STAND. COM. REP. NO. 405

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 957
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 957 entitled: 

     "A BILL FOR AN ACT RELATING TO MOTOR VEHICLE INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to extend the deadline for
submission of the Motor Vehicle Insurance Benefits Task Force's
(Task Force) final recommendations for a comprehensive motor
vehicle insurance plan.

     The State Insurance Commissioner and the Consumer Lawyers of
Hawaii presented testimony in support of the measure.  State Farm
Insurance Companies presented testimony reserving comment on the
proposed extension and suggesting an amendment to the measure.

     Act 251, Session Laws of Hawaii 1997, required that the Task
Force review the State's motor vehicle insurance system and
develop a comprehensive plan to reduce costs, pay for the cost of
motor vehicle insurance or benefits, maximize coverage and
benefits, and alleviate the uninsured motorists problem.  The Act
further required the Task Force to submit its final
recommendations to the Legislature and the Governor no later than
twenty days before the convening of the 1999 Legislature.

     Your Committee finds that several motor vehicle insurance
issues remain, which preclude the Task Force from developing and
issuing its final recommendations.  The following reasons justify
an extension of the deadline to June 30, 2000:

 
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                                   STAND. COM. REP. NO. 405
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     (1)  The State Actuary's analysis indicates that motor
          vehicle insurance premium rates are decreasing as a
          result of reform measures effected by Act 251.
          However, due to an eighteen month lag in the
          availability of earned premium data, the information
          necessary to accurately assess the impacts of the Act
          on premium rates will not be available until mid-1999; 

     (2)  The implementation of the Honolulu Police Department's
          mobile data terminal system, scheduled for the fall of
          1999, may render a comprehensive data base system
          unnecessary;

     (3)  The impact of prepaid health care insurers offering
          optional personal injury protection coverage requires
          further study before allowing health insurers to
          compete with auto insurers in this market; and

     (4)  An expert report on a per gallon fuel surcharges, which
          is necessary to consider a statewide pay-at-the-pump
          model of insurance, remains forthcoming.

     Upon careful consideration, your Committee has amended
section 2 of this measure, adding a requirement that the Task
Force's comprehensive plan balance the maximum coverage and
benefits for victims of motor vehicle accidents with the lowest
possible cost for purchasers of motor vehicle insurance.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 957, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 957, S.D. 1, and be referred to the Committee on Ways and
Means.


 
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                                   STAND. COM. REP. NO. 405
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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