Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Transportation, Military Affairs and Government Operations and Commerce, Consumer Protection and Housing, to which was referred S.B. No. 3028 entitled:

beg leave to report as follows:

The purpose of this measure is to regulate warrantors of vehicle protection products.

Testimony in support of this measure was received from the National Vehicle Protection Association. The Insurance Commissioner testified in opposition.

Your Committees find that companies sell vehicle protection products to participating automobile dealers, who in turn sell them to consumers. The products are normally accompanied by a warranty that provides the customer with certain remedies if the product fails to prevent theft. This measure requires warrantors to comply with certain financial security requirements and gives the insurance commissioner enforcement authority.

Your Committees have heard the concerns of the Commissioner that the bill would greatly expand the insurance division's jurisdiction beyond insurance, but believe the issue warrants further discussion.

As affirmed by the records of votes of the members of your Committees on Transportation, Military Affairs and Government Operations and Commerce, Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3028 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.