Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.C.R. No. 113 entitled:

begs leave to report as follows:

The purpose of this concurrent resolution is to evaluate the Hawaii Insurance Bureau's (Bureau's) Fire Rating Program (Program) by requesting that the Insurance Commissioner, Hawaii Insurers Council, and the Bureau report to the 2006 Legislature on the Program's effectiveness.

The Bureau and Insurance Commissioner of the Department of Commerce and Consumer Affairs supported this concurrent resolution.

Your Committee finds that the Bureau acts as a rating organization for property and casualty insurers in Hawaii. The Bureau has a fire rating program that collects information about public fire protection in each fire district in the state, which consists of a five, all-weather road miles radius around a fire station. Each district is given a public protection classification (PPC), a number from one to ten, with one representing exemplary fire protection, and ten, that the area's fire-suppression program does not meet minimum criteria.

Statistical data on insurance losses shows that there is a relationship between a high level of fire protection as measured by the PPC, and low fire losses. The Bureau disseminates PPC information to all property and casualty insurers; however, insurers are not required to use these classifications in establishing their rates.

Your Committee finds that this concurrent resolution will provide the Legislature with information about the Bureau's Program that will allow an evaluation of how the costs of the risks of fire are distributed among policyholders in Hawaii.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 113 and recommends its adoption.