STAND. COM. REP. NO. 2506

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2811
                                        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 S.B. No. 2811 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to provide for consistency
within the anti-discrimination provisions of the motor vehicle
insurance code, to clarify the scope of the code's applicability,
and to broaden the prohibition against discriminatory practices. 

     Testimony on the measure was submitted by the Insurance
Commissioner, Hawaii Insurers Council, State Farm Insurance
Companies, National Association of Independent Insurers, and an
individual. 

     Currently, the motor vehicle insurance code prohibits an
insurer from basing a standard or rating plan on a person's
credit bureau rating, but there is no prohibition on refusing to
continue insurance coverage based on consideration of this same
factor.  Conversely, while an insurer may not refuse to continue
a policy based on a person's place of residence, it is not
prohibited from basing its standards or rating plans on a
person's place of residence.  This measure would make the two
provisions consistent by prohibiting consideration of the factors
of credit bureau rating and place of residence both for purposes
of refusing to continue a policy and for purposes of establishing
standards and rating plans.


 
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     Additionally, this measure expands the discriminatory
practice prohibition to include the use of certain factors in
formulating underwriting guidelines, and clarifies the penalty
provision of the code by providing that all persons, and not only
insurance licensees, are subject to the code's requirements.  
  
     Your Committee has amended this measure by changing its
effective date to July 1, 2002, and by making technical,
nonsubstantive amendments.

     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. 2811, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 2811, 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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