STAND. COM. REP. 2988
Honolulu, Hawaii
, 2004
RE: H.B. No. 2786
H.D. 1
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 2786, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO ARBITRATION,"
begs leave to report as follows:
The purpose of this measure is to establish the right to reasonable attorney's fees and costs for a policyholder or beneficiary who prevails in an arbitration proceeding against an insurer to enforce coverage under an insurance policy.
The Department of Commerce and Consumer Affairs and Consumer Lawyers of Hawaii testified in support of this measure. State Farm Insurance Companies opposed the measure.
Your Committee finds that arbitration offers a more efficient and less costly alternative to litigation to resolve liability disputes between policyholders and their insurers, and should, therefore, be encouraged. Your Committee further finds that current law contains a disincentive to dispute resolution through arbitration because it entitles policyholders to an award of attorney's fees and costs if they succeed in obtaining benefits in a lawsuit, but not if the same rights are held enforceable in arbitration. Further, the Hawaii Supreme Court has interpreted current law to limit such awards to judicial proceedings. This measure corrects this inequity by extending the policyholder's right to an award of attorney's fees and costs to arbitration actions.
Your Committee has amended this measure:
(1) By deleting the proposed new subsection (b) to section 431:10-242, Hawaii Revised Statutes, and inserting language within the existing section that expands the type of contested proceedings pursuant to which a prevailing policyholder or beneficiary is entitled to an award of reasonable attorney's fees and costs to include arbitration and proceedings before the Insurance Commissioner;
(2) To provide that it takes effect upon its approval, rather than on July 1, 2345; and
(3) By making technical amendments for consistency purposes.
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. 2786, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2786, H.D. 1, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,
____________________________ RON MENOR, Chair |
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