REPORT TITLE:
Insurance


DESCRIPTION:
Creates a pure no-fault system (not including property damage)
for motor vehicle and motorcycle insurance.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           761
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MOTOR VEHICLE AND MOTORCYCLE INSURANCE.



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

 1      SECTION 1.  Chapter 431, Hawaii Revised Statutes, is amended
 
 2 by adding two new sections to article 10C to be appropriately
 
 3 designated and to read as follows:
 
 4      "431:10C-     Optional pain and suffering first-party
 
 5 insurance.  (a)  An insurer authorized to issue a motor vehicle
 
 6 insurance policy shall offer optional personal injury protection
 
 7 benefits as a first-party coverage for compensation for pain and
 
 8 suffering for an insured who suffers accidental harm resulting
 
 9 in:
 
10      (1)  Loss of life;
 
11      (2)  Permanent and serious impairment of body function; or
 
12      (3)  Permanent and serious disfigurement.
 
13 The commissioner shall establish a schedule of payment by which
 
14 compensation shall be paid to the insured for purposes of this
 
15 subsection.  The schedule shall specify the amount of payment in
 
16 correlation with the severity of the injury.  Policy limits shall
 
17 be in limits from $25,000 to $1,000,000, in increments approved
 
18 by the commissioner.
 
19      (b)  Subject to approval by the commissioner, an insurer may
 

 
Page 2                                                     
                                     S.B. NO.           761
                                                        
                                                        

 
 1 also offer optional personal injury protection benefits as a
 
 2 first-party coverage for compensation for pain and suffering for
 
 3 an insured who suffers accidental harm resulting in damages not
 
 4 covered by subsection (a).  The commissioner shall establish a
 
 5 schedule of payment for compensation for purposes of this
 
 6 subsection, by which an insurer has the option to follow that
 
 7 schedule.
 
 8      431:10C-      Coordination of benefits.  (a)  To avoid
 
 9 duplication of benefits available through medical insurance or
 
10 contract rights, collateral sources of an injured person shall be
 
11 primary to the person's personal injury protection benefits.
 
12      (b)  If an injured person does not have collateral source
 
13 coverage sufficient to cover total expenses as a result of
 
14 accidental harm, the person's personal injury protection benefits
 
15 shall cover the cost.
 
16      (c)  For the purposes of this section, optional pain and
 
17 suffering first-party insurance as specified in section
 
18 431:10C-    does not constitute coverage for medical benefits."
 
19      SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended
 
20 by adding a new section to article 10G to be appropriately
 
21 designated and to read as follows:
 
22      "431:10G-     Optional motorcycle and motor scooter policy
 
23 coverage.  In addition to the required policy coverage described
 

 
Page 3                                                     
                                     S.B. NO.           761
                                                        
                                                        

 
 1 in section 431:10G-301, every insurer issuing a policy covering a
 
 2 motorcycle or motor scooter shall make available to the insured
 
 3 the following optional insurance, to apply in the same manner to
 
 4 a motorcycle or motor scooter:
 
 5      (1)  Optional pain and suffering first-party insurance as
 
 6           provided in section 431:10C-   ;
 
 7      (2)  Coordination of benefits as provided in section
 
 8           431:10C-   ; and
 
 9      (3)  Optional additional insurance as provided in section
 
10           431:10C-302."
 
11      SECTION 3.  Section 431:10C-103, Hawaii Revised Statutes, is
 
12 amended by adding a new definition to be appropriately inserted
 
13 and to read as follows:
 
14      ""Collateral source" means all benefits one receives or is
 
15 entitled to receive as reimbursement of loss because of an injury
 
16 from sources other than personal injury protection benefits.  In
 
17 such calculation, no subtraction shall be made for amounts one
 
18 receives or is entitled to receive:
 
19      (1)  In discharge of familial obligations or support;
 
20      (2)  By reason of another's death, except that there is
 
21           subtracted from loss in calculating net loss those
 
22           amounts received from social security or workers'
 
23           compensation; and
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1      (3)  In no event shall any payment made by an employer to an
 
 2           employee or an employee's survivors be regarded as a
 
 3           gratuity."
 
 4      SECTION 4.  Section 431:10C-103, Hawaii Revised Statutes, is
 
 5 amended by amending the definitions of "maximum limit" and
 
 6 "uninsured motor vehicle" to read as follows:
 
 7      ""Maximum limit" means the total personal injury protection
 
 8 benefits payable for coverage under section
 
 9 431:10C-103.5[(a),](c), per person on account of accidental harm
 
10 sustained by the person in any one motor vehicle accident [shall
 
11 be $10,000,] regardless of the number of motor vehicles or
 
12 policies involved."
 
13      ""Uninsured motor vehicle" means [any of the following:
 
14      (1)  A motor vehicle for which there is no bodily injury
 
15           liability insurance or self-insurance applicable at the
 
16           time of the accident; or
 
17      (2)  An] an unidentified motor vehicle that causes an
 
18           accident resulting in injury; provided the accident is
 
19           reported to the police or proper governmental
 
20           authority, and the claimant notifies the claimant's
 
21           insurer within thirty days or as soon as practicable
 
22           thereafter, that the claimant or the claimant's legal
 
23           representative has a legal action arising out of the
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1           accident."
 
 2      SECTION 5.  Section 431:10C-103, Hawaii Revised Statutes, is
 
 3 amended by deleting the definition of "underinsured motor
 
 4 vehicle".
 
 5      [""Underinsured motor vehicle" means a motor vehicle with
 
 6 respect to the ownership, maintenance, or use for which sum of
 
 7 the limits of all bodily injury liability insurance coverage and
 
 8 self-insurance applicable at the time of loss is less than the
 
 9 liability for damages imposed by law."]
 
10      SECTION 6.  Section 431:10C-103.5, Hawaii Revised Statutes,
 
11 is amended by amending subsection (c) to read as follows:
 
12      "(c)  Personal injury protection benefits shall be [subject
 
13 to an aggregate limit of $10,000 per person for services provided
 
14 under this section.  An insurer may offer additional coverage in
 
15 excess of the $10,000 aggregate limit for services provided under
 
16 this section, or as provided by rule of the commissioner.]
 
17 offered in an amount of $250,000 up to a maximum of $1,000,000,
 
18 in increments approved by the insurance commissioner and as
 
19 selected by the insured.  The $250,000 shall be adjusted annually
 
20 by the commissioner beginning December 31, 2001, so that ninety-
 
21 nine per cent of personal protection insurance benefit claims are
 
22 fully covered by this limit.  The insurer may offer additional
 
23 limits in excess of $1,000,000 coverage for these expenses.
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 However, an insured may exercise an option in writing to purchase
 
 2 coverage amounts lower than $250,000, but not lower than
 
 3 $100,000.
 
 4      Any change in the limits as selected by the insured applies
 
 5 only to benefits arising out of motor vehicle accidents occurring
 
 6 after the date the change becomes effective.  Stacking of
 
 7 coverage is prohibited."
 
 8      SECTION 7.  Section 431:10C-105, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "431:10C-105  Self-insurance.  [The motor vehicle insurance
 
11 required by section 431:10C-104 may be satisfied by any owner of
 
12 a motor vehicle if:
 
13      (1)  Such owner provides a surety bond, proof of
 
14           qualifications as a self-insurer, or other securities
 
15           affording security substantially equivalent to that
 
16           afforded under a motor vehicle insurance policy,
 
17           providing coverage at all times for the entire motor
 
18           vehicle registration period, as determined and approved
 
19           by the commissioner under regulations; and
 
20      (2)  The commissioner is satisfied that in case of injury,
 
21           death, or property damage, any claimant would have the
 
22           same rights against such owner as the claimant would
 
23           have had if a motor vehicle insurance policy had been
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1           applicable to such vehicle.] For purposes of this
 
 2           chapter, any person who is the owner of an uninsured
 
 3           vehicle shall be considered a self-insurer."
 
 4      SECTION 8.  Section 431:10C-121, Hawaii Revised Statutes, is
 
 5 amended by amending subsection (b) to read as follows:
 
 6      "(b)  In the event section 431:10C-306[(a) to (d)] is held
 
 7 constitutionally invalid, then it is the intent of the
 
 8 legislature that the following sections only shall be voided:
 
 9      (1)  431:10C-104;
 
10      (2)  431:10C-105;
 
11      (3)  431:10C-120;
 
12      (4)  431:10C-303;
 
13      (5)  431:10C-304; and
 
14      (6)  431:10C-305.
 
15 It shall be conclusively presumed that the legislature would have
 
16 enacted the remainder of this article without such invalid or
 
17 unconstitutional provision."
 
18      SECTION 9.  Section 431:10C-211, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "431:10C-211  Attorney's fees.(a)  A person making a
 
21 claim for personal injury protection benefits may be allowed an
 
22 award of a reasonable sum for attorney's fees, and reasonable
 
23 costs of suit in an action brought by or against an insurer who
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 denies all or part of a claim for benefits under the policy,
 
 2 unless the court upon judicial proceeding or the commissioner
 
 3 upon administrative proceeding determines that the claim was
 
 4 unreasonable, fraudulent, excessive, or frivolous.  Reasonable
 
 5 attorney's fees, based upon actual time expended, shall be
 
 6 treated separately from the claim and be paid directly by the
 
 7 insurer to the attorney.
 
 8      [(b)  A person who has effected a tort recovery, whether by
 
 9 suit or settlement, and who is sued by the insurer to recover
 
10 fifty per cent of the personal injury protection benefits paid,
 
11 under section 431:10C-307, may be allowed reasonable attorney's
 
12 fees and reasonable costs of suit.
 
13      (c)  A person suing in tort, as permitted under this
 
14 article, may enter into any arrangement with an attorney.
 
15      (d)] (b)  An insurer or self-insurer may be allowed an award
 
16 of a reasonable sum as attorney's fees based upon actual time
 
17 expended, and all reasonable costs of suit for its defense
 
18 against a person making claim against the insurer or self-
 
19 insurer, within the discretion of the court upon judicial
 
20 proceeding or the commissioner upon administrative proceeding
 
21 where the claim is determined to be fraudulent or frivolous.
 
22 Such attorney's fees and all reasonable costs of suit so awarded
 
23 may be treated as an offset against any benefits due or to become
 

 
Page 9                                                     
                                     S.B. NO.           761
                                                        
                                                        

 
 1 due to the person."
 
 2      SECTION 10.  Section 431:10C-301, Hawaii Revised Statutes,
 
 3 is amended to read as follows:
 
 4      431:10C-301  Required motor vehicle policy coverage.  [(a)]
 
 5 An insurance policy covering a motor vehicle shall provide:
 
 6      (1)  Coverage specified in section 431:10C-304; and
 
 7     [(2)  Insurance to pay on behalf of the owner or any operator
 
 8           of the insured motor vehicle using the motor vehicle
 
 9           with a reasonable belief that the person is entitled to
 
10           operate the motor vehicle, sums which the owner or
 
11           operator may legally be obligated to pay for injury,
 
12           death, or damage to property of others, except property
 
13           owned by, being transported by, or in the charge of the
 
14           insured, which arise out of the ownership, operation,
 
15           maintenance, or use of the motor vehicle; provided that
 
16           in the case of a U-drive motor vehicle, insurance to
 
17           pay on behalf of the renter or any operator of the
 
18           insured motor vehicle using the motor vehicle with the
 
19           express permission of the renter or lessee, sums which
 
20           the renter or operator may be legally obligated to pay
 
21           for damage or destruction of property of others (except
 
22           property owned by, being transported by, or in the
 
23           charge of the renter or operator) arising out of the
 

 
Page 10                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           operation or use of the motor vehicle unless the motor
 
 2           vehicle is reported stolen by the owner within three
 
 3           days of notification of the incident; provided that the
 
 4           insurer and owner of a U-drive vehicle shall have the
 
 5           right of subrogation against the renter and operator
 
 6           for breach of the rental contract between owner and
 
 7           renter; and provided further that, in the event that
 
 8           any motor vehicle offered for rental or lease is
 
 9           involved in an accident, the lessor shall provide all
 
10           information it has or obtains relevant to the accident
 
11           to all other involved parties upon their request,
 
12           including but not limited to information about the
 
13           lessee, and the driver of the vehicle if other than the
 
14           lessee.
 
15      (b)  A motor vehicle insurance policy shall include:
 
16      (1)  Liability coverage of not less than $20,000 per person,
 
17           with an aggregate limit of $40,000 per accident, for
 
18           all damages arising out of accidental harm sustained as
 
19           a result of any one accident and arising out of
 
20           ownership, maintenance, use, loading, or unloading of a
 
21           motor vehicle;]
 
22      (2)  Liability coverage of not less than $10,000 for all
 
23           damages arising out of damage to or destruction of
 

 
Page 11                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           property including motor vehicles and including the
 
 2           loss of use thereof, but not including property owned
 
 3           by, being transported by, or in the charge of the
 
 4           insured, as a result of any one accident arising out of
 
 5           ownership, maintenance, use, loading, or unloading, of
 
 6           the insured vehicle[;
 
 7      (3)  With respect to any motor vehicle registered or
 
 8           principally garaged in this State, liability coverage
 
 9           provided therein or supplemental thereto, in limits for
 
10           bodily injury or death set forth in paragraph (1),
 
11           under provisions filed with and approved by the
 
12           commissioner, for the protection of persons insured
 
13           thereunder who are legally entitled to recover damages
 
14           from owners or operators of uninsured motor vehicles
 
15           because of bodily injury, sickness, or disease,
 
16           including death, resulting therefrom; provided that the
 
17           coverage required under this paragraph shall not be
 
18           applicable where any named insured in the policy shall
 
19           reject the coverage in writing; and
 
20      (4)  Coverage for loss resulting from bodily injury or death
 
21           suffered by any person legally entitled to recover
 
22           damages from owners or operators of underinsured motor
 
23           vehicles.  An insurer may offer the underinsured
 

 
Page 12                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           motorist coverage required by this paragraph in the
 
 2           same manner as uninsured motorist coverage; provided
 
 3           that the offer of both shall:
 
 4           (A)  Be conspicuously displayed so as to be readily
 
 5                noticeable by the insured;
 
 6           (B)  Set forth the premium for the coverage adjacent to
 
 7                the offer in a manner that the premium is clearly
 
 8                identifiable with the offer and may be easily
 
 9                subtracted from the total premium to determine the
 
10                premium payment due in the event the insured
 
11                elects not to purchase the option; and
 
12           (C)  Provide for written rejection of the coverage by
 
13                requiring the insured to affix the insured's
 
14                signature in a location adjacent to or directly
 
15                below the offer.
 
16      (c)  The stacking or aggregating of uninsured motorist
 
17 coverage or underinsured motorist coverage is prohibited, except
 
18 as provided in subsection (d).
 
19      (d)  An insurer shall offer the insured the opportunity to
 
20 purchase uninsured motorist coverage and underinsured motorist
 
21 coverage by offering the following options with each motor
 
22 vehicle insurance policy:
 
23      (1)  The option to stack uninsured motorist coverage and
 

 
Page 13                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           underinsured motorist coverage; and
 
 2      (2)  The option to select uninsured motorist coverage and
 
 3           underinsured motorist coverage, whichever is
 
 4           applicable, up to but not greater than the bodily
 
 5           injury liability coverage limits in the insured's
 
 6           policy.
 
 7      These offers are to be made when a motor vehicle insurance
 
 8 policy is first applied for or issued.  For any existing
 
 9 policies, an insurer shall offer such coverage at the first
 
10 renewal after January 1, 1993.  Once an insured has been provided
 
11 the opportunity to purchase or reject the coverages in writing
 
12 under the options, no further offer is required to be included
 
13 with any renewal or replacement policy issued to the insured.
 
14      (e)  If uninsured motorist coverage or underinsured motorist
 
15 coverage is rejected, pursuant to section 431:10C-301(b):
 
16      (1)  The offers required by section 431:10C-301(d) are not
 
17           required to be made;
 
18      (2)  No further offers or notice of the availability of
 
19           uninsured motorist coverage and underinsured motorist
 
20           coverage are required to be made in connection with any
 
21           renewal or replacement policy; and
 
22      (3)  The written rejections required by section
 
23           431:10C-301(b) shall be presumptive evidence of the
 

 
Page 14                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           insured's decision to reject the options]."
 
 2      SECTION 11.  Section 431:10C-302, Hawaii Revised Statutes,
 
 3 is amended by amending subsection (a) to read as follows:
 
 4      "(a)  In addition to the motor vehicle insurance coverages
 
 5 described in section 431:10C-301, every insurer issuing a motor
 
 6 vehicle insurance policy shall make available to the insured the
 
 7 following optional insurance under the following conditions.
 
 8 Every insurer issuing a commercial motor vehicle insurance policy
 
 9 shall make available to the insured the following optional
 
10 insurance, except for those benefits under paragraphs (3), (4),
 
11 [(5),] (8), (9), and (10)[, and (11)] under the following
 
12 conditions:
 
13      (1)  At the option of the insured, provisions covering loss
 
14           resulting from damage to the insured's motor vehicle
 
15           with such deductibles, including but not limited to
 
16           collision and comprehensive deductibles of $50, $100,
 
17           $250, $500, $1,000, $1,500, and $2,000, at
 
18           appropriately reduced premium rates, as the
 
19           commissioner, by rule, shall provide;
 
20      (2)  At the option of the insured, compensation to the
 
21           insured, the insured's spouse, any dependents, or any
 
22           occupants of the insured's vehicle for damages not
 
23           covered by personal injury protection benefits;
 

 
Page 15                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1      [(3) Additional coverages and benefits with respect to any
 
 2           injury or any other loss from motor vehicle accidents
 
 3           or from operation of a motor vehicle for which the
 
 4           insurer may provide for aggregate limits with respect
 
 5           to such additional coverage so long as the basic
 
 6           liability coverages provided are not less than those
 
 7           required by section 431:10C-301(b)(1) and (2);
 
 8      (4)] (3)  At the option of the insured, an option in writing
 
 9           for coverage for wage loss benefits for monthly
 
10           earnings loss for injury arising out of a motor vehicle
 
11           accident.  Any change in the wage loss benefits
 
12           coverage selected by an insured shall apply only to
 
13           benefits arising out of motor vehicle accidents
 
14           occurring after the date the change becomes effective.
 
15           Coverage shall be offered in multiples of $500 a
 
16           month/$3,000 per accident per person, from $500 a
 
17           month/$3,000 per accident to $2,000 a month/$12,000 per
 
18           accident; however, nothing shall prevent an insurer
 
19           from making available higher limits of coverage; 
 
20     [(5)] (4)  An option in writing for minimum coverage for
 
21           death benefits for death arising out of a motor vehicle
 
22           accident in an amount of $25,000, to be paid to the
 
23           surviving spouse, for the benefit of the spouse and
 

 
Page 16                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           dependent children, or if there are no surviving spouse
 
 2           or dependent children, then to the estate. Coverage
 
 3           shall also be made available for increased death
 
 4           benefits in increments of $25,000 up to $100,000;
 
 5           however, nothing shall prevent an insurer from making
 
 6           available higher limits of coverage.  At the option of
 
 7           the insured, coverage for funeral expenses of $2,000
 
 8           shall be made available;
 
 9     [(6)] (5)  Terms, conditions, exclusions, and deductible
 
10           clauses, coverages, and benefits which:
 
11           (A)  Are consistent with the required provisions of the
 
12                policy,
 
13           (B)  Limit the variety of coverage available so as to
 
14                give buyers of insurance reasonable opportunity to
 
15                compare the cost of insuring with various
 
16                insurers; and
 
17           (C)  Are approved by the commissioner as fair and
 
18                equitable;
 
19     [(7)] (6)  At appropriately reduced premium rates,
 
20           deductibles applicable only to claims of an insured in
 
21           the amounts of $100, $300, $500, and $1,000 from all
 
22           personal injury protection benefits otherwise payable;
 
23           provided that if two or more insureds to whom the
 

 
Page 17                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1           deductible is applicable under the contract of
 
 2           insurance are injured in the same accident, the
 
 3           aggregate amount of the deductible applicable to all of
 
 4           them shall not exceed the specified deductible, which
 
 5           amount where necessary shall be allocated equally among
 
 6           them;
 
 7     [(8)] (7)  Every insurer shall fully disclose the
 
 8           availability of all required and optional coverages and
 
 9           deductibles, including the nature and amounts, at the
 
10           issuance or delivery of the policy; or, for a policy
 
11           already issued on January 1, 1998, disclosure shall be
 
12           made at the first renewal after January 1, 1998.  The
 
13           insurer shall also disclose at issuance or renewal, as
 
14           applicable, the effect on premium rates and savings of
 
15           each option and deductible.  Further offers or
 
16           disclosures thereafter shall be required to be included
 
17           with every other renewal or replacement policy.  All
 
18           elections of coverages, options, and deductibles by a
 
19           named insured shall be binding upon additional insureds
 
20           covered under the named insured's policy.  The purpose
 
21           of this paragraph is to inform insureds or prospective
 
22           insureds of the coverages under this article;
 
23     [(9)] (8)  (A)  An insurer may make available, and provide at
 

 
Page 18                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1                the option of the named insured, the benefits
 
 2                described in section 431:10C-103.5(a) through
 
 3                managed care providers such as a health
 
 4                maintenance organization or a preferred provider
 
 5                organization.  The option may include conditions
 
 6                and limitations to coverage, including deductibles
 
 7                and coinsurance requirements, as approved by the
 
 8                commissioner. The commissioner shall approve those
 
 9                conditions and limitations which are substantially
 
10                comparable to or exceed the coverage provided
 
11                under section 431:10C-103.6;
 
12           (B)  An insurer may make available, and provide at the
 
13                option of the named insured, deductible and
 
14                coinsurance arrangements whereby the recipient of
 
15                care, treatment, services, products, expenses, or
 
16                accommodations shares in the payment obligation;
 
17           (C)  No deductible or coinsurance under a policy
 
18                covered under section 431:10C-302(a)(9)(A) or (B)
 
19                shall be applied with respect to care, treatment,
 
20                services, products, or accommodation provided or
 
21                expenses incurred by an insured during the first
 
22                twenty-four hours in which emergency treatment has
 
23                been provided or until the insured patient's
 

 
Page 19                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1                emergency medical condition is stabilized,
 
 2                whichever is longer;
 
 3           (D)  (i)  The optional coverage prescribed in section
 
 4                     431:10C-302(a)(9)(A) and (B) shall apply only
 
 5                     to the named insured, resident spouse, or
 
 6                     resident relative; and
 
 7               (ii)  "Resident relative" means a person who, at
 
 8                     the time of the accident, is related by
 
 9                     blood, marriage, or adoption to the named
 
10                     insured or resident spouse and who resides in
 
11                     the named insured's household, even if
 
12                     temporarily living elsewhere, and any ward or
 
13                     foster child who usually resides with the
 
14                     named insured, even if living elsewhere;
 
15           (E)  An agreement made under section 431:10C-302(a)(9)
 
16                must be a voluntary agreement between the insured
 
17                and the insurer, and no insurer shall require an
 
18                insured to agree to those policy provisions as a
 
19                condition of providing insurance coverage.
 
20                Requiring an agreement as a precondition to the
 
21                provision of insurance shall constitute an unfair
 
22                insurance practice and shall be subject to the
 
23                provisions, remedies, and penalties provided in
 

 
Page 20                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1                article 13; and
 
 2           (F)  An insurer providing the coverages authorized in
 
 3                section 431:10C-302(a)(9)(A) and (B) shall
 
 4                demonstrate in rate filings submitted to the
 
 5                commissioner the savings to the insured to be
 
 6                realized under the plan[;] and shall further
 
 7                submit to the commissioner, for preapproval, any
 
 8                disclosure form to be used to record an insured's
 
 9                election for any of the authorized coverages;
 
10    [(10)] (9)  An insurer shall make available optional coverage
 
11           for naturopathic, acupuncture, nonmedical remedial
 
12           care, and treatment rendered in accordance with the
 
13           teachings, faith, or belief of any group which relies
 
14           upon spiritual means through prayer for healing; and
 
15    [(11)] (10)  An insurer may make available optional coverage
 
16           for chiropractic treatment in addition to chiropractic
 
17           treatment provided under 431:10C-103.6 for not more
 
18           than the lesser of the following:
 
19           (A)  Thirty additional visits at no more than $75 a
 
20                visit; or
 
21           (B)  Treatment as defined by the Hawaii Chiropractic
 
22                Association guidelines in effect on January 25,
 
23                1997.
 

 
Page 21                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1      The commissioner shall adopt rules, including policy limits,
 
 2 terms, and conditions as necessary to implement the requirements
 
 3 of this section."
 
 4      SECTION 12.  Section 431:10C-306, Hawaii Revised Statutes,
 
 5 is amended to read as follows:
 
 6      "431:10C-306  Abolition of tort liability.  [(a)  Except as
 
 7 provided in subsection (b), this article abolishes tort] Tort
 
 8 liability [of the following persons with respect] is abolished as
 
 9 to accidental harm arising from motor vehicle accidents occurring
 
10 in this State[:
 
11      (1)  Owner, operator, or user of an insured motor vehicle;
 
12           or
 
13      (2)  Operator or user of an uninsured motor vehicle who
 
14           operates or uses such vehicle without reason to believe
 
15           it to be an uninsured motor vehicle.
 
16      (b)  Tort liability is not abolished as to the following
 
17 persons, their personal representatives, or their legal guardians
 
18 in the following circumstances:
 
19      (1)  Death occurs to the person in such a motor vehicle
 
20           accident;
 
21      (2)  Injury occurs to the person which consists, in whole or
 
22           in part, in a significant permanent loss of use of a
 
23           part or function of the body;
 

 
Page 22                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1      (3)  Injury occurs to the person which consists of a
 
 2           permanent and serious disfigurement which results in
 
 3           subjection of the injured person to mental or emotional
 
 4           suffering; or
 
 5      (4)  Injury occurs to the person in a motor vehicle accident
 
 6           and as a result of such injury that the personal injury
 
 7           protection benefits incurred by such person equal or
 
 8           exceed $5,000; provided that in calculating this
 
 9           amount:
 
10           (A)  The following shall be included:
 
11                (i)  Personal injury protection benefits incurred
 
12                     by, paid to or payable to, or on behalf of,
 
13                     an eligible injured person including amounts
 
14                     paid directly by or on behalf of the eligible
 
15                     insured because of the accidental harm or
 
16                     similar benefits under social security,
 
17                     worker's compensation, or public assistance
 
18                     laws;
 
19               (ii)  The applicable amounts of deductible or
 
20                     copayment paid or incurred;
 
21              (iii)  Amounts paid by or on behalf of an injured
 
22                     person who is not entitled to personal injury
 
23                     protection benefits, by health insurance or
 

 
Page 23                                                    
                                     S.B. NO.           761
                                                        
                                                        

 
 1                     other funds; provided that payment in excess
 
 2                     of the charges or services allowable under
 
 3                     this chapter shall not be included;
 
 4               (iv)  Where an eligible injured person receives
 
 5                     coverage on other than a fee for service
 
 6                     basis including, but not limited to, a health
 
 7                     maintenance organization operating on a
 
 8                     capitation basis, the value of services
 
 9                     provided shall be determined in accordance
 
10                     with the fee schedules allowable under this
 
11                     chapter for purposes of threshold
 
12                     determination;
 
13           (B)  When a person has optional coverage, benefits
 
14                received in excess of the maximum basic personal
 
15                injury protection limits set forth in section
 
16                431:10C-103.5 shall not be included.
 
17      (c)  Subsections (a) and (b)].  This section shall apply
 
18 whether or not the injured person is entitled to receive personal
 
19 injury protection benefits.  [The party against whom the
 
20 presumption under this section is directed shall have the burden
 
21 of proof to rebut the presumption.
 
22      (d)  No claim may be made for benefits under the uninsured
 
23 motorist coverage by an injured person against an insurer who has
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 paid or is liable to pay motor vehicle insurance benefits to the
 
 2 injured person unless the claim meets the requirements of this
 
 3 article.
 
 4      (e)]  No provision of this article shall be construed to
 
 5 exonerate, or in any manner to limit:
 
 6      (1)  The liability of any person in the business of
 
 7           manufacturing, retailing, repairing, servicing, or
 
 8           otherwise maintaining motor vehicles, arising from a
 
 9           defect in a motor vehicle caused, or not corrected, by
 
10           an act or omission in the manufacturing, retailing,
 
11           repairing, servicing, or other maintenance of a vehicle
 
12           in the course of such person's business;
 
13      (2)  The criminal or civil liability, including special and
 
14           general damages, of any person who, in the maintenance,
 
15           operation, or use of any motor vehicle:
 
16           (A)  Intentionally causes injury or damage to a person
 
17                or property;
 
18           (B)  Engages in criminal conduct, including driving
 
19                under the influence of alcohol, drugs, or both,
 
20                which causes injury or damage to person or
 
21                property;
 
22           (C)  Engages in conduct resulting in punitive or
 
23                exemplary damages; or
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1           (D)  Causes death or injury to another person in
 
 2                connection with the accident while operating the
 
 3                vehicle in violation of section 291-4 or 291-7.
 
 4      [(f)]  No provision of this section shall be construed to
 
 5 abolish tort liability with respect to property damage arising
 
 6 from motor vehicle accidents."
 
 7      SECTION 13.  Section 431:10G-301, Hawaii Revised Statutes,
 
 8 is amended to read as follows:
 
 9      "431:10G-301  Required motorcycle and motor scooter policy
 
10 coverage.  [(a)  An insurance policy covering a motorcycle or
 
11 motor scooter shall provide insurance in the following amounts to
 
12 pay, on behalf of the owner or any operator of the insured
 
13 motorcycle or motor scooter, sums that the owner or any operator
 
14 may legally be obligated to pay for injury, death, or damage to
 
15 the property of others, except property owned by, being
 
16 transported by, or in charge of the insured that arise out of the
 
17 ownership, operation, maintenance, or use of the motorcycle or
 
18 motor scooter:
 
19      (1)  Liability coverage of not less than $20,000 per person,
 
20           with an aggregate limit of $40,000 per accident, for
 
21           all damages arising out of accidental harm sustained as
 
22           a result of any one accident; and
 
23      (2)  Liability coverage of not less than $10,000 for all
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1           damages arising out of injury to or destruction of
 
 2           property, including motorcycles or motor scooters and
 
 3           including the loss of use thereof, but not including
 
 4           property owned by, being transported by, or in the
 
 5           charge of the insured, as a result of any one accident.
 
 6      (b)  At the option of the owner, each insurer shall:
 
 7      (1)  Offer medical payment coverage up to $10,000 to pay all
 
 8           reasonable expenses incurred within one year from the
 
 9           date of accident for necessary medical, surgical,
 
10           dental, ambulance, hospital, professional, and nursing
 
11           services;
 
12      (2)  Offer an income disability plan; and
 
13      (3)  Offer liability coverage in excess of the minimum
 
14           coverages required by this section.]
 
15      (a)  An insurance policy covering a motorcycle or motor
 
16 scooter shall provide insurance to pay for expenses allowed under
 
17 section 431:10C-103.5 in an amount of $500,000 up to a maximum of
 
18 $2,000,000 in increments approved by the insurance commissioner
 
19 and as selected by the insured.  The $500,000 shall be adjusted
 
20 annually by the commissioner beginning December 31, 2001, so that
 
21 ninety-nine per cent of personal protection insurance benefit
 
22 claims for injuries sustained by a person driving a motorcycle or
 
23 motor scooter, or a passenger, are fully covered by this limit.
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1      (b)  An insurer may offer additional limits in excess of
 
 2 $2,000,000 coverage for these expenses.  However, an insured may
 
 3 exercise an option in writing to purchase coverage amounts lower
 
 4 than $500,000, but not lower than $50,000.  Any change in the
 
 5 limits as selected by the insured applies only to benefits
 
 6 arising out of motor vehicle accidents occurring after the date
 
 7 the change becomes effective.  Stacking of coverage is
 
 8 prohibited.
 
 9      (c)  Any operator or passenger of a motorcycle or motor
 
10 scooter as defined in section 286-2 who receives injuries or dies
 
11 in a motor vehicle accident may not claim personal injury
 
12 protection benefits under a motor vehicle insurance policy,
 
13 unless expressly provided for in the motor vehicle policy."
 
14      SECTION 14.  Section 431:10C-118, Hawaii Revised Statutes,
 
15 is repealed.
 
16      ["431:10C-118  Fee in lieu of fine; defense.(a)  Any
 
17 person bringing an action in tort under this article who was
 
18 uninsured at the time of the accident shall pay a fee of $1,000
 
19 in lieu of any fine which could have been levied as a criminal
 
20 penalty for failing to obtain the motor vehicle insurance
 
21 coverage required by this article.
 
22      (b)  The fee required under subsection (a) shall be paid by
 
23 the person directly, or deducted from any settlement or verdict
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 received, or both.
 
 2      (c)  No person shall be required to pay the fee in
 
 3 subsection (a) if the person can show proof of having been
 
 4 convicted in a prior criminal proceeding for failing to have
 
 5 motor vehicle insurance coverage on the date of the accident
 
 6 which is the subject of the tort action."]
 
 7      SECTION 15.  Section 431:10C-307, Hawaii Revised Statutes,
 
 8 is repealed.
 
 9      ["431:10C-307  Reimbursement of duplicate benefits.
 
10 Whenever any person effects a tort liability recovery for
 
11 accidental harm, whether by suit or settlement, which duplicates
 
12 personal injury protection benefits already paid under the
 
13 provisions of this article, the motor vehicle insurer shall be
 
14 reimbursed fifty per cent of the personal injury protection
 
15 benefits paid to or on behalf of the person receiving the
 
16 duplicate benefits up to the maximum limit."]
 
17      SECTION 16.  Section 431:10C-308.5, Hawaii Revised Statutes,
 
18 is repealed.
 
19      ["431:10C-308.5  Limitation on charges.(a)  As used in
 
20 this article, the term "workers' compensation schedules" means
 
21 the schedules adopted and as may be amended by the director of
 
22 labor and industrial relations for workers' compensation cases
 
23 under chapter 386, establishing fees and frequency of treatment
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 guidelines, and contained in sections 12-13-30, 12-13-35,
 
 2 12-13-38, 12-13-39, 12-13-45, 12-13-85 through 92, and 12-13-94,
 
 3 Hawaii administrative rules.  References in the workers'
 
 4 compensation schedules to "the employer", "the director", and
 
 5 "the industrial injury", shall be respectively construed as
 
 6 references to "the insurer", "the commissioner", and "the injury
 
 7 covered by personal injury protection benefits" for purposes of
 
 8 this article.
 
 9      (b)  The charges and frequency of treatment for services
 
10 specified in section 431:10C-103.5(a), except for emergency
 
11 services provided within seventy-two hours following a motor
 
12 vehicle accident resulting in injury, shall not exceed the
 
13 charges and frequency of treatment permissible under the workers'
 
14 compensation schedules.  Charges for independent medical
 
15 examinations, including record reviews, physical examinations,
 
16 history taking, and reports, to be conducted by a licensed Hawaii
 
17 provider unless the insured consents to an out-of-state provider,
 
18 shall not exceed the charges permissible under the workers'
 
19 compensation schedules for consultation for a complex medical
 
20 problem.  The workers' compensation schedules shall not apply to
 
21 independent medical examinations conducted by out-of-state
 
22 providers; provided that the charges for the examination are
 
23 reasonable.  All records relating to an independent medical
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 examination shall be made available to the claimant upon request.
 
 2 The commissioner may adopt administrative rules relating to fees
 
 3 or frequency of treatment for injuries covered by personal injury
 
 4 protection benefits.  If adopted, these administrative rules
 
 5 shall prevail to the extent that they are inconsistent with the
 
 6 workers' compensation schedules.
 
 7      (c)  Charges for services for which no fee is set by the
 
 8 workers' compensation schedules or other administrative rules
 
 9 adopted by the commissioner shall be limited to eighty per cent
 
10 of the provider's usual and customary charges for these services.
 
11      (d)  Services for which no frequency of treatment guidelines
 
12 are set forth in the workers' compensation schedules or other
 
13 administrative rules adopted by the commissioner shall be deemed
 
14 appropriate and reasonable expenses necessarily incurred if so
 
15 determined by a provider.
 
16      (e)  The provider of services described in section
 
17 431:10C-103.5(a) shall not bill the insured directly for those
 
18 services but shall bill the insurer for a determination of the
 
19 amount payable.  The provider shall not bill or otherwise attempt
 
20 to collect from the insured the difference between the provider's
 
21 full charge and the amount paid by the insurer.
 
22      (f)  A health care provider shall be compensated by the
 
23 insurer for preparing reports documenting the need for treatments
 

 
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                                     S.B. NO.           761
                                                        
                                                        

 
 1 which exceed the schedules in accordance with the fee schedule
 
 2 for special reports.  The health care provider may assess the
 
 3 cost of preparing a report to the insurer at no more than $20 per
 
 4 page up to a maximum of $75 for each report."]
 
 5      SECTION 17.  Statutory material to be repealed is bracketed.
 
 6 New statutory material is underscored.
 
 7      SECTION 18.  This Act shall take effect on January 1, 2000.
 
 8 
 
 9                           INTRODUCED BY:  _______________________