STAND. COM. REP. NO. 1656

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.R. No. 203
                                     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.R. No. 203 entitled: 

     "HOUSE 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 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 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 DCCA the

 
 
                                 STAND. COM. REP. NO. 1656
                                 Page 2

 
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.R. No. 203, as amended herein, and recommends that it be
referred to the Committee on Finance, in the form attached hereto
as H.R. No. 203, H.D. 1.

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



                                   ______________________________
                                   RON MENOR, Chair