REPORT TITLE:
Insurance


DESCRIPTION:
Permits certain contracts of warranty or guaranty to include
coverage for towing and substitute transportation.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1786
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO GENERAL CASUALTY INSURANCE.



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

 1      SECTION 1.  The legislature finds that under present law
 
 2 automobile dealers are prohibited from providing a free loaner
 
 3 car or towing benefits because these services are deemed to be
 
 4 insurance-type benefits.  The legislature further finds that such
 
 5 a prohibition does not promote the interests of consumers and
 
 6 prevents dealers from supporting their communities.  The
 
 7 legislature further finds that the problem can be easily
 
 8 corrected by inserting "seven magic words" into the present
 
 9 language of the insurance code defining general casualty
 
10 insurance.
 
11      The purpose of this Act is to remove free loaner cars and
 
12 towing services from the purview of the insurance code.
 
13      SECTION 2.  Section 431:1-209, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "431:1-209  General casualty insurance defined.  General
 
16 casualty insurance includes vehicle insurance as defined in
 
17 section 431:1-208, disability insurance defined in section
 
18 431:1-205 and in addition is insurance:
 
19      (1)  Against legal liability for the death, injury or
 

 
Page 2                                                     1786
                                     H.B. NO.           
                                                        
                                                        

 
 1           disability of any human being, or from damage to
 
 2           property.
 
 3      (2)  Of medical, hospital, surgical, and funeral benefits to
 
 4           persons injured, irrespective of legal liability of the
 
 5           insured, when issued with or supplemental to insurance
 
 6           against legal liability for the death, injury or
 
 7           disability of human beings.
 
 8      (3)  Of the obligation accepted by, imposed upon, or assumed
 
 9           by employers under law for death, disablement or injury
 
10           to employees.
 
11      (4)  Against loss or damage by burglary, theft, larceny,
 
12           robbery, forgery, fraud, vandalism, malicious mischief,
 
13           confiscation, or wrongful conversion, disposal or
 
14           concealment, or from any attempt of any of the
 
15           foregoing; also insurance against loss or damage to
 
16           moneys, coins, bullion, securities, notes, drafts,
 
17           acceptances, or any other valuable papers or documents,
 
18           resulting from any cause, except while in the mail.
 
19      (5)  Upon personal effects of individuals, by an all-risk
 
20           type of policy commonly known as the personal property
 
21           floater.
 
22      (6)  Against loss or damage to glass and its appurtenances
 
23           resulting from any cause.
 

 
Page 3                                                     1786
                                     H.B. NO.           
                                                        
                                                        

 
 1      (7)  Against any liability and loss or damage to property
 
 2           resulting from accidents to or explosions of boilers,
 
 3           pipes, pressure containers, machinery, or apparatus.
 
 4      (8)  Against loss of or damage to any property of the
 
 5           insured resulting from the ownership, maintenance or
 
 6           use of elevators, except loss or damage by fire.
 
 7      (9)  Against loss or damage to any property caused by the
 
 8           breakage or leakage of sprinklers, water pipes or
 
 9           containers, or by water entering through leaks or
 
10           openings in buildings.
 
11     (10)  Against loss or damage resulting from failure of
 
12           debtors to pay their obligations to the insured (credit
 
13           insurance).
 
14     (11)  Against loss of or damage to any domesticated or wild
 
15           animal resulting from any cause (livestock insurance).
 
16     (12)  Against loss of or damage to any property of the
 
17           insured resulting from collision of any other object
 
18           with such property, but not including collision to or
 
19           by vessels, craft, piers, or other instrumentalities of
 
20           ocean or inland navigation (collision insurance).
 
21     (13)  Against legal liability of the insured, and against
 
22           loss, damage or expense incident to a claim of such
 
23           liability, and including any obligation of the insured
 

 
Page 4                                                     1786
                                     H.B. NO.           
                                                        
                                                        

 
 1           to pay medical, hospital, surgical, and funeral
 
 2           benefits to injured persons, irrespective of legal
 
 3           liability of the insured, arising out of the death or
 
 4           injury of any person, or arising out of injury to the
 
 5           economic interest of any person as the result of
 
 6           negligence in rendering expert, fiduciary or
 
 7           professional service (malpractice insurance).
 
 8     (14)  Against any contract of warranty or guaranty which
 
 9           promises service maintenance, parts replacement,
 
10           repair, money, or any other indemnity in the event of
 
11           loss of or damage to a motor vehicle or any part
 
12           thereof from any cause, including loss of or damage to
 
13           or loss of use of the motor vehicle by reason of
 
14           depreciation, deterioration, wear and tear, use,
 
15           obsolescence, or breakage if made by a warrantor or
 
16           guarantor who or which as such is doing an insurance
 
17           business.
 
18                The making of a contract covering only defects in
 
19           material and work, which may include towing and
 
20           substitute transportation, in exchange for a separately
 
21           stated charge where it is incidental to the business of
 
22           selling or leasing motor vehicles, shall not be deemed
 
23           insurance; provided the maker of the contract has an
 

 
Page 5                                                     1786
                                     H.B. NO.           
                                                        
                                                        

 
 1           insurance policy, with an insurer as defined in section
 
 2           431:1-202, providing coverage for the making of those
 
 3           contracts.  The policy shall assume the legal liability
 
 4           created by each contract or, alternatively, the
 
 5           ultimate legal liability of all contracts made by the
 
 6           issuer.  If the maker of the contract is unable to
 
 7           perform the duties imposed by the contract, the
 
 8           purchaser of the contract then shall be considered a
 
 9           policyholder of the insurer.  The policy shall include
 
10           a loss payee endorsement that provides coverage to any
 
11           lending institution as its interest may appear.  In
 
12           addition, the contract conspicuously shall state the
 
13           name and address of the licensed underwriting insurer
 
14           and contain a statement that the policyholder shall be
 
15           entitled to make a direct claim against the insurer
 
16           upon the failure of the issuer to pay any claim within
 
17           sixty days after proof of loss has been filed with the
 
18           issuer.  The requirement that the maker of the contract
 
19           have an insurance policy with an insurer shall not
 
20           apply if the maker is a manufacturer, distributor or
 
21           importer of automobiles.
 
22                The doing or proposing to do any business in
 
23           substance equivalent to the business described in this
 

 
Page 6                                                     1786
                                     H.B. NO.           
                                                        
                                                        

 
 1           section in a manner designed to evade the provisions of
 
 2           this section is the doing of an insurance business.
 
 3     (15)  Against any other kind of loss, damage or liability
 
 4           properly the subject of insurance and not within any
 
 5           other class or classes of insurance as defined in
 
 6           section 431:1-204 to section 431:1-211, if such
 
 7           insurance is not contrary to law or public policy."
 
 8      SECTION 3.  New statutory material is underscored.
 
 9      SECTION 4.  This Act shall take effect upon its approval.
 
10 
 
11                           INTRODUCED BY:  _______________________