REPORT TITLE:
Motor vehicle insurance


DESCRIPTION:
Extends the reporting date to the legislature and the governor of
the motor vehicle insurance benefits task force to June 30, 2000.
Requires the task force to develop a plan for balancing maximum
coverage and benefits for motor vehicle accident victims with the
lowest possible cost for motor vehicle insurance purchasers.
Provides free motor vehicle insurance coverage to public
assistance recipients who received medical services prior to July
1, 1994, and who continue to receive public assistance benefits.
(SB957 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        957
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            
                                                             
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                   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,
 
10 enforcement of uninsured motorist requirements, and possible
 
11 repeal of motor vehicle insurance and personal injury protection
 
12 coverage requirements, and needs more time to complete its study
 
13 and finalize its recommendations to the legislature.  The
 
14 legislature further finds that the State's actuary cannot conduct
 
15 an actuarial analysis of the motor vehicle insurance reform
 
16 mandated by Act 251 until at least eighteen months from the
 
17 January 1, 1988 effective date of the Act.
 

 
 
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 1      The purpose of this Act is to:
 
 2      (1)  Extend from 1999 to June 30, 2000, the date by which
 
 3           the motor vehicle insurance benefits task force is to
 
 4           report its findings and recommendations to the
 
 5           legislature and governor;
 
 6      (2)  Require that the motor vehicle insurance benefits task
 
 7           force develop a plan that balances maximum coverage and
 
 8           benefits for victims of motor vehicle accidents, with
 
 9           the lowest possible cost for purchasers of motor
 
10           vehicle insurance; and
 
11      (3)  Extend free motor vehicle insurance coverage to persons
 
12           receiving public assistance benefits in the form of
 
13           medical services prior to July 1, 1994, and who
 
14           continue to receive the benefits.
 
15      SECTION 2.  Section 431:10C-407, Hawaii Revised Statutes, is
 
16 amended by amending subsection (b) to read as follows:
 
17      "(b)  The plan shall provide all personal injury protection
 
18 benefits and services and bodily injury and property damage
 
19 liability coverages to the limits and coverages specified in this
 
20 article for all classes of persons, motor vehicles, and motor
 
21 vehicle uses specified in this part upon the payment of premiums
 
22 as provided in subpart C, as follows:
 

 
 
 
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 1      (1)  The plan shall provide personal injury protection
 
 2           benefits and policies for each of the following
 
 3           classes, and each class shall be able to secure a
 
 4           personal injury protection and bodily injury and
 
 5           property damage liability policy through the plan:
 
 6           (A)  All motor vehicles owned by licensed assigned risk
 
 7                drivers as the commissioner, by rules, shall
 
 8                define.  The commissioner shall regulate the class
 
 9                in accordance with the general practice of the
 
10                industry, the applicable results, if any, of the
 
11                commissioner's examination of the motor vehicle
 
12                insurers' business records and experience, and any
 
13                applicable and scientifically credible
 
14                governmental or academic studies of the
 
15                multi-accident or high-risk motor vehicle driver;
 
16           (B)  All motor vehicles owned by licensed drivers
 
17                convicted within the thirty-six months immediately
 
18                preceding the date of application, in any
 
19                jurisdiction of any one or more of the offenses
 
20                of, or of the offenses cognate to:
 
21                (i)  Heedless and careless driving;
 
22               (ii)  Driving while license suspended or revoked;
 
23              (iii)  Leaving the scene of an accident;
 

 
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 1               (iv)  Manslaughter, if resulting from the operation
 
 2                     of a motor vehicle; or
 
 3                (v)  Driving under the influence of an
 
 4                     intoxicating liquor as provided in section
 
 5                     291-4 or any drug as provided in section
 
 6                     291-7;
 
 7           (C)  All commercial uses, first class, defined as any
 
 8                commercial use engaged in the transport of
 
 9                passengers for hire or gratuity;
 
10           (D)  All commercial uses, second class, defined as any
 
11                commercial, business, or institutional use other
 
12                than the transport of passengers as described in
 
13                subparagraph (C) or the exclusive use of a vehicle
 
14                for domestic-household-familial purposes; and
 
15           (E)  All other motor vehicles, not classified under
 
16                subparagraph (A), (B), (C), or (D), owned by
 
17                licensed drivers who are unable to obtain motor
 
18                vehicle insurance policies and optional additional
 
19                insurance through ordinary methods;
 
20      (2)  The plan shall provide personal injury protection
 
21           benefits and bodily injury and property damage policies
 
22           for all classes of persons, motor vehicles, and motor
 
23           vehicle uses, at the premiums specified under subpart
 

 
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 1           C, at the option of the owners, for the following
 
 2           classes, which the commissioner, by rules, shall
 
 3           further define and regulate:
 
 4           (A)  All licensed drivers, or unlicensed permanently
 
 5                disabled individuals unable to operate their motor
 
 6                vehicles, who are receiving public assistance
 
 7                benefits consisting of direct cash payments, or
 
 8                who received public assistance benefits in the
 
 9                form of medical services prior to July 1, 1994,
 
10                and are still receiving the benefits, through the
 
11                department of human services, or benefits from the
 
12                [supplemental security income] Supplemental
 
13                Security Income program under the Social Security
 
14                Administration; provided that the licensed
 
15                drivers, or unlicensed permanently disabled
 
16                individuals unable to operate their motor
 
17                vehicles, are the sole registered owners of the
 
18                motor vehicles to be insured; provided further
 
19                that not more than one vehicle per public
 
20                assistance unit shall be insured under this part,
 
21                unless extra vehicles are approved by the
 
22                department of human services as being necessary
 
23                for medical or employment purposes; provided
 

 
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 1                further that the motor vehicle to be insured shall
 
 2                be used strictly for personal purposes, and not
 
 3                for commercial purposes; and
 
 4           (B)  Any licensed physically handicapped driver,
 
 5                including drivers with any auditory limitation.
 
 6           Each category of driver/owner under subparagraphs (A)
 
 7           and (B) may secure motor vehicle insurance coverage
 
 8           through the plan at the individual's option; provided
 
 9           any previous motor vehicle insurance policy has expired
 
10           or has been canceled.  Any person becoming eligible for
 
11           plan coverage under subparagraph (A) shall first
 
12           exhaust all paid coverage under any motor vehicle
 
13           insurance policy then in force before becoming eligible
 
14           for plan coverage.
 
15                Any person eligible or becoming eligible under
 
16           rules adopted by the commissioner under subparagraph
 
17           (B), may at any time elect coverage under the plan and
 
18           terminate any prior private insurer's coverage.
 
19                A certificate shall be issued by the department of
 
20           human services indicating that the person is a bona
 
21           fide public assistance recipient as defined in
 
22           subparagraph (A).  The certificate shall be deemed a
 
23           policy for the purposes of this chapter [431] upon the
 

 
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 1           issuance of a valid motor vehicle insurance
 
 2           identification card pursuant to section 431:10C-107;
 
 3           and
 
 4      (3)  Under the joint underwriting plan, the required motor
 
 5           vehicle policy coverages as provided in section
 
 6           431:10C-301 shall be offered by every insurer to each
 
 7           eligible applicant assigned by the bureau.  In
 
 8           addition, uninsured motorist and underinsured motorist
 
 9           coverages shall be offered in conformance with section
 
10           431:10C-301, and optional additional coverages shall be
 
11           offered in conformance with section 431:10C-302, for
 
12           each class except [that] the class defined in paragraph
 
13           (2)(A), as the commissioner, by rules, shall provide."
 
14      SECTION 3.  Act 251, Session Laws of Hawaii 1997, is amended
 
15 by amending section 65 to read as follows:
 
16      "SECTION 65.  There is established a motor vehicle insurance
 
17 benefits task force that shall be administratively attached to
 
18 the insurance division of the department of commerce and consumer
 
19 affairs.
 
20      The task force shall consist of the following three members: 
 
21      (1)  The insurance commissioner;
 
22      (2)  One person appointed by the governor from a list
 
23           submitted by the president of the senate; and
 

 
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 1      (3)  One person appointed by the governor from a list
 
 2           submitted by the speaker of the house of
 
 3           representatives.
 
 4      If a vacancy occurs, the vacancy shall be filled for the
 
 5 unexpired term in the same manner as the office was previously
 
 6 filled.  The members shall serve without compensation but shall
 
 7 be reimbursed for all necessary expenses.
 
 8      The task force shall review the motor vehicle insurance
 
 9 system and develop a comprehensive plan for:
 
10      (1)  Reducing costs;
 
11      (2)  Paying for the cost of motor vehicle insurance or
 
12           benefits;
 
13      (3)  Maximizing coverage and benefits for residents; [and]
 
14      (4)  Balancing the maximum coverage and benefits for victims
 
15           of motor vehicle accidents with the lowest possible
 
16           cost for purchasers of motor vehicle insurance; and
 
17     [(4)] (5)  Alleviating the problem of uninsured motorists.
 
18     In assisting the task force to carry out this section, the
 
19 insurance commissioner may:
 
20      (1)  Hire, without regard to chapters 76 and 77, Hawaii
 
21           Revised Statutes, sufficient staff and retain, without
 
22           regard to chapter 103D, Hawaii Revised Statutes,
 

 
 
 
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 1           consultants or other persons to provide those services
 
 2           deemed by the task force necessary to carry out its
 
 3           function; and
 
 4      (2)  Conduct informational hearings and compel, through the
 
 5           issuance of subpoenas, the attendance of witnesses and
 
 6           the production of documents and records.
 
 7      The task force shall submit a progress report to the
 
 8 legislature and the governor no later than twenty days prior to
 
 9 the convening of the regular session of 1998 and a report of its
 
10 final recommendations to the legislature and the governor no
 
11 later than [twenty days prior to the convening of the regular
 
12 session of 1999.] June 30, 2000."
 
13      SECTION 4.  Statutory material to be repealed is bracketed.
 
14 New statutory material is underscored.
 
15      SECTION 5.  This Act shall take effect on July 1, 2010.