STAND. COM. REP. NO. 1657

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.C.R. No. 227
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.C.R. No. 227 entitled: 

     "HOUSE CONCURRENT RESOLUTION REQUESTING THE DIRECTOR OF
     COMMERCE AND CONSUMER AFFAIRS TO CONVENE A TASK FORCE TO
     STUDY FORCE PLACED INSURANCE,"

begs leave to report as follows:

     The purpose of this concurrent resolution is to request that
the Director of Commerce and Consumer Affairs convene a Task
Force (Task Force) to examine industry use and possible abuse of
forced-placed insurance policies, and if warranted, recommend
possible legislative solutions.

     Your Committee received testimony from AARP providing
information on the problems related to forced-placed insurance.
The Insurance Division of the Department of Commerce and Consumer
Affairs (DCCA) was willing to participate in the Task Force under
this resolution.  Comments were offered by Hawaii Credit Union
League, and testimony in opposition to the resolution was
submitted by Hawaii Bankers Association.

     Your Committee has amended this concurrent resolution to
remove the clause stating basically that providers of insurance
coverages provide monetary incentives for lenders to select them
as insurer, because your Committee is concerned that this
language may not accurately reflect industry practice.  Your
Committee has also responded to industry concerns by removing the
five-member limit on the Task Force and giving the Director of

 
 
                                 STAND. COM. REP. NO. 1657
                                 Page 2

 
DCCA the flexibility to include more than one representative of
the banking and insurance industries.  Finally, your Committee
has made a technical amendment to the resolution by changing the
term "force placed" to read "forced-placed," reflective of usage
in industry testimony.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee concurs with the intent and purpose
of H.C.R. No. 227, as amended herein, and recommends that it be
referred to the Committee on Finance, in the form attached hereto
as H.C.R. No. 227, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair