REPORT TITLE:
Motor Vehicle Insurance


DESCRIPTION:
Extends reporting deadline for MVIB task force to June 30, 2000.
Requires task force to balance maximum coverage and benefits for
motor vehicle accident victims with lowest possible cost for
motor vehicle insurance purchasers.  Expands free insurance
coverage to include certain public assistance recipients. (CD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        957
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            C.D. 1
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MOTOR VEHICLE INSURANCE.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The motor vehicle insurance benefits task force
 
 2 (task force) was created by Act 251, Session Laws of Hawaii 1997,
 
 3 which instituted major reforms to the no-fault system.  The task
 
 4 force was to review the motor vehicle insurance system and
 
 5 develop a comprehensive plan for reducing costs, paying for the
 
 6 cost of motor vehicle insurance or benefits, maximizing coverage
 
 7 and benefits, and alleviating the problem of uninsured motorists.
 
 8 The legislature finds that the task force has been studying
 
 9 issues such as pay-at-the-pump, twenty-four hour care, enforcing
 
10 uninsured motorist requirements, possible repeal of required
 
11 motor vehicle insurance, and repealing the requirement for
 
12 personal injury protection coverage, and needs more time to
 
13 complete its study and to make recommendations to the
 
14 legislature.  The legislature further finds that the State's
 
15 actuary cannot make an actuarial analysis of Act 251 until at
 
16 least eighteen months from the implementation of the Act, which
 
17 took effect January 1, 1998.
 
18      The purpose of this Act is to extend the date of the motor
 
19 vehicle insurance benefits task force for its report to the
 

 
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 1 legislature and the governor.  This Act also provides certain
 
 2 public assistance recipients with free no-fault insurance
 
 3 coverage.
 
 4      SECTION 2.  Act 251, Session Laws of Hawaii 1997, is amended
 
 5 by amending section 65 to read as follows:
 
 6      "SECTION 65.  There is established a motor vehicle insurance
 
 7 benefits task force that shall be administratively attached to
 
 8 the insurance division of the department of commerce and consumer
 
 9 affairs.
 
10      The task force shall consist of the following three members: 
 
11      (1)  The insurance commissioner;
 
12      (2)  One person appointed by the governor from a list
 
13           submitted by the president of the senate; and
 
14      (3)  One person appointed by the governor from a list
 
15           submitted by the speaker of the house of
 
16           representatives.
 
17      If a vacancy occurs, the vacancy shall be filled for the
 
18 unexpired term in the same manner as the office was previously
 
19 filled.  The members shall serve without compensation but shall
 
20 be reimbursed for all necessary expenses.
 
21      The task force shall review the motor vehicle insurance
 
22 system and develop a comprehensive plan for:
 
23      (1)  Reducing costs;
 

 
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 1      (2)  Paying for the cost of motor vehicle insurance or
 
 2           benefits;
 
 3      (3)  Maximizing coverage and benefits for residents; [and]
 
 4      (4)  Balancing the maximum coverage and benefits for victims
 
 5           of motor vehicle accidents with the lowest possible
 
 6           cost for purchasers of motor vehicle insurance; and
 
 7      (5)  Alleviating the problem of uninsured motorists.
 
 8      In assisting the task force to carry out this section, the
 
 9 insurance commissioner may:
 
10      (1)  Hire, without regard to chapters 76 and 77, Hawaii
 
11           Revised Statutes, sufficient staff and retain, without
 
12           regard to chapter 103D, Hawaii Revised Statutes,
 
13           consultants or other persons to provide those services
 
14           deemed by the task force necessary to carry out its
 
15           function; and
 
16      (2)  Conduct informational hearings and compel, through the
 
17           issuance of subpoenas, the attendance of witnesses and
 
18           the production of documents and records.
 
19      The task force shall submit a progress report to the
 
20 legislature and the governor no later than twenty days prior to
 
21 the convening of the regular session of 1998 and a report of its
 
22 final recommendations to the legislature and the governor no
 
23 later than [twenty days prior to the convening of the regular
 

 
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 1 session of 1999.] June 30, 2000."
 
 2      SECTION 3.  Section 431:10C-407, Hawaii Revised Statutes, is
 
 3 amended by amending subsection (b) to read as follows:
 
 4      "(b)  The plan shall provide all personal injury protection
 
 5 benefits and services and bodily injury and property damage
 
 6 liability coverages to the limits and coverages specified in this
 
 7 article for all classes of persons, motor vehicles, and motor
 
 8 vehicle uses specified in this part upon the payment of premiums
 
 9 as provided in subpart C, as follows:
 
10      (1)  The plan shall provide personal injury protection
 
11           benefits and policies for each of the following
 
12           classes, and each class shall be able to secure a
 
13           personal injury protection and bodily injury and
 
14           property damage liability policy through the plan:
 
15           (A)  All motor vehicles owned by licensed assigned risk
 
16                drivers as the commissioner, by rules, shall
 
17                define.  The commissioner shall regulate the class
 
18                in accordance with the general practice of the
 
19                industry, the applicable results, if any, of the
 
20                commissioner's examination of the motor vehicle
 
21                insurers' business records and experience, and any
 
22                applicable and scientifically credible
 
23                governmental or academic studies of the
 

 
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 1                multi-accident or high-risk motor vehicle driver;
 
 2           (B)  All motor vehicles owned by licensed drivers
 
 3                convicted within the thirty-six months immediately
 
 4                preceding the date of application, in any
 
 5                jurisdiction of any one or more of the offenses
 
 6                of, or of the offenses cognate to:
 
 7                (i)  Heedless and careless driving;
 
 8               (ii)  Driving while license suspended or revoked;
 
 9              (iii)  Leaving the scene of an accident;
 
10               (iv)  Manslaughter, if resulting from the operation
 
11                     of a motor vehicle; or
 
12                (v)  Driving under the influence of an
 
13                     intoxicating liquor as provided in section
 
14                     291-4 or any drug as provided in section
 
15                     291-7;
 
16           (C)  All commercial uses, first class, defined as any
 
17                commercial use engaged in the transport of
 
18                passengers for hire or gratuity;
 
19           (D)  All commercial uses, second class, defined as any
 
20                commercial, business, or institutional use other
 
21                than the transport of passengers as described in
 
22                subparagraph (C) or the exclusive use of a vehicle
 
23                for domestic-household-familial purposes; and
 

 
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 1           (E)  All other motor vehicles, not classified under
 
 2                subparagraph (A), (B), (C), or (D), owned by
 
 3                licensed drivers who are unable to obtain motor
 
 4                vehicle insurance policies and optional additional
 
 5                insurance through ordinary methods;
 
 6      (2)  The plan shall provide personal injury protection
 
 7           benefits and bodily injury and property damage policies
 
 8           for all classes of persons, motor vehicles, and motor
 
 9           vehicle uses, at the premiums specified under subpart
 
10           C, at the option of the owners, for the following
 
11           classes, which the commissioner, by rules, shall
 
12           further define and regulate:
 
13           (A)  All licensed drivers, or unlicensed permanently
 
14                disabled individuals unable to operate their motor
 
15                vehicles, who are receiving public assistance
 
16                benefits consisting of direct cash payments, or
 
17                who received public assistance benefits in the
 
18                form of medical services prior to July 1, 1994,
 
19                and are still receiving the benefits, through the
 
20                department of human services, or benefits from the
 
21                [supplemental security income] Supplemental
 
22                Security Income program under the Social Security
 
23                Administration; provided that the licensed
 

 
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 1                drivers, or unlicensed permanently disabled
 
 2                individuals unable to operate their motor
 
 3                vehicles, are the sole registered owners of the
 
 4                motor vehicles to be insured; provided further
 
 5                that not more than one vehicle per public
 
 6                assistance unit shall be insured under this part,
 
 7                unless extra vehicles are approved by the
 
 8                department of human services as being necessary
 
 9                for medical or employment purposes; provided
 
10                further that the motor vehicle to be insured shall
 
11                be used strictly for personal purposes, and not
 
12                for commercial purposes; and
 
13           (B)  Any licensed physically handicapped driver,
 
14                including drivers with any auditory limitation.
 
15           Each category of driver/owner under subparagraphs (A)
 
16           and (B) may secure motor vehicle insurance coverage
 
17           through the plan at the individual's option; provided
 
18           any previous motor vehicle insurance policy has expired
 
19           or has been canceled.  Any person becoming eligible for
 
20           plan coverage under subparagraph (A) shall first
 
21           exhaust all paid coverage under any motor vehicle
 
22           insurance policy then in force before becoming eligible
 
23           for plan coverage.
 

 
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 1                Any person eligible or becoming eligible under
 
 2           rules adopted by the commissioner under subparagraph
 
 3           (B), may at any time elect coverage under the plan and
 
 4           terminate any prior private insurer's coverage.
 
 5                A certificate shall be issued by the department of
 
 6           human services indicating that the person is a bona
 
 7           fide public assistance recipient as defined in
 
 8           subparagraph (A).  The certificate shall be deemed a
 
 9           policy for the purposes of this chapter [431] upon the
 
10           issuance of a valid motor vehicle insurance
 
11           identification card pursuant to section 431:10C-107;
 
12           and
 
13      (3)  Under the joint underwriting plan, the required motor
 
14           vehicle policy coverages as provided in section
 
15           431:10C-301 shall be offered by every insurer to each
 
16           eligible applicant assigned by the bureau.  In
 
17           addition, uninsured motorist and underinsured motorist
 
18           coverages shall be offered in conformance with section
 
19           431:10C-301, and optional additional coverages shall be
 
20           offered in conformance with section 431:10C-302, for
 
21           each class except [that] the class defined in paragraph
 
22           (2)(A), as the commissioner, by rules, shall provide."
 
23      SECTION 4.  Statutory material to be repealed is bracketed.
 

 
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 1 New statutory material is underscored.
 
 2      SECTION 5.  This Act shall take effect upon its approval.