appellees.       )    [No. 4949 - February 20, 1998]
______________________________)



          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                        John Reese, Judge.


          Appearances:  Gregory G. Silvey, Guess & Rudd,
Anchorage, for Appellant.  Michael W. Flanigan, Walther & Flanigan,
Anchorage, for Appellee.


          Before:  Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.  


          BRYNER, Justice.
          


I.   INTRODUCTION
          In this appeal, we must decide whether recent statutory
amendments expanding the scope of underinsured motorist coverage
also impliedly repealed a facially unaltered statutory definition
of "underinsured motor vehicle,"which narrowly restricts the
circumstances triggering underinsured motorist coverage.  We
conclude that implied repeal must be found.
II.  FACTS AND PROCEEDINGS
          The parties do not dispute the relevant facts.  Fifteen-
year-old Teisha Simmons suffered serious injuries in a single-car
accident near Galena in 1992; Simmons was a passenger at the time.
The car's driver was insured under an automobile insurance policy
with Progressive Northwestern Insurance Company (Progressive).  The
policy provided liability coverage for bodily injury in the amounts
of $50,000 per person and $100,000 per accident, as well as
uninsured motorists (UM)/underinsured motorists (UIM) protection in
like amounts.  For purposes of the policy's UIM coverage, Simmons
was deemed to be an insured person.
          Simmons's bodily injuries resulted in damages totaling
more than $100,000.  Through her mother, Simmons sought separate
payments of policy limits from Progressive under both the liability
and UIM policies. [Fn. 1]  Progressive tendered payment of policy
limits under the liability portion of the policy but denied
Simmons's UIM benefits claim.  Simmons and Progressive agreed to a
partial settlement, pursuant to which Simmons accepted policy
limits under the liability coverage, while reserving the right to
litigate her UIM claim through a superior court action. 
          The parties eventually filed cross-motions for summary
judgment on the UIM claim.  Superior Court Judge John Reese granted
Simmons's motion, finding that Simmons was entitled to recover UIM
payments in addition to the liability payments she had already
received.  The court entered judgment against Progressive for the
full single-person limit of the UIM policy.
          Progressive appeals the superior court's determination
that Simmons is entitled to UIM benefits. 
III. DISCUSSION
     A.   Standard of Review

          This appeal involves questions of statutory construction,
which we resolve de novo by applying our independent judgment.  See
Deal v. Kearney, 851 P.2d 1353, 1356 n.4 (Alaska 1993).  In so
doing, we have a "duty . . . to adopt the rule of law that is most
persuasive in light of precedent, reason, and policy."  Guin v. Ha,
591 P.2d 1281, 1284 n.6 (Alaska 1979).
     B.   Did Simmons's Accident Involve an "Underinsured Motor
Vehicle"as that Term Was Defined in Former AS 28.20.445(h)?

          Progressive asserts that the car Simmons was riding in
when she was injured was not underinsured.  Progressive further
asserts that involvement of an underinsured motor vehicle is
necessary to trigger UIM coverage.  Accordingly, in Progressive's
view, Simmons had no right to UIM payments. [Fn. 2] 
          Under AS 21.89.020(c), insurance companies writing
automobile liability policies in Alaska must offer coverage for
damages caused by drivers of "uninsured or underinsured motor
vehicles."  Here, as we have already indicated, it is undisputed
that Simmons was an "insured person"under a Progressive policy
providing liability and UIM coverage with $50,000/$100,000 per
person/per accident limits.  
          To determine whether the car was an "underinsured motor
vehicle,"we turn to former AS 28.20.445(h), which was in effect at
the time of Simmons's accident.  This subsection defined the term
to mean a car with liability coverage for bodily injury in an
amount that 
               (1) is less than the limit for . . .
underinsured motorists coverage under the insured's policy;  or

               (2) has been reduced by payments to
persons other than an insured, injured in an accident, to less than
the limit for . . . underinsured motorists coverage under the
insured's policy. [Fn. 3]

          Under this definition, Simmons's accident did not involve
an underinsured motor vehicle: subparagraph (1) does not apply to
Simmons, since the limits of Progressive's liability coverage were
equal to, not "less than,"those of its UIM coverage; subparagraph
(2) likewise does not apply, since the only payment reducing the
liability coverage available to Simmons was the payment to Simmons
herself -- an insured person under the policy rather than a
"person[] other than an insured."  If this definition governed
Simmons's case, Simmons would not have suffered damages caused by
the driver of an underinsured motor vehicle; hence, her right to
UIM benefits would never have been triggered.  
     C.   Did the 1990 Revision of the Uninsured and Underinsured
Motorists Statute, AS 28.20.445(a) and (b), Impliedly Repeal the
Definition of "Underinsured Motor Vehicle"in AS 28.20.445(h)?

          While Simmons does not dispute that the car she was
riding in would fail to qualify as an "[u]nderinsured motor
vehicle"within the meaning of AS 28.20.445(h), she nonetheless
insists that she was entitled to UIM coverage.  Specifically,
Simmons contends that changes to the UIM statute enacted by the
Alaska Legislature in 1990 impliedly repealed subsection (h)'s
definition of underinsured motor vehicle. 
          1.  Background of statutory changes 
          Before we address the particulars of Simmons's implied
repeal argument and Progressive's response, it is appropriate to
describe briefly the 1990 amendments and the law governing UIM
coverage prior to their enactment. 
          Alaska law formerly took a narrow approach to the
compensation of those injured by underinsured motorists by adopting
a "reduction"scheme of UIM coverage.  As originally adopted in
1984, AS  28.20.445(a) and (b) fixed the maximum amount of an
insurer's liability on any given UIM policy by subtracting from the
UIM policy limits any amount paid or payable to the insured from
other sources, including liability coverage. [Fn. 4]  By
subtracting from UIM policy limits all other payments, these
provisions rendered UIM coverage superfluous to the extent of
coverage under any liability policy.  This narrow reduction
approach thus precluded an injured person from combining, or
"stacking,"liability and UIM coverages, even when neither coverage
alone would fully pay the person's damages. 
          In 1990, the Alaska Legislature considered CSHB 429, a
proposal to broaden UIM coverage by substituting an "excess"
approach for the original reduction approach.  This broader
approach sought to compensate the injured person for actual damages
sustained in an accident.  Accordingly, CSHB 429 expressly allowed
UIM payments to supplement, or be "excess to,"available liability
coverage to the extent of actual damages or combined policy limits,
whichever was less. 
          Representative Dave Donley, chief sponsor of the bill,
addressed the House Judiciary Standing Committee concerning the
purpose of this legislation:
               [T]he bill is aimed at underinsured or
uninsured automobile insurance.  The consumer thinks they are
buying a certain amount of insurance coverage, for example
$100,000.  In fact, what they are buying is protection up to
$100,000.  If they were hit by someone with $25,000 insurance,
their own insurance company would only pay $75,000.  Most people
don't realize this when they purchase insurance. [The bill] is an
attempt to better compensate consumers for their actual damages.

Minutes, House Judiciary Standing Committee, March 20, 1990, at 13.
Donley further explained that, whereas the insurance statutes
generally prevented stacking of multiple insurance policies to
obtain multiple recoveries, his proposed amendment "creates an
exception to this antistacking rule."
          Elaborating on Representative Donley's statements, Don
Koch, Acting Deputy Director of Alaska's Division of Insurance,
told the committee that he had helped draft CSHB 429 and that the
bill was intended to "solve the problem mentioned by Representative
Donley by making the coverage in excess of the policy not
diminished by what coverage the responsible party might have."  Id.
at 14.  Koch later went on to explain that the amendments
          would assure that if an individual bought
$100,000 of uninsured or underinsured motorist protection, and the
other party has $200,000 coverage available, the first individual's
$100,000 coverage would come in after the $200,000 is utilized.

Id. at 15.

          Similarly, Representative Donley told the Senate Labor
and Commerce Committee that
          it became apparent that people weren't getting
what they thought they were when buying uninsured/underinsured
motorist coverage.  Currently, if an individual buys a standard
policy with $100,000 worth of uninsured/ underinsured coverage and
is in an accident and the person who hits him has $50,000 worth of
insurance, that individual's policy only covers him for the
difference between the $50,000 and the $100,000.  Most consumers
believe that they are buying an additional $100,000 in protection,
but they are not.

Minutes, Senate Labor and Commerce Committee, May 2, 1990, at 13.
          The legislature ultimately passed CSHB 429; as amended by
that bill, subsections (a) and (b) of AS 28.20.445 now provide:
               (a) The maximum liability of the insur-
          
          ance carrier under the uninsured and
underinsured motorists coverage required to be offered under AS
28.20.440 shall be the lesser of

               (1) the difference between the amount of
the covered person's damages for bodily injury and property damage
and the amount paid to the covered person by or for a person who is
or may be held legally liable for the damages; and

               (2) the applicable limit of liability of
          the uninsured and underinsured motorist
coverage.

               (b) An amount payable under the uninsured
and underinsured motorist coverage shall be excess to an amount
payable under automobile bodily injury, death, or medical payments
coverage, or as workers' compensation benefits and may not
duplicate amounts paid or payable under valid and collectible
automobile bodily injury, death, or medical payments coverage, or
as workers' compensation benefits.
 
          At the same time it amended subsections (a) and (b) of
the UIM statute, however, the legislature left intact the
previously quoted definition of "underinsured motor vehicle,"at
the time set out in subsection (h) of the same statute. [Fn. 5]  By
narrowly describing the circumstances under which UIM coverage is
triggered, this definition substantially reduced the number of
cases in which UIM coverage could supplement liability payments.  
          2.  The parties' implied repeal arguments
               a.  Simmons's argument
          Pointing to the restrictive effect of subsection (h) on
the expanded form of UIM coverage adopted in 1990, Simmons argues
that this subsection is in obvious conflict with the amended
versions of subsections (a) and (b) and must therefore be deemed
impliedly repealed.  
          Simmons maintains that the legislature's intent in
enacting the 1990 amendments was obvious: first, to permit stacking
of UIM and liability coverages to the extent necessary for full
compensation of actual damages; second, to preclude the offset of
UIM coverage by liability payments against UIM coverage except when
necessary to prevent double recovery.  Simmons reasons that the
narrow triggering mechanism in AS 28.20.445(h) is thus inconsistent
with this legislative purpose, because its effect is to reduce UIM
coverage. Surmising that "the legislature apparently did not
consider [AS 28.20.445(h)] when writing its amendments,"Simmons
urges that this
          oversight should not be elevated to a "veto"
of the 1990 amendments when the explicit language which was removed
and inserted, along with the clear legislative intent, makes the
legislature's changes to allow stacking of UIM coverage on top of
liability coverage to the extent of a claimant's damages,
abundantly clear. 

               b.  Progressive's reply

          Progressive insists that Simmons's implied repeal
argument -- which the superior court accepted in granting summary
judgment -- lacks merit.
          Progressive reads the 1990 amendments to AS 28.20.445(a)
and (b) as having left intact subsection (h)'s definition of
"underinsured motor vehicle,"and as having simply altered the
allowable benefits that are payable once UIM coverage is triggered. 
The precise effect of the changes, according to Progressive, is
that "if the insured's injuries are found to have been caused by an
underinsured motor vehicle, as that term is defined in the
statutes, he or she may recover up to the maximum of the
underinsured motorist benefits that [the insured's] policy
provides,"without that sum being offset by what has been paid by
the underinsured motorist.
          More particularly, Progressive argues:
          The 1990 amendments will still provide
additional UIM benefits if the definition of underinsured motor
vehicle is left intact. . . .  Insureds will receive greater UIM
protection, as the legislature intended, with the current
definition of underinsured motor vehicle left in place.  It will be
necessary to determine at the outset whether UIM coverage is
triggered, but if it is, the insured will receive up to the total
UIM limit, without offset for amounts paid under the tortfeasor's
liability coverage.

          3.  Principles governing implied repeal

          The principle of repeal by implication is one of
pragmatic realism:
          The legislatures cannot be expected to have
complete knowledge of the detail contained in the statute laws of
a state, nor have they the time to extensively research the mass of
statutory provisions in order to specify what statutes should be
repealed.  In the course of enacting legislation, it is only
natural that subsequent enactments could declare an intent to
repeal preexisting laws without mention or reference to such laws. 
A repeal may arise by necessary implication from the enactment of
a subsequent act.

1A Norman J. Singer, Sutherland Statutory Construction sec. 23.09,
at
337 (5th ed. 1994) (footnotes omitted).
          In determining whether one legislative enactment
impliedly repeals another, "[l]egislative intent is the key." 
Halfling v. Inlandboaters' Union of the Pac., 585 P.2d 870, 876
n.20 (Alaska 1978).  
               It is the necessary effect of the later
enactment construed in the light of the existing law that
ultimately determines an implied repeal.  As the legislative intent
defines the operation of the statute and divulges the purpose and
limitations of the enactment, it may establish or deny a repeal by
implication.  Therefore in the process of construing a statute the
intent of the legislature is always of prime importance.

Singer, supra, sec. 23.09, at 338.

          Although a presumption against implied repeal has often
been applied elsewhere, see generally id., sec. 23.10, Alaska has
recognized that this presumption is artificial and potentially at
odds with the primacy of legislative intent; accordingly, our cases
have expressly declined to invoke the presumption:
               We are persuaded that in endeavoring to
ascertain the legislative intent, we should not commence with a
presumption against implied repeal.  We shall look to the purpose
indicated by the legislature in passage of an act in our effort to
determine whether the new enactment is intended to repeal a prior
one.  If enforcement of the prior statute is in irreconcilable
conflict with such purpose, it will be held to have been impliedly
repealed.

Peter v. State, 531 P.2d 1263, 1268 (Alaska 1975).

          To determine whether two statutory provisions stand in
conflict, we must interpret them together, in context with other
pertinent provisions rather than in isolation, and with a view
toward reconciling conflict and producing "a harmonious whole." 
City of Anchorage v. Scavenius, 539 P.2d 1169, 1174 (Alaska 1975)
(quoting 2 J. Sutherland, Statutes and Statutory Construction, sec.
4703, at 336-37 (Horrack ed., 3d ed. 1943)).  
          When construing statutory provisions for the presence or
absence of conflict, we do not mechanically adhere to their literal
meaning in disregard of legislative intent.  See Peninsula Mktg.
Ass'n v. State, 817 P.2d 917, 922 (Alaska 1991).  Instead of the
"plain meaning"rule, Alaska follows a sliding scale approach best
summed up as, "the plainer the meaning of the language of the
statute, the more convincing any contrary legislative history must
be."  Id. (citing State v. Alex, 646 P.2d 203, 208-09 n.4 (Alaska
1982)).  This approach calls for application of the rules of
statutory construction and inquiry into legislative history, even
when statutory language appears clear in the abstract.  See Homer
Elec. Ass'n v. Towsley, 841 P.2d 1042, 1043-44 (Alaska 1992).
          Neither literal clarity of statutory language nor the
desire to avoid implied repeal can justify construing a statute in
a manner that is plainly unreasonable in light of its intent,
"because giving the statute an unintended meaning 'would be
stepping over the line of interpretation and engaging in
legislation.'"  State v. Alex, 646 P.2d 203, 207-08 (Alaska 1982)
(quoting Gottschalk v. State, 575 P.2d 289, 296 (Alaska 1978)). 
The goal of reconciling conflict must thus give way when harmony
between potentially conflicting provisions can be achieved only at
the price of an interpretation at odds with statutory purpose.  
See Peter, 531 P.2d at 1268; cf. Alex, 646 P.2d at 207-08.
          4.   Does subsection (h) irreconcilably conflict with
the purpose of the 1990 amendments to subsections (a) and (b)?
               
          Comparing the pre- and post-amendment versions of AS
28.20.445 leaves little doubt that the 1990 amendments marked a
basic change in the UIM provision.  Despite widespread differences
in language and detail from state to state, two basic statutory
approaches for providing UIM coverage have emerged nationwide, each
reflecting a fundamentally different coverage philosophy and
employing an essentially distinct coverage mechanism.  
          The first approach -- reduction coverage -- strives to
provide a predictable level of compensation by essentially allowing
the purchaser of UIM insurance to choose in advance the limits of
coverage that will apply in the event of future injuries inflicted
by a negligent motorist.  See 3 Irvin E. Schermer, Automobile
Liability Insurance 3d sec. 57.01 (1995).  This approach guarantees
compensation in the amount selected for UIM coverage, but no more. 
In contrast, the second approach -- excess coverage -- seeks to
maximize the potential for full compensation by allowing the
purchaser of UIM insurance to supplement available liability
payments with UIM payments to the extent necessary to cover all
actual damages.  See State Auto. Mut. Ins. Co. v. Youler, 396
S.E.2d 737, 747 (W. Va. 1990) [Fn. 6]; see also Schermer, supra,
sec.
56.02, sec. 57.01[2] (citing AS 28.20.445(b) as a "full
compensation"
statute). 
          These divergent approaches necessarily translate into
differing notions of what constitutes an underinsured motorist and
an underinsured motor vehicle.  Under a reduction coverage scheme,
an underinsured driver is one whose liability limits are less than
the UIM limits covering the injured person, or whose liability
coverage becomes unavailable to the injured person.  Under an
excess coverage provision, an underinsured driver is one whose
liability limits are insufficient to cover the injured person's
actual damages.  As Schermer puts it: 
               In some states the tortfeasor's vehicle
is deemed underinsured when its bodily injury liability limits are
less than the insured's [underinsured] motorist limits. . . . In
some states the tortfeasor's vehicle is deemed underinsured when
its bodily injury limits are inadequate to compensate the insured
for his damages. 
Schermer, supra, sec. 56.02, at 56-6.
          As should be clear from our summary of our own state's
statutory background, Alaska initially opted for the first approach
to UIM coverage -- reduction coverage -- but in 1990, the
legislature changed to the second -- excess coverage.  Yet
notwithstanding this philosophical shift, the definition of
"underinsured motor vehicle"set out in AS 28.20.445(h) continued
to be the one originally tailored to suit reduction coverage.  The
misfit is apparent and has serious adverse consequences.
          In the context of Alaska's current provision allowing
excess UIM coverage, subsection (h) serves no rational purpose; its
sole effect is to allow or deny excess UIM coverage on an arbitrary
basis.  A purchaser of automobile insurance has no way to predict
the liability coverage limits of another motorist whose negligent
acts might some day cause the purchaser injury.  As a result, when
subsection (h) is applied in the context of an excess coverage
statute, the purchaser has no way to predict whether excess
coverage will be triggered in an accident where liability coverage
proves inadequate for full compensation.  The triggering of excess
coverage becomes a game of chance: if an injured person happens to
have chosen a level of UIM coverage even a dollar higher than the
liability limits of the motor vehicle causing the injuries, excess
UIM compensation is triggered as necessary for full compensation,
up to the selected UIM limit; yet if the liability limits of the
injuring vehicle increase by only a dollar -- becoming equal to the
injured person's UIM coverage -- the injured person receives no UIM
benefits at all. [Fn. 7] 
          Progressive altogether fails to explain how this
particular definition can be deemed rational in the context of
Alaska's current excess coverage approach to UIM insurance.  Beyond
positing the need for some definition of "underinsured motor
vehicle"to trigger UIM coverage, Progressive offers no
justification for subsection (h).  Nor can we conceive of any
rational explanation for the provision. [Fn. 8]  The close fit
between this provision and Alaska's former reduction coverage
statute and the provision's seeming senselessness in the context of
the 1990 amendments provide telling evidence that its continued
existence was not contemplated in 1990.  
          Progressive nonetheless argues that subsection (h) is
logically compatible with the purpose of the 1990 amendments and
that the provision must therefore stand.  According to Progressive,
the legislature's goal in adopting the 1990 amendments was to
increase UIM coverage by allowing excess compensation in some
cases.  Progressive asserts that, even with the narrow triggering
definition in subsection (h), the amended version of AS 28.20.445
affords broader coverage than its predecessor because it does
sometimes result in excess coverage.  Progressive thus reasons that
implied repeal is not necessary to fulfill the legislature's goal
of increased coverage. 
          But in our view, Progressive seriously underestimates the
strength and specificity of legislative history bearing on the
statutory purpose of the 1990 amendments.  Representative Donley's
remarks in legislative committee hearings, quoted above, strongly
suggest that he envisioned CSHB 429, with its focus on full
compensation for actual damages, as a general substitute for, not
just an occasional relaxation of, the then-existing approach to
reduction-based coverage. 
          As also shown above, the legislative testimony of the
Insurance Division's Acting Deputy Director, Don Koch, confirmed
Donley's remarks.  Koch indicated that excess UIM coverage would
"not [be] diminished by what coverage the responsible party might
have."  Minutes, House Judiciary Standing Committee, March 20,
1990, at 14.  The example Koch used to illustrate this point
unmistakably demonstrated his view that, under the proposed
amendments, excess UIM coverage would be triggered even if
liability limits exceeded UIM coverage:
          [I]f an individual bought $100,000 of
uninsured or underinsured motorist protection, and the other party
has $200,000 coverage available, the first individual's $100,000
coverage would come in after the $200,000 is utilized. 
Id. at 15. 
          Moreover, the argument that subsection (h) is consistent
with the 1990 amendments becomes colorable only if Progressive is
correct in characterizing greater UIM coverage as the sole purpose
underlying the amendments.  Progressive's view of the amendments'
purpose is unduly constricted, however, for it ignores another
vital goal of the 1990 legislation -- upholding consumer
expectations.  
          The passages of legislative history we have quoted
establish beyond doubt that upholding consumer expectations --
always an important factor in the interpretation of insurance
policies and statutes [Fn. 9] -- was a matter of crucial concern to
the amendments' sponsor, Representative Donley.  As Donley stated,
the amendments were prompted by the fact that "people weren't
getting what they thought they were when buying
uninsured/underinsured motorist coverage."   Minutes, Senate Labor
and Commerce Committee, May 2, 1990, at 13.
          In regard to this purpose, subsection (h) falls far short
of the mark: it seems virtually unimaginable that a typical
consumer selecting a given level of UIM protection would expect to
receive a lottery-like coverage in which the insured bets double or
nothing against the unpredictable odds of injury by a motor vehicle
with lower liability limits than the limits selected for the UIM
policy.  Retaining subsection (h) would stand in obvious conflict
with the statutory purpose of upholding consumer expectations.
          A consistent theme of Progressive's argument to the
contrary is that the meaning of AS 28.20.445 is plain on its face
and that there is no logical inconsistency between its recently
revised subsections and the original form of subsection (h).  As we
have already established, however, plain meaning does not trump
clear legislative history to the contrary.  See Towsley, 841 P.2d
at 1043-44; Peninsula Mktg. Ass'n, 817 P.2d at 922.  Nor does
implied repeal require irreconcilable conflict between the literal
terms of a new and old enactment.  Instead, the status of prior
legislation must be gauged by reference to the legislative purpose
of the new provision: "If enforcement of the prior statute is in
irreconcilable conflict with such purpose, it will be held to have
been impliedly repealed."  Peter, 531 P.2d at 1268.
          Our consideration of legislative history and statutory
purpose persuades us that subsection (h) is fundamentally
incompatible with the 1990 amendments to AS 28.20.445. [Fn. 10] 
Subsection (h) seems inoffensive when viewed in isolation.  But the
provision makes little sense when read in conjunction with the
entirety of AS 28.20.445.  Because subsection (h) conflicts with
the purpose of the 1990 amendments to subsections (a) and (b),
these amendments must be deemed to have worked a repeal by
implication.
     D.   Does AS 28.20.445 Apply to Simmons's Case?
          One additional point requires our attention.  Alaska
Statute 28.20.445 is a provision of the Motor Vehicle Safety
Responsibility Act (MVSRA), which is codified as Title 28, chapter
20 of the Alaska Statutes.  Progressive raises a conclusory
argument that AS 28.20.445 does not apply to this case at all,
because Progressive's policy is not subject to the mandatory filing
provisions of the MVSRA.  Progressive submits that the MVSRA does
not apply here because "this policy was not certified or required
as proof of financial responsibility."  According to Progressive,
the case is instead governed by the Alaska Mandatory Automobile
Insurance Act (AMAIA), which is codified as Title 28, chapter 22 of
the Alaska Statutes.  
          This argument requires a brief explanation of the two
acts.  The MVSRA is not a mandatory insurance law.  See Evron v.
Gilo, 777 P.2d 182, 187 (Alaska 1989) (purchase of automobile
liability insurance encouraged, not compelled); Johnson v. U.S.
Fidelity & Guar. Co., 601 P.2d 260, 264 n.3 (Alaska 1979).  Enacted
in 1959, see ch. 163, sec. 2, SLA 1959, the act requires an
uninsured
driver who has been involved in an accident to prove financial
responsibility for the future, either by posting a bond or
submitting a certificate of insurance.  See AS 28.20.050; Hart v.
National Indem. Co., 422 P.2d 1015, 1021 (Alaska 1967).
          The act also requires that insurance policies issued to
comply with its proof requirements contain certain provisions
including uninsured and underinsured motor vehicle coverage.  See
AS 28.20.440(b)(3).  In 1968 legislation was enacted which required
that all policies issued in the state meet the content requirements
imposed by the MVSRA, regardless of whether the policies were
required as proof under the act.  See ch. 105, SLA 1968.  The 1968
act, which was codified as AS 21.89.020, expressly referred to
subsection 28.20.440(b)(3) of the MVSRA, which required uninsured
motor vehicle coverage unless waived in writing by the insured. 
See ch. 146, sec. 2, SLA 1966.  Although the MVSRA has never been
a
mandatory insurance law, as of 1968 the act's policy content
requirements became mandatory for all policies written in the
state.
          In contrast to the MVSRA, the AMAIA, enacted in 1989 (see
ch. 108, SLA 1989), does compel insurance coverage.  See AS
28.22.011. [Fn. 11]  Although the AMAIA's coverage limits generally
parallel those of the MVSRA, [Fn. 12] the two acts are not
coextensive. [Fn. 13]  Thus, the MVSRA and the AMAIA coexist as
components of the Alaska Uniform Vehicle Code.  See AS 28.40.110. 
The mandatory act supplements, but does not supplant, the MVSRA.
[Fn. 14]  
          For present purposes, one other potentially significant
feature distinguishes the two acts.  Prior to 1990, the AMAIA's UIM
coverage provisions conformed to the MVSRA's.  Yet when the
legislature amended the UIM provisions of the MVSRA in 1990, it did
not enact corresponding amendments to the AMAIA.  The AMAIA thus
continued to employ the reduction approach to UIM coverage that AS
28.20.445 also originally embodied. [Fn. 15]  And this scheme of
coverage was subject to a definition of "underinsured motor
vehicle"conforming to the definition set out in AS 22.20.445(h). 
See former AS 28.40.100(a)(22).  Thus, by arguing that the MVSRA is
inapplicable to this case and suggesting that the case is instead
governed by the AMAIA, Progressive seeks application of essentially
the same reduction coverage originally reflected in AS 28.20.445(a)
and (b).
          Progressive's argument is unpersuasive.  First, the UIM
provision of the policy itself tracks almost verbatim the language
of the MVSRA, AS 28.20.445, instead of the language of the AMAIA. 
Moreover, the language of the Progressive policy indicates that the
policy was drafted in a manner intended to conform to the
requirements of the MVSRA in the event certification as proof of
financial responsibility might sometime be necessary. [Fn. 16] 
Hence, there is good reason to conclude that the policy was meant
to be interpreted consistently with current interpretations of the
MVSRA's parallel provisions.  
          Second, the fact that the Progressive policy was not
required as proof of financial responsibility under the MVSRA does
not mean that the provisions of the policy were not required to
conform to the policy content provisions of that act.  As we have
seen, since 1968 all policies of insurance written in the state
have had to comply with the MVSRA's requirements.
          Finally, prior to the mandatory insurance act of 1989, AS
21.89.020(c) read as follows:
               An insurance company offering automobile
liability insurance in this state for bodily injury or death shall
offer coverage prescribed in AS 28.20.440 and 28.20.445 . . . for
the protection of the persons insured under the policy who are
legally entitled to recover damages for bodily injury or death from
owners or operators of uninsured or underinsured motor vehicles.

The mandatory act changed this by adding the phrase "or AS 28.22"
after "28.20.445."  See ch. 108, sec. 5, SLA 1989. [Fn. 17]
          How should this language be interpreted where the
contents of policies required under the mandatory act differ from
the content requirements of the MVSRA?  In our view, this language
means that all policies in the state must continue to conform to
the content requirements of the MVSRA, and that if the content
requirements of the mandatory act are broader than those of the
MVSRA, those requirements must also be complied with as to persons
covered by the mandatory act.
          This construction is consistent with the legislative
intent that the two acts coexist as part of a uniform vehicle code. 
It recognizes that the legislature has superimposed a mandatory
insurance system, which does not apply to all drivers, on a non-
mandatory system, which does apply to all drivers.  Absent some
indication of legislative intent that the comprehensive application
of the MVSRA to all drivers was meant to be limited by the
mandatory act, we conclude that the scope of the MVSRA's
application was not limited by the mandatory act.
          Since at the time of Simmons's accident, the MVSRA
afforded broader coverage with respect to UIM coverage than the
mandatory act did, it follows that the MVSRA governs interpretation
of the policy's UIM coverage in this case.
IV. CONCLUSION
          The superior court's order granting summary judgment to
Simmons is AFFIRMED. 


                            FOOTNOTES


Footnote 1:

     Separate claims were also asserted by Simmons's mother,
another injured passenger, and the Alaska Division of Medical
Assistance; all of these claims were eventually resolved.


Footnote 2:

     As Progressive puts it: "A straightforward reading of both the
policy and the relevant statutes demonstrates that there was no
underinsured motor vehicle here, and consequently no underinsured
motorist benefits are available to Teisha Simmons for this
accident."


Footnote 3:

     The definition set forth in former subsection (h) applied to
the provisions of AS 22.20.445, which deal specifically with
uninsured and underinsured motorists coverage.  An almost identical
definition of "underinsured motor vehicle"was included in former
AS 28.40.100(a)(22), the general definitional provision for
Alaska's Uniform Vehicle Code, Alaska Statutes, Title 28.

          The Alaska legislature recently repealed AS 28.20.445(h)
and amended AS 28.40.100(a)(22).  See Ch. 81, sec. 114-15, SLA
1997,
effective July 1, 1997.  The amended version of AS 28.40.100(a)(22)
provides that an underinsured motor vehicle is one

          for which there is a bodily injury or property
damage insurance policy or a bond applicable at the time of an
accident and the amount of insurance or bond is less than the
amount the covered person is legally entitled to recover for bodily
injury or property damage from the owner or operator of the
underinsured motor vehicle.

          This repeal and amendment address the statutory conflict
that we discuss in this opinion, see infra Part III.C.4.  The
apparent effect of this recent legislative action is that people
similarly situated to Simmons are viewed as traveling in
underinsured motor vehicles, and are thus permitted to "stack"
insurance recoveries under the provisions of AS 28.20.445(a) and
(b).  See infra Part III.C.1.  To avoid awkwardness, in this
opinion we generally refer to "AS 28.20.445(h)"and "subsection
(h)"rather than to "former AS 28.20.445(h)"and "former subsection
(h)." 


Footnote 4:

     AS 28.20.445 (a) and (b) formerly provided:

               (a) The maximum liability of the
insurance carrier under the uninsured and underinsured motorists
coverage required to be offered under AS 28.20.440 shall be the
difference between the coverage limit of liability and the amount
paid to the insured by or on behalf of the uninsured and
underinsured motorist.

               (b) Amounts payable under the uninsured
motorists and underinsured coverage may be reduced by
 
               (1) amounts paid or to be paid under any
worker's compensation law;

               (2) amounts paid or payable under valid
and collectible automobile medical payments insurance or bodily
injury or death liability insurance; and

               (3) amounts paid by or on behalf of the
uninsured or underinsured motorist.
 
Ch. 70, sec. 12, SLA 1984.


Footnote 5:

     The legislature similarly left unaltered AS 28.22.211, a UIM
provision of the Alaska Mandatory Automobile Insurance Act
mirroring the reduction approach enacted in the original version of
AS 28.20.445, a provision of the Motor Vehicle Safety
Responsibility Act.  The legislature has recently repealed AS
28.22.211.  See Ch. 81, sec. 115, SLA 1997.  The repeal of this
provision was part of the same act that repealed AS 28.20.445(h)
and amended AS 28.40.100(a)(22).  See supra note 3.


Footnote 6:

     In Youler, the Supreme Court of West Virginia provided a
particularly helpful description of these two approaches:

               One approach . . . is that the
          tortfeasor's liability insurance coverage is
to be set off against the underinsured motorist coverage limits. 
This type of underinsured motorist legislation, sometimes called
reduction-type or decreasing-layer underinsured motorist coverage,
is premised upon the idea that the purpose of underinsured motorist
coverage is to put the insured in the same position he or she would
have occupied had the tortfeasor's liability insurance limits been
the same as the underinsured motorist coverage limits purchased by
the insured.  Part of this level of coverage is provided in effect
by the tortfeasor's liability insurance, and the remainder is
provided by the underinsured motorist coverage.

               The second approach . . . is that the
tortfeasor's liability insurance coverage is to be set off against
the amount of damages sustained by the injured person, and the
insurer providing the underinsured motorist coverage is liable to
such injured person . . . for any excess, up to the limits of the
underinsured motorist coverage.  This type of underinsured motorist
legislation, sometimes called excess-type or floating-layer
underinsured motorist coverage, is premised upon the idea that the
injured person is entitled to recover under his or her own
underinsured motorist coverage to the extent that the tortfeasor's
liability insurance coverage is insufficient to compensate the
injured person fully for his or her loss, subject only to the
limits of the underinsured motorist coverage.

Youler, 396 S.E.2d at 747-48 (citations and footnotes omitted).


Footnote 7:

     The situation is even worse for persons who choose UIM
coverage equal to the statutory minimum for liability coverage, for
in their case the coverage will be all but illusory -- that is, if
the injuring vehicle is insured at all, its limit of liability
coverage will by definition equal or exceed the injured person's
limit of UIM coverage, the sole exceptions being accidents
involving multiple injuries where available liability payments are
depleted and accidents involving motor vehicles covered by policies
from states with minimum liability limits lower than Alaska's.  Cf.
Stracener v. United Servs. Auto. Ass'n, 777 S.W.2d 378, 383 (Tex.
1989) (stating that, in minimum limits cases, "the underinsured
motorist coverage for which the policyholder has paid a premium
would be worthless unless there were multiple claimants with
substantial damages"). 


Footnote 8:

     We disagree with Progressive's argument that there is a need
for some definition of "underinsured motor vehicle."  Implicit in
subsection .445(a) is the concept that an underinsured motor
vehicle is a vehicle with liability coverage that is insufficient
to pay the covered person's damages.  See Schermer, supra, sec.
#56.02, at 56-6 ("[In excess coverage states] the tortfeasor's
vehicle is deemed underinsured when its bodily injury limits are
inadequate to compensate the insured for his damages").  We note
again that the legislature, when it recently repealed AS
28.20.445(h), also amended AS 28.40.100(a)(22), which defines
"underinsured motor vehicle"for Title 28, the Alaska Uniform
Vehicle Code.  See supra note 3.  The amended definition is
consistent with the excess coverage approach of AS 28.20.445(a) and
(b).


Footnote 9:

     See, e.g., Starry v. Horace Mann Ins. Co., 649 P.2d 937, 939
(Alaska 1982); Stracener, 777 S.W.2d at 383-84.


Footnote 10:

     Our conclusion finds reinforcement in two cases from other
states with similar schemes of UIM coverage. 

          In Shelby Mutual Insurance Co. of Shelby, Ohio v. Smith,
556 So.2d 393 (Fla. 1990), a divided Florida Supreme Court,
interpreting an amended UIM coverage statute that mirrors AS
28.20.445, declined to find implied repeal of a provision defining
"uninsured motor vehicle"as a vehicle with liability limits less
than applicable limits of the injured party's uninsured motorist
coverage.  The statutory background of the Florida definition was
similar to that of Alaska's subsection (h): Florida's definition
had been left intact by a 1984 amendment substituting excess
coverage for reduction coverage.  Id. at 394.  In rejecting implied
repeal, the Florida Supreme Court expressly relied on Florida's
tradition of adherence to the plain meaning rule of statutory
interpretation, which precluded it from considering the statute's
legislative history -- history that, in the court's view, made it
clear that the 1984 amendment was intended to permit stacking of
UIM coverage.  Id. at 395.  The Florida Legislature subsequently
amended the definition to include vehicles with liability coverage
"less than the total damages sustained by [the injured party]." 
Fla. Rev. Stat. sec.37.627.727(3)(b).

          And in Pristavec v. Westfield Insurance Co., 400 S.E.2d
575 (W. Va. 1990), the West Virginia Supreme Court, construing a
UIM statute whose provisions and history were comparable to those
of AS 28.20.445, found implied repeal of a definition of
"underinsured motor vehicle"that was virtually indistinguishable
from that set out in subsection (h) of the Alaska statute.  Id. at
581-82.


Footnote 11:

     Although the Alaska Mandatory Automobile Insurance Act was
enacted in 1989, Alaska's first mandatory insurance act was enacted
in 1984 and was effective beginning January 1, 1985.  See ch. 70,
sec. 13, SLA 1984.  The 1984 mandatory insurance act was generally
similar to the current mandatory insurance act with respect to
required policy provisions, limits, and coverage.  The 1984 act,
however, provided for its own repeal as of January 1, 1989.  See
ch. 70, sec. 17, SLA 1984.  The repeal took effect.  Thus from
January
1, 1989, until June 14, 1989, when the current mandatory insurance
act took effect, Alaska did not have a mandatory insurance
requirement.  During that period, of course, and as anticipated in
the 1984 act, the MVSRA remained in effect.  See ch. 70, sec.sec.
18, 19,
20, SLA 1984 (effective January 1, 1989).


Footnote 12:

     Compare, e.g., AS 28.20.440 and AS 28.20.445 with AS 28.22.101
and AS 28.22.201.


Footnote 13:

     The MVSRA applies statewide to drivers and owners of all
vehicles subject to registration in Alaska, see AS 28.20.050(a),
but the act generally requires insurance only after a driver's
first accident.  See AS 28.20.010, .060, .070.  On the other hand,
the mandatory insurance act does not require an accident before
requiring insurance, but it does not apply to persons who have not
within five years received a citation for a serious traffic
violation who drive in certain areas of Alaska that are unconnected
by road to the state highway system.  See AS 28.22.011.  Under the
mandatory act, a motor vehicle operator involved in an accident
involving personal injury or property damage must show that the
operator was insured at the time of the accident.  See AS
28.22.021.  If the operator fails to make this showing, the
operator's driver's license is suspended for a specified period. 
For a first offense the period of suspension is not less than
ninety days.  See AS 28.22.041(a)(1).  A person whose license is
suspended under the mandatory act is required to file proof of
insurance under the MVSRA before his or her driving privileges may
be restored.  See AS 28.22.061.  This proof must be maintained for
a period of three years following the expiration of the suspension. 
See id.


Footnote 14:

     Despite these differences -- perhaps because the MVSRA and the
AMAIA are largely overlapping -- our past decisions have sometimes
failed to distinguish the two acts and have tended to treat them
interchangeably.  See, e.g., Hughes v. Harrelson, 844 P.2d 1106
(Alaska 1993).


Footnote 15:

     See former AS 28.22.211.  As we have noted, see supra note 5,
the legislature has now repealed section 211 of the AMAIA.  See ch.
81, sec. 115, SLA 1997.  The result of the recent repeal of this
section is that the current versions of the AMAIA and the MVSRA
both conform to the excess coverage approach.


Footnote 16:

     Under "Part I - Liability"the policy provides:

          Financial Responsibility Laws -

          When WE certify this policy as proof of
Financial Responsibility, it will comply with the minimum Financial
Responsibility requirements, and only those minimums, in the state
where the policy is certified.  YOU agree to repay US for any
payment made which WE would not have made if this policy were not
certified as proof of Financial Responsibility.

          This language would appear to be "an agreement . . . to
conform with the requirements of [the MVSRA],"which would qualify
the policy to "be certified as proof of financial responsibility
under [the MVSRA]."  AS 28.20.460(a).


Footnote 17:

     We note that the current mandatory act, like that enacted in
1984, contained prospective repeal provisions, effective January 1,
1994.  See ch. 108, sec. 31, SLA 1989.  The MVSRA was not subject
to
prospective repeal, and the legislature contemplated its continued
application regardless of the possibility of repeal of the
mandatory act.  Compare ch. 108, sec.sec. 3, 5, 7, SLA 1989, which
were
effective June 14, 1989, with sec.sec. 4, 6, 8 of the same chapter,
which
were to take effect January 1, 1994.  The prospective repeal
provision of the 1989 act was itself repealed in 1992.  See ch. 26,
sec. 2, SLA 1992.