Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 595, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to standardize bonding and errors and omissions insurance requirements for managing general agents and reinsurance intermediary–managers.

Your Committee proposed replacing the contents of this measure with language amending the motor vehicle insurance code to increase the mandatory minimum motor vehicle liability coverage amount from $20,000 to $25,000 per person and the aggregate damages limit from $40,000 to $100,000 per accident.

The Consumer Lawyers of Hawaii testified in support of the proposed measure. Opposing testimony was received from the Hawaii Insurers Council, State Farm Insurance Companies, AIG Hawaii Insurance Company, Inc., and CATRALA. The Insurance Commissioner presented comments on the proposed measure.

Your Committee finds that the current liability coverage minimum and aggregate damages limit are inadequate to protect and compensate victims of motor vehicle accidents, but that the impact of raising these amounts is unknown. Your Committee further finds that the State Actuary is in the process of studying the effects of raising the coverage minimum and damages limit and that the Actuary's findings are expected prior to the end of this legislative session. Therefore, in order to keep this measure alive for further consideration pending the completion of the Actuary's analysis, your Committee has amended this measure by replacing its contents with language that replaces the current liability coverage minimum and aggregate damages limit with unspecified monetary amounts.

Finally, your Committee notes that while it is recommending passage of this measure pending receipt of the actuarial analysis, it is your Committee's intent not to enact changes to the liability coverage requirement and damages limit that will adversely affect policyholders in the form of increased premiums.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 595, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 595, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.