Report Title:

MV Insurance; Sixty-Day Cancellations

Description:

Authorizes motor vehicle insurers to cancel or not renew any motor vehicle insurance policy that has been in effect for 60 days or less.

HOUSE OF REPRESENTATIVES

H.B. NO.

1821

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO MOTOR VEHICLE INSURANCE.

 

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

SECTION 1. The legislature finds that the motor vehicle insurance laws in Hawaii today were largely designed around a system of insurance that mandated insurers to insure any motor vehicle where the owner was able to pay the premium.

The purpose of this Act is to conform Hawaii's motor vehicle insurance laws to those of most other states by allowing an insurer to cancel a policy on or before the sixtieth day after issuance, and is often referred to as a "sixty-day underwriting period." This Act will allow insurers to perform driving record and claims history searches, to ensure that a policy is properly rated, and to cancel the policy in the event that there are differences from the applicant's statements.

The legislature is convinced that this Act will benefit consumers as well. Many insurers ask prospective insureds to obtain traffic abstracts prior to issuing a policy. With a sixty-day underwriting period, this procedure will no longer be necessary, and will improve immediate access to motor vehicle insurance for consumers.

In addition, driving record surcharges for undisclosed traffic violations and accidents often result in very large additional premiums, and a number of such cases result in collection activities. The sixty-day underwriting period will reduce the number of such cases referred to collection agencies and departments.

SECTION 2. Section 431:10C-111, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) An insurer may not cancel or refuse to renew a motor vehicle insurance policy, including required optional additional insurance meeting section 431:10C-302, once issued except when:

(1) The license of the principal operator to operate the type of motor vehicle is suspended or revoked;

(2) Premium payments for the policy are not made after reasonable demand therefor; [or]

(3) The nonrenewal or conditional renewal is limited in accordance with section 431:10C-111.5[.]; or

(4) The motor vehicle insurance policy has been in effect for sixty days or less."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2004.

INTRODUCED BY:

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