STAND. COM. REP. NO. 641-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2349
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Consumer Protection and Commerce and
Judiciary and Hawaiian Affairs, to which was referred H.B. No.
2349 entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

beg leave to report as follows:

     The purpose of this bill is to clarify that reckless drivers
who:

     (1)  Engage in particularly egregious conduct, such as
          driving under the influence of alcohol or drugs,
          causing injury while engaged in criminal conduct; or

     (2)  Drive in a manner warranting the imposition of punitive
          damages,

shall be responsible for the payment of the covered loss
deductible in section 431:10C-301.5, Hawaii Revised Statutes
(HRS).

     This measure also codifies Hawaii Administrative Rule 16-23-
10.2.

     Section 431:10C-306(e), HRS, provides that the civil
liability of reckless drivers who engage in extreme conduct shall
not be exonerated or limited, rendering threshold and covered
loss deductible provisions inapplicable in those situations.
Your Committees find that the reckless driver should be held
responsible for payment of the covered loss deductible in those
situations.

 
                                 STAND. COM. REP. NO. 641-00
                                 Page 2

 

     Your Committees received testimony in support of this bill
from the Insurance Division of the Department of Commerce and
Consumer Affairs (Insurance Division), which is already enforcing
a similar measure by rule.  The Insurance Division recommends
that the liability of these drivers be mandatory, rather than
permissive.  The bill has been amended accordingly.  

     Testimony regarding this measure was also received from
State Farm Insurance Companies and the Consumer Lawyers of
Hawaii.

     Technical, nonsubstantive amendments were made for purposes
of style, clarity, and consistency.

     As affirmed by the records of votes of the members of your
Committees on Consumer Protection and Commerce and Judiciary and
Hawaiian Affairs that are attached to this report, your
Committees are in accord with the intent and purpose of H.B. No.
2349, as amended herein, and recommend that it pass Second
Reading in the form attached hereto as H.B. No. 2349, H.D. 1, and
be placed on the calendar for Third Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Consumer
                                   Protection and Commerce and
                                   Judiciary and Hawaiian
                                   Affairs,

                                   
                                   
                                   
                                   
______________________________     ______________________________
ERIC G. HAMAKAWA, Chair            RON MENOR, Chair