Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1819 entitled:

begs leave to report as follows:

The purpose of this bill is to exempt member-owned reciprocal motor vehicle insurers and their wholly owned subsidiaries:

(2) Whose primary purpose is to serve its members,

from the requirement that the insurer provide a complete sales and service office in the State, so long as satisfactory arrangements are made to provide consumers with claims service and adjustment and policy service.

Testimony in support of this bill was submitted by the Insurance Division of the Department of Commerce and Consumer Affairs and USAA, a member-owned insurance and financial services company that serves active duty and former members of the military. The Hawaii Independent Insurance Agents Association offered comments.

Your Committee finds that the insurer affected by this bill has been providing worldwide sales and claims service through the telephone and Internet. Furthermore, the insurer insures its members and is member-owned, which provides an incentive for high quality, low-cost services and products. Your Committee finds that under this bill the Insurance Commissioner would still maintain oversight authority, and could require specific information in writing about the claims, adjustment, and policy service arrangements available to policyholders.

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. 1819 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.