Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1510
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committees on Commerce and Consumer Protection and
Judiciary, to which was referred S.B. No. 1510 entitled: 


beg leave to report as follows:

     The purpose of this bill, as received by your Committees, is
to require professionals and businesses to maintain liability
insurance and to exclude professionals and businesses that
maintain the required liability insurance from the definition of
"joint tortfeasors."

     Testimony in support of this measure was submitted by the
Building Industry Association of Hawaii, the Hawaii Association
of Realtors, and Pacific Geotechnical Engineers, Inc.  Testimony
commenting on this measure was submitted by the Department of
Commerce and Consumer Affairs, State Farm Insurance Companies,
the Hawaii Insurers Council, and Consumer Lawyers of Hawaii.
Testimony in opposition to this measure was submitted by
Consulting Structural Hawaii, Inc.

     Your Committees further find that Hawaii's liability
insurers are in a unique position to provide important empirical
data illuminating the effectiveness of Hawaii's tort system
generally.  A Tort Law Study Group was convened in 1997 pursuant
to S.C.R. 256, H.D. 1, to undertake a comprehensive study of the
tort law system and to submit recommendations to the legislature
for possible reforms.  The Study Group found that there was a
paucity of empirical data available regarding tort claims in

                                   STAND. COM. REP. NO. 792
                                   Page 2

Hawaii, and recommended that the Insurance Commissioner establish
a procedure for the systematic collection of tort claims data.
The vast majority of tort claims involve liability insurance
claims of some sort.  Your Committees believe that insurers have
the capability to track empirical data of the sort requested by
the Study Group, but that insurers may have concerns that
disclosure of such information would give an advantage to
competitors or to plaintiffs' attorneys, or would reveal
confidential information about specific claims.  Explicitly
permitting and requiring that such information be collected and
provided to the Insurance Commissioner will allow the Insurance
Commissioner to compile an accurate picture of the operation and
effectiveness of Hawaii's tort law system.

     Your Committees are concerned that property and casualty
insurance lines generally, including the insurance coverages
affecting most businesses, have been reaping profits from Hawaii
business that are well above the national average and, for some
lines, are the highest in the nation.  The Insurance Commissioner
has broad powers to regulate insurance premiums for worker's
compensation and automobile insurance, including the power to
reduce rates when appropriate.  Your Committees believe this
power should be extended to allow the Insurance Commissioners to
roll back rates on all lines as appropriate to prevent excessive
insurance profits at the expense of Hawaii's businesses and

     Your Committees find that there is interest in the business
and professional communities in the abrogation of joint and
several liability, perhaps in exchange for carrying a mandatory
minimum level of liability insurance.  However, it is not clear
who would be best suited to set minimum liability insurance
levels for a broad range of businesses and professions.  Further,
the potential costs and economic effects of this measure are
unsusceptible to any accurate estimation at this time.  For these
reasons, your Committees believe it will be best to first examine
the feasibility of this approach for a limited segment of the
professional and business communities.  Because the real estate
community, in particular, has indicated interest in this measure,
and because the real estate community is subject to state
regulation, your Committees believe that real estate
professionals will be an appropriate group to study and
eventually test a system in which mandatory minimum insurance
levels are combined with exemption from joint and several

     Upon further consideration, your Committees have amended
this measure by:

                                   STAND. COM. REP. NO. 792
                                   Page 3

     (1)  Deleting the proposed new article relating to mandatory
          liability insurance;

     (2)  Deleting the proposed amendment to the definition of
          joint tortfeasors;

     (3)  Inserting a section requiring the Insurance
          Commissioner to study the feasibility of setting
          mandatory minimum insurance levels for real estate
          agents and brokers, in exchange for an exemption from
          joint and several liability for complying agents and

     (4)  Adding a new section to the Hawaii Revised Statutes
          requiring the Insurance Commissioner to track tort
          claims data and permitting insurers to collect tort
          claims data as requested by the Insurance Commissioner;

     (5)  Allowing the Insurance Commissioner to adjust rates for
          all types of insurance.

     As affirmed by the records of votes of the members of your
Committees on Commerce and Consumer Protection and Judiciary that
are attached to this report, your Committees are in accord with
the intent and purpose of S.B. No. 1510, as amended herein, and
recommend that it pass Second Reading in the form attached hereto
as S.B. No. 1510, S.D. 1, and be placed on the calendar for Third

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Commerce and
                                   Consumer Protection and

____________________________       ______________________________
AVERY B. CHUMBLEY, Co-Chair        BRIAN KANNO, Co-Chair

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