HB1717

SECTION 1. The legislature finds that that there are a large number of vehicles on Hawaii's roads, perhaps twenty per cent or even higher, that are not insured, despite the requirement that motor vehicles and trailers have appropriate vehicle liability insurance at all times. While proof of insurance is required when renewing a safety check on a motor vehicle, too often the registered owner buys insurance only for the purpose of obtaining the required insurance card and then cancels the insurance, but continues to drive the vehicle. Of course, there also is the problem of drivers forging insurance cards, something that is not difficult to do with today's computers.

The legislature further finds that uninsured drivers place a heavy burden on the bulk of the registered owners in Hawaii who, when involved in an accident where an uninsured motorist is at fault, find themselves unable to obtain appropriate compensation from the uninsured motorist. If the injured party has acquired uninsured motorist coverage at additional cost, that party must seek compensation from that party's own insurance company. The plight of injured pedestrians and cyclists is even worse because they may not even own a motor vehicle and thus do not have any insurance to cover these incidents.

The purpose of this Act is to make it substantially more difficult for the owner of a registered vehicle to operate that vehicle without insurance.

SECTION 2. Chapter 286, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§286-A Revocation of registration upon cancellation of insurance; notice. (a) Upon cancellation of a motor vehicle insurance policy or bond issued in compliance with chapters 287 and 431, the motor vehicle insurer or bond holder, within twenty-four hours, shall notify by certified mail the director of finance of the county in which the registration was issued that the policy or bond was canceled and shall further verify receipt by the director of finance of the notice of cancellation in the manner prescribed by the director of finance. If the notice and verification is not provided, the insurance or bond shall remain in effect and the insurer or bond holder shall remain liable under the terms of the policy or bond issued.

When the director of finance receives notice of cancellation for any vehicle, the director of finance shall revoke the registration of the vehicle on the effective date of the cancellation specified in the notice unless, not later than two days prior to the effective date, the director of finance has received a new certificate of insurance covering the same motor vehicle, or unless the revocation has been stayed by an order of a court or administrative agency, pursuant to the applicable provisions of chapters 287 and 431, which order has been duly served upon the director of finance.

Upon revocation, the director of finance shall promptly notify the registered owner of the vehicle that the registration has been cancelled, that the vehicle's license plates and certificate of registration shall be surrendered to the director of finance immediately, and that further operation of the vehicle is prohibited. The director of finance shall also ensure that the notice of cancellation is provided to all law enforcement agencies charged with traffic enforcement in the form necessary for inclusion in their systems of record.

Upon receipt of notice from the director of finance, the registered owner shall surrender the license plates and the certificate of registration for the vehicle to the director of finance within seven days of the mailing date of the notice.

(b) The director of finance, upon receipt of a notice of the cessation of the authority of an insurance or surety company to issue or execute motor vehicle liability policies or bonds in the State and upon the written request of the commissioner of insurance, shall send written notice to every owner of a motor vehicle covered by a motor vehicle liability policy or bond issued or executed by the company, that the registration thereof will be revoked unless, within ten days after the date of mailing of the notice, the registered owner files with the director of finance a new certificate of insurance; provided that, if the authority of the company to issue or execute motor vehicle liability policies or bonds in the State ceases by reason of its merger or consolidation with another company so authorized, and it is proved to the satisfaction of the commissioner of insurance that the new or continuing company has assumed all the obligations and liabilities of the company under any and all policies and bonds issued by it, the director of finance shall not be required to give notice with respect to policies or bonds issued prior to the effective date of the merger or consolidation.

(c) Upon the failure of the owner of a motor vehicle to file a new certificate issued by an authorized insurer or to obtain a bond and to file notice of the bond as required by this section, the director of finance shall immediately revoke the registration of the vehicle; provided that if a new certificate is filed prior to the effective date of the cancellation of the existing policy or bond, the director of finance, in the director of finance's discretion, may rescind the revocation.

(d) The director of finance upon receipt of an attested copy of a finding and order of an appropriate court or administrative agency ordering the reinstatement of a motor vehicle liability policy or bond, shall promptly rescind the revocation of the registration of the motor vehicle covered by the policy or bond. This section shall not preclude the director of finance from issuing the reinstatement on the director of finance's own authority as provided by law.

(e) Any notice required by this section to be given by the director of finance shall be deemed sufficient if mailed by the director of finance, or the director of finance's authorized representative, postage prepaid, to the address on the application for registration, and an affidavit of the director of finance or authorized representative that the notice has been so mailed shall be prima facie evidence of mailing.

§286-B Notice to law enforcement officials; seizure of registration plates; suspension of registered owner's driver's license. (a) The director of finance, after receipt of a notice issued pursuant to section 286-A by a motor vehicle insurer or bond holder and upon the effective date of revocation pursuant to that section, shall notify the police department of the county in which the motor vehicle is registered of the failure to provide and maintain an insurance policy or bond and of the cancellation of the vehicle registration. The notice shall include the name and address of the registered owner of the motor vehicle.

(b) If the registered owner of the vehicle, or the registered owner's agent, has not surrendered the license plates and certificate of registration of the vehicle within seven days as required by section 286-A(a), the police department in the county in which the motor vehicle is registered, upon receipt of notice from the director of finance, shall seize the certificate of registration and license plates of the vehicle and return them forthwith to the director of finance, unless the registered owner presents to the director of finance a notice of reinstatement from the insurer or evidence of a new motor vehicle insurance policy dated at least two days prior to the effective date of revocation, and the director has issued a withdrawal of the revocation of registration.

(c) If the registered owner has not surrendered the license plates and certificate of registration within thirty days of the date of issuance by the director of finance of the notice of cancellation of registration, the director of finance shall immediately suspend the registered owner's driver's license and the license shall not be reinstated unless and until the vehicle's license plates and certificate of registration are surrendered as required by section 286-A(a) or unless a certificate of insurance or bond issued in compliance with chapters 287 and 431 has been provided to the director of finance by an authorized insurer or bond holder.

If the registered owner files an affidavit with the director of finance showing that the license plates and certificate of registration have either been stolen or destroyed in an accident and has filed a police report or equivalent document supporting that assertion, the director shall either not suspend the driver's license or shall reinstate the license if already suspended. The director of finance, in the director of finance's discretion, may also decline to suspend the driver's license if other significant and appropriate mitigating factors are present.

(d) The director of finance, not later than six months after the effective date of this Act, shall adopt rules pursuant to chapter 91, necessary to enforce the provisions of this section and section 286-A and to take effect at that time. No state or county official shall delay the implementation of these provisions or rules necessary for their implementation."

SECTION 3. Section 286-41, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) [~~Notwithstanding any other law to the contrary, the~~] The director of finance of the county in which the application for registration is sought shall [~~not~~] require proof of insurance as a condition to satisfy the requirements of this part. [~~This subsection shall apply only to the initial registration of any motor vehicle.~~]

No motor vehicle or trailer shall be registered in the State unless the application required by this section is accompanied by a certificate of insurance from an automobile insurance company licensed to do business in the State that demonstrates that the vehicle is insured in compliance with chapters 287 and 431. The certificate of insurance shall be maintained with the record of registration of the vehicle. The director of finance may waive the requirement of a certificate of insurance if the director is otherwise satisfied that the provisions of compulsory motor vehicle liability insurance have been met for the vehicle.

The director of finance shall issue a certificate of registration upon the filing of a bond, satisfactory to the department in form and amount, covering all motor vehicles and trailers of the obligor for which application for registration may be made, containing the condition of a motor vehicle liability bond, as defined in chapters 287 and 431 of the Hawaii Revised Statutes.

A certificate of registration shall be issued by the director of finance upon presentation to it of satisfactory evidence of adequate personal injury liability insurance providing indemnity or protection equal to motor vehicle liability policies, as required by chapters 287 and 431.

The director of finance, pursuant to section 286-B shall revoke without a hearing any certificate of registration if the director is satisfied that the certificate of insurance required by section 286-A has not been maintained for a period at least coterminous with that of the registration.

Vehicles owned by the State, the counties, and the federal government shall not be subject to the requirements of this subsection."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on January 1, 2008.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1717
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII