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HOUSE OF REPRESENTATIVES             H.C.R. NO.H.D. 1      
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE  CONCURRENT
                        RESOLUTION

REQUESTING A STUDY EVALUATING ALTERNATIVE FUNDING FOR AUTOMOBILE
   INSURANCE COVERAGE FOR PUBLIC ASSISTANCE RECIPIENTS.



 1       WHEREAS, those receiving financial public assistance
 2   through the Department of Human Services in Hawaii are eligible
 3   for free automobile insurance coverage; and
 4   
 5       WHEREAS, this policy is premised on the need for
 6   transportation experienced by those actively seeking employment
 7   or ineligible for employment due to disability; and
 8   
 9       WHEREAS, during the 1980s, it was difficult for Hawaii
10   drivers to procure auto insurance because the insurance
11   industry was not fully competitive; and
12   
13       WHEREAS, high-risk drivers found it almost impossible to
14   obtain auto insurance and were forced to buy insurance through
15   the Hawaii Joint Underwriting Plan (HJUP), which resulted in
16   their paying higher premiums; and
17   
18       WHEREAS, others unable to obtain insurance due to market
19   conditions and public assistance recipients requiring coverage
20   were also included in the HJUP; and
21   
22       WHEREAS, the higher premiums paid by high-risk drivers in
23   the HJUP offset the cost of insuring public assistance
24   recipients, who were also in the HJUP; and
25   
26       WHEREAS, because the insurance industry in Hawaii is now
27   more competitive, those drivers who can pay are now able to
28   obtain auto insurance through private carriers and are no
29   longer insured through the HJUP; and
30   
31       WHEREAS, because more HJUP drivers switched to private
32   carriers and the number of drivers insured through the
33   Department of Human Services increased, losses began to accrue
34   to the HJUP; and
35   
36       WHEREAS, the HJUP is no longer self-sustaining and its
37   losses are paid by insurance carriers; and
38   

 
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                                  H.C.R. NO.            H.D. 1
                                                        
                                                        

 
 1       WHEREAS, as a cost of operating in the State, the Insurance
 2   Commission assesses private carriers operating in Hawaii to
 3   compensate the HJUP for financial shortfalls, and in 1998 those
 4   assessments were roughly $20,000,000; and
 5   
 6       WHEREAS, in these difficult economic times, the State's
 7   free auto insurance for public assistance recipients policy
 8   must be evaluated to determine whether this policy merits the
 9   financial losses it is incurring; now, therefore,
10   
11       BE IT RESOLVED by the House of Representatives of the
12   Twentieth Legislature of the State of Hawaii, Regular Session
13   of 1999, the Senate concurring, that the Department of Human
14   Services, in cooperation with the Insurance Commissioner, is
15   requested to conduct a study evaluating alternative funding for
16   automobile insurance coverage for public assistance recipients;
17   and
18   
19       BE IT FURTHER RESOLVED that this study is requested to
20   include the following:
21   
22       (1)  The number of claims submitted annually by public
23            assistance recipients;
24   
25       (2)  The costs of paying those claims;
26   
27       (3)  The corresponding cost to insurance carriers who pay
28            assessments into the HJUP;
29   
30       (4)  The criteria used by the Department of Human Services
31            to certify recipients for free auto insurance
32            coverage; and
33   
34       (5)  The feasibility of alternative funding for providing
35            auto insurance for public assistance recipients;
36   
37   and
38   
39       BE IT FURTHER RESOLVED that the Department of Human
40   Services is requested to submit a report with its findings and
41   recommendations to the Legislature no later than twenty days
42   before the convening of the Regular Session of 2000; and
43   
44       BE IT FURTHER RESOLVED that certified copies of this
45   Concurrent Resolution be transmitted to the Director of Human
46   Services and the Insurance Commissioner.