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HOUSE OF REPRESENTATIVES             H.R. NO.              
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE  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

 
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                                  H.R. NO.              
                                                        
                                                        

 
 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, that the Department of Human Services, in cooperation
14   with the Insurance Commissioner, conduct a study evaluating
15   alternative funding for automobile insurance coverage for
16   public assistance recipients; and
17   
18       BE IT FURTHER RESOLVED that this study include the
19   following:
20   
21       (1)  The number of claims submitted annually by public
22            assistance recipients;
23   
24       (2)  The costs of paying those claims;
25   
26       (3)  The corresponding cost to insurance carriers who pay
27            assessments into the HJUP;
28   
29       (4)  The criteria used by the Department of Human Services
30            to certify recipients for free auto insurance
31            coverage; and
32   
33       (5)  The feasibility of alternative funding for providing
34            auto insurance for public assistance recipients;
35   
36   and
37   
38       BE IT FURTHER RESOLVED that the Department of Human
39   Services submit a report with its findings and recommendations
40   to the Legislature no later than twenty days before the
41   convening of the Regular Session of 2000; and
42   
43       BE IT FURTHER RESOLVED that certified copies of this
44   Resolution be transmitted to the Director of Human Services and
45   the Insurance Commissioner.
46 
47 
48 
49                         OFFERED BY:  ____________________________

 
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