STAND. COM. REP. NO. 260-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2751
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 2751 entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to implement a recommendation of
the Motor Vehicle Insurance Benefits Task Force (Task Force)
created by Act 251 in 1997, by establishing a data base of
insured vehicles identified by vehicle identification numbers,
that insurers would be required to update within 48 hours of the
issuance, cancellation, non-renewal, or lapse of a motor vehicle
insurance policy.

     Your Committee received testimony in support of this measure
from the Insurance Commissioner of the Department of Commerce and
Consumer Affairs (DCCA), who chaired the Task Force, and from the
Honolulu Police Department (HPD).  Testimony in opposition to
this measure was received from State Farm Insurance Companies
(State Farm) and the Hawaii Insurers Council (HIC).  An
individual submitted comments.

     DCCA testified that although the Task Force consulted with
the City & County of Honolulu's Motor Vehicle Branch (MVB), which
found the bill's proposed data base feasible, motor vehicle
divisions of the other counties would also need to be consulted.
DCCA testified that the data base would reside alongside that of
the MVB, and that a service provider would maintain communication
lines allowing data base updating by insurers, with costs

 
 
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depending upon the frequency of updates.  HPD testified that the
bill was a start in the right direction, and would allow HPD to
resolve the long-standing problem of verifying motor vehicle
insurance coverage.

     State Farm questioned whether the benefits of identifying
uninsured motorists would counterbalance the costs of
identification, which would be passed onto insured motorists.

     HIC testified, among other things, that the 48-hour insurer
reporting time would in some cases cause problems for insured
drivers, by providing erroneous information regarding their
insured status because of delays in database information
reporting and processing.

     Your Committee recognizes the concerns and issues raised by
the testifiers.  However, your Committee believes that this bill
merits further consideration and should be kept alive for further
discussion.

     Your Committee has amended this measure by:

     (1)  Replacing its effective date with a blank; and

     (2)  Making technical, nonsubstantive amendments for the
          purpose of style and clarity.

     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 is in accord with the intent and
purpose of H.B. No. 2751, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2751, H.D. 1, and be referred to the Committee on Finance.

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



                                   ______________________________
                                   RON MENOR, Chair