STAND. COM. REP. NO. 760

Honolulu, Hawaii

RE: S.B. No. 543

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 543 entitled:

"A BILL FOR AN ACT RELATING TO MOTOR VEHICLE INSURANCE,"

begs leave to report as follows:

The purpose and intent of this measure is to clarify the requirement for a motor vehicle insurer to maintain a complete sales and claims service office does not apply to the County of Kalawao.

Your Committee received testimony in support of this measure from the Hawaii Insurers Council, State Farm Insurance Company, and one individual.

Your Committee finds that under existing law, motor vehicle insurers must maintain a "brick and mortar" sales and claims service office, although licensed producers of motor vehicle insurers are able to satisfy this requirement by establishing and maintaining a sales and claims office in every county in which the insurer does business. However, when this exception to the complete sales and claims office requirement was passed, the County of Kalawao was not excluded. Your Committee notes that the County of Kalawao is the smallest county in the country. There are no driver's licenses issued by the county and, due to the limited number of vehicles, no insurance agent offices. Requiring a sales and claims agent in the County of Kalawao is therefore an unnecessary expense with no benefit. Accordingly, this measure excludes the County of Kalawao from the complete sales and claims office requirement and the county office exception under the State's motor vehicle insurance code.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 543 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,

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ROSALYN H. BAKER, Chair