STAND. COM. REP. NO. 2930

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2314
                                        H.D. 1
                                        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. 2314, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to require insurers to
provide coverage under a policy notwithstanding the insured's
potential claim for damages against a third party.

     The Insurance Commissioner, Consumer Lawyers of Hawaii,
Hawaii Medical Service Association, and State Farm Insurance
Companies submitted testimony on the measure.

     This measure will help to clarify an insurer's rights and
duties and protect consumers' rights to coverage in cases
involving third party claims by: 

     (1)  Prohibiting an insurer from refusing to provide or
          limiting coverage to an insured on the basis of an
          insured's potential claim for damages against a third
          party, but allowing the insurer to recover benefits
          paid when the insured recovers damages on the third
          party claim; and

     (2)  Clarifying health care entities' subrogation and lien
          rights where an insured has recovered damages from a
          third party.

 
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                                   STAND. COM. REP. NO. 2930
                                   Page 2


     Upon careful consideration, your Committee has amended this
measure by replacing its contents with provisions that amend the
Hawaii Hurricane Relief Fund (HHRF) Act.  As amended, this
measure:

     (1)  Clarifies the circumstances under which standard
          extended coverage endorsements offered by insurers
          qualify as a comparable coverage for purposes of
          levying assessments on an insurer's gross direct
          written premiums for property insurance in the State;
          and

     (2)  Establishes a grant program for HHRF policyholders who
          install hurricane mitigation devices in their homes.

     Your Committee finds that this measure, as amended, will
clarify the obligations of insurers under the HHRF and reduce the
potential liability of the HHRF in the event of a hurricane by
encouraging policyholders to retrofit their homes to mitigate
hurricane losses.

     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. 2314, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 2314, H.D. 1, S.D. 1, and be referred to the
Committee on Ways and Means.

                                   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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