STAND. COM. REP. NO. 3280

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2213
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 2213 entitled: 

     "A BILL FOR AN ACT RELATING TO BINDING ARBITRATION AWARDS,"

begs leave to report as follows:

     The purpose of this measure is to limit the collection of
any arbitration award for a tort claim covered by a motor vehicle
insurance policy to the applicable liability policy limit.

     Your Committee received testimony from State Farm Insurance
Companies and Consumer Lawyers of Hawaii.

     This measure is intended to encourage the use of arbitration
in deciding tort claims covered by motor vehicle insurance
policies.  A defendant would be assured that the defendant's
personal assets would not be applied to paying the arbitration
award, if the award exceeded the limits of the liability policy.

     Your Committee has amended this measure to add that the
amount of the arbitration award shall not be binding on a
subsequent underinsured motorist claim.  This change is intended
to address the situation where the amount of the tort award is
insufficient and the claimant then files an underinsured motorist
claim.  The underinsured carrier should not be bound and thereby
prejudiced by the amount of the award in the tort claim,
particularly where the defendant in the tort claim would lack
incentive to vigorously defend the tort claim in the knowledge

 
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                                   STAND. COM. REP. NO. 3280
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that the collection of the award would be limited to the limits
of the liability policy.

     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 H.B. No. 2213, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B.
No. 2213, S.D. 1, and be placed on the calendar for Third
Reading.

                                   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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