STAND. COM. REP. NO. 3270

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2349
                                        H.D. 1




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

Sir:

     Your Committee on Judiciary, to which was referred
H.B. No. 2349, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of the bill is to maintain the cost savings
associated with the covered loss deductible and accountability of
reckless drivers under the 1997 motor vehicle insurance reforms
(Act 251, SLH 1997).

     The covered loss deductible reduces medical costs by
deducting a claimant's medical expenses from a liability
recovery.  This discourages unnecessary medical treatment, since
greater medical expenses result in a greater reduction of the
liability award.  Savings accrue to both PIP (medical) and
BI (bodily injury) liability coverage components of the motor
vehicle insurance policy.

     Drivers who engage in particularly reckless conduct, such as
drunk driving, criminal conduct or intentionally causing injury
or damage are held accountable for the full damages inflicted
upon others.  They do not get the benefit of the covered loss
deductible under current law.

     This measure is intended to assure that the additional
costs, that result because the covered loss deductible does not
apply, is paid by the reckless driver and not passed on to

 
a                                                     HB2349 HD1
                                   STAND. COM. REP. NO. 3270
                                   Page 2


consumers in the form of higher premiums.  Insurers are given the
right to recover the amount of the covered loss deductible
directly from the reckless driver to both maintain cost
containment as well as hold particularly reckless drivers
accountable for their conduct.

     As affirmed by the record of votes of the members of your
Committee on Judiciary that is attached to this report, your
Committee is in accord with the intent and purpose of
H.B. No. 2349, H.D. 1, and recommends that it pass Third Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary,



                                   ______________________________
                                   AVERY B. CHUMBLEY, Co-Chair



                                   ______________________________
                                   MATTHEW M. MATSUNAGA, Co-Chair

 
a                                                     HB2349 HD1