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MOTORCYCLES UNDER THE HAWAII NO-FAULT LAW

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					MOTORCYCLES UNDER
THE HAWAII
NO-FAULT LAW




 UA
S S N K. CLAVERIA
Researcher




March, 1984




Legislative Reference Bureau
State Capitol
Honolulu, Hawaii
                                                  FOREWORD


       T h i s r e p o r t is s u b m i t t e d t o t h e L e g i s l a t u r e p u r s u a n t t o House Resolution
N o . 391 which was adopted d u r i n g t h e R e g u l a r Session of 1983.

          I n s u r a n c e ratemaking is an i n t r i c a t e p r o c e s s a n d t h e cause of high
m o t o r c y c l e r a t e s f o r personal i n j u r y p r o t e c t i o n i s even more complex--
i n v o l v i n g more t h a n t h e f a c t t h a t motorcycles a r e i n c l u d e d i n t h e n o - f a u l t
law.         T h i s r e p o r t does n o t p u r p o r t t o h a v e t h e f i n a l answer t o resolve t h e
m o t o r c y c l e i n s u r a n c e problem,       b u t it is h o p e d t h a t t h e f i n d i n g s and
conclusions r e p o r t e d h e r e i n w i l l e n l i g h t e n all i n t e r e s t e d p a r t i e s on t h e facts
a n d set t h e d i r e c t i o n f o r meaningful l e g i s l a t i v e d e l i b e r a t i o n .

           T h e data p r e s e n t e d a n d t h e f i n d i n g s a n d conclusions reached i n t h i s
r e p o r t c o u l d n o t have been achieved w i t h o u t t h e assistance o f t h o s e i n t h e
f i e l d s o f m o t o r c y c l e i n s u r a n c e a n d h i g h w a y s a f e t y , and t h e motorcyclists
themselves. Due t o t h e h i g h l y t e c h n i c a l n a t u r e o f t h e application o f t h e no-
f a u l t i n s u r a n c e law a n d t h e c o m p l e x i t y o f t h e m o t o r c y c l e rates issue, t h e
B u r e a u r e l i e d h e a v i l y on t h e e x p e r t i s e of t h e I n s u r a n c e D i v i s i o n . The
B u r e a u is i n d e b t e d t o t h e l n s u r a n c e D i v i s i o n f o r t h e many h o u r s spent i n
d i s c u s s i n g t h e problems s u r r o u n d i n g t h e m o t o r c y c l e issue a n d i n p r o v i d i n g
necessary d a t a .           Special t h a n k s a r e e x t e n d e d t o Hit-am Tanaka a n d Shelley
Santo f o r t h e i r valuable assistance, w i t h o u t w h i c h t h i s r e p o r t c o u l d n o t have
b e e n completed.

          T h e Department of T r a n s p o r t a t i o n p r o v i d e d t h e B u r e a u w i t h access to
t h e l i s t of r e g i s t e r e d motorcycles f r o m w h i c h t h e random sample f o r t h e
m o t o r c y c l i s t s u r v e y was e x t r a c t e d and, t h r o u g h i t s Motor V e h i c l e Safety
O f f i c e a n d Research a n d Statistics U n i t o f t h e H i g h w a y s D i v i s i o n , c o n t r i b u t e d
t h e data on t r a f f i c accidents.                 F o r t h i s assistance, t h e B u r e a u i s deeply
gratef uI .

         T h e B u r e a u also e x t e n d s i t s a p p r e c i a t i o n t o t h e Hawaii I n s u r e r s Council,
t h e Hawaii I n d e p e n d e n t l n s u r a n c e A g e n t s Association, C r i t e r i o n l n s u r a n c e
Company, t h e Hawaii bledical Services Association, t h e Commander i n Chief
Pacific,           Kuan Cot-poration dba Wheels Hawaii,                             T w o Wheels,       Montgomery
M o t o r s , Wheels Kaneohe, S t r e e t B i k e r s U n i t e d , Kona M o t o r c y c l i s t Association,
 B i g I s l a n d M o t o r c y c l e Association, T h e American M o t o r c y c l i s t Association, t h e
m o t o r c y c l i s t s w h o responded t o o u r s u r v e y , a n d t h e l n s u r a n c e Departments of
t h e n o - f a u l t states, all o f whom s u b m i t t e d i n f o r m a t i o n a n d comments r e g a r d i n g
t h e exclusion o f motorcycles from t h e n o - f a u l t law.

            Special acknowledgment is made f o r t h e a r d u o u s w o r k o f t h e B u r e a u ' s
c l e r i c a l s t a f f , especially Joyce Aramaki a n d blaizie M u k a i , i n p r o c e s s i n g t h i s
r e p o r t u n d e r extremely t i g h t time c o n s t r a i n t s a n d f o r assistance on t h e
s u r v e y s b y Dan Aono, K a r l Motoyama, a n d Colleen N a k a t s u .



                                                     SAMUEL        B . K . CHANG
                                                     Director

M a r c h 1983
                                                 TABLE OF CONTENTS




                                                                                                                                      ...
     FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   111


1.   INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1

              Problems Prompting t h i s S t u d y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 1
              C o n d u c t of Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2

2.   HAWAII'S NO-FAULT LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     4
              Enactment o f t h e Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4
              How t h e Law Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          5

3.   THE MOTORCYCLE COMMUNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              9

              D r i v e r Licensing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   9
              Motorcycle Safety Equipment Requirements . . . . . . . . . . . . . . . . . . . . . .                                     9
              Special Laws f o r t h e Opei-ation o f Motoi.cycles . . . . . . . . . . . . . . . . . . . .                             9
              Profile of Motorcyclists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            11
              Motorcycle Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          12
              Motorcycle I n s u r e r s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      13

4.   MOTORCYCLE INSURANCE RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               15

              T h e Open Rating System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                15
              Regulation o f Rates b y t h e Insurance Division . . . . . . . . . . . . . . . . . .                                   16
              How Rates A r e Developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               16
              R e l a t i v i t y t o Automobile Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            19
              Why blotorcycle Rates A r e H i g h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 20
              Shopping f o r Low I n s u r a n c e Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  21
              Special Provisions f o r Motor-cycles t o Reduce Rates . . . . . . . . . . . . . .                                      24
              T h e Added Cost of Optional Insurance Coverage . . . . . . . . . . . . . . . .                                         25
              Problems w i t h Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25

5.   MOTORCYCLE ACCIDENTS                                ..........................................                                   27

              A c c i d e n t Involvement Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            27
              Motorcycle Accidents and Helmet Use . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             28

6.   SURVEY OF NO-FAULT STATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            38

7.   CONCLUSIONS AND RECOMMENDATIONS                                               ............................                       41

              T h e Consequences o f Removal . .
              Recommendations . . . . . . . . . . . . . . . .

     FOOTNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    47
                                                                                                                       PAGE
                                                                                                                        ..
                                                                                                                       ..  .




                                                     Tables

 N u m b e r o f R e g i s t e r e d Motor Vehicles I n s u r e d by Vehicle T y p e

M o t o r c y c l e Loss Ratio, 9/77 - 6/82                  ..................................
l n s u r a n c e Companies w i t h A c t i v e M o t o r c y c l e l n s u r a n c e
Pokicies as o f 12/31/82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

T y p e o f Motor Vehicles I n v o l v e d i n A l l A c c i d e n t s , State
o f Hawaii, 1973-1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

V e h i c l e R e g i s t r a t i o n a n d l n v o l v e m e n t i n A l l Accidents,
State o f Hawaii, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

T y p e o f Motor Vehicles l n v o l v e d i n Fatal Accidents, S t a t e
o f Hawaii, 1973-1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

V e h i c l e R e g i s t r a t i o n a n d l n v o l v e m e n t i n Fatal A c c i d e n t s ,
S t a t e o f Hawaii, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1982 National a n d State M o t o r c y c l e S t a t i s t i c s             .................

M o t o r c y c l e A c c i d e n t s b y I n j u r y a n d Damage.. . . . . . . . . . . . . . . . . . . . . . . . .

T y p e of Motorcycle Accidents.. . . . . . . . . . . . . . . . . . . .

Fatal M o t o r c y c l e Accidents,            Cause/Responsibility

M i l i t a r y l n v o l v e m e n t i n Fatal Motorcycle A c c i d e n t s

D r i v e r ' s License T y p e , M o t o r c y c l e Fatalities



                                                 Appendices

House Resolution No. 391, House of Representatives, T w e l f t h
L e g i s l a t u r e , 1983 R e g u l a r Session, State o f Hawaii . . . . . . . . . .

C h a p t e r 291, M o t o r c y c l e Vehicle A c c i d e n t Reparations,
Hawaii Revised Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S u r v e y of R e g i s t e r e d M o t o r c y c l e Owners . . . . . . . . . . .

N o - F a u l t l n s u r a n c e Premium G u i d e

L e t t e r s f r o m Montgomery Motors, L t d . , t o l n s u r a n c e D i v i s i o n ,
D e p a r t m e n t of Commerce a n d Consumer A f f a i r s , State o f Hawaii,
a n d Response o f t h e I n s u r a n c e D i v i s i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State N o - F a u l t Laws          ................................
                                                         Chapter 1

                                                    INTRODUCTION



         D u r i n g t h e 1983 Legislative Session, t h e House o f Representatives
a d o p t e d House Resolution No. 391 (see A p p e n d i x A),                              requesting t h e
L e g i s l a t i v e Reference B u r e a u t o s t u d y t h e p r o b a b l e consequences o f removing
m o t o r c y c l e s a n d o t h e r vehicles w i t h less t h a n f o u r wheels f r o m t h e m a n d a t o r y
p e r s o n a l i n j u r y r e q u i r e m e n t o f t h e Hawaii n o - f a u l t law. T h e Resolution also
r e q u e s t e d t h a t t h e s t u d y consider t h e removal o f t h e coverage r e q u i r e m e n t i n
light o f t h e f o l l o w i n g a l t e r n a t i v e s :

        (1)     T h a t m o t o r c y c l e owners a n d o p e r a t o r s a n d t h e i r passengers b e
                p r e c l u d e d f r o m r e c e i v i n g n o - f a u l t b e n e f i t s as p e d e s t r i a n s a n d
                d i s q u a l i f i e d f r o m r e c e i v i n g b e n e f i t s u n d e r t h e assigned claims
                p r o g r a m o f t h e Hawaii j o i n t u n d e r w r i t i n g plan; o r

        (2)     T h a t m o t o r c y c l e owners a n d o p e r a t o r s a n d t h e i r passengers b e
                allowed t o r e c e i v e n o - f a u l t b e n e f i t s as pedestrians, a n d to
                r e c e i v e b e n e f i t s u n d e r t h e assigned claims p l a n s .

T h e R e s o l u t i o n also d i r e c t e d t h e s t u d y t o i n c l u d e i n f o r m a t i o n on t h e
e x p e r i e n c e of states w h i c h h a v e e i t h e r removed o r added r e q u i r e m e n t s t h a t
m o t o r c y c l e s a n d vehicles w i t h fewer t h a n f o u r wheels b e c o v e r e d f o r n o - f a u l t
benefits f o r personal i n j u r y protection.


Problems P r o m p t i n g t h i s S t u d y

            M o t o r c y c l i s t s a n d motorcycle dealers i n Hawaii have been opposed t o t h e
i n c l u s i o n o f motorcycles i n t h e n o - f a u l t law e v e r since t h e law was b e i n g
c o n s i d e r e d by t h e L e g i s l a t u r e i n t h e e a r l y seventies.      A r e v i e w o f available
1973 l e g i s l a t i v e committee r e c o r d s a t t h e State A r c h i v e s revealed testimony i n
o p p o s i t i o n t o t h e i n c l u s i o n o f motorcycles f r o m t h e motorcycle associations,
m o t o r c y c l e dealers,               a n d even a n i n s u r a n c e association.           Most o f t h e
t e s t i m o n i e s c i t e d t h e e f f e c t s on t h e premium rates of m o t o r c y c l i s t s as t h e
j u s t i f i c a t i o n f o r e x c l u s i o n a n d maintained t h a t since t h e o t h e r n o - f a u l t states
e x c l u d e d motorcycles, so s h o u l d Hawaii.

          D e s p i t e t h e s t r o n g l o b b y i n g e f f o r t , t h e L e g i s l a t u r e i n c l u d e d motorcycles
u n d e r th@ scope o f t h e law.                     Because i n s u r a n c e rates f o r motorcycles have
b e e n s u b j e c t t o g r e a t e r increases i n r e c e n t years, t h e movement f o r t h e
e x c l u s i o n o f motorcycles f r o m t h e n o - f a u l t law has been r e v i v e d .

     T h e I n s u r a n c e D i v i s i o n o f t h e S t a t e D e p a r t m e n t o f Commerce a n d
Consumer A f f a i r s , has opposed t h e exclusion o f motorcycles f o r t h e f o l l o w i n g
reasons :

        (1)     T h e medical costs o f personal i n j u r y i n c u r r e d b y m o t o r c y c l i s t s
                w i l l s t i l l b e p r e s e n t a n d exclusion f r o m t h e n o - f a u l t law w o u l d
                mean t h a t s u c h costs w i l l h a v e t o b e t a k e n care of b y t h e
                                                                    A
                             MOTORCYCLES UNDER THE HAWAII NO-FAULT L W



               b o d i l y i n j u r y l i a b i l i t y i n s u r a n c e coverage o f o t h e r m o t o r i s t s , o r
               b y medical i n s u r a n c e p l a n s s u c h as HMSA o r K a i s e r .                      This in
               t u r n w o u l d mean p r o b a b l e increases in i n s u r a n c e rates f o r t h e
               motoring public o r the subscribers t o health insurance plans.

       (2)     M a k i n g an exception f o r motorcycles w i l l open t h e d o o r t o
               o t h e r g r o u p s s e e k i n g e x c l u s i o n such as t h e r e g i s t e r e d o w n e r s
               of subcompact c a r s w h o can make t h e same arguments a b o u t
               h a v i n g t o p a y h i g h e r i n s u r a n c e even t h o u g h t h e y d o n o t i n f l i c t
               as much damage on a n o t h e r v e h i c l e a n d i t s occupants, o r t h e
               senior c i t i z e n s w h o can a r g u e t h a t t h e y seldom d r i v e t h e i r
               vehicles, so t h e y s h o u l d n o t b e r e q u i r e d t o p u r c h a s e t h e same
               coverage as o t h e r s who d r i v e t h e i r c a r s e v e r y d a y .

     I n view of t h e s e concerns, t h e I n s u r a n c e D i v i s i o n has s u g g e s t e d t h a t if
exclusion is g r a n t e d t o motorcycles, t h e n o - f a u l t law s h o u l d also b e amended
to:

       (1)     Exclude m o t o r c y c l i s t s f r o m r e c e i v i n g n o - f a u l t b e n e f i t s    in the
               same way as p e d e s t r i a n s a n d b i c y c l i s t s a r e covered;

       (2)     S u b j e c t m o t o r c y c l i s t s t o t h e same conditions as o t h e r m o t o r i s t s
               b e f o r e t h e m o t o r c y c l i s t can sue;

       !3)     Require motorcyclists t o maintain bodily i n j u r y liability and
               p r o p e r t y damage l i a b i l i t y i n s u r a n c e coverage f o r t h e p r o t e c t i o n
               of anyone who i s i n j u r e d , o r whose p r o p e r t y is damaged by a
               motorcycle; and

       (4)     Preclude a m o t o r c y c l e o w n e r / o p e r a t o r ,   o r passenger from
               o b t a i n i n g b e n e f i t s u n d e r t h e assigned claims p r o g r a m o f t h e
               Hawaii j o i n t u n d e r w r i t i n g p l a n .


C o n d u c t of S t u d y

          N a t u r e a n d Scope - T h e scope o f t h e s t u d y was l i m i t e d t o t h e t r e a t m e n t
of motorcycles a n d o t h e r vehicles w i t h less t h a n f o u r wheels u n d e r t h e n o -
f a u l t i n s u r a n c e laws o f Hawaii a n d o t h e r n o - f a u l t states.         T h e s t u d y focuses
on t h e issue o f w h e t h e r o r n o t motorcycles s h o u l d b e e x c l u d e d f r o m t h e
personal i n j u r y p r o t e c t i o n r e q u i r e m e n t o f t h e n o - f a u l t l a w .  Although t h e
r e p o r t focuses o n motorcycles, t h e f i n d i n g s a n d conclusions a r e a p p l i c a b l e t o
o t h e r vehicles w i t h less t h a n f o u r wheels.

       Objectives       -
       1       T o ascertain t h e i n t e n t o f t h e Legislature i n adopting t h e
               Hawaii n o - f a u l t law w h i c h i n c l u d e d motorcycles.

       (2)    T o r e v i e w t h e e x p e r i e n c e o f o t h e r n o - f a u l t states w i t h r e s p e c t
              t o motorcycles a n d t o a p p l y r e l e v a n t f i n d i n g s t o Hawaii's
              situation.
                                                  INTRODUCTION


        13)     T o i d e n t i f y t h e possible consequences o f removing motorcycles
                f r o m t h e m a n d a t o r y personal i n j u r y p r o t e c t i o n r e q u i r e m e n t .

        (4)     T o d e t e r m i n e w h e t h e r o r n o t motorcycles should b e e x c l u d e d
                f r o m t h e law a n d t o recommend a p p r o p r i a t e courses of action t o
                t h e Legislature.

            Methodology - Following general r e s e a r c h on automobile i n s u r a n c e and
n o - f a u l t laws, research was c o n d u c t e d a t t h e State A r c h i v e s on o l d r e c o r d s of
l e g i s l a t i v e committee h e a r i n g s a n d o n committee r e p o r t s a n d f l o o r debates on
House Bill N o . 637 ( w h i c h became A c t 203, Session Laws o f Hawaii 1973) t o
o b t a i n t h e h i s t o r y of Hawaii's law.               S u r v e y questionnaires w e r e s e n t t o no-
f a u l t states a n d t o 800 r e g i s t e r e d m o t o r c y c l i s t s .         L e t t e r s seeking impact
i n f o r m a t i o n w e r e s e n t to i n s u r a n c e companies, motorcycle dealers, health
i n s u r a n c e companies, m o t o r c y c l i s t associations, a n d t h e m i l i t a r y .            D a t a on
traffic             accidents         were         obtained     through         the    State         Department        of
T r a n s p o r t a t i o n ' s M o t o r V e h i c l e Safety O f f i c e a n d t h e Research a n d S t a t i s t i c s
U n i t of t h e Highways Division.                       Finally, most of t h e b a c k g r o u n d i n f o r m a t i o n
o n t h e o p e r a t i o n of t h e n o - f a u l t law a n d t h e data on m o t o r c y c l e i n s u r a n c e
claims a n d premiums w e r e o b t a i n e d t h r o u g h personal i n t e r v i e w s w i t h t h e s t a f f
of, a n d a r e v i e w o f r e c o r d s at, t h e i n s u r a n c e D i v i s i o n of t h e D e p a r t m e n t o f
Commerce a n d Consumer A f f a i r s .

          I n t h e c o u r s e o f t h i s s t u d y , a s i g n i f i c a n t problem was e v i d e n t : many o f
t h e c o n t e n t i o n s made b y those a d v o c a t i n g as well as b y those o p p o s i n g t h e
e x c l u s i o n o f motorcycles c o u l d n o t b e s u b s t a n t i a t e d b y f a c t s .     Perhaps much
of t h e f r u s t r a t i o n a n d a n g e r e x p e r i e n c e d by motorcyclists, dealers, i n s u r a n c e
companies, t h e i n s u r a n c e d i v i s i o n , a n d even t h e L e g i s l a t u r e c o u l d h a v e been
a v o i d e d if u n f o u n d e d allegations w e r e n o t allowed t o b e p e r p e t u a t e d y e a r a f t e r
y e a r a n d if o b v i o u s misconceptions o f t h e l a w were c o r r e c t e d .            If t h e r e i s a n y
one p u r p o s e t o b e accomplished b y t h i s s t u d y , it is t o clear t h e a i r , o n c e a n d
f o r all, a n d t o d i s t i n g u i s h t r u t h f r o m alleged f a c t o n t h e m o t o r c y c l e issue.
                                                      Chapter 2

                                         H A W A I I ' S N O - F A U L T LAW



Enactment o f t h e Law

             I n 1965, Professor R o b e r t E. Keeton, Professor o f Law a t H a r v a r d
University,              a n d Professor J e f f r e y O'Connell,                       Professor o f        Law a t t h e
U n i v e r s i t y o f I l l i n o i s p u b l i s h e d a book e n t i t l e d , Basic Protection f o r t h e
T r a f f i c Victim.         T h e s t u d y c o n t a i n e d a r e v o l u t i o n a r y proposal t o change t h e
h a n d l i n g of automobile i n s u r a n c e claims f r o m a system of f a u l t - b a s e d t o r t
l i a b i l i t y t o one of n o - f a u l t basic p r o t e c t i o n i n s u r a n c e , similar i n p r i n c i p l e t o
w o r k e r s ' compensation.               Following t h e p u b l i c a t i o n o f t h i s s t u d y , t h e r e was
serious a n d e n t h u s i a s t i c d i s c u s s i o n a t b o t h t h e s t a t e a n d f e d e r a l levels f o r
t h e adoption of t h e n o - f a u l t c o n c e p t p r o p o s e d by Keeton a n d O'Connell.
Massachusetts became t h e f i r s t state,                                 i n 1971, t o enact a n o - f a u l t law.
Today, t h e r e are 16 states w i t h a n o - f a u l t system t h a t limits t o r t a c t i o n s . '
A n o t h e r 11 states p r o v i d e f o r b e n e f i t s w i t h o u t r e g a r d t o f a u l t , b u t h a v e no
r e s t r i c t i o n s on t o r t actions.'            L e g i s l a t i o n a t t h e f e d e r a l level, however, has
n e v e r been successful.

           I n 1971, 30 proposals f o r m o t o r v e h i c l e i n s u r a n c e r e f o r m w e r e i n t r o d u c e d
i n t h e Hawaii L e g i s l a t u r e a n d e x t e n s i v e h e a r i n g s w e r e c o n d u c t e d on t h e no-
f a u l t concept.              As a r e s u l t o f t h e p u b l i c hearings,                    legislators f o u n d
themselves w i t h o u t s u f f i c i e n t i n f o r m a t i o n t o make a sound decision a n d called
f o r a comprehensive s t u d y b y t h e O f f i c e o f t h e Legislative A u d i t o r o f Hawaii's
e x i s t i n g motor vehicle i n s u r a n c e system.                     T h e c o n s u l t i n g f i r m of H a l d i
Associates,           I n c . , was c o n t r a c t e d t o c o n d u c t t h e s t u d y a n d t h e completed
r e p o r t entitled, A S t u d y o f Hawaii's M o t o r Vehicle I n s u r a n c e Program, was
s u b m i t t e d t o t h e L e g i s l a t u r e i n J a n u a r y , 1973.

          T h e Haldi r e p o r t recommended t h e a d o p t i o n of a p u r e n o - f a u l t system f o r
Hawaii. A t about t h e same time, t h e National Conference o f Commissioners on
U n i f o r m State Laws completed i t s d r a f t o f t h e U n i f o r m Motor V e h i c l e A c c i d e n t
Reparations A c t ( h e r e i n a f t e r UMVARA) w h i c h was a modified n o - f a u l t s y s t e m
since it p e r m i t t e d t o r t actions u n d e r c e r t a i n c o n d i t i o n s . T h e law enacted by
t h e Hawaii L e g i s l a t u r e as A c t 203, Session Laws of Hawaii,                           1973, was
p a t t e r n e d a f t e r t h e UMVARA p r o p o s a l .     A t t h e time Hawaii's law was b e i n g
considered,             o n l y Massachusetts,    F l o r i d a , Connecticut,            New J e r s e y ,  and
Michigan h a d n o - f a u l t laws a l r e a d y i n e f f e c t .   T h e states of New Y o r k , Utah,
Kansas, Nevada, a n d Colorado enacted n o - f a u l t legislation i n 1973.                             All the
states adopted a modified n o - f a u l t system; p u r e n o - f a u l t has n e v e r been
adopted b y a n y s t a t e .

           I n b o t h t h e H a l d i p u r e n o - f a u l t a n d t h e UMVARA proposals, motorcycles
w e r e i n c l u d e d i n t h e scope o f t h e law.            Hawaii i s t h e o n l y s t a t e t h a t i n c l u d e s
motorcycles on a m a n d a t o r y basis w h i l e t w o states, Kansas a n d K e n t u c k y ,
i n c l u d e motorcycles o n an o p t i o n a l b a s i s .
                                                                 A
                                       H A W A I I ' S NO-FAULT L W



How t h e Law Works

        T h e components o f t h e Hawaii law a r e as follows (see Appendix                                     B for
t e x t o f c h a p t e r 2941:

     (1)   A l l r e g i s t e r e d motor vehicles a r e included;

     (2)   A l l persons i n v o l v e d in a m o t o r vehicle accident a r e e n t i t l e d t o
           benefits, e x c e p t t h a t n o b e n e f i t s w i l l b e p a i d t o t h e o w n e r o f
           an u n i n s u r e d m o t o r v e h i c l e o r t o t h e o p e r a t o r o r u s e r of a
           motor vehicle e n g a g i n g i n c r i m i n a l c o n d u c t w h i c h causes a n y
           loss;

     (3)   No-fault benefits are p a i d secondarily and net of any benefits
           t h e person receives f r o m w o r k e r s ' compensation because o f t h e
           accident b u t a r e p a i d p r i m a r i l y t o a n y o t h e r i n s u r a n c e s u c h as
           h e a l t h i n s u r a n c e o r social s e c u r i t y ;

     (4)   N o - f a u l t b e n e f i t s must b e p a i d w i t h i n thirty d a y s a f t e r t h e
           claimant s u p p l i e s p r o o f o f loss;

     (5)   Pedestrians a n d b i c y c l i s t s i n v o l v e d i n an accident w i t h a motor
           vehicle a r e e n t i t l e d t o n o - f a u l t b e n e f i t s f r o m t h e i n s u r e r o f t h e
           vehicle t h a t caused accidental h a r m t o t h e p e d e s t r i a n ;

     (6)   T h e r i g h t t o sue i s abolished e x c e p t when ( A ) d e a t h occurs o r
           t h e r e is s i g n i f i c a n t permanent loss o f use o f a p a r t o r f u n c t i o n
           of t h e b o d y , o r permanent d i s f i g u r e m e n t which subjects t h e
           i n j u r e d p e r s o n t o mental o r emotional s u f f e r i n g ;                     ( B ) the
           m e d i c a l - r e h a b i l i t a t i v e l i m i t ( p r e s e n t l y $4,500)' i s exceeded; o r
           ( C ) the total aggregate limit of no-fault benefits payable to a
           p e r s o n ($15,000) i s exhausted;

     (7)   E v e r y r e g i s t e r e d motor vehicle is r e q u i r e d t o h a v e insurance
           p r o v i d i n g coverages o f a t least $15,000 f o r personal i n j u r y
           protection;          $25,000 f o r r e s i d u a l b o d i l y i n j u r y l i a b i l i t y ; and
           $10,000 f o r p r o p e r t y damage l i a b i l i t y ;

     (81   l n s u r e r s cannot r e f u s e t o i n s u r e an a p p l i c a n t unless t h e
           p r i n c i p a l o p e r a t o r is n o t licensed o r does n o t p a y a I-easonable
           p o r t i o n of t h e premium;

     (9)   l n s u r e r s a r e r e q u i r e d t o o f f e r t h e f o l l o w i n g optional coverages:

           (A)    Physical damage c o v e r a g e w i t h deductibles                      o f $50, $100,
                  a n d $250, f o r losses i n c u r r e d by damage t o                    t h e insured's
                  vehicle.            T h i s includes "collision" coverage                f o r damage t o
                  t h e i n s u r e d ' s v e h i c l e r e s u l t i n g f r o m an       accident and
                  "comprehensive" c o v e r a g e f o r losses o t h e r                   t h a n collision
                  damages r e s u l t i n g f r o m s u c h t h i n g s as t h e f t ,        vandalism, a
                  t r e e f a l l i n g o n a c a r , f i r e , o r flood;

           f B ) U n i n s u r e d m o t o r i s t coverage o f $25,000 a p e r s o n ;
                   MOTORCYCLES UNDER             THE HAWAII         NO-FAULT       LAW


       (C)     l n c r e a s e d personal i n j u r y coverage w i t h l i m i t s o f $30,000;
               $50,000; $75,000; a n d $100,000;

       1D)     lncreased   residual  l i a b ~ l i t y coverage                       with       limits      of
               $50,000; $75,000; and $100,000; a n d

       (E)     l n c r e a s e d p r o p e r t y damage l i a b i l i t y coverage w i t h limits o f
               $15,000; 520,000; a n d 930,000;"

(lo)   Optional deductibles at appropriately reduced premium rates
       f o r n o - f a u l t b e n e f i t s a r e allowed i n t h e amounts of $100, $300,
       a n d $500 f o r motor vehicles a n d a $1,000 d e d u c t i b l e i s also
       allowed f o r vehicles w i t h less t h a n f o u r wheels;

(11)   A n e q u i t a b l e allocation o f b u r d e n s system w h i c h r e q u i r e s
       vehicles t o maintain a b u r d e n reasonably c o n s i s t e n t w i t h t h e i r
       p r o p e n s i t y t o a f f e c t p r o b a b i l i t y a n d s e v e r i t y o f i n j u r y so t h a t
       i n accidents i n v o l v i n g a v e h i c l e w e i g h i n g more t h a n 10,000
       p o u n d s a n d a v e h i c l e w e i g h i n g less t h a n 10,000 p o u n d s , t h e
       h e a v i e r vehicle's i n s u r e r m u s t r e i m b u r s e 60 p e r c e n t 5 of t h e
       n o - f a u l t b e n e f i t s p a i d b y t h e i n s u r e r of t h e l i g h t e r v e h i c l e a n d
       i n an a c c i d e n t i n v o l v i n g a v e h i c l e w i t h less t h a n f o u r wheels
       a n d a v e h i c l e w i t h f o u r o r more wheels, t h e v e h i c l e w i t h f o u r
       o r more wheels must r e i m b u r s e 75 p e r c e n t 6 o f t h e n o - f a u l t
       b e n e f i t s p a i d b y t h e vehicle w i t h less t h a n f o u r wheels; a n d

(12)   A j o i n t u n d e r w r i t i n g plan ( h e r e i n a f t e r J U P f w h i c h pr-ovides no-
       f a u l t coverage f o r c e r t a i n e l i g i b l e d r i v e r s a n d c e r t a i n uses.
       T h i s g r o u p includes d r i v e r s w i t h b a d d r i v i n g r e c o r d s ; d r i v e r s
       c o n v i c t e d of c e r t a i n d r i v i n g - r e l a t e d offenses w i t h i n t h e 36
       months immediately p r e c e d i n g t h e d a t e o f application; f i r s t a n d
       second ciass commercial vehicles; vehicles w i t h less t h a n f o u r
       wheels r e q u i r e d t o b e r e g i s t e r e d u n d e r t h e h i g h w a y s a f e t y
       law; a n d p h y s i c a i l y handicapped d r i v e r s .

                T h e JUP p r o v i d e s n o - f a u l t b e n e f i t s , u n d e r t h e assigned
       claims p r o g r a m , t o victims f o r whom n o i n s u r a n c e p o l i c y is
       applicable s u c h as t h e h i t - a n d - r u n v i c t i m who does n o t have a
       n o - f a u l t p o l i c y . T h e JUP also p r o v i d e s n o - f a u l t policies a n d
       b e n e f i t s t o welfare r e c i p i e n t s who d o n o t p a y premiums f o r
       t h e i r coverage.           As a c o n d i t i o n of licensure, each i n s u r e r is
       r e q u i r e d t o p a y a minimum f e e o f $100 a y e a r a n d t h e cost f o r
       t h e o p e r a t i o n of t h e JUP p r o g r a m i s e q u i t a b l y allocated among
       t h e JUP i n s u r e r s .        The cost f o r covering welfare recipients
       a n d assigned claims p r o g r a m i s a b s o r b e d b y t h e JUP members.

                 Only      a few          i n s u r e r s a r e designated as " s e r v i c i n g
       c a r r i e r s " w h i c h process t h e assigned claims a n d w e l f a r e
       r e c i p i e n t claims.       A n y a g e n t licensed t o w r i t e motor vehicle
       i n s u r a n c e i n Hawaii, however,                   can w r i t e a JUP p o l i c y .
       A c c o r d i n g t o t h e r u l e s g o v e r n i n g t h e JUP, a n a g e n t m u s t
       i n f o r m t h e a p p l ~ c a n tof t h e p r e m i u m r a t e s u n d e r b o t h JUP a n d
       non-JUP covet-age. '
                                             HAWAII'S NO-FAULT LAW



          U n d e r t h e n o - f a u l t law, a motor v e h i c l e o w n e r is r e q u i r e d t o p u r c h a s e
"personal injury protection" (PIP) i n s u r a n c e to cover injuries sustained b y
t h e o w n e r o r o c c u p a n t s of t h e o w n e r ' s v e h i c l e . T h e o w n e r a l s o is r e q u i r e d t o
p u r c h a s e : (1) " r e s i d u a l bodily i n j u r y liability" i n s u r a n c e t o c o v e r c o s t s of u p
t o $25,000 a p e r s o n in t h e e v e n t t h e bodily i n j u r i e s s u f f e r e d b y a p e r s o n
e x c e e d t h e t o r t t h r e s h o l d a n d t h e o w n e r , o r a n a u t h o r i z e d d r i v e r of t h e
o w n e r ' s motor vehicle, is s u e d f o r b e i n g a t f a u l t ; a n d ( 2 ) " p r o p e r t y damage
liability" t o c o v e r u p t o $10,000 f o r e a c h o c c u r r e n c e of d a m a g e t h e o w n e r of a
v e h i c l e o r t h e d r i v e r of t h e o w n e r ' s v e h i c l e c a u s e s t o someone e l s e ' s
property. '

          When an a c c i d e n t o c c u r s b e t w e e n t w o v e h i c l e s , t h e i n s u r e r of each
v e h i c l e p a y s , within t h i r t y d a y s of t h e f i l i n g of a valid claim, all b e n e f i t s
claimed b y t h e o c c u p a n t s of t h a t v e h i c l e w i t h o u t r e g a r d t o f a u l t .               If o n e
v e h i c l e h a p p e n s to b e a motorcycle, t h e i n s u r e r of t h e motorcycle files a
claim, u n d e r t h e allocation of b u r d e n s p r o v i s i o n , f o r r e i m b u r s e m e n t from t h e
o t h e r v e h i c l e ' s i n s u r e r f o r 75 p e r c e n t of t h e b e n e f i t s p a i d t o t h e o c c u p a n t ( s )
of t h e motorcycle.                     If t h e i n j u r i e s s u s t a i n e d b y t h e o c c u p a n t ( s 1 of t h e
m o t o r c y c l e meets t h e t o r t t h r e s h o l d , t h e m o t o r c y c l i s t may s u e t h e o t h e r d r i v e r
if t h e o t h e r d r i v e r is a t f a u l t a n d t h e motorcycle i n s u r e r is e n t i t l e d t o
r e c o v e r from t h e motorcyclist u p t o 50 p e r c e n t of i t s allocation of b u r d e n s
a m o u n t if t h e motorcyclist is s u c c e s s f u l .

          If t h e motorcycle is u n i n s u r e d , t h e motorcycle o w n e r is n o t e n t i t l e d t o
n o - f a u l t b e n e f i t s ; h o w e v e r , if t h e d r i v e r o r p a s s e n g e r of t h e motorcycle is
n o t t h e r e g i s t e r e d o w n e r , t h a t p e r s o n is e n t i t l e d t o n o - f a u l t b e n e f i t s a s an
a s s i g n e d claim u n d e r t h e joint u n d e r w r i t i n g p l a n .          T h e r e g i s t e r e d o w n e r of
t h e u n i n s u r e d motorcycle, h o w e v e r , is s u b j e c t t o a f i n e of between 5100 t o
$1,000 f o r n o t h a v i n g i n s u r a n c e a n d c a n b e s u e d b y t h e d r i v e r o r p a s s e n g e r
of t h e o w n e r ' s motorcycle o r b y t h e i n s u r a n c e c o m p a n y t h a t had t o p a y
b e n e f i t s b e c a u s e t h e motorcycle was n o t i n s u r e d .

         T h e following hypothetical examples of how t h e n o - f a u l t law w o r k s were
t a k e n from t h e I n s u r a n c e Division's c o n s u m e r ' s p r i m e r on n o - f a u l t i n s u r a n c e :

                Example:       Y h i l e d r i v i n g , you h i t a t r a f f i c l i g h t p o l e and knock
        it down, c a u s i n g darnage t o your c a r .           Sirice you were a t f a u l t , your
        p r o p e r t y damage l i a b i l i t y coverage p a y s f o r damage t o t h e p o l e .
        Damage t o your c a r can be t a k e n c a r e o f under your c o l l i s i o n
        c o v e r a g e , i f you had purcliased i t . You pay t h e d e d u c t i b l e amount
        and your company pays t h e r e s t .

                  Example: In t h e same a c c i d e n t a b o v e , you were a l s o i n j u r e d and
        t r e a t e d f o r minor c u t s and b r u i s e s .        You i n c u r a $100 b i l l and
        remain a t home from work f o r two d a y s . Under your n o - f a u l t b e n e f i t s
        c o v e r a g e , your i n s u r a n c e company pays t h e d o c t o r b i l l , i n c l u d i n g any
        x - r a y o r s u r g i c a l c o s t s , and f o r two d a y s ' l o s s of wages.

              Example: A car i n f r o n t o f you s t o p s suddenly a t a s t o p s i g n .
        Following t o o c l o s e l y , you r e a r - e n d t h a t c a r . The d r i v e r of t h a t
        c a r endures minor c u t s and b r u i s e s , f o u r d a y s o f l o s t work and
        damage t o h i s c a r .      Your c a r was a l s o damaged, and you and your
        spouse s u f f e r minor c u t s and b r u i s e s .
                   MOTORCYCLES UNDER THE H A W A I I NO-FAULT LAW



         I n t h i s s i t u a t i o n , t h e o t h e r d r i v e r w i l l be reimbursed f o r h i s
medical expenses and l o s t wages by h i s i n s u r a n c e company under h i s
n o - f a u l t b e n e f i t s c o v e r a g e , even though you were c l e a r l y a t f a u l t .
But your p r o p e r t y damage l i a b i l i t y coverage pays f o r h i s c a r damage.

         You and your s p o u s e ' s medical b i l l s w i l l b e p a i d from your no-
f a u l t b e n e f i t s coverage.        Your c a r damages w i l l a l s o b e p a i d under
your own c o l l i s i o n c o v e r a g e , w i t h your company p a y i n g o v e r t h e
d e d u c t i b l e you had s e l e c t e d . For i n s t a n c e , i f t h e damage c o s t s $400
and you have a $100 d e d u c t i b l e c o l l i s i o n coverage, your company w i l l
pay $300 towards t h e r e p a i r a f t e r you p u t up t h e f i r s t $ 1 0 0 .

         Example: While d r i v i n g through an i n t e r s e c t i o n , you a r e h i t by
a d r i v e r r u n n i n g t h e r e d l i g h t . You a r e t a k e n t o t h e h o s p i t a l by
ambulance, s u f f e r i n g a broken arm and a f a c i a l l a c e r a t i o n which
r e q u i r e s s t i t c h e s t h a t r e s u l t i n permanent s c a r r i n g .

         Your n o - f a u l t h e n e f i t s coverage w i l l c o v e r your m e d i c a l ,
s u r g i c a l , h o s p i t a l , n u r s i n g and ambulance b i l l s , and up t o $800 a
month i n l o s t wages f o r t h e time you a r e u n a b l e t o work. Remember,
your company w i l l pay up t o $ 1 5 , 0 0 0 f o r a l l t h e b e n e f i t s p r o v i d e d
under t h i s b a s i c c o v e r a g e .

        You can a l s o s u e t h e o t h e r d r i v e r f o r your i n j u r i e s , i n c l u d i n g
p a i n and s u f f e r i n g due r o t h e permanent s c a r which caused your
mental and emotional d i s t r e s s . And payment f o r your c a r damage w i l l
come from t h e o t h e r d r i v e r ' s i n s u r a n c e company under h i s p r o p e r t y
damage l i a b i l i t y c o v e r a g e .

          Example:    You a r e h i t by an oncoming c a r w h i l e c r o s s i n g t h e
s t r e e t and s u s t a i n s e r i o u s i n j u r i e s . A s a p e d e s t r i a n , you a r e
e n t i t l e d t o a l l no-fault          b e n e f i t s i n each of t h e f o l l o w i n g
situations.

          F i r s t , t h e i n s u r a n c e company of t h e c a r t h a t s t r u c k you must
pay f o r a l l n o - f a u l t b e n e f i t s you c l a i m . But i f t h a t c a r c a r r i e d no
i n s u r a n c e , t h e n your company w i l l pay you under your n o - f a u l t
b e n e f i t s c o v e r a g e , p r o v i d i n g you own a c a r and have a b a s i c a u t o
insurance policy.

        On t h e o t h e r hand, i f you do n o t own a c a r , t h e n you c a n g e t
p a i d u n d e r a r e l a t i v e ' s n o - f a u l t b e n e f i t s c o v e r a g e , p r o v i d i n g he
owns a c a r and i s a r e s i d e n t of your household.

         F i n a l l y , i f none o f t h e above s i t u a t i o n s a p p l y and no b e n e f i t s
a r e r e a d i l y a v a i l a b l e t o you, you c a n f i l e a c l a i m w i t h t h e Hawaii
J o i n t G n d e r w r i t i n g P l a n Assigned Claims Program t h r o u g h t h e S t a t e
?lotor V e h i c l e I n s u r a n c e D i v i s i o n . Your c l a i m w i l l t h e n be a s s i g n e d
t o an a u t o i n s u r a n c e company and handled j u s t a s i f you had a no-
f a u l t p o l i c y w i t h t h a t p a r t i c u l a r company.
                                                      Chapter 3

                                     THE MOTORCYCLE COMMUNITY



         As o f J u l y 1, 1983, t h e r e w e r e 10,261 r e g i s t e r e d m o t o r c y c l i s t s i n Hawaii.
D e s p i t e claims o f a steadily decreasing m o t o r c y c l e population, t h e r e g i s t r a t i o n s
f o r 1978 t h r o u g h 1982 i n d i c a t e a s l i g h t b u t i n c r e a s i n g t r e n d (see T a b l e 1 ) .

        T h e u n i n s u r e d motorist s t a t i s t i c s i n Table 1 also show t h a t t h e r e has
b e e n a n i n c r e a s i n g t r e n d of u n i n s u r e d r e g i s t e r e d motorcycles.          Motorcyclists
h a v e claimed t h a t t h e h i g h cost o f i n s u r a n c e i s t h e p r i m a r y reason f o r such a
h i g h percentage of uninsured motorcyclists.                            Despite t h e p o s s i b i l i t y o f p a y i n g
a f i n e between $100 a n d $1,000, m a n y m o t o r c y c l i s t s e v i d e n t l y feel it i s w o r t h
t h e r i s k o f d r i v i n g without insurance.


D r i v e r L i c e n s i n g Requirements

           I n o r d e r t o o p e r a t e a motorcycle, t h e law r e q u i r e s a p e r s o n t o o b t a i n a
c a t e g o r y 2 d r i v e r ' s license which i s s p e c i f i c a l l y f o r t h e o p e r a t i o n o f a
m o t o r c y c l e o r motorscooter.'            An a p p l i c a n t f o r a c a t e g o r y 2 license m u s t t a k e
a w r i t t e n , oral, o r automated examination w h i c h includes q u e s t i o n s on r u l e s o f
t h e road, h i g h w a y signs, a n d t h e o p e r a t i o n o f m o t o r c y c l e s . U p o n s a t i s f a c t o r y
completion o f t h e w r i t t e n examination a n d a v i s i o n t e s t , t h e a p p l i c a n t i s
i s s u e d a n i n s t r u c t i o n p e r m i t which i s v a l i d f o r n i n e t y d a y s .                In order to
o b t a i n a p e r m a n e n t license, t h e a p p l i c a n t i s r e q u i r e d t o t a k e an o f f - s t r e e t
s k i l l t e s t w h i c h t e s t s t h e applicant's a b i l i t i e s i n s t e e r i n g , s t o p p i n g , balancing,
a c c e l e r a t i n g , a n d maneuvering a m o t o r c y c l e .           If t h e a p p l i c a n t demonstrates
good coordination i n t h e off-street test,                                    an on-street test will b e
administered.


M o t o r c y c l e S a f e t y Equipment Requirements

          Since J u n e 7,             1977, when t h e helmet law was p a r t i a l l y repealed,
m o t o r c y c l e o p e r a t o r s who a r e eighteen y e a r s of age o r o l d e r have n o t been
 r e q u i r e d t o wear a s a f e t y helmet w h i l e o p e r a t i n g o r r i d i n g a m o t o r c y c l e . ' All
m o t o r c y c l e o p e r a t o r s a n d t h e i r passengers a r e r e q u i r e d t o wear s a f e t y
glasses, goggles, o r a face shield, i n t h e case o f a motorcycle o r motorscooter
t h a t i s n o t e q u i p p e d w i t h windscreens o r w i n d s h i e l d s . '


Special Laws f o r t h e O p e r a t i o n o f M o t o r c y c l e s

          M o t o r c y c l e s a r e subject t o v a r i o u s special r u l e s u n d e r t h e Hawaii Revised
S t a t u t e s as follows:

        (1)     I n s t r u c t i o n permits f o r t h e operation of a motorcycle o r
                motorscooter may n o t b e renewed more t h a n once a n d may b e
                renewed o n l y if t h e h o l d e r o f t h e p e r m i t has t a k e n t h e
                examination f o r a motorcycle o r motorscooter license a t l e a s t
                              hT?;NBEROF REGISTERED MOTOR VEHICLES ISSLJED
                                             BY VEKSCLE TYPE

Note: The percentages displayed below for each vehicle typo are slightly
      distorted because of a difference in definition of commercial vehicle for




                             m;
      insurance and registration purposes.       For example, U-drive cars are
      classified as private passenger vehicles for regisrration purposes, but for
      iiisuiance purposes vould be considered commercial vehicles.

-.
                                                                  b'EHICLE TYPE

YEAR

1982,
       ii

       '    Regular
                     HOW J>SLI'RED                PASSENGER       MOTORCYCX

                                                                                                  'i
                                                                                     COMblERCSAL/--T~~-

                                                                                       67,808
                                                                                                   I
                                                                                                       >22,969




                              1
            Joint Underwriting Plan                                                        745           9,117
            Self-insured
                                              '      -0-                 -0-     '
                                                                                 /                 i     8,437


       ,
            Total No. Insured
            Total No. Regisrered
                                                   459,022
                                                   610,456           6
                                                                      4,511
                                                                                 /
                                                                                       76,990
                                                                                       48,495      1   540,523
                                                                                                       670,267
            b of Registered
              Vehicles Insured
                                              1
                                              1          75                40    1         159


            Regular
            Joint Underwriting Plan
            Self-insured
            Toral No. insured
            Totai No. Registered
            ?
            ,   of Registered
                Vehicles Insured

            Regular
            Joint Underwriting Plan
            Self-insured
            Total No. Insured
            Total No. Registered
            "
            ,
            f      Registered
                Vehicles Insured

            Regular
            Joint Underwriting Plan
            Self-insured
            Total No. Insured
            Total No. Regisrered
            :of    Regisisred
                Insured Vehicles

            Regular
            Joint Underwriting Plan
            Self-insured
            Total No. Insured
            ioial No. Regisrered
            P of Registered
                Insured Vehicles


Source:         Hawaii, Department of Cumserie and Cocscmer A f f s a i s , i n s u r a n c e G i u i s i o n ,
                Insured Census Report.

                                                         10
                                             THE M O T O R C Y C L E C O M M U N I T Y



                 once b e f o r e t h e e x p i r a t i o n o f t h e second t e m p o r a r y i n s t r u c t i o n
                 p e r m i t - section 286-l10(f).

         (2)     A d r i v e r w i t h a t e m p o r a r y p e r m i t may n o t c a r r y a passenger
                 o r d r i v e a t n i g h t - section 286-1101e).

         (3)     A m o t o r c y c l e m u s t have a m u f f l e r meeting c e r t a i n specifications
                 t o p r e v e n t excessive noise - section 291-24.

         (4)     Head lamps f o r motorcycles m u s t meet specified r e q u i r e m e n t s as
                 t o power a n d placement - section 291-25.

         (5)     D r i v e r s a n d passengers must r i d e o n a r e g u l a r ,                        permanently
                 attached seat - section 291C-152.

         (6)     A vehicle must n o t c a r r y more passengers t h a n t h e v e l l i c l e i s
                 designed a n d e q u i p p e d t o c a r r y , i . e . , a p a s s e n g e r m u s t have
                 f o o t pegs a n d h a n d hold s t r a p s - sections 291C-152 a n d
                 291C-155.

         (7)     T h e minimum age f o r a m o t o r c y c l e p a s s e n g e r i s seven y e a r s o l d
                 - section 291 -1 1 .

         (8)     T h e o p e r a t o r m u s t have b o t h hands on t h e h a n d l e b a r s when
                 d r i v i n g - section 291C-152.

         (9)     A motorcycle i s e n t i t l e d t o t h e use of t h e f u l l w i d t h of a
                 t r a f f i c lane a n d may n o t r i d e between lanes o f t r a f f i c o r
                 between r i g h t lane t r a f f i c a n d t h e c u r b o r s h o u l d e r o f t h e
                 roadway - section 291C-153.


Profile of Motorcyclists

         T o o b t a i n i n f o r m a t i o n about t h e m o t o r c y c l e p o p u l a t i o n i n Hawaii a n d i t s
v i e w p o i n t s a b o u t t h e n o - f a u l t issue, t h e B u r e a u u t i l i z e d i n f o r m a t i o n f r o m t h e
m o t o r v e h i c l e r e g i s t r a t i o n r e c o r d s a n d s e n t a c o n f i d e n t i a l q u e s t i o n n a i r e t o 800
r a n d o m l y selected r e g i s t e r e d m o t o r c y c l i s t s .    (See A p p e n d i x C . )

           Personal Data - T h e motorcycle p o p u l a t i o n i n Hawaii i s a r e l a t i v e l y y o u n g
g r o u p w i t h 80.5% i n t h e a g e g r o u p between 18-40 y e a r s of age.                               According to
t h e motor vehicle r e g i s t r a t i o n r e c o r d s as o f J u l y 1 , 1983, o f t h e 10,261
r e g i s t e r e d motorcyclists, 3,182 (31%) w e r e i n t h e m i l i t a r y a n d 7,079 (69%)
w e r e c i v i l i a n s . T h e B u r e a u ' s s u r v e y r e s p o n d e n t p o p u l a t i o n c o n s i s t e d o f 32.70,
m i l i t a r y personnel a n d 66.7% c i v i l i a n s .

          O n l y 61 . l % o f t h e r e s p o n d e n t s r e p o r t e d h a v i n g a p e r m a n e n t Hawaii s t a t e
m o t o r c y c l e o p e r a t o r ' s license w h i l e         27.2% h a d p e r m a n e n t o u t - o f - s t a t e
m o t o r c y c l e o p e r a t o r ' s licenses a n d 9.30, r e p o r t e d h a v i n g a m o t o r c y c l e l e a r n e r ' s
p e r m i t . Most of t h e respondents have been d r i v i n g a m o t o r c y c l e f o r o v e r f i v e
y e a r s (66.6%) a n d s l i g h t l y o v e r o n e - q u a r t e r of t h e r e s p o n d e n t s r e p o r t e d
a c c i d e n t involvement 128.50,).                T h e s u r v e y f o u n d t h a t o n l y 35.500 o f t h e
r e s p o n d e n t s have t a k e n a m o t o r c y c l e safe d r i v i n g c o u r s e i n Hawaii. M o s t of
                            MOTORCYCLES UNDER THE H A W A I I NO-FAULT LAW



t h e respondents (84.34)                 r e p o r t e d also o w n i n g a motor v e t i i c l e w i t h f o u r o r
more wheels.

         Motorcycle Use - Most m o t o r c y c l i s t s use t h e i r motorcycles f o r b o t h
p l e a s u r e a n d commuting (6300). T h e size o f t h e motorcycles d r i v e n b y t h e
respondents t e n d t o b e i n t h e medium t o low range; o n l y 1600 r e p o r t e d o w n i n g
t h e "muscle" motorcycles o f o v e r 1,000 ccs.

           I n s u r a n c e Coverage - E i g h t y - n i n e p e r c e n t o f t h e respondents r e p o r t e d
being insured.                   Since t h e B u r e a u i s aware t h a t o n l y a b o u t 40% of t h e
r e g i s t e r e d m o t o r c y c l i s t s a r e i n s u r e d , t h i s c o u l d mean t h a t those who h a d
i n s u r a n c e w e r e more w i l l i n g t o r e s p o n d t o t h e s u r v e y t h a n those who w e r e
uninsured.                T h e questions i n t h e s u r v e y r e l a t i n g t o t h e t y p e of i n s u r a n c e
coverage a n d t h e d e d u c t i b l e s t h e m o t o r c y c l i s t s purchased c o u l d n o t b e used
because t h e manner i n w h i c h t h e s e q u e s t i o n s were asked e v i d e n t l y caused
confusion a n d misunderstanding.                                  Consequently,         a l t h o u g h 55.90, of t h e
respondents h a v i n g i n s u r a n c e r e p o r t e d p a y i n g $450 o r less i n annual
premiums, t h e Bureau does n o t k n o w w h e t h e r t h i s is o n l y f o r t h e r e q u i r e d
n o - f a u l t coverages o r w h e t h e r s u c h p e r s o n s also have t h e o p t i o n a l collision
a n d comprehensive coverages.                          I f t h e f o r m e r i s t h e case t h e n t h e c o s t of f u l l
coverage t o such m o t o r c y c l i s t s w o u l d b e almost doubled ( o r $900 a y e a r ) , b u t
i f t h e l a t t e r is t h e case, t h e n m o t o r c y c l e i n s u r a n c e f o r many may n o t b e as
p r o h i b i t i v e l y h i g h as some claim.

            T h e M o t o r c y c l i s t s * V i e w on E x c l u s i o n f r o m N o - f a u l t - O n t h e q u e s t i o n o f
w h e t h e r motorcycles s h o u l d b e e x c l u d e d f r o m t h e n o - f a u l t law, 68.2% said
yes, 28.700 said no, a n d 3.1% d i d n o t a n s w e r . Many commented t h a t i n s u r a n c e
f o r t h e i r motorcycles i s too e x p e n s i v e . O f those who did n o t want exclusion,
a few respondents who commented c o u l d n o t u n d e r s t a n d w h y t h e l e g i s l a t u r e
was c o n s i d e r i n g removal o f t h e p e r s o n a l i n j u r y p r o t e c t i o n r e q u i r e m e n t . T h e y
maintained t h a t since m o t o r c y c l i s t s a r e more susceptible t o i n j u r i e s a n d seldom
a t f a u l t i n an accident, t h e y need personal i n j u r y p r o t e c t i o n more t h a n
l i a b i l i t y coverage.


Motorcycle Dealers

           T h e B u r e a u a t t e m p t e d t o o b t a i n t h e views of t h e m o t o r c y c l e dealers i n
Hawaii t h r o u g h t h e Hawaii M o t o r c y c l e I n d u s t r y Council.                   T h e Council,
however, is d e f u n c t b u t t h r o u g h t h e assistance of i t s f o r m e r p r e s i d e n t , o t h e r
dealers w e r e i n f o r m e d o f t h e B u r e a u ' s s t u d y a n d many dealers s u b m i t t e d
i n d i v i d u a l statements o n t h e i s s u e of e x c l u d i n g motorcycles f r o m t h e n o - f a u l t
law.

          Motorcycle dealers a r e s t r u g g l i n g w i t h d e c l i n i n g sales a n d t h e y a t t r i b u t e
t h e i r p l i g h t p r i m a r i l y t o t h e i n c l u s i o n o f motorcycles u n d e r t h e n o - f a u l t law
w h i c h t h e y claim has caused m o t o r c y c l e i n s u r a n c e rates t o b e o u t of reach f o r
many p o t e n t i a l b u y e r s .             Consequently, o v e r t h e p a s t several y e a r s , t h i s
g r o u p has been a c t i v e l y s e e k i n g a s o l u t i o n t o t h e h i g h motorcycle i n s u r a n c e
r a t e s . As a r e s u l t o f a s u c c e s s f u l l o b b y i n g e f f o r t b y motorcycle dealers, i n
1980, t h e l e g i s l a t u r e e n a c t e d a law t o allow an insurance company t o deal
e x c l u s i v e l y i n motorcycle i n s u r a n c e sales.5              While one dealer acknowledged
p a s t i n t e r e s t i n e s t a b l i s h i n g an i n s u r a n c e company i n Hawaii t o sell m o t o r c y c l e
                                         THE MOTORCYCLE COMMUNITY



i n s u r a n c e e x c l u s i v e l y as p e r m i t t e d by t h i s law, t h e dealer l a t e r d r o p p e d t h e
plans.             A n o t h e r d e a l e r is a c t i v e l y w o r k i n g w i t h an i n s u r a n c e agency i n
C a l i f o r n i a t o establish an i n s u r a n c e p r o g r a m i n Hawaii e x c l u s i v e l y f o r
motorcycles.                  T h e i n s u r a n c e agency, however,                   has made t h i s commitment
c o n d i t i o n e d upon amending t h e n o - f a u l t law t o e x c l u d e motorcycles f r o m
p e r s o n a l i n j u r y p r o t e c t i o n b e n e f i t s t o m o t o r c y c l e owners i n accidents n o t
i n v o l v i n g a second v e h i c l e . T h e i n s u r a n c e agency has also u r g e d t h e dealers
t o seek o t h e r s t a t u t o r y changes t o :                  11) s t i f f e n t h e penalties f o r not h a v i n g
i n s u r a n c e ; 12) r e q u i r i n g t h e State t o c o n t r i b u t e a p o r t i o n of t h e cost f o r
w e l f a r e c l i e n t s c o v e r e d b y t h e JUP; a n d (31 t o streamline a n d s i m p l i f y t h e
i n s u r e r ' s r e p o r t i n g r e q u i r e m e n t s a n d lessen t h e f r e q u e n c y o f s u c h r e p o r t s .

          T h e dealers a r e concerned t h a t if something is n o t done i n t h e n e a r
f u t u r e t o lower t h e c o s t o f m o t o r c y c l e insurance, some dealers w i l l b e f o r c e d
t o close d o w n t h e i r b u s i n e s s .


Motorcycle l n s u r e r s

       Many p r o p e r t y - c a s u a l t y i n s u r e r s d o n o t w a n t t h e m o t o r vehicle i n s u r a n c e
business.        From t h e i n s u r e r s ' p e r s p e c t i v e , t h i s l i n e of i n s u r a n c e loses money
because t h e number o f personal i n j u r y claims a n d t h e amount o f such claims
a r e too h i g h .

          T h e Bureau e n l i s t e d t h e assistance of t h e Hawaii I n s u r e r s Council t o
o b t a i n d a t a from,            a n d the viewpoints of,                     i n s u r a n c e companies on t h e
m o t o r c y c l e problem.            O f t h e f o u r t e e n i n s u r e r s t h a t h a d a c t i v e motorcycle
policies as of J u n e 1983, t h e Hawaii l n s u r e r s C o u n c i l r e p r e s e n t s s i x :              First
I n s u r a n c e , Hawaiian I n s u r a n c e , I s l a n d l n s u r a n c e , Pacific Insurance, Allstate,
S t a t e Farm, a n d U S A A .                  I n a d d i t i o n t o t h e s u r v e y s e n t t o t h e Hawaii
I n s u r e r s Council, t h e B u r e a u also c o n t a c t e d C r i t e r i o n l n s u r a n c e Company,
w h i c h w r i t e s a p p r o x i m a t e l y 4000 o f t h e m o t o r c y c l e policies.

          When asked a b o u t t h e consequences t h a t m i g h t o c c u r if motorcycles were
e x c l u d e d f r o m t h e n o - f a u l t law, t h e i n s u r e r s n o t e d t h e f o l l o w i n g :

        1.     T h e cost o f personal i n j u r i e s f r o m m o t o r c y c l e accidents would
               s t i l l b e p r e s e n t a n d t h e e x c l u s i o n of motorcycles f r o m t h e
               r e q u i r e m e n t o f m a i n t a i n i n g p e r s o n a l i n j u r y p r o t e c t i o n would
               s h i f t t h e cost t o o t h e r s .

       2.      T o r t r e s t r i c t i o n s f o r m o t o r c y c l i s t s m i g h t have t o b e removed i f
               t h e y a r e e x c l u d e d f r o m t h e l a w a n d t h i s c o u l d cause an
               increase i n t o r t a c t i o n s .                If t h e r e i s an increase i n t o r t
               actions, t h e c u r r e n t rates f o r automobile r e s i d u a l b o d i l y i n j u r y
               l i a b i l i t y may b e increased.

       3.      E x c l u d i n g motorcycles m i g h t i n c r e a s e t h e n u m b e r o f people
               g o i n g t o t h e assigned claims pool if m o t o r c y c l i s t s a r e allowed t o
               receive b e n e f i t s u n d e r t h e assigned claims p r o g r a m .

       4.      If motorcycles are e x c l u d e d f r o m t h e p e r s o n a l i n j u r y p r o t e c t i o n
               r e q u i r e m e n t of t h e n o - f a u l t faw b u t i n s u r a n c e compantes a r e
          MOTORCYCLES UNDER THE HP,WAII NO-FAULT LAW



r e q u i r e d t o o f f e r personal i n j u r y coverage as an o p t i o n t o
m o t o r c y c l i s t s , such o p t i o n a l coverage w o u l d p r o b a b l y cost t h e
same i f n o t more t h a n t h e p r e s e n t cost d e p e n d i n g on t h e t y p e
of r i s k s who elect t h e o p t i o n a l coverage.
                                                        Chapter 4

                                    MOTORCYCLE INSURANCE R A T E S



          U n d e r t h e old t o r t l i a b i l i t y system, a p e r s o n p u r c h a s e d insurance t o pay
f o r damages t h e p e r s o n caused t o a n o t h e r vehicle's occupants; therefore, t h e
i n s u r a n c e companies p r o v i d e d r a t i n g i n c e n t i v e s based o n the insured's
p r o p e n s i t y t o cause a n accident a n d impose i n j u r y t o a n o t h e r vehicle a n d i t s
occupants.             T h e n o - f a u l t system, o n t h e o t h e r hand, i s essentially a f i r s t
p a r t y i n s u r a n c e system u n d e r w h i c h t h e i n s u r e d b u y s i n s u r a n c e t o pay f o r
t h e i n s u r e d ' s own i n j u r i e s as well as l i a b i l i t i e s so t h e system must p r o v i d e
i n c e n t i v e s t o vehicles w h i c h minimize i n j u r i e s t o t h e i n s u r e d vehicle's
occupants.             Consequently, those m o t o r i s t s who choose t o d r i v e vehicles t h a t
expose them a n d t h e i r passengers t o s e r i o u s i n j u r i e s w o u l d b e expected t o
p a y a h i g h e r r a t e f o r personal i n j u r y i n s u r a n c e c o v e r a g e .


T h e O p e n R a t i n g System

          U n l i k e o t h e r f o r m s of p r o p e r t y - c a s u a l t y i n s u r a n c e i n Hawaii which are
r e g u l a t e d u n d e r c h a p t e r 431, Hawaii Revised Statutes, motor vehicle Insurance
r a t e s a r e set on an open c o m p e t i t i v e basis u n d e r c h a p t e r 294, Hawaii Revised
S t a t u t e s . T h i s means t h a t each company sets i t s own rates f o r motor vehicle
i n s u r a n c e coverages a n d such r a t e s can become e f f e c t i v e , once f i l e d w i t h t h e
Insurance             Commissioner,           without           prior         approval           by   the   lnsurance
Commissioner.                T h e Legislature, in a l l o w i n g f o r o p e n r a t i n g , believed t h a t
o p e n competition w o u l d s e r v e t o keep m o t o r v e h i c l e r a t e s a t reasonable levels.

           T h e r e appears t o b e some m i s u n d e r s t a n d i n g about t h e motor vehicle
i n s u r a n c e r a t i n g system as some m o t o r c y l i s t s have accused the l n s u r a n c e
D i v i s i o n o f n o t h o l d i n g p u b l i c h e a r i n g s o n r a t e increases.                 A f t e r careful
r e v i e w of t h e c h a p t e r 294 a n d i t s l e g i s l a t i v e h i s t o r y , t h e B u r e a u believes t h a t
t h i s p r o b l e m i s p r i m a r i l y a t t r i b u t a b l e t o some o b v i o u s d r a f t i n g e r r o r s i n t h e
r a t i n g sections of t h e n o - f a u l t law.                   (See A p p e n d i x B f o r t e x t o f C h a p t e r
294. )

          When t h e n o - f a u l t law was i n i t i a l l y enacted, t h e L e g i s l a t u r e p r o v i d e d f o r
a t e m p o r a r y t h r e e - y e a r p e r i o d o f open r a t i n g f r o m September 1, 1975 t o
A u g u s t 31, 1978 w h e r e i n each f i r m licensed t o u n d e r w r i t e n o - f a u l t i n s u r a n c e
i n Hawaii w o u l d e s t a b l i s h i t s own schedule o f r a t e s .             A f t e r the t h r e e - y e a r
p e r i o d , it was i n t e n d e d t h a t t h e l n s u r a n c e Commissioner w o u l d be responsible
f o r t h e setting and regulation of uniform rates.                            I n 1977, t h e L e g i s l a t u r e
amended t h e law t o e x t e n d t h e o p e n r a t i n g p e r i o d t o A u g u s t 31, 1983' a n d i n
1982, t h e L e g i s l a t u r e , u p o n f i n d i n g t h a t Hawaii does h a v e a competitive
m a r k e t a n d t h a t open r a t i n g i s e f f e c t i v e i n k e e p i n g i n s u r a n c e premiums a t
reasonable levels, p r o v i d e d f o r a permanent o p e n r a t i n g system b y d e l e t i n g
t h e e x p i r a t i o n date.

      T h e deletion o f t h e e x p i r a t i o n date s h o u l d have been accompanied b y t h e
repeal o f t h e sections empowering t h e commissioner t o set rates, since these
sections were i n t e n d e d t o implement t h e p r i o r a p p r o v a l system t h a t was
                                                                       A
                           MOTORCYCLES UNDER THE H A W A I I NO-FAULT L W



supposed t o become e f f e c t i v e u p o n t h e e x p i r a t i o n of t h e t e m p o r a r y o p e n
rating period.           These p r i o r a p p r o v a l sections p r o v i d e f o r p u b l i c h e a r i n g s
b e f o r e r a t e increases a n d s u c h h e a r i n g r e q u i r e m e n t is n o t applicable t o a n
open r a t i n g system.


R e g u l a t i o n o f Rates by t h e l n s u r a n c e D i v i s i o n

           M o t o r vehicle rates d o n o t r e q u i r e t h e l n s u r a n c e Commissioner's a p p r o v a l
b e f o r e t h e y become effective, b u t t h e Commissioner has t h e power t o a d j u s t
rates t h a t a r e f o u n d excessively h i g h o r u n c o n s c i o n a b l y below t h e actual costs
o f p r o v i d i n g t h e a s s u r e d coverage.        The lnsurance Division reported that, i n
p r a c t i c e , Hawaii has a modified p r i o r a p p r o v a l system because most of t h e
i n s u r e r s f i l e t h e i r rates a b o u t s i x t y d a y s p r i o r t o t h e e f f e c t i v e d a t e a n d
request t h e Division's approval.                     T h e reason f o r t h i s is t h a t i t i s too t i m e
consuming a n d c o s t l y f o r t h e i n s u r e r t o make adjustments a f t e r new r a t e s
become e f f e c t i v e .

          T h e absence of a p u b l i c h e a r i n g r e q u i r e m e n t on r a t e f i l i n g s does n o t
mean t h e r e i s no check on t h e i n s u r e r s r a t e m a k i n g process.               The lnsurance
D i v i s i o n conducts a t h o r o u g h examination o f each r a t e f i l i n g t o e n s u r e t h a t
t h e r a t e s are j u s t i f i e d .    T h e examination c o n s i s t s of a r e v i e w of t h e g e n e r a l
i n f o r m a t i o n about t h e company i n c l u d i n g i t s r a t e h i s t o r y , loss experience, a n d
expense experience.                     T h e D i v i s i o n t h e n analyzes t h e d a t a a n d methods
p r e s e n t e d i n t h e f i l i n g t o t e s t i t s reasonableness.            This analysis is h i g h l y
t e c h n i c a l and since t h e l n s u r a n c e D i v i s i o n has capable r a t i n g analysts, t h e
i n s u r e r s are u n l i k e l y t o submit inadequate a n d unreasonable f i l i n g s .

          I n a d d i t i o n t o t h e examination of r a t e f i l i n g s , i n s u r e r s a r e r e q u i r e d t o
submit q u a r t e r l y r e p o r t s o n : (1) a census o f vehicles i n s u r e d ; (2) d e t a i l s o f
e x p e r i e n c e f o r motor vehicle i n s u r a n c e policies by class o f v e h i c l e a n d t y p e o f
coverage; (3) data on applications, renewals, termination, a n d cancellation o f
policies; and (4) data on n o - f a u l t b e n e f i t claims.'               I n s u r e r s also must s u b m i t
a n annual r e p o r t c o n t a i n i n g t h e e x p e r i e n c e f o r each class o f motor v e h i c l e
i n s u r a n c e a n d detailed explanations of t h e methods used t o assign expenses
a n d i n v e s t m e n t income t o t h e Hawaii motor v e h i c l e classes a n d u s e d t o d e v e l o p
reserves f o r losses a n d loss adjustment expenses.'

          I n s u r e r s a r e also r e q u i r e d , u n d e r t h e allocation o f b u r d e n s p r o v i s i o n , t o
submit r e p o r t s i n v o l v i n g n o - f a u l t claims f o r accidents i n v o l v i n g t w o o r more
vehicles of d i s p r o p o r t i o n a t e s i z e . '       T h e law also r e q u i r e s i n s u r e r s t o s u b m i t
a l l applications f o r JUP i n s u r a n c e c o v e r a g e . 6                       Finally,       tfie     lnsurance
Commissioner is empowered t o r e q u e s t a n y o t h e r a d d i t i o n a l i n f o r m a t i o n o f
i n s u r e r s u n d e r t h e j u r i s d i c t i o n of t h e D i v i s i o n a n d t o c o n d u c t a u d i t s of t h e
r e c o r d s o f such companies.


How    Rates Are Developed

         Section 294-13(a)(1),              Hawaii Revised Statutes,                 requires t h a t motor
vehicle i n s u r a n c e r a t e s b e a p p r o v e d o n ( 1 ) p a s t a n d p r o s p e c t i v e loss
e x p e r i e n c e w i t h i n t h i s State;   (2) reasonable m a r g i n f o r p r o f i t f r o m a n d
contingencies i n t h e a d m i n i s t r a t i o n o f motor v e h i c l e i n s u r a n c e sold w i t h i n t h e
                                    MOTORCYCLE INSURANCE RATES



State; a n d (3) p a s t a n d p r o s p e c t i v e expenses i n t h e sale a n d administration
of m o t o r v e h i c l e i n s u r a n c e w i t h i n t h e State. Loss experience o u t s i d e t h e
State can b e used o n l y if it serves t o lower t h e r a t e s . T h i s section o n rates
also c o n t a i n s what appears t o b e a d r a f t i n g e r r o r i n t h a t t h e p a r a g r a p h i s
r e p e t i t i o u s a n d does n o t make sense when r e a d t h r o u g h o u t .

           Most i n s u r e r s i n Hawaii belong t o t h e Hawaii l n s u r a n c e R a t i n g B u r e a u
w h i c h i s a n a d v i s o r y b o d y t h a t p r o v i d e s i n f o r m a t i o n a n d services t o i t s
member i n s u r e r s .         T h r o u g h t h e Hawaii l n s u r a n c e R a t i n g Bureau, companies
h a v e access t o "loss c o s t " data and guidelines f o r t h e calculation o f rates
f r o m t h e l n s u r a n c e Services O f f i c e w h i c h i s a national organization t h a t
compiles a n d analyzes s t a t i s t i c a l information f o r i n s u r a n c e p u r p o s e s .   A "loss
cost" means t h e amount o f dollars t h e i n s u r e r m u s t p a y p e r u n i t o f e x p o s u r e
i n o r d e r t o p r o v i d e a p a r t i c u l a r coverage.       A "loss cost" is based on t h e
amount t h e i n s u r e r m u s t pay on a claim a n d o n allocated a n d unallocated
expenses.             Allocated expenses a r e expenses o f a company i n connection w i t h
claim settlements w h i c h can b e d i r e c t l y allocated t o a p a r t i c u l a r claim, e . g . ,
a t t o r n e y fees f o r ciaims i n s u i t , cost o f o t h e r s p e c i f i e d items o f expenses
s u c h as medical exams, e x p e r t medical o r o t h e r testimony, l a b o r a t o r y a n d x -
r a y fees, a u t o p s y expense, etc.               Unallocated expenses a r e company o v e r h e a d
expenses allocated t o t h e claim f u n c t i o n p l u s fees p a i d t o independent
adjusters, e.g.,               claim expenses which c a n n o t b e d i r e c t l y allocated t o a
p a r t i c u l a r claim.

         Rates a r e u s u a l l y set on t h e basis o f a n assumed loss ratio, e.g., t h a t
a p p r o x i m a t e l y 65 p e r c e n t of t h e premium w i l l b e u s e d t o p a y f o r losses a n d
allocated a n d unallocated expenses a n d 35 p e r c e n t w i l l b e u s e d t o p a y for-
o p e r a t i n g expenses o f t h e company.            A "loss r a t i o " is t h e r e s u l t achieved
w h e n c o m p a r i n g i n c u r r e d losses and e a r n e d premiums.          Rate changes o c c u r
when, a f t e r r e v i e w i n g actual experience, t h e assumed loss r a t i o f a r exceeds
o r i s t o o f a r below t h e actual loss r a t i o .

           A c c o r d i n g t o data o b t a i n e d from t h e l n s u r a n c e D i v i s i o n , t h e statewide
loss r a t i o s f o r each t y p e of motorcycle coverage o v e r a f i v e - y e a r p e r i o d a r e
r e f l e c t e d i n Table 2 below. These loss r a t i o s a r e computed b y t h e l n s u r a n c e
D i v i s i o n f o r i n t e r n a l purposes as p a r t o f i t s check o f t h e loss e x p e r i e n c e o f
insurers.
                             MOTORCYCLES UNDER THE H A W A I I NO-FAULT LAW



                                                            Table 2

                                                ?iOTORCYCLE LOSS RATIO
                                                      9/77 - 6/82

                                                    Premiums Earned;:                I n c u r r e d Losses"       Loss R a t i o

Personal I n j u r y P r o t e c t i o n                 2,385,000                        3,118,000                    1.302

Residual Bodily I n j u r y
  Liability-Cninsured Elotorist                           1 , iii1,000                    1,709,000                      .9i7

P r o p e r t y Damage L i a b i l i t y                  1,175,000                          289,000                     .246

P h y s i c a l Damage

   Total

       "Rounded t o t h e n e a r e s t t h o u s a n d .

        Source:        H a w a i i , Department o f Commerce and Consumer A f f a i r s ,
                       Insurance D i v i s i o n .

           A s s u m i n g t h a t t h e s e l o s s r a t i o s w e r e t h e a c t u a l loss r a t i o s o f a p a r t i c u l a r
c o m p a n y , t h e r a t e l e v e l c a l c u l a t i o n w o u l d b e as f o l l o w s :      If t h e o v e r a l l l o s s
r a t i o o f 1.021 i n T a b l e 2 i s d i v i d e d by t h e e x p e c t e d l o s s a n d l o s s a d j u s t m e n t
 r a t i o o f 65 p e r c e n t ( t h e a v e r a g e e x p e c t e d loss a n d l o s s a d j u s t m e n t r a t i o ) ,
t h e i n d i c a t e d r a t e l e v e l c h a n g e i s 157.1%. I f t h i s i s c a l c u l a t e d s e p a r a t e l y f o r
each coverage, t h e i n d i c a t e d statewide r a t e level changes f o r each c o v e r a g e
w o u l d b e as f o l l o w s :

                Personal        injury protection
                Residual        bodily injury l i a b i l i t y
                Property        damage l i a b i l i t y
                Physical        damage

          A f t e r t h e i n d i c a t e d r a t e l e v e l c h a n g e is c a l c u l a t e d , t h e e f f e c t s o f
i n v e s t m e n t income a r e s u b t r a c t e d .       T h e r a t e l e v e l c h a n g e s e l e c t e d by t h e
insurer,           even a f t e r s u c h adjustment,                 is usually lower t h a n w h a t is
permissible.

        While t h e b a s e " l o s s c o s t " a m o u n t s f o r e a c h t y p e o f p o l i c y c o v e r a g e f o r
H a w a i i e s t a b l i s h e d by t h e I n s u r a n c e S e r v i c e s O f f i c e ( h e r e i n a f t e r I S O ) for the
H a w a i i I n s u r a n c e R a t i n g B u r e a u h a v e b e e n a p p r o v e d by t h e l n s u r a n c e
Commissioner, t h e C o m m i s s i o n e r h a s w a r n e d t h e c o m p a n i e s t h a t t h e d a t a in
t h e I S 0 "loss c o s t " p u b l i c a t i o n alone c a n n o t j u s t i f y a company's r a t e s since
t h e IS0 b a s e a m o u n t s a r e " b e n c h m a r k s " f o r s t a t e w i d e u s e .                   Each company
t h a t uses s u c h d a t a m u s t r e v i e w i t s o w n e x p e r i e n c e a n d f a c t o r s u c h
exuerience into t h e calculation o f its rates.
                                          MOTORCYCLE INSURANCE RATES


R e l a t i v i t y t o Automobile Rates

          T h e "law o f l a r g e numbers", a statistical p r i n c i p l e upon w h i c h t h e
i n s u r a n c e b u s i n e s s i s based, holds t h a t t h e " . . . g r e a t e r                   t h e number of
e x p o s u r e s , t h e more n e a r l y w i l l t h e actual r e s u l t s o b t a i n e d approach t h e
p r o b a b l e r e s u l t e x p e c t e d w i t h an i n f i n i t e number o f e x p o s u r e s . . . . T o p u t it
a n o t h e r way, e v e n t s t h a t seem t o b e t h e r e s u l t o f p u r e chance o c c u r w i t h
s u r p r i s i n g r e g u l a r i t y as t h e number of instances o b s e r v e d becomes l a r g e r . 9
Since i n s u r a n c e is a r i s k business, i n s u r e r s m u s t a p p l y s t a t i s t i c a l methods
t h a t o f f e r them t h e g r e a t e s t p r o b a b i l i t y i n t h e i r f o r e c a s t i n g .

           T h e r e a r e o n l y 11,000 r e g i s t e r e d motorcycles i n Hawaii compared t o o v e r
560,000 automobiles.                   T h i s small n u m b e r of motorcycles poses a c r e d i b i l i t y
p r o b l e m f o r i n s u r a n c e purposes.            T h e Insurance Division explained that t o
allow f o r r e l i a b l e f o r e c a s t i n g , t h e m a j o r i t y o f companies d e t e r m i n e m o t o r c y c l e
i n s u r a n c e r a t e s i n r e l a t i o n t o automobile r a t e s .               A c t u a r i a l l y determined
r e l a t i v i t y f a c t o r s m e a s u r i n g t h e loss experience b y coverages between
automobiles a n d motorcycles a r e developed and t h e s e f a c t o r s are a p p l i e d t o
t h e more c r e d i b l e r a t e s f o r automobile coverages.                   T h i s method has r e s u l t e d
i n more stable m o t o r c y c l e rates a n d lower rate increases t h a n o t h e r w i s e would
h a v e o c c u r r e d . '*

     T o i l l u s t r a t e how t h e r e l a t i v i t y factors a r e applied, a n insurance
company's m o t o r c y c l e rates m i g h t b e calculated as follows f o r a 450 cc
motorcycle:

                                                    Automobile                 Motorcycle                  ??otorcycle
                                                   Base Premium            R e l a t i v i t y Facror         Rate

Personal i n j u r y
  protection

Residual b o d i l y i n j u r y
  liability                                                90                         .40                        36.00

P r o p e r t y damage
    liability

Uninsured m o t o r i s t                                  25                        1.00                        25.00

C o l l i s i o n ($250 d e d u c t i b l e )             150                         .60                        90.00

Comprehensive ($50 d e d u c t i b l e )                  140                       2.00                        280.00



         U n d e r t h e Hawaii j o i n t u n d e r w r i t i n g plan, t h e automobile base rates a r e
h i g h e r because t h e y a r e developed f o r t h e h i g h r i s k g r o u p .       F o r a 450 cc
m o t o r c y c l e t h e r a t e computation w o u l d b e as follows:
                            MOTORCYCLES UNDER THE H A W A I I NO-FAULT LAW



                                                     Automobile                    Motorcycle                 !lotorcycle
                                                    Base Premium             R e l a t i v i t y Factor            Rate

Personal i n j u r y
  protection

Residual b o d i l y i n j u r y
  liability                                                606                           .40                       242

P r o p e r t y damage
    liability

Uninsured m o t o r i s t                                    12                        1.00                          12

C o l l i s i o n ($250 d e d u c t i b l e )              25 2                          .60                       15 1

Comprehensive ($50 d e d u c t i b l e )                     64                        2.40                        153



          A l t h o u g h m o t o r c y c l i s t s have complained about motorcycle r a t e s b e i n g
based o n automobile rates, t h e h i g h incidence o f accidents a n d t h e s e v e r i t y o f
m o t o r c y c l e p e r s o n a l i n j u r y claims w o u l d cause motorcycle r a t e s t o b e
p r o h i b i t i v e l y h i g h i f r a t e s w e r e e s t a b l i s h e d solely on motorcycle e x p e r i e n c e .


Why Motorcycle Rates A r e H i g h

           M o t o r c y c l i s t s h a v e alleged t h a t Hawaii's rates a r e much h i g h e r t h a n i n
o t h e r states because motorcycles a r e i n c l u d e d u n d e r t h e n o - f a u l t law.                             That
Hawaii's rates a r e h i g h e r t h a n many o t h e r states i s p r o b a b l y t r u e , b u t
a t t r i b u t i n g t h i s o n l y t o t h e i n c l u s i o n o f motorcycles u n d e r n o - f a u l t i s n o t
a p p r o p r i a t e because m o t o r c y c l e r a t e s d e p e n d o n many o t h e r f a c t o r s such as
climatic conditions, t o t a l n u m b e r o f s u b s c r i b e r s i n t h e pool, a n d t h e e x t e n t o f
competitiveness among i n s u r a n c e companies.                                 F o r i n s u r a n c e r a t i n g purposes,
Hawaii does n o t score well.                        Hawaii's excellent climatic conditions accommodate
m o t o r c y c l e d r i v i n g o n a y e a r - r o u n d basis w h i c h means more r i d i n g time a n d
more e x p o s u r e t o a c c i d e n t s .               Hawaii,        b e i n g a small state has a small
p o p u l a t i o n of m o t o r c y c l i s t s , and, a c c o r d i n g t o t h e "law o f l a r g e numbers", t h e
smaller            the        pool o f         insureds,        the       higher the               rates.          Finally,  the
competitiveness among i n s u r a n c e companies f o r t h e motorcycle i n s u r a n c e
business is almost n o n - e x i s t e n t .                 A n o b v i o u s p r o b l e m is t h a t d e s p i t e Hawaii's
" t a k e a l l comers" p r o v i s i o n "            i n t h e n o - f a u l t law, i n s u r e r s a n d a g e n t s who d o
n o t wish t o w r i t e m o t o r c y c l e policies have managed t o avoid d o i n g so.                                  Only
eleven companies a c t i v e l y w r i t e policies f o r t h e v o l u n t a r y m o t o r c y c l e i n s u r a n c e
market, and f i v e o f t h e eleven companies a r e w r i t i n g 9800 of t h e t o t a l n u m b e r
o f motorcycle policies.                       I f t h e insurers are n o t interested i n t h e motorcycle
business, t h e r e is no i n c e n t i v e f o r them t o o f f e r competitive r a t e s .

           Motorcycle i n s u r e r s commented t h a t Hawaii motorcycle i n s u r a n c e r a t e s a r e
n o t always h i g h e r t h a n t h e rates o f o t h e r states a n d t h a t t h e h i g h r a t e s f o r
p e r s o n a l i n j u r y p r o t e c t i o n f o r motorcycles as compared t o automobiles i s
r e f l e c t i v e of t h e r i s k e x p o s u r e . D e p e n d i n g on t h e size of t h e motorcycle, t h e
                                       MOTORCYCLE I N S U R A N C E RATES



personal i n j u r y p r o t e c t i o n ( h e r e i n a f t e r PIP) coverage f o r motorcycles is
approximately 50% t o 300% h i g h e r t h a n PIP coverage f o r p r i v a t e passenger
automobiles.

            One i n s u r e r n o t e d that t h e r e l a t i v e h i g h e r cost o f PIP coverage f o r
motorcycles is t o b e e x p e c t e d s i n c e motorcycles l a c k much p r o t e c t i o n a g a i n s t
personal b o d i l y i n j u r y a n d t h e r e is g r e a t e r likelihood of b o d i l y i n j u r y i n t h e
e v e n t o f an accident.             Even t h o u g h motorcycles t e n d n o t t o b e d r i v e n as
much as automobiles, a n d a r e consequently i n v o l v e d i n f e w e r accidents, t h e
r e l a t i v e p o r t i o n o f accidents i n v o l v i n g b o d i l y i n j u r y , a n d t h e s e v e r i t y of
i n j u r i e s , a r e much h i g h e r .

         T h e I n s u r a n c e D i v i s i o n r e p o r t e d i n i t s 1982 a n n u a l r e p o r t t o t h e
L e g i s l a t u r e t h a t " . . . T h e s e v e r i t y of motorcycle claims o r average claim size
f o r t h e r e q u i r e d n o - f a u l t i n s u r a n c e coverages (personal i n j u r y p r o t e c t i o n ,
residual b o d i l y i n j u r y l i a b i l i t y a n d p r o p e r t y damage l i a b i l i t y ) shows t h a t t h e
personal i n j u r y p r o t e c t i o n s e v e r i t y has been increasing a t an annual r a t e of
61.0% a n d t h e p r o p e r t y damage s e v e r i t y has been i n c r e a s i n g a t a n annual r a t e
of 1 7 . 1 % . " ' 2

         I n s u r e r s have i n d i c a t e d t h a t t h e y r e l y o n local s t a t i s t i c a l data on i n j u r y
and f a t a l i t y rates compiled by t h e Department o f T r a n s p o r t a t i o n .                  The Bureau
f o u n d t h a t s u c h s t a t i s t i c a l data does s u p p o r t t h e h i g h e r PIP rates assessed on
motorcycles (see C h a p t e r 5 f o r s t a t i s t i c s on motorcycle accidents and i n j u r y
rates).

        A major reason f o r t h e increase i n rates is t h a t t h e r e i s an exceptionally
high         incidence o f s i n g l e vehicle accidents i n m o t o r c y c l e accidents.                            The
UMVARA              law discussed i n C h a p t e r 2 which is t h e basis o f t h e Hawaii law
contained a n equitable allocation o f b u r d e n s p r o v i s i o n w h i c h r e q u i r e d t h e
allocation o f losses t o b e reasonably consistent w i t h t h e p r o p e n s i t y of
d i f f e r e n t vehicles t o a f f e c t p r o b a b i l i t y a n d s e v e r i t y of i n j u r y t o p e r s o n s o r
p h y s i c a l damage t o vehicles.                T h e Hawaii Legislature, c o g n i z a n t t h a t t h e
inclusion o f motorcycles u n d e r t h e n o - f a u l t law would r e s u l t i n h i g h e r
premiums f o r motorcycle insurance, believed t h a t t h i s allocation of b u r d e n s
p r o v i s i o n , along w i t h t h e allowance o f u p t o $1,000 d e d u c t i b l e f o r personal
i n j u r y p r o t e c t i o n insurance, w o u l d r e s o l v e t h e problem o f p r o h i b i t i v e l y h i g h
motorcycle i n s u r a n c e r a t e s .      I n r e a l i t y , however, these p r o v i s i o n s have n o t
p r e v e n t e d motorcycle i n s u r a n c e rates f r o m steadily i n c r e a s i n g .                  I n claims
a r i s i n g f r o m a s i n g l e vehicle accident, t h e r e i s no o t h e r motor vehicle
i n s u r a n c e company t o s h a r e t h e cost o f motorcycle i n j u r i e s w i t h t h e motorcycle
insurer.


S h o p p i n g f o r Low I n s u r a n c e Rates

         P u r s u a n t t o A c t 5, Session Laws o f Hawaii 1980, t h e I n s u r a n c e D i v i s i o n
a n n u a l l y p u b l i s h e s a n o - f a u l t i n s u r a n c e premium g u i d e w h i c h l i s t s c u r r e n t
rates o f all companies licensed t o sell automobile i n s u r a n c e i n t h e State.                            The
L e g i s l a t u r e i n t e n d e d t o encourage consumers t o shop c o m p a r a t i v e l y f o r motor
vehicle i n s u r a n c e b y p r o v i d i n g a c o n v e n i e n t r e f e r e n c e of r e p r e s e n t a t i v e
rates. "             I n t h e g u i d e t h a t appeared i n t h e Honolulu S t a r - B u l l e t i n on
J a n u a r y 28, 1983, t h e r e w e r e 134 companies l i s t e d w i t h r a t e s f o r automobiles
                          MOTORCYCLES UNDER THE HAWAII NO-FAULT LAW



a n d motorcycles ( s e e A p p e n d i x D ) . O f t h e 134 companies, however, o n l y 14
a c t u a l l y h a d motorcycle policies i n e f f e c t as o f J u n e 1983 a n d some o f t h e
companies t h a t l i s t e d t h e lowest rates did n o t have a n y                 motorcycle
p o l i c y h o l d e r s (see Table 3 ) .

         One o f the arguments made b e f o r e t h e L e g i s l a t u r e i n response t o
m o t o r c y c l i s t s ' complaints o v e r h i g h r a t e s was that motorcyclists s h o u l d use
t h e i r i n i t i a t i v e t o shop a r o u n d f o r b e t t e r r a t e s .    Motorcyclists o n t h e o t h e r
hand, have a r g u e d t h a t even i f one shops a r o u n d , most companies w i l l e i t h e r
r e f e r y o u t o one o f t h e few companies t h a t a c t i v e l y w r i t e motorcycle policies
o r w i l l t e l l y o u t h a t t h e y d o n o t sell m o t o r c y c l e i n s u r a n c e .

          T o g e t t o t h e t r u t h o f t h e matter, t h e B u r e a u conducted a telephone poll
o f t h e companies l i s t e d i n t h e newspaper g u i d e u s i n g t h e services of a law
s t u d e n t w h o was a licensed m o t o r c y c l e o p e r a t o r . T h e s t u d e n t was i n s t r u c t e d
t o call as a p r o s p e c t i v e m o t o r c y c l e o w n e r w h o wanted t o shop a r o u n d f o r a
good i n s u r a n c e r a t e b e f o r e d e c i d i n g t o p u r c h a s e a motorcycle.          F i r s t , i t was
f o u n d t h a t most o f t h e companies l i s t e d i n t h e g u i d e a r e n o t l i s t e d i n t h e
Hawaii telephone d i r e c t o r y .               T o g e t t h e p h o n e number o f t h e agent
r e p r e s e n t i n g such companies, one must call t h e l n s u r a n c e D i v i s i o n o r g o down
i n person t o t h e D i v i s i o n ' s o f f i c e t o look t h r o u g h a l i s t i n g of agents
r e p r e s e n t i n g licensed companies.               A f t e r o b t a i n i n g t h e phone numbers o f
several agents, t h e s t u d e n t began c a l l i n g f o r r a t e quotations e x p l a i n i n g t h a t
t h e g u i d e was b e i n g used as a basis f o r t r y i n g t o o b t a i n t h e lowest possible
r a t e f o r a 550 cc m o t o r c y c l e t h e s t u d e n t was p l a n n i n g t o p u r c h a s e .

         T h e s t u d e n t f o u n d t h a t i t was almost impossible t o g e t quotes f o r
motorcycle i n s u r a n c e f r o m most of t h e agents.                  T h e most f r e q u e n t responses
o f t h e agents were t h a t :              ( 1 ) t h e y did n o t r e p r e s e n t t h e i n s u r a n c e company
as l i s t e d by t h e l n s u r a n c e Division; (2) t h e y did n o t q u o t e rates o v e r t h e
telephone a n d w o u l d o n l y p r o v i d e a q u o t e if t h e s t u d e n t went down t o t h e
agent's o f f i c e w i t h a copy of t h e s t u d e n t ' s t r a f f i c a b s t r a c t ; (3) t h e y did n o t
sell motorcycle i n s u r a n c e ; (4) o t h e r i n s u r a n c e companies such as C r i t e r i o n o r
State Farm could o f f e r t h e s t u d e n t a b e t t e r rate; o r (5) t h e y w e r e o n l y a
c o u n t e r s i g n i n g a g e n c y i n Hawaii f o r a mainland company and, as such, t h e y
d i d n o t k n o w t h e actual rates a n d w o u l d have t o w r i t e t o t h e home o f f i c e f o r
s u c h information.              While t h e agents w e r e c o u r t e o u s , i t was e v i d e n t t h a t t h e y
w e r e e i t h e r v e r y adept a t a v o i d i n g h a v i n g t o w r i t e motorcycle i n s u r a n c e
policies o r were i g n o r a n t o f t h e i r o b l i g a t i o n s u n d e r t h e n o - f a u l t law.         The
B u r e a u f o u n d t h a t i t was indeed f r u s t r a t i n g f o r m o t o r c y c l i s t s t o shop a r o u n d
f o r i n s u r a n c e and even t h e most conscientious m o t o r c y c l i s t would p r o b a b l y n o t
b e able t o g e t t h e lowest possible premium r a t e w i t h o u t e x p e n d i n g much time
a n d money.

          A similar s u r v e y on m o t o r c y c l e i n s u r a n c e rates was c o n d u c t e d b y a
motorcycle dealer i n a n e f f o r t t o v e r i f y customer complaints that many
i n s u r e r s h a v e r e f u s e d t o p r o v i d e motorcycle i n s u r a n c e .  As a r e s u l t o f t h i s
s u r v e y w h i c h was c o n d u c t e d on a personal basis r a t h e r t h a n b y telephone,
complaints w e r e f i l e d w i t h t h e l n s u r a n c e D i v i s i o n a n d t h e l n s u r a n c e D i v i s i o n
i s c u r r e n t l y i n v e s t i g a t i n g possible violations o f t h e law. (See A p p e n d i x E . )

       T h e l n s u r a n c e D i v i s i o n is aware o f t h e d i f f i c u l t y i n o b t a i n i n g rates o v e r
t h e phone a n d emphasized t h a t i n s u r a n c e companies a r e n o t and s h o u l d n o t b e
                                                          Table 3

                              INSCRAXCE CO?iPANIES WITH ACTIVE ?IOTORCYCLE
                                                        S F
                                   INSURAKCE POLICIES A O 1 2 / 3 1 / 8 2



                                                                                 No. o f M o t o r c y c l e s
Name o f Company                                                                 - Insured
Allstate

Criterion

Government Employees, I n c .                                                                    2

I s l a n d I n s u r a n c e Co

L i b e r t y Mutual F i r e

S t a t e Farm

GSAA

Commercial Uiiion Assoc.                                                                         9

C a r r i e r s Insurance Co.

Employers I n s u r a n c e Kausau

Universal U n d e r x r i t e r Iiisurance


S e r v i c i n g C a r r i e r s for Hawaii J o i i i i U ~ i d e r ~ r i t i i ~ a n
                                                                               Pl g

A.    C e r t i f i e d Public Assistance Insured

           F i r s t Insurance

B.    Other t h a n CPAI

           F i r s t Insurance

           Hawaiian I n s u r a n c e                                                          16

           Island Insurance

           P a c i f i c Insurance

                     -
Source:       Hawaii, Department of Coinnierce and Consumer A f f a i r s , Insur,ince
              Division.
                            MOTORCYCLES UNDER THE HAWAII NO-FAULT LAW



r e q u i r e d t o q u o t e r a t e s o v e r t h e telephone.   Because r a t e s a r e calculated o n
v a r i o u s factors, it is t o t h e b e n e f i t o f b o t h t h e a p p l i c a n t a n d t h e agent t o
h a v e a r a t e q u o t e d o n a face-to-face b a s i s w h e r e a n y m i s u n d e r s t a n d i n g can
b e minimized.

           As t o t h e comments made b y a g e n t s t h a t t h e i r companies did n o t o f f e r
m o t o r c y c l e i n s u r a n c e because t h e y specialized i n a p a r t i c u l a r l i n e such as
commercial insurance, o r t h a t t h e y h a d t o send t h e application t o t h e mainland
o f f i c e f o r a quote, t h e l n s u r a n c e D i v i s i o n is s e r i o u s l y c o n c e r n e d t h a t s u c h
responses appear t o b e b l a t a n t v i o l a t i o n s o f t h e "take all comers" p r o v i s i o n
a n d t h e r e q u i r e m e n t t h a t all companies licensed t o d o b u s i n e s s as a motor
v e h i c l e i n s u r e r m u s t maintain a complete sales a n d claims o f f i c e i n Hawaii.'"

          T h e Hawaii n o - f a u l t law i s v e r y c o n s u m e r - o r i e n t e d i n t h a t i t contains
many r e s t r i c t i o n s on t h e operations o f i n s u r e r s and it r e q u i r e s e x t e n s i v e
r e p o r t i n g b y t h e companies.              T h e law,              however,             c a n n o t account f o r
everything.            Consumers must b e more aware of t h e r e q u i r e m e n t s of t h e law
a n d must t a k e an a c t i v e r o l e i n p r o t e c t i n g t h e i r r i g h t s .             T o w a r d t h i s end,
t h e l n s u r a n c e D i v i s i o n publishes an e x c e l l e n t p r i m e r on t h e n o - f a u l t law w h i c h
contains sound a d v i c e f o r t h e consumer.                        I f consumers u n d e r s t a n d t h e l a w
a n d are aware o f t h e i r r i g h t s , t h e y can f i l e m e a n i n g f u l complaints w i t h t h e
l n s u r a n c e D i v i s i o n w h i c h can be a p p r o p r i a t e l y i n v e s t i g a t e d a n d violators can
b e caught and punished.


Special Provisions f o r Motorcycles t o Reduce Rates

     T o ease t h e h i g h cost of p e r s o n a l i n j u r y p r o t e c t i o n coverage f o r
motorcyclists, t h e Legislature included t h e following provisions i n t h e no-fault
law:

           1. Safety I n c e n t i v e s - I n s u r e r s a r e r e q u i r e d t o p r o v i d e a t e n p e r c e n t
premium r e d u c t i o n f o r a n y m o t o r c y c l i s t who completes a n a p p r o v e d safe
d r i v i n g course and may p r o v i d e similar r e d u c t i o n t o a m o t o r c y c l i s t w h o
submits an a f f i d a v i t t o t h e i n s u r e r t h a t an a p p r o v e d s a f e t y helmet w i l l b e
worn.15         I t appears,          however, t h a t n o t many m o t o r c y c l i s t s a r e t a k i n g
advantage of s u c h premium r e d u c t i o n s .

         T h e B u r e a u ' s s u r v e y o f m o t o r c y c l i s t s showed t h a t o n l y 35.50, of t h e
respondents h a d t a k e n a safe d r i v i n g c o u r s e i n Hawaii. With r e s p e c t t o t h e
premium r e d u c t i o n f o r helmet use, t h e B u r e a u f o u n d t h a t i n s u r a n c e companies
g e n e r a l l y w i l l n o t o f f e r t h i s r e d u c t i o n because t h e r e is no way of m o n i t o r i n g
helmet use.               M o t o r c y c l i s t s can easily s u b m i t a n a f f i d a v i t j u s t t o o b t a i n t h e
premium r e d u c t i o n w h e n t h e y have no i n t e n t i o n o f u s i n g t h e helmet.                         This
premium r e d u c t i o n i n c e n t i v e appears t o b e impractical.

      2.      S1.000     D e d u c t i b l e - I n s u r a n c e companies a r e r e q u i r e d t o o f f e r
optional deductibies o n personal i n j u r y p r o t e c t i o n coverage o f $100, $300, a n d
$500 f o r motor vehicles w i t h f o u r o r more wheels.16                 F o r m o t o r vehicles w i t h
less t h a n f o u r wheels, t h e companies m u s t also o f f e r an o p t i o n a l d e d u c t i b l e o f
$1,000.      T a k i n g a $1,000 d e d u c t i b l e w i l l r e s u l t i n s a v i n g s i n i n s u r a n c e
premiums r a n g i n g f r o m 10 t o 20 p e r cent, d e p e n d i n g on t h e i n s u r a n c e
company.
                                      MOTORCYCLE INSURANCE RATES



          T h e B u r e a u ' s s u r v e y o f m o t o r c y c l i s t s i n c l u d e d a q u e s t i o n on such
deductibles; however, t h e r e s u l t s a r e o f limited use because 29.6°0 did n o t
answer t h e question.              T h e B u r e a u believes t h a t t h e r e was c o n f u s i o n o v e r t h e
q u e s t i o n d u e t o a n e r r o r i n t h e q u e s t i o n a n d also d u e t o a g e n e r a l lack o f
p u b l i c awareness about t h e use of d e d u c t i b l e s f o r personal i n j u r y p r o t e c t i o n .
D e s p i t e t h i s problem, t h e B u r e a u believes t h a t t h e r e is some c r e d i b i l i t y i n t h e
response since m o t o r c y c l i s t s a r e l i k e l y t o k n o w i f t h e y h a v e $1,000 d e d u c t i b l e
t h a t means an o u t - o f - p o c k e t c o s t t o them if t h e y a r e i n j u r e d i n an accident.
Of those w h o responded, o n l y 4.90, r e p o r t e d t a k i n g t h e S1,000 d e d u c t i b l e so
t h e r e appears t o b e minimal use of t h i s o p t i o n .


The A d d e d Cost o f O p t i o n a l I n s u r a n c e C o v e r a g e

         M o t o r c y c l i s t s complain t h a t t h e cost o f m o t o r c y c l e i n s u r a n c e o v e r a few
y e a r s exceeds t h e actual cost o r w o r t h o f t h e motorcycle.                      While t h i s may b e
t r u e , f o r r a t i n g purposes, t h e cost o f personal i n j u r y p r o t e c t i o n i n s u r a n c e
does n o t have a n y r e l a t i o n s h i p t o t h e v a l u e o f t h e motorcycle.                 Moreover, it
s h o u l d b e emphasized t h a t w h e r e m o t o r c y c l i s t s h a v e f u l l i n s u r a n c e coverage,
h a l f o f t h e cost may b e a t t r i b u t a b l e t o t h e o p t i o n a l coverages f o r collision a n d
comprehensive ( t h e f t a n d o t h e r p h y s i c a l damage).                T h e collision coverage f o r
motorcycles is lower t h a n f o r automobiles, b u t t h e comprehensive coverage i s
much h i g h e r t h a n c a r s because m o t o r c y c l e loss experience w i t h respect t o
t h e f t is u n u s u a l l y f r e q u e n t a n d h i g h .

          I t s h o u l d b e noted t h a t if a m o t o r c y c l i s t has t o o b t a i n a loan t o p u r c h a s e
a motorcycle, t h e l e n d i n g i n s t i t u t i o n w i l l r e q u i r e collision a n d comprehensive
coverage t o protect its investment.                              Thus,        i t can b e s t a t e d t h a t a
p r o h i b i t i v e l y h i g h premium c o s t f o r some m o t o r c y c l i s t s may b e a t t r i b u t a b l e t o
t h e f a c t t h a t t h e y m u s t o b t a i n t h e o p t i o n a l coverages i n a d d i t i o n t o t h e
r e q u i r e d n o - f a u l t coverage a n d , f o r s u c h p e r s o n s , it i s easier t o seek removal
o f t h e mandatory personal i n j u r y p r o t e c t i o n r e q u i r e m e n t .


Problems with A g e n t s

          It has been alleged t h a t m o t o r c y c l i s t s can o b t a i n i n s u r a n c e o n l y u n d e r
t h e JUP p r o g r a m w h i c h is i n t e n d e d t o p r o v i d e i n s u r a n c e f o r t h e f o l l o w i n g
g r o u p s t h a t a r e unable t o o b t a i n i n s u r a n c e i n t h e marketplace:             (1) "assigned
r i s k s " ( t h o s e w i t h b a d d r i v i n g r e c o r d s ) ; (2) licensed p h y s i c a l l y handicapped
persons; (3) commercial vehicles; a n d (4) vehicles w i t h less t h a n f o u r wheels.

           T h e rules o f t h e Department o f Commerce a n d Consumer A f f a i r s r e l a t i n g
t o t h e n o - f a u l t law specifically r e q u i r e i n s u r a n c e agents t o i n f o r m t h e
a p p l i c a n t whether o r n o t t h e a p p l i c a n t i s e l i g i b l e f o r J U P coverage. I f the
a p p l i c a n t is eligible, t h e agent must p r o v i d e t h e premium r a t e s f o r b o t h JUP
a n d r e g u l a r coverage.            It is conceivable t h a t a n agent may q u o t e o n l y a JUP
r a t e if t h a t agent knows t h a t t h e rates of all t h e o t h e r companies t h e agent
r e p r e s e n t s a r e h i g h e r t h a n t h e JUP r a t e s . If, however, an a g e n t w i t h h o l d s
r a t e information f o r non-JUP coverage, t h e a p p l i c a n t s h o u l d r e p o r t such
action t o t h e l n s u r a n c e D i v i s i o n .
                       MOTORCYCLES UNDER THE H A W A I I NO-FAULT LAW



         It s h o u l d b e n o t e d t h a t most o f t h e companies a r e r e p r e s e n t e d b y
u n d e r w r i t i n g a g e n t s who earn commissions o n policies a n d who can w r i t e
policies f o r several d i f f e r e n t companies.          It is n o t inconceivable t h a t a n a g e n t
w o u l d encourage t h e sale o f a p o l i c y f r o m an i n s u r a n c e company t h a t i s easier
t o w o r k w i t h o r t h a t o f f e r s h i g h e r commissions.     I n m a k i n g t h i s observation,
t h e B u r e a u does n o t i n t e n d t o cast a n y aspersions on i n s u r a n c e agents.
R a t h e r , it i s i n t e n d e d t o emphasize t h a t consumers have t o b e more aware o f
t h e v a r i o u s o p t i o n s available t o them w h e n shopping f o r i n s u r a n c e .
                                                      Chapter 5

                                             MOTORCYCLE ACCIDENTS



            I n s u r a n c e companies a n d a g e n t s maintain t h a t t h e p r i m a r y reason f o r
h i g h rates i n Hawaii i s t h e m o t o r c y c l e accident experience c o u p l e d w i t h t h e
f a c t t h a t o n l y a f e w companies i n Hawaii a r e c a r r y i n g t h e b u r d e n o f losses
a t t r i b u t a b l e t o motorcycle accidents.        T h e B u r e a u was n o t able t o c o n d u c t a
d e t a i l e d analysis o n motorcycle accidents because o n l y c e r t a i n data f r o m
a c c i d e n t r e p o r t s a r e computerized a n d t h e r e was i n s u f f i c i e n t time a n d s t a f f o n
t h i s s t u d y t o r e v i e w t h e more t h a n 29,000 accident r e p o r t s f o r one y e a r .


A c c i d e n t I n v o l v e m e n t Data

          From i n f o r m a t i o n p r o v i d e d b y t h e Department o f T r a n s p o r t a t i o n ' s
H i g h w a y Safety O f f i c e a n d Research a n d Statistics Office, t h e B u r e a u f o u n d
t h a t motorcycles h a v e a h i g h a c c i d e n t involvement r a t e (see Tables 4 a n d 5)
a n d a h i g h f a t a l i t y r a t e (see Tables 6 a n d 7 ) .                    On a nationwide basis,
Hawaii's accident a n d f a t a l i t y r a t e s p e r 10,000 r e g i s t e r e d motorcycles r a n k
h i g h (see T a b l e 8 ) .        These h i g h r a t e s , however, a r e n o t t h e o n l y f a c t o r s
i n s u r e r s consider i n t h e i r ratemaking.                  Of equal importance i s t h e r a t e o f
i n j u r y i n c u r r e d b y m o t o r c y c l i s t s a n d w h e t h e r o r n o t t h e accident i n v o l v e d
a n o t h e r vehicle.        On these p o i n t s , t h e B u r e a u f o u n d t h a t , i n 1982, i n j u r y
o c c u r r e d i n about 90% o f t h e accidents (see T a b l e 9) a n d 480, o f t h e
m o t o r c y c l e accidents d i d n o t i n v o l v e a n o t h e r vehicle (see T a b l e 1 0 ) .

            I n s u p p o r t of t h e i r position t o e x c l u d e motorcycles f r o m t h e n o - f a u l t law,
m o t o r c y c l i s t s have contended t h a t m o t o r c y c l e accidents a r e n o t caused b y
motorcycles so t h e y should n o t b e r e q u i r e d t o c a r r y t h e b u r d e n o f t h e i r
i n j u r i e s . T h e B u r e a u was n o t a b l e t o o b t a i n complete data o n t h e cause of all
accidents,               b u t based on available i n f o r m a t i o n , t h i s assertion cannot b e
upheld.             I n a n y g i v e n y e a r , a b o u t o n e - h a l f o f t h e motorcycle accidents i n
Hawaii d i d n o t i n v o l v e another motor vehicle, a n d a n a l a r m i n g l y h i g h n u m b e r
of m o t o r c y c l e accidents w e r e a t t r i b u t a b l e t o collision w i t h a f i x e d o b j e c t (see
T a b l e 1 0 ) . Moreover, an analysis of f a t a l motorcycle accidents b y t h e Motor
V e h i c l e Safety O f f i c e revealed t h a t most s u c h accidents w e r e caused b y t h e
m o t o r c y c l i s t (see T a b l e 1 1 ) .

           I t should b e emphasized t h a t t h e i n t e n t of t h e n o - f a u l t c o n c e p t i s t o
p r o v i d e immediate i n s u r a n c e payment t o those motorists w h o s u f f e r i n j u r i e s
f r o m a n accident.              U n d e r Hawaii's law, t h e m o t o r i s t m u s t b u y i n s u r a n c e t o
c o v e r personal i n j u r y losses. With t h e allocation o f b u r d e n s p r o v i s i o n , t h e
m o t o r c y c l e i n s u r e r p a y s o n l y 25% w h i l e t h e o t h e r vehicle's i n s u r e r p a y s 7 0        50
r e g a r d l e s s of who i s a t f a u l t .       If those losses exceed t h e t h r e s h o l d a n d if t h e
m o t o r c y c l i s t is n o t a t f a u l t , t h e m o t o r c y c l i s t can b r i n g s u i t against t h e o t h e r
vehicle's d r i v e r a n d t h e m o t o r c y c l i s t ' s i n s u r e r i s e n t i t l e d t o r e c o v e r u p t o 5E
o f i t s losses. T h e issue o f who is a t f a u l t s h o u l d n o t b e a d e t e r m i n i n g f a c t o r
f o r i n c l u s i o n o r exclusion f r o m t h e scope of t h e law, especially i n view o f t h e
allocation o f b u r d e n s p r o v i s i o n .            If m o t o r c y c l i s t s i n s i s t on u s i n g a f a u l t
f a c t o r , it would have t h e opposite e f f e c t o f s u p p o r t i n g t h e i n c l u s i o n o f
                             MOTORCYCLES UNDER THE HAWAII NO-FAULT LAW



motorcycles u n d e r t h e n o - f a u l t law since t h e allocation o f b u r d e n p r o v i s i o n
p r o v i d e s f o r a s u b s i d y even if t h e m o t o r c y c l i s t is a t f a u l t .

           I t has been alleged b y a m o t o r c y c l e dealer t h a t t h e r e i s no evidence
available showing t h a t                     i n s u r a n c e companies o f motorcycles a r e                  being
r e i m b u r s e d b y automobile i n s u r e r s and t h a t t h e m o t o r c y c l e i n s u r e r s a r e
carrying the full burden.                              In f a c t , t h e I n s u r a n c e D i v i s i o n does h a v e
i n f o r m a t i o n s u b m i t t e d b y i n s u r a n c e companies on m u l t i - v e h i c l e accidents w h i c h
show t h e amounts i n c u r r e d b y t h e i n s u r e r s of each vehicle i n v o l v e d i n an
accident a n d t h e r e is ample e v i d e n c e t h a t t h e allocation of b u r d e n s p r o v i s i o n
i s b e i n g implemented.

            State Farm a n d C r i t e r i o n w h i c h t o g e t h e r w r i t e most of t h e m o t o r c y c l e
policies i n t h i s State, e x p l a i n e d t h a t i n t h e calculation of r a t e s , t h e losses
t h a t a r e r e c o v e r e d i n m o t o r c y c l e accidents from automobile i n s u r e r s b y t h e
allocation of b u r d e n s p r o v i s i o n a r e included, b u t t h e m o t o r c y c l e losses a r e
s t i l l h i g h d u e t o t h e l a r g e n u m b e r o f s i n g l e vehicle accidents w h e r e no o t h e r
vehicle shares i n t h e cost.                     T h i s i n f o r m a t i o n f r o m t h e i n s u r a n c e companies i s
s u p p o r t e d by s t a t i s t i c s f r o m t h e M o t o r Vehicle Safety O f f i c e w h i c h show t h a t
o u t of a t o t a l o f 497 motor v e h i c l e accidents i n v o l v i n g a m o t o r c y c l e i n 1982,
260 i n v o l v e d another v e h i c l e a n d 237 w e r e s i n g l e vehicle a c c i d e n t s .                      The
B u r e a u was n o t able t o o b t a i n a comparison of t h e d o l l a r amounts o f losses
a t t r i b u t a b l e t o s i n g l e v e h i c l e a n d m u l t i - v e h i c l e accidents; however, i t was
f o u n d t h a t of those accidents, 11 r e s u l t e d i n motorcycle f a t a l i t i e s of w h i c h 5 . 5
o f t h e accidents were a t t h e f a u l t o f t h e motorcyclists a n d 4 . 5 w e r e a t t h e
f a u l t of t h e o t h e r v e h i c l e .             T h e s e statistics a r e i m p o r t a n t t o i n s u r a n c e
companies because t h e i n j u r i e s r e s u l t i n g f r o m s i n g l e vehicle accidents have t o
b e paid e n t i r e l y b y t h e motorcycle i n s u r a n c e company since t h e r e is n o o t h e r
company t o p i c k up t h e 75% s h a r e . As f o r t h e f a t a l accidents, t h e i n s u r a n c e
company automatically loses $15,000 f o r each f a t a l i t y w h e r e t h e m o t o r c y c l i s t
was a t f a u l t .

           It has been alleged t h a t Hawaii's motorcycle p o p u l a t i o n has a l a r g e
m i l i t a r y segment t o w h i c h most of t h e accidents can b e a t t r i b u t e d s i n c e t h i s
g r o u p is u n f a m i l i a r w i t h Hawaii's roads, t r a f f i c p a t t e r n s , a n d d r i v i n g h a b i t s .
T h e t o t a l n u m b e r o f r e g i s t e r e d m o t o r c y c l i s t s i n Hawaii as of J u l y 1, 1983 was
10,261.          O f t h a t number, 3,182 o r 31% w e r e f r o m t h e m i l i t a r y .                       T h e Bureau
c o u l d n o t o b t a i n a b r e a k d o w n of accident involvement b y m i l i t a r y a n d c i v i l i a n
d r i v e r s b u t t h e B u r e a u f o u n d t h a t on f a t a l accidents i n v o l v i n g motorcycles,
m i l i t a r y involvement i n some y e a r s was r a t h e r h i g h (see T a b l e 12).                               A more
r e v e a l i n g s t a t i s t i c is t h a t o f t h e f a t a l i t i e s e v e r y y e a r , t h e r e i s a h i g h n u m b e r
o f m o t o r c y c l i s t s w i t h o u t - o f - s t a t e licenses o r w i t h o u t a n y license (see T a b l e
13).


M o t o r c y c l e A c c i d e n t s a n d Helmet Use

        A s t u d y of motorcycle accidents b y t h e Motor Vehicle S a f e t y O f f i c e f o u n d
t h a t since t h e u s e of s a f e t y helmets became optional r a t h e r t h a n mandatory,
t h e e x t e n t of i n j u r i e s i n c u r r e d i n motorcycle accidents a n d f a t a l i t i e s caused
by head i n j u r i e s have increased. T h e s t u d y w h i c h i n v o l v e d t h e compilation of
data f r o m J a n u a r y 1, 1964 t h r o u g h December 31, 1982, made t h e f o l l o w i n g
findings:
                             MOTORCYCLE ACCIDENTS


Motorcycle Fatalities

1.    D u r i n g t h e f o u r years, 1964 t h r o u g h      1967,    prior    to    any
      s t a t u t o r y helmet use requirement:
      T o t a l Fatalities - 50; A n n u a l Rate - 12.5.

2.    D u r i n g 8.4 years, J a n u a r y 1, 1969 t h r o u g h J u n e 7, 1977, t h e
      p e r i o d when helmet use was r e q u i r e d b y statutes:
      Total Fatalities - 46; T h e A n n u a l Rate DECREASED 56% t o
      5.48.

3.    D u r i n g t h e 5.6 years, J u n e 7 , 1977 t h r o u g h December 31,
      1982, following a p p r o v a l o f A c t 183 t o reduce helmet use
      requirements:
      Total Fatalities - 89; T h e A n n u a l Rate INCREASED 190% t o
      15.89.

Fatal Head I n j u r i e s

1.    D u r i n g t h e 4.4 years, J a n u a r y 1, 1973 t h r o u g h J u n e 7, 1977,
      seven (28.0%) o f t h e fatally i n j u r e d motorcyclists s u f f e r e d f a t a l
      head i n j u r i e s while wearing helmets.        T h e r e were no f a t a l l y
      i n j u r e d motorcyclists n o t wearing helmets;            helmet use was
      v i r t u a l l y 100%.

2.    D u r i n g t h e 5.6 years, June 7, 1977 t h r o u g h December 31,
      1982, eleven (12.4%) o f t h e f a t a l l y i n j u r e d m o t o r c y c l i s t s
      suffered f a t a l head i n j u r i e s w h i l e wearing helmets; b u t d u r i n g
      t h e same period, t h i r t y - s i x (40.4%) of t h e f a t a l l y i n j u r e d
      motorcyclists s u f f e r e d f a t a l head i n j u r i e s while n o t wearing a
      helmet.

Reported Motorcycle Accidents

1.    D u r i n g t h e f o u r years, 1964 t h r o u g h 1967,          prior    to   the
      s t a t u t o r y helmet use requirement:
      T o t a l Number - 2,158; Annual Rate - 540.

2.    D u r i n g t h e 8 . 4 years, J a n u a r y 1, 1969 t h r o u g h J u n e 7 , 1977,
      when helmet use was r e q u i r e d b y statutes:
      T o t a l Number - 3,595; T h e A n n u a l Rate DECREASED 20.7% t o
      428.

3.    D u r i n g t h e 5.6 years, June 7, 1977 t h r o u g h December 31,
      1982, following t h e approval o f reduced helmet requirements of
      A c t 183:
      T o t a l Number - 3,048; T h e A n n u a l Rate INCREASED 27.10, t o
      544.

Registered Motorcycles

1.    T h e number of r e g i s t e r e d motorcycles i n Hawaii has changed
      v e r y l i t t l e d u r i n g t h e combined p e r i o d s .
                           MOTORCYCLES UNDER THE H A W A I I NO-FAULT LAW



       2.      D u r i n g t h e f o u r years,           1964 t h r o u g h 1967, p r i o r t o t h e
               s t a t u t o r y helmet use r e q u i r e m e n t , average a n n u a l r e g i s t r a t i o n s
               w e r e 9,918 motorcycles.

       3.      D u r i n g t h e 8.4 years, J a n u a r y 1, 1969 t h r o u g h J u n e 7, 1977,
               when helmet use was r e q u i r e d b y statutes, average annual
               r e g i s t r a t i o n s w e r e 9,758 motorcycles, 1.6% less t h a n d u r i n g t h e
               1964-1967 p e r i o d .

       4.      D u r i n g t h e 5.6 years, J u n e 7, 1977 t h r o u g h December 31,
               1982, f o l l o w i n g t h e a p p r o v a l of A c t 183, a v e r a g e annual
               r e g i s t r a t i o n s w e r e 10,146 motorcycles; 40% more t h a n t h e 1969-
               1977 p e r i o d .

          I n 1979, t h e renowned H u r t R e p o r t 1 noted, among o t h e r f i n d i n g s , t h a t
i n i t s s t u d y of 899 motorcycle accidents a n d 3,622 m o t o r c y c l e i n v o l v e d
accidents r e p o r t s i n t h e c i t y of Los Angeles 92 p e r c e n t o f t h e m o t o r c y c l i s t s
h a d no professional o r formal t r a i n i n g o n t h e operation of a m o t o r c y c l e a n d
t h a t a l t h o u g h a t y p i c a l m o t o r c y c l e c r a s h e r h a d almost t h r e e y e a r s of s t r e e t
r i d i n g experience t h e m o t o r c y c l i s t h a d less t h a n f i v e months of e x p e r i e n c e on
t h e p a r t i c u l a r cycle i n v o l v e d i n t h e c r a s h .      T h e H u r t R e p o r t also n o t e d t h a t
t h e use of a safety helmet i s t h e s i n g l e c r i t i c a l f a c t o r i n t h e p r e v e n t i o n o r
r e d u c t i o n o f head i n j u r y .

          Subsequently, i n 1980, t h e U . S . Department of T r a n s p o r t a t i o n i n a
r e p o r t t o Congress o n t h e e f f e c t s o f t h e motorcycle helmet use law repeal,
concluded t h a t unhelmeted r i d e r s a r e t w o times more l i k e l y t o i n c u r a head
i n j u r y of a n y t y p e a n d a r e a t least t h r e e times more l i k e l y t o i n c u r a f a t a l
head i n j u r y .   The s t u d y also c o n c l u d e d t h a t t h e r e is no evidence t o s u g g e s t
t h a t helmet use causes neck i n j u r y o r causes accidents a n d t h a t w h e r e helmet
use is o n l y r e q u i r e d b y minors, o r n o t r e q u i r e d a t all, t h e r a t e o f u s e i s
low, on t h e o r d e r o f 50-60 p e r c e n t . '

         Since t h e Hawaii motorcycle a c c i d e n t data indicate h i g h f r e q u e n c y a n d
s e v e r i t y , i t would appear t h a t increased measures a r e r e q u i r e d t o i m p r o v e t h e
safety o f motorcycle r i d i n g i n o r d e r t o realize meaningful premium r e d u c t i o n s
f o r personal i n j u r i e s .
                                                                 F
                                                           TYPE O MOTOR VEHICLES INVOLVED I N ALL ACCIDENTS
                                                                     STATE OF HAWAII, 1973-1982




Psssenger c a r s                    31,793           23,117           31,172              22,783               211,704        28,022        28,376        26.U82     23,459   %3,170
Trilcks                                  3.091         2,640             2,528              2,407                2,678          3.344         3,685         Is, 082    3,805    3,651
Btrses                                      426            398              310                405                 392              967            596        1122       390      39 1
M o t o r c y c l e s and
  Motorsconters                             417            306              396                4 4 14              518              619            599        561        531      508
O t h e r M o t o r Vehicles                    52           55               37                    5Q              [t 5             80            83           70        89       -1 4

Not Stated                           -    3      1         524              3 70               4        %   -      4112             506          679          7311      b>7       622
           TOTALS                    36,330           27,120           2,812              26,5147               28,779         33,038        34,078        31,351     28,739   28,473


Source:        Hawa i i , Oepa r t m e n t o f Transports t ion, W L L 7 _ r E f f _ i ~ _ A ~ c i d < n t ~ S t . a o f
                                                                                                                 te                       t(aawaiilpN.Z.



                                                                                             Table 5
                                                     VEWtCLE REGISTRATION AND INVOLVrHENT IN ALL ACCIDENTS
                                                                     STATE OF IIAWA! I , 1982

                                                                                          VEHICl.tS
                                                                                                    .
                                                                                                                    VEHICLES I N
                                                                                                                                              --
                                          TYPE O MOTOR V!_G
                                                F       EL
                                                        Hc                           REGISLEGXU                      4cCIVENTS                  DJ
                                                                                                                                              !N E


                                          Passenqer Cars                                  566,060                          23,170             0.99
                                          Trucks                                           89,805                           3,651              0.98


                                          Motorcycles and
                                           Motorscooters                                                                                       1.06
                                                        T0TAI.S                           6 7 ) , 005                      27,720
                                           ..
                                          --                                                    ~                                                   .
                                                                                                                                                    .

                                          V e h i c l e lnvolvr?ment lridex = ~ ~ ~ : c i ~ ~ . . I o i i. n Acci.de&s
                                                                                                            v e d
                                                                                     P e r c e n t Key i s t e r e d

                                          Note:        F x c l i i d r d from t o t a 1    a r e " n o t s t a t e d " and " o t h e r m o t o r
                                                       vehic!estt.




So<trce:       Nawa i i     . De(iArtment       o r T r a n s p o r t , a t i o o . Ma.i~r_lC;i~~~c~A~idde!!tsssS.ta.trr~fftipwa~1.~8.2.
           m - c
                .
           P. - m a.
           O     r    -




           .- -
           0
           0     Ln
                      N




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     9
     '3
     W
     a:
                                                                             Accldenrz                            raraiiiiei     F a t a l vises
                                                               Reported     p e r 10,000                          p e r 10,000    p e r in0
                                                        tots
                                                ~eq9siiit      ~cccdenih   RRL; s i r a t fans   Fnra I I t i s
                                                                                                           .e
     NaLionai D a t a :           1972           3,609,059      117.120        320.95              3,006              8.23           2.56
                                  1977           4.962.340      317.456        3U5.51              9,115              8.29           2.40
2     -                                          5578,859       165.689        296.99              4.540              8.13           2 71
                                                                                                                                        1
     S t a t e Data:           1982
     Alabama (1. 6. 15, 201                         70,960       2.462         346.95                  57             1.32           2.11
     Aiaska (2, 11, 15, 201                         10.897          352        323.02                   15           13.16           Q.26
     firiron. (12, 75. 201                          84.116       3,807         4119.06                 88            10.38           2.31
     A r k l n s a s (2. 10. 75, 201                25.938       1.796         499.65                  24             9.25           1.85
     Cllirornia (12. 15. 201                       645.000      22.658         352.28                 68 1           10.55           3.00
     colorado        (1.      12. 15. 201          119.019       3.196*        268.39                  15             6.29           2.3u
                        t
     ~ o n n e ~ r l c u112. 15. 201                79.932       3.614-       452.13                   93            11.63          2.57
     m i a w a r e (10. 15. 201                      8.216         315        456.92                   18           21.90           U.80
     District of Columbia (1. 9. 13. 75. 201         5.896         425         720.82                    3            5.08          0.70
     floradl       ( 7 , 15. 701                   221,511       261
                                                                1.5'           510.96                 259            11.68          2.0U
    Georgia        (1.     2, 10. 15. 201          110.795       3.639%       328.44                  lil            10.01          3.05
    Hawaii (5.           11.    15. 20)             11.311         508        948.88                   13            11.48          7.55
     idano (2, 10. 15. 20)                          53.102         810"        163.22                  22              11
                                                                                                                      1.2           2.52
     Illinois (1-5. 10. 15. 701                    285.188       1.40U        259.61                   91
                                                                                                      11              6.80          2.62
     iodiana (1. 9. 15. 201                        160.071       4. 357       272.19                  11b             7.12          2.61
     Iowa    (1.    10. 15. 201                    234,985       2.152          91.58                  69            2.93           3.20
    Ksnsss ( I , 1 1 .          15. 201            106.566       1.856        1111.16                  51            4.78           2.7U
    Kenttlcky (5. 9. 15, 701                       60.958        1.731        284.95                   50            8.20           2.87
    ioiiiriaoa 12.             13. 15, 201         109.312       3.828        350.19                 124            11.3U           3.73
    nacne 13, 11.              15, 20)             38,872        1.160        298.41                   30            1.71           2-58
    Haryian*        (1-11. 13. 15, 201             18,829        3.159        40OlU                    78            9.89           7.46
    Hassachusetrz 15, 12. 15, 20)                  108.U10"      9,359*       40Z.08                   55            5.07           1.26
    Hachigan (5. 9. 15. 201                       230.194        5.939        257.32                 119             5.15           2.00
    M i n n e s o t a (5, 12. IS. 201              159,345       2.518        158.02                   75            4.70           2.97
                      pi
    ~ i s ~ ~ r r i o 14. 10. 15. 19)              79.068          62 1       213.63                  42            iQ.44           6.76
    ~ ( i r l o u r l (1-5.     17. 15, 701       117.781        7.508        212.92                  69             5.85           2.15
    Nontana, (2, 10. 15. 201                       U5.702          547        119.68                   18            3.93           3.29
    Nebrerks (10. 15. 20)                          97,887        7,214        253.5;                  27             5.63           2.22
    Yevada ( 1 .         14. 15. 201               21.940        7.056       481.31                   23            10.48           2.17
    New Haapsnlre (5, 14, 15. 701                  99.196"       1,166*      237.01                   21             4.26           1.80
        Jersey 11-5, 10, 16, 20)
    ~ e u                                         114,112*       U,779"       U18.79                  93*            8.15           1.94
    New t(ex8co (1. 75. 20)                        58.581        1.989        339.49                  49             8.36          2.46
    New Y o r k ( 3 , 12. 18, 20)                 157.792       7.822        495.71                  190            12.04          7.U2
    North C a r o l i n a (5, 9, 15. 20)          110,000       2.691        2411.63                  85             7.12           3.15
    North Dakota (12. 15, 20)                      31.312          368        117.52                  19             6.06          5.16
    onlo 18. 15, 201                              217.143       7.219        262.64                  198             7. 111        2.77
    Okiahoma (4. 11, 15. 701
    Oregon ( 9 . 15. 201
    Pennsylvania (13. 15. 70)
    Rhode iaiand (1, 13.              15. 201
             C
    S a ~ t h a r a l i n a (9, 15, 20)

    South Dakota (2, 12. 15. 701
    Tennessee (1, 13. 15. 201
    Texar 11-4. 10. 15, 201
                                                                                                                      nccidenis                                     rafai,tier            r a t a n tines
                                                                                                   Reported          P e r 10,000                                   Per 10,000              p e r 100
-                                                                   ~eoirtrations                  liccidcnts      ~ e q ~ s t r a i i o n s Fata I i t i e s      Reoisfrations        _*ccidenii
U t a h 172. 15, 201                                                        66,934'                   1.384             206.77                       3i                    b.63               2.24
v e r n o n t (1, 9. 15. 201                                                21,812                       8'
                                                                                                        45              222.35                       13                    5.96               2.68
Virginls    (14.   i5, 201                                                  80,515                    2.65'4            329.62                       54                    6.70               2.03
W a s h i n g t o n (11. 15. 20)                                           131,667                    3,376             256.40                     109                     8.27               3.22
Vest Virginia      (2-5, 10. 15. 201                                        37.680                      283              75.10                       25                    6.63               8.83
U ~ s c o n s i n(1. 12, 15, 20)                                          188,863                     3,728             191.28                     115                     6.08               3.08
vyoning ( 1 .   10. 1 5 , 201                                               21.937                      352             160.45                       10                    4.55               2.811




                                                                                                      -
                                                                                                      KEY

                   RDgiS*i8t,O"r:                                                                     Accidents--DeSCrlprion:
                       1.    l n c t u d e e moped3 or n o t o r i r e d c y c i e r                      IS.   Accident l 8 s t e d as " p r o p e r t y daaage,         ~erronal
                                                                                                                injirry or f a t a l i t y "
                       2.    lncliedes mopeds and " r i m ! i a r v e h l ~ l e r ' ~
                                                                                                         16.    Accidentmll s t e d as "any r e p o r t e d m o t o r c y c l e
                       3.    includes t r i c y c l e s                                                         accident
                       4.    I n c l u d e s mopedf,       t r i c y c l e s and s c o o t e r s         17.    Only records a c e r d e n t r      i n v e r t l g a t e d b y state
                                                                                                                Hignvay P a l m i
                       5.    Other
                                                                                                         18.    other
                   nccioenrn--0nmager i h r e s h o l d :
                                                                                                      ratairties:
                      6.     $0-525-550 p r o D e r i y d a m a g e fhreshoio
                                                                                                         19.    Number o f f a t a l a c c i d e n t s    i n w h i c h a motor-
                       7.    5100 p r o o e r i y damage inreahold                                              c y c i e was ~nvoived
                      8 , $150 p r o p e r t y damage r n r e s h o i d                                  20.    Niimbei OF m o t o r c y c l 6 r r s a n d p a s s e n g e r s
                                                                                                                f a i a i l y l n j u i e d ,n a a o l o r c y c i e accidenr
                      9.     $100 p r o p e r t y aanage ibresnoid

                     10.     5250 P r o p e r t y danage t h r e s h o l d
                     11.     $300 p r o p e r t y damage threshaid
                     12.     5400-$500 p r o p e r t y damage threshold
                     13,     NO    p r o p e r x y damage r i g t i r e a p e c i r i e d
                     74.     Other




                   source:     n o t o r c y c l e Safety foundstron,                                                    n.
                                                                                   Cvcte S a c e x ~ n f o r s r a $ # o ~ ( ~ f o r c y c i e
                                                                                                                                           Statistics-1982, Chador
                               Ford, P e n n r y i v a n l a .
                                MOTORCYCLE ACCIDENTS
                                BY INJURY AND DAMAGE


            NO. OF                 NO. OF                  NO. Of                  NO. O i
YEAR       ACCIDENTS             FATALITIES               INJURIES             PROPERTY DAMAGE

1982           508                14     (3%)          458      (90%)                  10

1981           537                16     (3%)          474      (88%)                  47

1980           561                10     2             524      (93%)                  27

1979           599                19     (3%)          550      (92%)                  30

1978           619                23     4    %        564      (91%)                  32


Source:    Hawai i, D e p a r t m e n t o f T r a n s p o r t a t i o n ,     Highways
           Division.




                                          Table 10

                        TYPE OF MOTORCYCLL ACCIDENTS

                                              .
                                                               YEAR
       ACCIDENT TYPE                         1982          1981     1980              1971

       With Another Vehicle
         in Transport                          260           115            118        299

       With Bicyclist                              4            1              3            3

    With Pedestrian                               14           11             7         12

    With P a r k e d V e h i c l e                10            7             9         16
    W i t h Animal                                 4            6             3             5
    With Fixed Object                          1L.5          123            154        159

    O t h e r Non-Col I i s i o n                 60
                                                   .        2 7             78          96
                TOTAL                         497            344          372          590


    Source:       Hai/ai i . D e p a r t m e n t o f T r a n s p o r t a t i o n ,   notor
                  Vehicle s a f e t y O f f ice.
                                                 T a b l e 11
                                F A T A L MOTORCYCLE ACCIDENTS
                                     CAUSE/RESPONSIBILITY


                                              CAUSE/RESPONSIBILITY
           NUMBER OF               OTHER V E H I C L E         MOTORCXCL I ST
YEAR       ACCIDENTS                  ORlVfR           MULTI-VEHICLE   SINGLE M/C

 1982          11                         4.5                              1.5                    5
 1981          15                         2.0                              4.0                    9
 1980          10                         2.0                              1.0                    7
 1979          18                         5.0                              6.0                    7
 1976         23                          5.5                              6.5                  11

 1977         11                          1.5                             5.5                     4
1976            6                          --                              1 .0                   5
1975            9                         3.0                               --                    6
1974            4                        2.0                              2.0                     --
1913            3                          --                              1. O                   2



Source:    tlawa i i . D e p a r t m e n t o f     T r a n s p o r t a t ion,     Motor Vehicle
           Safety O f f ice.




                                             Table 12

                                 M I L I T A R Y INVOLVEMENT I N
                                F A T A L MOTORCYCLE ACCIDENTS


                                       Al I                       Military
                                    Motorcycle                   Motorcycle
                      u     r       Fatalities                   Fatalities

                       1982                13                    7     153.8%)

                       1981                15                    9     (60.0%)

                       1980                10                    3     (30.0%)

                      1979                 21                    6     (28.6%)

                      1978                 23                    9     139.1%)

                      1977                 11                    7    (63.6%)

                      1976                  6                    Ir   (66.7%)

                      1975                  9                    7    (77.8%)

                      1974                  4                    1    (25.0%)

                      1973                  3                    1    (33.3%)




Sotirce:   Hawaii, Department o f Transportation,                               Motor Vehicle
           S a f e t y Off ice.
                                     D R I V E R ' S L I C E N S E TYPE
                                     MOTORCYCLE F A T A L I T I E S


            NO. OF              HAWA i I           HAWA l I         OUT-OF-STATE
YEAR      FATALITIES            LICENSE            PERMIT             LICENSE                   UNLICENSED

1982         13                      1                0                      4                          8
1981         15                      1                3                      3                          8

1980         10                      4                0                      1                          5
1979         20                      7                0                      7                          6
1978         23                      4                2                      5                        12

1977         11                      2                3                      0                          6
1976          6                      3                0                      2                          1

1975          9                      5                0                      1                          3

1974          4                      2                0                      2                          0

1973          3*                                                                                        2


*One   accident report d i d n o t provide d r i v e r Iicense information.




Source:    Hawa i i, D e p a r t m e n t o f T r a n s p o r t a t i o n ,   M o t o r V e h i c l e S a f e t y Off i c e
                                                        Chapter 6

                                     SURVEY OF NO-FAULT STATES



           T o obtain information a b o u t t h e motorcycle experience of o t h e r n o - f a u l t
states, t h e B u r e a u s e n t a s u r v e y t o t w e n t y - s i x s t a t e s t h a t h a v e b e e n
m e n t i o n e d in o n e l i s t o r a n o t h e r as h a v i n g a n o - f a u l t l a w . '            O f t h e states
surveyed,            t h e B u r e a u received responses f r o m Arkansas,                                  Connecticut,
F l o r i d a , G e o r g i a , Kansas, K e n t u c k y , M a s s a c h u s e t t s , M i c h i g a n , M i n n e s o t a , N e w
H a m p s h i r e , New Y o r k , N o r t h D a k o t a , O r e g o n , P e n n s y l v a n i a ,       South Carolina,
South Dakota, Virginia, a n d Wisconsin.

         As a r e s u l t o f t h e responses, t h e B u r e a u has d e f i n e d " n o - f a u l t " s t a t e
f o r t h e p u r p o s e s o f t h i s s t u d y t o mean, a s t a t e t h a t has p r o v i s i o n s f o r :      (1)
m a n d a t o r y i n s u r a n c e ; (2) t h e p a y m e n t o f b e n e f i t s w i t h o u t r e g a r d t o f a u l t ;
a n d (3) r e s t r i c t i o n s o n t o r t a c t i o n s .    T h e s t a t e s , b e s i d e s Hawaii, t h a t m e e t
these c r i t e r i a are:                Colorado,           Connecticut,          Florida,       Georgia,    Kansas,
K e n t u c k y , M a s s a c h u s e t t s , M i c h i g a n , Minnesota, Nevada, New J e r s e y ,                New
Y o r k , N o r t h Dakota, P e n n s y l v a n i a , a n d U t a h . Some s t a t e s s u c h as A r k a n s a s
a n d O r e g o n c o n s i d e r themselves t o b e n o - f a u l t states, however, since t h e y d o
n o t meet t h e t h i r d c r i t e r i o n , t h e B u r e a u w i l l n o t c o n s i d e r t h e m as s u c h in
this study.           (See A p p e n d i x F . )

        I n addition t o t h e s u r v e y , t h e B u r e a u conducted a review o f t h e statutes
o f t h e s i x t e e n n o - f a u l t states.  T h e B u r e a u f o u n d Hawaii t o b e t h e o n l y s t a t e
t h a t has mandatory inclusion o f motorcycles u n d e r t h e n o - f a u l t law.                            While
some s o u r c e s h a v e l i s t e d M a s s a c h u s e t t s as a s t a t e t h a t i n c l u d e s motor-cycles,
t h e B u r e a u f o u n d t h a t Massachusetts, b y regulation, excludes motorcycles
f r o m n o - f a u l t benefits a n d motorcyclists m u s t recover benefits t h r o u g h t h e
t o r t system.

         K a n s a s a n d K e n t u c k y i n c l u d e m o t o r c y c l e s in t h e i r laws, b u t o n a n
optional basis.            K e n t u c k y r e p o r t e d t h a t such optional inclusion o c c u r r e d t w o
y e a r s a f t e r t h e i n i t i a l e n a c t m e n t o f the n o - f a u l t l a w b e c a u s e o f t h e high c o s t
of motorcycle insurance.

         A s t o t h e r e a s o n g i v e n for e x c l u d i n g m o t o r c y c l e s f r o m t h e n o - f a u l t law,
m o s t s t a t e s r e p o r t e d t h a t t h e a n t i c i p a t e d high c o s t o f p e r s o n a l injury
protection coverage f o r motorcyclists a n d f e a r t h a t motorcyclists w o u l d r i s k
b e i n g u n i n s u r e d , even as t o l i a b i l i t y , r a t h e r t h a n p a y t h e h i g h premium was
t h e major reason.              M a s s a c h u s e t t s , w h i c h was t h e f i r s t s t a t e t o e n a c t a n o -
f a u l t law. e x c l u d e d m o t o r c y c l e s f r o m t h e n o - f a u l t l a w by a r e g u l a t i o n
p r o m u l g a t e d by t h e i n s u r a n c e c o m m i s s i o n e r o n December 4,                 1970.          The
following is t h e justification p r o v i d e d :

                 I.      To d a t e ,     b o d i l y i n j u r y coverage on m o t o r c y c l e s has
       compensated o n l y p e d e s t r i a n s and o c c u p a n t s o f         other vehicles
       i n v o l v e d i n che a c c i d e n t .    I t has not compensated m o t o r c y c l e d r i v e r s
       o r g u e s t s , and premium r a t e s have t a k e n t h i s f a c t i n t o a c c o u n t .
                                            SURVEY OF N O - F A U L T STATES



                 2.       Due t o t h e n a t u r e o f m o t o r c y c l e s , a very l a r g e p r o p o r t i o n
        of motorcycle a c c i d e n t s r e s u l t i n s e r i o u s bodily i n j u r y t o t h e
        m o t o r c y c l e d r i v e r and h i s g u e s t , i f a n y .

                  3.      Thus, i f i n s u r a n c e companies were r e q u i r e d t o begin t o
        p r o v i d e P e r s o n a l I n j u r y P r o t e c t i o n coverage i n accordance w i t h S t .
        1970, c . 670, f o r m o t o r c y c l e s , t h e y would e x p e r i e n c e s u b s t a n t i a l
        a d v e r s e f i n a n c i a l consequences, s i n c e t h e r a t e s would be d e c r e a s e d
        15"; a t t h e same t i m e t h a t t h e r i s k s covered were v a s t l y expanded t o
        i n c l u d e i n j u r y t o t h e m o t o r c y c l e d r i v e r s and t h e i r g u e s t s , i f any.
        S p e c i f i c a l l y , t h e premium t h a t t h e t h r e e companies which w r i t e t h e
        overwilelming m a j o r i t y of m o t o r c y c l e i n s u r a n c e i n t h e Commonwealth
        e x p e c t t o e a r n i n 1 9 7 1 would b e a p p r o x i m a t e l y $1,000,000, whereas
        t h e y would e x p e c t t h e n e t payment of c l a i m s i f t h e y were r e q u i r e d t o
        w r i t e P e r s o n a l I n j u r y P r o t e c t i o n t o b e about $3,000,000.

                  4 . To a v o i d i n c u r r i n g t h e s e s e r i o u s p o t e n t i a l l o s s e s i n 1 9 7 1 ,
        t h e i n s u r a n c e companies which w r i t e t h e bulk o f m o t o r c y c l e i n s u r a n c e
        i n Classachusetts i n d i c a t e d t h a t t h e y would t a k e t h e n e c e s s a r y s t e p s
        t o c e a s e w r i t i n g motorcycle i n s u r a n c e w i t h i n t h e Commonwealth,
        l e a v i n g m o t o r c y c l i s t s w i t h o u t any i n s u r a n c e o t h e r t h a n through t h e
        so-called assigned r i s k plan.

                  I f m o r o r c y c l i s t s were t o o b t a i n coverage through t h e s o - c a l l e d
        a s s i g n e d r i s k p l a n , t h e y would r e c e i v e coverage a t r a t e s which
        u n r e a s o n a b l y d i s c r i m i n a t e i n t h e i r f a v o r a s compared t o o t h e r
        m o t o r i s t s , withoiit ally a c t u a r i a l s u p p o r t f o r such d i s c r i m i n a t i o n ,
        s i n c e m o t o r c y c l e r a t e s would d e c r e a s e a t t h e same time t h a t t h e
        r i s k s c o v e r e d were v a s t l y expanded t o i n c l u d e p e r s o n a l i n j u r y t o
        m o t o r c y c l e d r i v e r s and t h e i r g u e s t s . There is no j u s t i f i c a t i o n f o r
        requiring other motorists t o , i n e f f e c t , subsidize motorcyclists.
        I n a d d i t i o n , m o t o r c y c l i s t s would b e u n a b l e t o o b t a i n t h e same t y p e s
        of c o v e r a g e a s p r e v i o i l s l y a v a i l a b l e t o them, and a burden would be
        p l a c e d upon t h e s o - c a l l e d a s s i g n e d r i s k p l a n .

          It a p p e a r s t h a t m o s t s t a t e s b a s e d t h e i r decision to e x c l u d e motorcycles
f r o m t h e i r law o n similar c o n c e r n s .            The c o n s t i t u t i o n a l i t y of s u c h e x c e p t i o n a l
t r e a t m e n t f o r m o t o r c y c l e s u n d e r v a r i o u s s t a t e laws h a s b e e n u p h e l d on t h e
b a s i s t h a t t h e l e g i s l a t i v e b o d i e s h a d s t r o n g rational b a s i s t o c o n c l u d e t h a t
motorcyclists r e q u i r e d special treatment.

        T h e Michigan law specifically allows m o t o r c y c l e o p e r a t o r s a n d p a s s e n g e r s
to claim p e r s o n a l i n j u r y p r o t e c t i o n b e n e f i t s from a p p l i c a b l e n o - f a u l t policies in
t h e following o r d e r :           ( 1 ) from t h e o w n e r o r r e g i s t r a n t of t h e n o - f a u l t vehicle
i n v o l v e d in t h e a c c i d e n t ; (2) from t h e n o - f a u l t vehicle's o p e r a t o r ; ( 3 ) f r o m
t h e m o t o r c y c l e o p e r a t o r if t h e m o t o r c y c l i s t o w n s a n o - f a u l t vehicle; a n d (4)
from t h e m o t o r c y c l e o w n e r if t h e o w n e r o w n s a n o - f a u l t vehicle.&

          I n K a n s a s a n d K e n t u c k y w h e r e p e r s o n a l i n j u r y p r o t e c t i o n is optional f o r
m o t o r c y c l i s t s , p e r s o n s e l e c t i n g t o r e j e c t s u c h c o v e r a g e a r e not e n t i t l e d to a n y
p e r s o n a l i n j u r y p r o t e c t i o n b e n e f i t s but t h e y h a v e u n r e s t r i c t e d t o r t r i g h t s .
T h e laws of M i n n e s o t a , New Y o r k , a n d P e n n s y l v a n i a specifically e x c l u d e
motorcycle o p e r a t o r s a n d p a s s e n g e r s from no-fault benefits a n d r e q u i r e t h a t
                            MOTORCYCLES UNDER THE H A W A I I NO-FAULT L W
                                                                        A



t h e y r e s o r t t o t h e t o r t system f o r damages i n c u r r e d i n accidents i n v o l v i n g
o t h e r vehicles. Massachusetts s i m i l a r l y d i s q u a l i f i e s m o t o r c y c l i s t s f r o m b e n e f i t s
i n i t s departmental r e g u l a t i o n o n motorcycles.

             Case law i n New J e r s e y a n d U t a h h o l d s t h a t a m o t o r c y c l i s t s u s t a i n i n g
i n j u r i e s r e s u l t i n g f r o m accidents i n v o l v i n g a n o t h e r v e h i c l e i s e n t i t l e d t o
p e r s o n a l i n j u r y p r o t e c t i o n b e n e f i t s if t h e m o t o r c y c l i s t possesses a n o - f a u l t
p o l i c y on a n automobile.                 I n t h e case o f a m o t o r c y c l e a c c i d e n t n o t i n v o l v i n g
a n o t h e r vehicle, t h e m o t o r c y c l i s t is n o t e n t i t l e d t o personal i n j u r y p r o t e c t i o n
b e n e f i t s , even if t h e m o t o r c y c l i s t h a d a n o - f a u l t i n s u r a n c e p o l i c y f o r an
automobile.                  i n Colorado, it was h e l d t h a t a m o t o r c y c l i s t who o n l y h a d
l i a b i l i t y , collision, a n d comprehensive c o v e r a g e was n o t e n t i t l e d t o p e r s o n a l
i n j u r y b e n e f i t s w h e n i n v o l v e d i n an a c c i d e n t w i t h a c a r . 6

         O t h e r states such as Connecticut, F l o r i d a , Georgia, and N o r t h Dakota
s u b j e c t m o t o r c y c l i s t s t o t h e t o r t system w i t h o u t r e s t r i c t i o n s b y t h e e x c l u s i o n
of motorcyclists f r o m personal i n j u r y p r o t e c t i o n b e n e f i t s u n d e r t h e n o - f a u l t
law.         No s t a t e r e s t r i c t s t o r t action unless m o t o r c y c l i s t s a r e e n t i t l e d t o claim
b e n e f i t s f r o m a n o - f a u l t i n s u r e r as i n M i c h i g a n .

          I n t h e states of Georgia, Kansas, K e n t u c k y , blassachusetts, Michigan,
Minnesota, New J e r s e y , a n d New Y o r k , m o t o r c y c l e owners a r e r e q u i r e d t o
maintain r e s i d u a l b o d i l y i n j u r y a n d p r o p e r t y damage l i a b i l i t y coverage.
Colorado, Connecticut, F l o r i d a , N o r t h Dakota, Pennsylvania, a n d U t a h o n l y
s u b j e c t motorcycle owners t o t h e f i n a n c i a l r e s p o n s i b i l i t y law w h i c h r e q u i r e s
p r o o f of s e c u r i t y a f t e r involvement i n a n a c c i d e n t .

          New Y o r k r e p o r t e d t h a t f r o m t h e e f f e c t i v e date o f i t s n o - f a u l t law,
2/12/73 u n t i l 12/1/77, m o t o r c y c l e r i d e r s i n v o l v e d i n an accident w i t h a n o t h e r
motor vehicle received n o - f a u l t b e n e f i t s f r o m t h e i n s u r a n c e of t h e o t h e r motor
v e h i c l e i n v o l v e d i n t h e accident.        T h i s " f r e e " coverage d i d n o t a f f e c t
motorcycle i n s u r a n c e r a t e s .

          New Y o r k was t h e o n l y s t a t e t o r e p o r t an a t t e m p t b y o t h e r g r o u p s t o
o b t a i n exclusion f r o m n o - f a u l t l i k e m o t o r c y c l e s . T h i s r e p o r t e d a t t e m p t came
f r o m buses.          New Y o r k r e p o r t e d several u n s u c c e s s f u l attempts d u r i n g t h e
p a s t few y e a r s t o i n c l u d e motorcycles i n t h e n o - f a u l t law.                       Connecticut
r e p o r t e d t h a t a l l attempts t o make motorcycles s u b j e c t t o n o - f a u l t have been
strongly resisted.

          The r e s u t t s o f t h e state s u r v e y a r e o f l i m i t e d value i n t r y i n g t o p r e d i c t
t h e consequences i n Hawaii if motorcycles a r e e x c l u d e d f r o m n o - f a u l t because
no o t h e r s t a t e has p r o v i d e d f o r m a n d a t o r y i n c l u s i o n of motorcycles i n i t s no-
f a u l t law.      Hawaii's law also i s u n i q u e because it i n c l u d e d an allocation of
b u r d e n s p r o v i s i o n t o m i t i g a t e t h e a n t i c i p a t e d h i g h cost o f motorcycle personal
i n j u r y protection.            Moreover, because motorcycles h a v e been i n c l u d e d i n
Hawaii's law f o r t e n years, it i s v e r y l i k e l y t h a t t h e e f f e c t s of t h e s h i f t i n g of
t h e b u r d e n of m o t o r c y c l e i n j u r i e s t o t h e m o t o r i n g p u b l i c a n d t o health
i n s u r a n c e plans w i l l b e f e l t whereas i f motorcycles w e r e e x c l u d e d f r o m t h e law
a t t h e v e r y b e g i n n i n g , t h e e f f e c t s w o u l d n o t b e as noticeable.
                                                     Chapter 7

                             CONCLUSIONS A N D RECOMMENDATIONS



           T h i s s t u d y was o n l y a b l e t o t o u c h u p o n t h e s u r f a c e of t h e most obvious
issues s u r r o u n d i n g t h e e x c l u s i o n o f motorcycies f r o m t h e n o - f a u l t law.                 A
more t h o r o u g h examination a n d analysis o f t h e e n t i r e motorcycle i n s u r a n c e
issue w o u l d r e q u i r e more time a n d technical s t a f f expertise, b o t h o f which
w e r e n o t available a t t h e B u r e a u .             I n v i e w o f t h e u r g e n c y of r e s o l v i n g t h e
p r o b l e m o f h i g h motorcycle i n s u r a n c e rates, t h e B u r e a u believes t h a t t h e
f i n d i n g s i n t h i s s t u d y a r e s u f f i c i e n t t o d r a w c e r t a i n conclusions a n d t o
d i s c u s s a l t e r n a t i v e policies a n d m a t t e r s t h e L e g i s l a t u r e must consider if a n y
o f t h e policies a r e t o b e adopted.

           The         Bureau was              unable t o          uncover any        new o r e x t r a o r d i n a r y
consequences t h a t w o u l d r e s u l t f r o m t h e e x c l u s i o n of motorcycles f r o m t h e n o -
fault law.              A major p r o b l e m e n c o u n t e r e d i n t h i s s t u d y was t h e p a u c i t y o f
r e a d i l y accessible i n f o r m a t i o n on motorcyclists, motorcycle accidents, a n d
m o t o r c y c l e n o - f a u l t claims p a i d by i n s u r a n c e companies.         Consequently, t h e
B u r e a u i s n o t able t o estimate t h e m a g n i t u d e o f t h e financial impact on t h e
n o - f a u l t i n s u r a n c e premiums of t h e r e s t o f t h e m o t o r i n g p u b l i c a n d on o t h e r
t y p e s o f coverages s u c h as health i n s u r a n c e o r m i l i t a r y medical i f motorcycles
w e r e removed f r o m t h e n o - f a u l t law because t h e t o t a l amount of losses
a t t r i b u t a b l e t o b e n e f i t s p a i d t o m o t o r c y c l e occupants was n o t available.         At
best,          t h i s s t u d y can o n l y c o n f i r m o r c o n t r o v e r t t h e p r e v i o u s l y alleged
consequences.


T h e Consequences of Removal

         House Resolution No. 391 adopted b y t h e House o f Representatives
d u r i n g t h e Regular Session of 1983, r e q u e s t e d t h e Bureau t o s t u d y t h e
p r o b a b l e consequences of r e m o v i n g motorcycles a n d o t h e r vehicles w i t h less
t h a n f o u r wheels f r o m t h e m a n d a t o r y personal i n j u r y p r o t e c t i o n requirements
of t h e Hawaii n o - f a u l t law i n l i g h t o f t h e f o l l o w i n g a l t e r n a t i v e s :

        (1)     That motorcycle o w n e r s a n d o p e r a t o r s a n d t h e i r passengers b e
                p r e c l u d e d f r o m r e c e i v i n g n o - f a u l t b e n e f i t s as pedestrians a n d
                d i s q u a l i f i e d f r o m r e c e i v i n g b e n e f i t s u n d e r t h e assigned claims
                p r o g r a m o f t h e Hawaii j o i n t u n d e r w r i t i n g p l a n ; o r

        (2)     That motorcycle o w n e r s a n d o p e r a t o r s and t h e i r passengers b e
                allowed t o r e c e i v e n o - f a u l t b e n e f i t s as p e d e s t r i a n s , a n d t o
                receive b e n e f i t s u n d e r t h e assigned claims p l a n s .

     Based on t h e i n f o r m a t i o n compiled i n t h i s s t u d y , t h e Bureau f i n d s t h a t i f
motorcycles a r e excluded f r o m t h e n o - f a u l t law t h e f o l l o w i n g w i l l o c c u r :
                          MOTORCYCLES UNDER THE HAWAII NO-FAULT LAW


1.      Coverage for Motorcycle I n j u r i e s

          A.      If, i n t h e case of m u l t i - v e h i c l e accidents, m o t o r c y c l e o p e r a t o r s a n d
passengers are t r e a t e d l i k e p e d e s t r i a n s a n d a r e a b l e t o o b t a i n n o - f a u l t
b e n e f i t s f r o m t h e o t h e r v e h i c l e ' s p o l i c y , t h e y w i l l h a v e t h e same coverage
t h e y now pay f o r u n d e r t h e i r i n s u r a n c e policies,                           i n c l u d i n g medical,
rehabilitation,               wage loss,     replacement services, s u r v i v o r ' s b e n e f i t s , a n d
f u n e r a l b e n e f i t s . A l l these b e n e f i t s w o u l d b e a t t h e f u l l expense o f t h e r e s t
o f t h e m o t o r i n g p u b l i c a n d m o t o r vehicle i n s u r a n c e r a t e s w i l l p r o b a b l y b e
increased t o c o v e r t h i s new area of e x p o s u r e .

          If t h e r e i s no o t h e r v e h i c l e i n v o l v e d , a n d m o t o r c y c l e o p e r a t o r s a n d
passengers a r e allowed t o r e c e i v e b e n e f i t s u n d e r t h e assigned claims p r o g r a m
o f t h e Hawaii j o i n t u n d e r w r i t i n g p l a n (JUP), t h i s w o u l d b e tantamount t o
p r o v i d i n g " f r e e i n s u r a n c e " as is p r o v i d e d f o r w e l f a r e r e c i p i e n t s .     The
o p e r a t i o n a l cost o f t h e Hawaii JUP w o u l d b e g r e a t l y increased.

          B.    If motorcycle o p e r a t o r s a n d passengers a r e p r e c l u d e d f r o m r e c e i v i n g
n o - f a u l t b e n e f i t s as p e d e s t r i a n s a n d f r o m r e c e i v i n g b e n e f i t s u n d e r t h e
assigned claims p r o g r a m , t h e f o l l o w i n g are l i k e l y t o o c c u r :

        (1)    If motorcycle o p e r a t o r s a n d passengers a r e p e r m i t t e d t o h a v e
               u n r e s t r i c t e d r i g h t s t o t o r t action, t h e y can s u e t h e d r i v e r of
               t h e o t h e r vehicle i n a m u l t i - v e h i c l e accident a n d r e c o v e r t h e i r
               losses.           T h i s u n r e s t r i c t e d t o r t right w i l l p r o b a b l y cause t h e
               automobile residual b o d i l y i n j u r y l i a b i l i t y rates t o increase i f
               there          a r e many            suits.          It i s possible,           however,         that
               motorcyclists may choose n o t t o sue i n cases w h e r e i n j u r i e s a r e
               n o t t o o serious.              C o v e r a g e f o r medical b e n e f i t s t h e n w o u l d b e
               p r o v i d e d b y available medical plans a n d rates f o r s u c h plans
               would b e s u b j e c t t o i n c r e a s e .

        (2)    M o t o r c y c l e o p e r a t o r s a n d passengers c o u l d b e p e r m i t t e d , b y
               law, t o claim n o - f a u l t b e n e f i t s ( w h e n i n j u r i e s a r e s u s t a i n e d i n
               a n accident i n v o l v i n g a n o t h e r vehicle) f r o m a n o - f a u l t p o l i c y of
               a n automobile owned b y t h e r e g i s t e r e d o w n e r o r o p e r a t o r of
               t h e motorcycle o r a r e l a t i v e i n t h e same household.                            Under
               s u c h a situation, a m o t o r c y c l i s t w i l l receive f u l l personal i n j u r y
               b e n e f i t s f r o m t h e m o t o r c y c l e o w n e r ' s automobile i n s u r a n c e
               policy.          Personal i n j u r y p r o t e c t i o n rates f o r a l l motor vehicles
               a r e l i k e l y t o increase t o c o v e r t h i s new area o f e x p o s u r e .

        (3)    I n e i t h e r of t h e above-mentioned situations, if t h e m o t o r c y c l e
               accident is a s i n g l e v e h i c l e accident [ a n d almost o n e - h a l f a r e ) ,
               t h e motorcycle o p e r a t o r , if t h e o p e r a t o r is also t h e r e g i s t e r e d
               owner,             w i l l n o t b e able t o r e c o v e r f u l l personal i n j u r y
               protection benefits.                 T h e o p e r a t o r w o u l d p r o b a b l y b e able t o
               have most medical b i l l s c o v e r e d t h r o u g h a h e a l t h i n s u r a n c e
               plan, if c o v e r e d by one, a n d h e a l t h p l a n r a t e s a r e e x p e c t e d t o
               rise.            A motorcyclist,          however, w i l l n o t b e c o v e r e d f o r
               r e h a b i l i t a t i o n , wage loss, s u r v i v o r s , a n d f u n e r a l b e n e f i t s .
               T h e motorcycle o w n e r a n d o p e r a t o r also w i l l b e p e r s o n a l l y
               liable f o r a n y i n j u r i e s s u s t a i n e d b y a p a s s e n g e r of t h e
                                      CONCLUSIONS AND RECOMMENDATIONS



                 motorcycle.             Moreover, if t h e law does n o t c l e a r l y s t a t e t h a t
                 motorcycles shall n o t b e c o n s i d e r e d u n i n s u r e d vehicles, it i s
                 possible t h a t passengers o n a m o t o r c y c l e w o u l d t r y t o claim
                 b e n e f i t s t h r o u g h t h e i r u n i n s u r e d m o t o r i s t i n s u r a n c e , if t h e y
                 have s u c h coverage, o r t h r o u g h t h e a s s i g n e d claims p r o g r a m .


2.      E f f e c t s on Medical l n s u r a n c e Rates

           It has been alleged that since most m o t o r c y c l i s t s a r e c o v e r e d by medical
i n s u r a n c e t h e i r medical costs w o u l d b e t a k e n c a r e of if t h e y w e r e e x c l u d e d
from no-fault.               T h e p r o b l e m w i t h t h i s a s s e r t i o n i s t h a t most owners o f
v e h i c l e s w i t h f o u r o r more wheels also a r e c o v e r e d by medical i n s u r a n c e
because Hawaii has a p r e p a i d health c a r e law w h i c h r e q u i r e s employers t o
p r o v i d e medical c a r e coverage f o r t h e i r employees.                     A c c o r d i n g l y , if h e a l t h
i n s u r a n c e w o u l d b e t h e p r i m a r y source o f b e n e f i t s f o r m o t o r c y c l i s t s ' i n j u r i e s ,
it also s h o u l d b e p r i m a r y f o r a l l d r i v e r s .

           T h e B u r e a u attempted t o ascertain t h e t o t a l a n n u a l medical costs f o r a
f i v e - y e a r p e r i o d a r i s i n g f r o m motorcycle accidents i n o r d e r t o estimate t h e
d o l l a r impact on t h e medical i n s u r a n c e c a r r i e r s if m o t o r c y c l e i n j u r i e s w e r e t o
b e c o v e r e d p r i m a r i l y u n d e r medical i n s u r a n c e .            Unfortunately.               i t was
d i s c o v e r e d t h a t s u c h a t a s k was impossible u n d e r t h e time c o n s t r a i n t s o f t h i s
study.            l n s u r a n c e companies a r e r e q u i r e d t o r e p o r t a d e t a i l e d b r e a k d o w n of
p a y o u t s made o n l y on accidents i n v o l v i n g more t h a n one v e h i c l e t o t h e
Insurance Division.                     T h i s requirement was i n c l u d e d i n t h e n o - f a u l t law t o
e n a b l e t h e l n s u r a n c e D i v i s i o n t o t r a c k t h e implementation o f t h e allocation of
b u r d e n s p r o v i s i o n . Such i n f o r m a t i o n o n p a y o u t s i s n o t available f o r single
v e h i c l e accidents, e . g . , a motorcycle c r a s h e s i n t o a g u a r d r a i l . Even if such
i n f o r m a t i o n were available a t t h e l n s u r a n c e D i v i s i o n f o r s i n g l e v e h i c l e
a c c i d e n t s , t h e t o t a l medical payments f o r m u l t i - v e h i c l e accidents would n o t b e
complete because some companies e i t h e r f a i l t o r e p o r t a claim o r f i l e incomplete
o r inaccurate reports.

           Consequently, w h i l e t h e r e i s no d o u b t t h a t e x c l u d i n g m o t o r c y c l i s t s f r o m
t h e n o - f a u l t law a n d f r o m claiming n o - f a u l t b e n e f i t s u n d e r t h e law w i l l have
a n impact o n medical i n s u r a n c e plans, w i t h o u t t h e e x a c t d o l l a r amount of
medical payment losses i n c u r r e d by a l l i n s u r a n c e companies f o r accidents
i n v o l v i n g motorcycles, one can o n l y v e n t u r e an e d u c a t e d guess on t h e exact
d o l l a r impact.

          T h e Hawaii Medical Services Association w h i c h i s t h e l a r g e s t g r o u p health
i n s u r e r i n t h e State was w i l l i n g t o p r o v i d e a f i n a n c i a l impact assessment f o r
t h e B u r e a u based on t h e loss experience o f m o t o r c y c l e i n j u r i e s .           Since we
c o u l d n o t p r o v i d e t h e loss e x p e r i e n c e data, it p r o v i d e d i n s t e a d a general
estimate o f an i n i t i a l o v e r a l l dues increase o f between $3 t o $4 million a y e a r
t o c o v e r t h e added l i a b i l i t y o f motorcycle i n j u r i e s .           T h e Association also
noted : l

        Ilost o f our health plan rates are determined for employer groups,
        and a11 members in a group plan pay the same due rate. Therefore,
        the added liability which would increase the monthly dues rate will
        be shared by all of our members, not o n l y the motorcyc?ists.
                             MOTORCYCLES UNDER THE HAWAII NO-FAULT LAW




        Due t o t h e r e c e n t h i g h r a t e o f increases i n medical care c o s t s ,
        t h e r e c u r r e n t l y i s a growing move i n our community t o r e s i s t f u r t h e r
        increases i n medical c a r e expenses.                         As a r e s u l t , we b e l i e v e t h a t
        employers who w i l l be p a y i n g f o r a l l o r a p o r t i o n o f t h e dues
        increases w i l l p r o b a b l y o b j e c t t o a p r o p o s a l t o s h i f t coverage o f
        m o t o r c y c l e i n j u r i e s from t h e m o t o r c y c l i s t s ' p e r s o n a l r e s p o n s i b i l i t y
        under t h e i r n o - f a u l t coverage t o employers' r e s p o n s i b i l i t y under
        h e a l t h plans.           As a n example, t h e e s t i m a t e d impact t o t h e H a w a i i
        P u b l i c Employees H e a l t h Fund x o u l d b e an a d d i t i o n a l $450,000 i n dues
        d u r i n g t h e f i r s t year t h a t i t s members and t h e s t a t e and county
        governments would have t o pay.                     W b e l i e v e t h e Board o f Trustees o f
                                                              e
        t h e H a w a i i P u b l i c Employees H e a l t h Fund would s t r o n g l y o b j e c t t o
        such r a t e increases.

          If m o t o r c y c l i s t s a r e n o t allowed t o claim b e n e f i t s l i k e p e d e s t r i a n s , t h e y
w i l l b e m a k i n g t h e i r claims w i t h t h e i r medical i n s u r a n c e c a r r i e r s a n d t h e
health i n s u r a n c e s u b s c r i b e r s , w h e t h e r o r n o t t h e y are d r i v e r s , w i l l b e
s u b s i d i z i n g t h e medical costs f o r m o t o r c y c l i s t i n j u r i e s .


3.      Effects o n M i l i t a r y Coverage

           C u r r e n t l y , when a m o t o r c y c l i s t w h o is i n t h e m i l i t a r y i s i n j u r e d i n an
accident a n d receives t r e a t m e n t t h r o u g h a m i l i t a r y f a c i l i t y , t h e m o t o r c y c l i s t ' s
i n s u r a n c e company i s b i l l e d by t h e m i l i t a r y f a c i l i t y f o r s e r v i c e s r e n d e r e d .
A c c o r d i n g t o t h e Commander i n Chief P a c i f i ~ , it is t h e consensus o f t h e
                                                                            ~
m i l i t a r y community i n Hawaii t h a t m i l i t a r y medical f a c i l i t i e s a n d t h e U . S .
t a x p a y e r w o u l d c a r r y a n u n f a i r additional b u r d e n if m o t o r c y c l i s t s w e r e
e x c l u d e d f r o m o r disallowed b e n e f i t s u n d e r t h e n o - f a u l t law. T h e s e v e r i t y o f
t h e impact, however, i s n o t k n o w n .


4.      O t h e r Consequences

         A.      If m o t o r c y c l i s t s a r e p e r m i t t e d t o p u r c h a s e personal i n j u r y p r o t e c t i o n
coverage on a n o p t i o n a l basis s u c h as is allowed i n Kansas o r K e n t u c k y , i t i s
e x p e c t e d t h a t i n s u r a n c e rates w i l l p r o b a b l y remain t h e same o r may b e
increased.          T h e r a t e s w o u l d depend on who w i l l u t i l i z e t h e o p t i o n t o o b t a i n
personal i n j u r y coverage.                    If those who u t i l i z e t h e o p t i o n a r e t h e h i g h e r r i s k
t y p e s . t h e r a t e s w o u l d increase.

          8. T h e n u m b e r of r e g i s t e r e d motorcycles a n d t h e miles d r i v e n b y
m o t o r c y c l i s t s m i g h t increase, c a u s i n g a concomitant increase i n t h e i n c i d e n c e
o f motorcycle accidents.                  Consequently, t h e b u r d e n o n t h e g e n e r a l m o t o r i n g
p u b l i c o r t h e health i n s u r a n c e s u b s c r i b e r s o f p a y i n g f o r m o t o r c y c l i s t i n j u r i e s
w i l l b e even g r e a t e r .

         C.       As f a r as t h e B u r e a u could ascertain, t h e p r o b l e m o f s e t t i n g a
p r e c e d e n t f o r o t h e r g r o u p s t o seek exclusion may n o t b e unmanageable s i n c e
o t h e r states have n o t e x p e r i e n c e d d i f f i c u l t y i n t h i s area a n d t h e r e i s case law
which upholds t h e special t r e a t m e n t of motorcycles u n d e r n o - f a u l t laws.
                                     C O N C L U S I O N S AND R E C O M M E N D A T I O N S



Recommendations

          G i v e n t h e c o n c e p t o f n o - f a u l t , t h e B u r e a u believes t h a t t h e Legislature,
i n i t s wisdom, made t h e right decision by i n c l u d i n g motorcycles u n d e r t h e no-
f a u l t law.         T h e decision was based n o t o n l y o n t h e b e l i e f t h a t all motorists
s h o u l d b e r e q u i r e d t o pay t h e i r own way f o r t h e p r i v i l e g e o f d r i v i n g t h e
v e h i c l e o f t h e i r choice, b u t also on a p a t e r n a l i s t i c c o n c e r n t h a t t h e personal
i n j u r y losses o f m o t o r c y c l i s t s , i n t h e e v e n t o f accidents n o t i n v o l v i n g another
vehicle,           should b e f u l l y covered.                    While t h e B u r e a u empathizes w i t h
motorcyclists f o r h a v i n g t o pay high insurance                                 premiums,           it cannot
w h o l e h e a r t e d l y recommend exclusion;                   however, a l t e r n a t i v e s c o v e r i n g b o t h
i n c l u s i o n and e x c l u s i o n a r e o u t l i n e d below.

         I n w e i g h i n g t h e m e r i t s o f t h e a l t e r n a t i v e s below, t h e B u r e a u advises t h e
Legislature t o consider the following.                            T h e r e w i l l d e f i n i t e l y b e a n increase i n
premiums on t h e r a t e s p a i d b y m o t o r i s t s o r t h e h e a l t h s u b s c r i b e r s if
m o t o r c y c l e s a r e e x c l u d e d f r o m n o - f a u l t because t h e r e w i l l b e a new area o f
e x p o s u r e t h a t has to b e p a i d f o r b y someone.                           A l t h o u g h t h e amount p e r
p e r s o n i n i t i a l l y may b e small since i t w o u l d b e s p r e a d o v e r a l a r g e r g r o u p of
people, t h e cost p e r p e r s o n should n o t b e t h e d e c i d i n g f a c t o r .                        However, i f
t h e L e g i s l a t u r e believes, l i k e t h e o t h e r states, t h a t motorcycles comprise a
special class o f vehicles, motorcycles s h o u l d n o t b e i n c l u d e d i n t h e n o - f a u l t
law.


1.      M a i n t a i n i n g t h e I n c l u s i o n o f Motorcycles

          If t h e L e g i s l a t u r e determines t h a t i n c l u s i o n o f m o t o r c y c l i s t s u n d e r t h e
n o - f a u l t law i s s t i l l w a r r a n t e d ,       t h e B u r e a u believes t h a t t h e problem
c o n c e r n i n g m o t o r c y c l e i n s u r a n c e can b e addressed i n o t h e r ways.                  Toward
t h i s e n d t h e f o l l o w i n g i s recommended:

           A.        A r e v i e w o f t h e e n t i r e n o - f a u l t m o t o r v e h i c l e i n s u r a n c e system
s l l o u l d b e made b y a c o n s u l t a n t knowledgeable i n t h e f i e l d o f i n s u r a n c e i n
o r d e r t o i d e n t i f y each v a r i a b l e c o n t r i b u t i n g t o t h e h i g h cost of motorcycle
i n s u r a n c e a n d t o recommend possible a l t e r n a t i v e s t o c o n t r o l t h e level of
increases.             Such a r e v i e w should i n c l u d e b u t n o t b e l i m i t e d t o :                      (1)
examination o f t h e claims b e i n g f i l e d , t h e e x t e n t o f claimant abuse i n making
f r a u d u l e n t claims, a n d suggestions t o c o n t r o l s u c h abuse; (2) assessment of
t h e e f f e c t i v e n e s s o f t h e r e q u i r e m e n t s imposed on                  insurers;          and ( 3 )
e x p l o r a t i o n o f d i f f e r e n t approaches t o h a n d l i n g m o t o r c y c l e i n s u r a n c e , e . g . ,
t h e establishment of a state i n s u r a n c e f u n d t o sell t h e i n s u r a n c e coverages
r e q u i r e d b y law.           If such a r e v i e w is o r d e r e d , f u n d s s h o u l d b e a p p r o p r i a t e d
t o c o n t r a c t t h e services of a c o n s u l t a n t .         Such r e v i e w s h o u l d also i n c l u d e an
examination of t h e e f f e c t i v e n e s s o f t h e " t a k e a l l comers" p r o v i s i o n .               If it i s
f o u n d t h a t t h e p r o v i s i o n i s indeed s t i f l i n g i n s u r a n c e companies t o t h e
d i s a d v a n t a g e o f t h e m o t o r vehicle i n s u r a n c e consumer, p e r h a p s t h e law should
b e amended.              If it i s f o u n d t h a t t h e " t a k e all comers" p r o v i s i o n i s a v i t a l
p a r t o f t h e e n t i r e n o - f a u l t law, steps s h o u l d b e t a k e n t o allow f o r s u f f i c i e n t
c o n t r o l o v e r i n s u r a n c e companies i n c o m p l y i n g w i t h t h e p r o v i s i o n , e . g . , t h e
Insurance Division should b e provided w i t h sufficient staff and funds t o
appropriately enforce t h e provision.
                                                                    A
                             MOTORCYCLES UNDER THE HAWAII NO-FAULT L W



            B . T h e L e g i s l a t u r e s h o u l d c o n s i d e r t h e effects of p r o v i d i n g f o r h i g h e r
deductibles, e . g . , u p t o $5,000, f o r motorcycle personal i n j u r y p r o t e c t i o n .
T h i s i s t h e o n l y way m o t o r c y c l i s t s w i l l t r u l y p a y f o r t h e i r own p e r s o n a l
i n j u r i e s w i t h o u t t h e h i g h p r e m i u m cost, since t h e y would p a y lower premiums
f o r p e r s o n a l i n j u r y p r o t e c t i o n on t h e c o n d i t i o n t h a t t h e y b e I-esponsible f o r
t h e d e d u c t i b l e amount.           T h e problems i n v o l v e d w i t h t h i s proposal; however,
a r e t h a t (1) it appears t h a t even w i t h t h e p r e s e n t $1,000 d e d u c t i b l e ,
m o t o r c y c l i s t s seldom use t h i s o p t i o n a n d (2) oftentimes t h e ones who use t h e
o p t i o n f o r t h e h i g h e s t d e d u c t i b l e t e n d t o b e those who may n o t b e able t o p a y
t h e d e d u c t i b l e amount i n t h e e v e n t o f an accident and such p e r s o n s t h e n
w o u l d b e w i t h o u t coverage o r may b e f o r c e d t o r e l y on some k i n d o f p u b l i c
assistance p r o g r a m .


2.      E x c l u s i o n of Motorcycles

           If t h e L e g i s l a t u r e believes t h a t it w o u l d be i n t h e p u b l i c i n t e r e s t t o
e x c l u d e motorcycles f r o m t h e p e r s o n a l i n j u r y p r o t e c t i o n r e q u i r e m e n t o f t h e
n o - f a u l t law, t h e B u r e a u recommends d i s q u a l i f y i n g m o t o r c y c l e o p e r a t o r s a n d
passengers f r o m a n y personal i n j u r y p r o t e c t i o n b e n e f i t s f r o m a n y m o t o r
v e h i c l e p o l i c y o r t h e assigned claims p r o g r a m and p e r m i t t i n g them t o r e c o v e r
damages f o r i n j u r i e s sustained i n m u l t i - v e h i c l e accidents thr-ough t h e t o r t
system w i t h o u t r e s t r i c t i o n s if t h e o t h e r vehicle i s a t f a u l t .                      Although t h e
Bureat1 c o u l d n o t determine t h e cost ramifications o f t h e a n t i c i p a t e d increase
i n suits,              r e c o v e r y t h r o u g h t o r t w i l l b e less complicated t h a n a l l o w i n g
m o t o r c y c l i s t s t o claim o n c e r t a i n applicable automobile policies.                             It s h o u l d b e
n o t e d t h a t u n d e r t h i s proposal, a m o t o r c y c l e owner c o u l d b e s u b j e c t t o s u i t s
f o r i n j u r i e s sustained b y a p a s s e n g e r o r b y a person b o r r o w i n g t h e o w n e r ' s
motorcycle o r b y a p e d e s t r i a n .                   A c c o r d i n g l y , motorcycle owners s h o u l d b e
r e q u i r e d t o maintain t h e c u r r e n t coverages f o r r e s i d u a l b o d i l y i n j u r y a n d
p r o p e r t y damage l i a b i l i t y . A d d i t i o n a l l y , t o d i s q u a l i f y a m o t o r c y c l e o p e r a t o r o r
passenger f r o m claiming b e n e f i t s u n d e r an u n i n s u r e d m o t o r i s t coverage, t h e
law s h o u l d c l e a r l y s t a t e t h a t m o t o r c y c l i s t s shall n o t b e deemed u n i n s u r e d
motorists.

          T h e B u r e a u believes t h a t e x c l u s i o n f r o m t h e n o - f a u l t law s h o u l d b e made
on t h e c o n d i t i o n t h a t m o t o r c y c l i s t s b e r e q u i r e d t o wear s a f e t y helmets a n d t o
t a k e a safe d r i v i n g c o u r s e a p p r o v e d b y t h e Department of T r a n s p o r t a t i o n
b e f o r e b e i n g allowed t o operate a motorcycle i n Hawaii.                         T h e reason f o r such
a c o n d i t i o n is t h a t i f t h e r e a r e increased s a f e t y r e q u i r e m e n t s f o r m o t o r c y c l e
o p e r a t o r s , p e r h a p s t h e incidence of accidents i n v o l v i n g g r e a t i n j u r y c o u l d b e
lessened a n d t h e b u r d e n imposed on o t h e r s m i g h t n o t b e as g r e a t .
                                                                                  FOOTNOTES



                                Chapter 2                                                 L.   DCCA R u l e s , sec. 16-23-66

     Tne 16 s c a r e s vi:h                 n o - f a u l r s y s i e m s rha:           5.   H3.iaLRev.             Star.,           sec.      292-3:(b:;           DCCA
     iimii      rorr          aciiiiiis             are:          Coiorado,                    Ru:ea,     sec.     16-23-b!.
     Connrcricut,             Florida,              Georgia.           Hacaii,
     Kansas, Kenruck?, l a s s a c h u s e r c s , ?lichigai:,                            6.   DCCA R u l e s , s e c . 1 6 - 2 3 - i S .
     !linnesoia,        e u a d a , New J e r s e y , Se= York,
     I;orrll D a k o t a , P e n n s y l v a n i a , and U t a h .                        7.   Hakaii         Rev.        SraL.,        secs.        294-13(j)          aiid
                                                                                               294-15.
     The       1 1 stares t h a i p r o v i d e b e n e f i t s w i r h o ~ r
     r e g a r d t o f a u i i b u r have no t o r t r e s t r i c r i o s s              8.   The l e g i s l a r i v e h i s t o r y o f t h e 1973 b i l l o a a
     arc:           Arkansas,        D o l a c a r e , ?lazyland, Kex                          t h o r o u g h l y t r a c e d and ii a p p e a r s r h a r t h e
     Hampiiilre, Oregon, South C a r o l i n a ,                   South                       language i n s e c t i o n 2 9 4 - 1 3 ( a ) ( l ) L-as modeled
     Dakora,         T e x a s , V i r g i n i a , h'x'ashingron,      ahd                     a f t e r rhe l a n g u a g e i n t h e c a s u a l r y r a t i n g
     iiscoiiiin                                                                                )a,., secrioi? 431-693is)il) ~ M c h e a d :       i

     H a w a i i , Department o f Commerce end Consumgr                                        (1)     Due c o n s i d e r a t i o n s h a i l be g i v e n t o p a s t
     A f f a i r s , A d m i n i i i r a r i r e R u l e s . s e c . 16-23-16.                         and p r o s p e c r i v e l o s s e x p e r i e n c e v i r h i n
                                                                                                       and o u t s i d e t h i s S r a r e , io c a r a s t r c p h t
     -,
     Ibid      s e c . 16-23-11                                                                        h a z a r d s , i f a n y , t o a r e a s o n a b l e margin
                                                                                                       for             u i i d e i ~ r i r i n ~ ?ref i t           and
     A;     r h e i n i t i a l enactment o f r h e law, t h e a l -                                   conringencies, t o dividends, savings, or
     l o c a t i o n o f burdens v a i 7 5 : .         The c u r r e n t 60*-                          unabsorbed premium d e p o s i t s a l l o u e d or
     % a s e s i a b l i s h c d by r u i e e f f e c t i v e 9jl,'S2.                                  rerarned by i n s u r e r s ro c h e l r policy
                                                                                                       h o l d e r s , members, o r subscribers, ro
     a t t h e i n l r l a ! enactment o f r h e l a c . r h r a l -                                   p a s c and p r o s p e c t i v e e x p e n s e s borh caun-
     1aca:io:r    o f b u r d e n s was 80"s. The c u r i e n r 73:                                    t r y i . i d e and chose ~ p r c i a l l yt p p i i c a b i c
     was e s r a b l i s h e d by r u i e e f f e c t i v e 9:1/81.                                    t o r t t i s S t a r e , and Lo a i l o t h e r r e l e v a n t
                                                                                                       f e c r o r s c i t h i n and o u r i i d e r h l i J r s r e .
     H a w a i i , Deparrmrnc o f Commerce and Coiasumbr
     A f f a i r s , A d m i n i i c r a t l v e R u l e s , s e c . 16-13-;:+.                I t a p p e a r s t h a t i n modifying t h e !a:rguage to
                                                                                               a l : o ~ - f o r r h e c o n a i d e i a t z o r , of e n p e r ~ e n c ea n d
     1nsura:icc b e n e f i c phymenrs ~ i c l i o a r r e g i r d iG                          e x p e c s e s on:)-      L - i i h i n rh,         S r a z r and v i r i i
     f a u l t on:? a p p i y t o b o d i l y i n j u r i e s .      AhT                       respec: r o t h e a d m i n l s r r a i i o n o f moro:               crhi-
     p r a p e r r y damage i n c u r r e d i n a n aciide:,r is                               c i e insurance,              a d r a f t i n g o r r)-pzng e r r o r
     s u b j e c r ro s e r r i e m e n l on rile b a s i s of  fault.                         occurred. T h e Bureau b e l i e v e s t h e secrlon
     Hence,         i f a d r i v e r erashes i n t o a house, t h e                           st80i:ld r e a d :
     owner of rhe hoaic c*,? rue fhc d r i i - e r f o r ripe
     damages. The payment f o r r h e damages i i i l he                                       (1)     Due c o n s i d e r a t i o n s h a i i be giver? r o p a s t
     made bj- t h e p r o p e r t y damage i i a b i l i r y p o r r i o o                             and p r o s p e c r i v e l o s s e x p e r i e n c e i l r t . i r l
     of t h e mocor u e h i c i e ; i n s u r a n c e .                                                j r h ~ s S t a r e . t o catastrophe hazards. i f
                                                                                                       a n y , t o a reanonabin margin f o r p r r f l i

                               Chapter 3
                                                                                                       and           cor.:ingencies,             ro         drriderids      .
                                                                                                       s a v i n g s , or unabsorbed premium d e p a s i r s
                                                                                                       a i i o u e d or r e c u i n e d by i n s u r e r s ro i h e i r
     Hawsii R e v . S c a r . , s e c . 286-102
     --                                                                                                p o i i c y h o l d e r s . rnembqrs, o r e u b i c r ~ b r r 5 ,
                                                                                                       t o p a s r and prospecrive loss experience
     H a i a i i , Depairmenr o f T r a n s p o r r a t i o i i . bioior                               c i i h i n j t h e Stare; reasonable cargin for
     \ehi:ie       Safery Office, Adminisriari~~e ules,          R                                     p r o f > % from and c o n t i i i g e i l c i e s i-. t h e a d -
     s e c ~ . 1 9 - 1 2 2 - l i ro i 9 - 1 2 2 - 1 4 .                                                m i n i s t r a t i o n o f motor ve1ticle i n s o i a r i c e
                                                                                                       s o l d v i r h i n r h e S t a t e ; p a s r and p r u s p e i -
     1977 H a i . S e a s . Lads, Acr 183.                                                             r i v e e x p e n s e s i n Khe s a l e and a d m i n l s -
                                                                                                       iraiion              of     mocor v e h i c i r i n s u r a n c e
     H a i a i i R e v . S r a t . . sei. 285-81                                                       ~ i r h i n h e S r a t e ; and, o p i i o n a l l y . ro
                                                                                                                     t
                                                                                                       p a s r or p r o s p e c r i v i l o s s . s a l e s and a d -
     198: H a i . S e r s . Laws, Air 5 6 .                                                            m i c i s r r a t i v e ccsrs experience i n r h e
                                                                                                       n a r i a n or r e g i o n a l 1 3 , ~ h e r : e r e r i b c h C a r l -
                                                                                                       s i d e r a t i o n r i i i serve to reduce r a r e s .

                                                                                          9.   Robert          I.    Hehr   and   Erneisoii  Cammaci..
                                                                                               P ~ i n c i p i e sof insurance <Re:,-. Ed. Homer.&-d,
                                                                                               I l l . : Richard D. 1-in,       Ini., 195::.  p p . 3h-
     1982 Haw. S e s s . L a u s , Act 173

3.   H a c a i i R e v . S r a t . sets. 29S-1OCb) and 29;-15;                           10.   H a ~ a i i , Department of C o m c r c e a n d Consumer
     H a i a i i , Departmen% o f Commerce and Consumer                                        A f f a i r s , I n s u r a n c e D i v i s l o o , Annual RePnr:.,ic
     Aifaiis          Adminisrrative h i e s (herranaft,:                                      %he L e & ~ s l a ~ u r e ,J c l y 1, 1 9 S l - J ~ r : ~39. 1382
                                                                                                                                                            .
     CCCA R a l e s j , s e c s . 16-23-03 and 16-23-65.                                       ( h e r e x a i r r r Annual i ; e p o ? t j , pp. 5 - 5 .
11. The    "rake all comers" ~rovisionrefers to                     7.   in    1577 rhe      srarote    was   amended to
      sec.  294-9(b), Uawaii ~ k v , Star,,  which                       specifica!ly exclude oicopanis of notorcycles
      prohibirs an insurer from rejecring ail ap-                        from entitlement to personal injar? p r c c e c -
      plicarion for a no-fault poiicy unless the                         rioii benefits. 1 9 7 7 K.Y. Laus c. 892
      principle operalor of the vehicle is not
      licensed or rhe appliianr d j e s co: p e r a
      reasonable porrion of the premium.                                                    Chapter i

12.   Annual R e p o i l , pp. 5-6                                  1. Lerier    from Eugene 1. Eujii, Adninistraror.
                                                                         Coniiacrs 6   Lega! LiaiBor., Hat-aii ?lcdicai
13. House Standing Cornsirtee Reporr So. 8 - E C on                      Association, ro Samuel E . K . Chang. Direcror,
    Senare Bill No. 1115, Teoih Legislarure,                             Legislarive     Reference     Bureau,     dated
    1980, Srate of Hacaii.                                               December 7 . 1983.

.
1
;     Hasaii     Rsa.       Stat.,      secs.      29;-9(b)   and   2.   Letier  f r o m t i i l l i a m 3 Crove, J r . , Admiral,
      294-1&(a)(3).                                                      G.S. Navy, Commander in Chief Pacific, r o
                                                                         Samuel B. K . Chang, Direcror, L e g z s ; a r i ~ , e
15. Havaii Rev. Stat., sec. 29i-13(m) and (n)                            Reference Bureau, dared Sep:ernbcr 7. 1953.

16.   Hawaii Rev. Star., s e c . 2 % - i i ( a ) ( j ) .


                            Chapter 5

 1.   hsh   H. Hurt, J r . , &ratus Report an Accideny
      Ini,esaation D a r a , Cniuersity o f S o u t h e r n
      California, J a n u a r y 1979.

2.    C.S., Department of Transportation, Karional
      HighKay Traffic Safer? Administiarioii, A
      Report ru rhe Congres-          t h e Effect o?
      ~lororc).cie Helmet Lse Repeal--A Case for
      Heirnet b a e , Aprii 1 9 8 0 .


                            Chapter 6

1.    The     t ~ e n i y - s i x stares    vere    Arkansas.
      Colorado, Conriectiiui. Delaware, Florida.
      Georgia,        i(ans;ls,       Xearuc'~ii);, >larylaiid,.
      ?lassachuzetrs, Plichigan. Hinnesora. iei-adz.
      New Hampshire.            he^ Jersey, Yes; 'iork. Xorih
      Dakors, Oregon, Perms)-l\.an~a, Sourli C a r o i l r i a .
      Swrh       Dakcra,          Texas, L i a h ,  Virginia.
      Washinginn, and Vieconsin.

2. 3assachusrtts Insurance Department Regula-
   tions, For the Purpose of E n a b l i n g k n e r s of
   !lo~orcyiles to Readii?        Obrain Adequate
   Insurance Through      Privare           Enrerprise.
   December 4 . 1970.

3.    See Laskev V . Stare Farm Ins. Co.. 296 So.?d
      9 ( F l a . i9:L); ?anranares h.. B e l l , 214 h a n .
      5 8 9 . 522 P.2d 1251 (19iA); E t g o m v v .
      w,           38 N . Y . 2 d 4 1 . 3 i 0 S.E.2d 444, 376
      NY-S.2d 1             i C r . App. 1973);      Sir,-v.
      w.            464 Pa. 387, 346 A.2d 89i ( 1 9 - 5 ; :
      Underhill v . Safeco Ins. C o , 407 5I;ct:. 173.
      28; K.h..Zd 4 6 3 , on renand 9i Yich. Aou. 181.
      293 K.U.2d 799; sad Horgan v . Orcinoii. 163
                                                       ..
      K.3. Super. 3 9 5 , A43 A.2d llli (L. 1561).

4.    nich. C o m ~ .Laws Ann., s e c . 500.321&(5)

5.    See Gerber v . Allscare. 161 N.J. Super. 5&3.
      391A.2d 1285 (1978),     Coares r. American
      Econmr Ins. Co., 627 P.2d 92 (Crah 1981).

".    9~iar       v . Dairvl_anr!J n s . t o . .   616 P.Zd 7 3 6
      iCala. C r . App. 1980:.
(To be made one and ten copies)
                                                 .   *



HOUSE OF REPRESENTATIVES
WELFTH      LEGISLATURE, 198 3
STATE OF HAWAII
        -                                                                   -   -              -




                       O
  REQUESTING A STUDY T DETERMINE THE CONSEQUENCES OF REMOVING THE
       REQUIREMENT THAT MOTORCYCLES AN;) OTHER VEEICLES WITH LESS
             OR                OO
       THAN F U =EELS CARRY M T R VEHICLE INSURANCE UNDER THE
       HELWAII NO-FAULT LAW.


           WEREAS, t h e Hawaii n o - f a u l t l a w , c h a p t e r 294, Hawaii
  Revised S t a t u t e s , p r e s e n t l y r e q u i r e s motor v e h i c l e i n s u r a n c e
  c o v e r a g e f o r a l l v e h i c l e s ; and

           WHEREAS, m s r o r c y c l e owners have sought t o m a ~ et h e p e r s o n a l
 i n j u r y p r o t e c t i o n p o r t i o n o f n o - f a u l t coverage optiona: f o r t h e
 owzers of m o t o r c y c l e s and o t h e r v e h i c l e s h a v i n g fewer t h a n f o u r
 w h e e l s ; and
           WHEREAS, m c t o r c y c l e owners s e e k i n g t o e l i m i n a t e t h e
 s a n d i t o r y coverage have argued t h a t e x l s t i n g h e a l t h i n s u r a n c e
 p l a n s a r e adequate t o c o v e r t h e i r n e e d s f o r p e r s o n a l i n j u r y
 p r o t e c t io:i; and
        WHEREAS, t 3 e i n s u r a n c e commissioner h a s argued a g a i n s t
  remova!. of t h e mandatory coverage on t h e grounds t h a t :

          ( 1 ) A whole c l a s s o f motor v e h i c l e a c c i d e n t s c o u l d b e
                l i f t e d o u t of t h e t o r t l i a b i l i t y l i m i t a t i o n s of t h e
                p r e s e n t law; and

          (2)     The same argiiments u s e d t o exempt m o t o r c y c l e s c o u l d
                  a l s o b e u s e d by t h e owners of sub-compact o r o t h e r
                  cars;

 now, t h e r e f o r e ,

           EE IT RZS3LYE3 by the House o f R e p r e s e n t a t i v e s o f the
 T w e l f t h L e g i s i 8 t u r e of +he S t a t e o f Hawaii, Regular S e s s i o n of
 1983, t h a t t h e L e g i s l a t i v e R e f e r e n c e Bureau i s r e q u e s t e d t o s t u d y
 the p r o b a b l e consequences of removing m o t o r c y c l e s and o t h e r
 v e h i c l e s w i t h less t h a n f o u r wheels from the mandatory p e r s o n a l
 i n j u r y protection r e q u i r e m e n t s o f t h e Hawaii n o - f a u l t law; and
Page   2          -

       EE I T FURTHER RESOLVED that the study additionally consider
  the removal of the coverage requirement in light of the followi~g
  alternatives:
       (1)   That motorcycle owners and operators and their
             paEsengers:
               (a) Are precluded from receiving no-fault benefits as
                   pedestrians; and
               (b) Are disqualified froin receiving benefits under the
                   assigned claims progran of the Hawaii joint
                   ~nderwritingplan; or
       (2) That motorcycle owners and operGtors and their
           passengers are ~llowedto receive no-fault benefits as
           pedestrians, aad are not djsqualified from receiving
           benefits under the assigned claims plans;


        BE I T FURTEER RESOLVED that the Legislative iteference Bureau
                         r
  include informztion o : the experience of states, if any, which
  ha1.c either remcved G Z added requirements that motorcycles and
  vehicies wxth feh-er than four wheels be covered for no-fault
  benefits for perso~alinjury protection; and
       i3'i I T FUR;%IEX ZESOLVED that input be obtained from the
  inocrancc comisrioner on ail aspects of +he study; and
       EE :T   F'JT?TfiCX RESOLT7Z3 that the Legislative 3eference rjureau
  report its                                 to
               findings and recoin~r~endatlons the Legislature not
  later thax   t%er.ty days befcre rhe convening of the Regular
  Session of   1984; and

        52 I11 riiRmR  RESOLVED that certified copies of this
  Raso?ution be transmitted to the Director of the Legislative
                          ie
  ffeferenc6 Surealr &ad t r Insurance Commissioner.
                        CHAPTER 294                                vehicle accidents. Those persons who cry t o ahralo
            MOTOR YEIiICU ACCIDEkT REPARATIOKS                     thir privilege b.irhour the concomicanr respunsibill-
                                                                   tier murr be dealr virh severely. and cheiefoie ibis
         Pert I . Ko-fault insurance                               chapiei rrearr uninsured drivers more severely r h a n
Secrion                                                            those who obtain the legally required no-fsuii ~ n -
     294-1 Purpose                                                 surance coverage.    To the errenc rhai rhls dlfferen:
     294-2 Definirions                                             treacmenr exists in che criminal or civil areas, ic is
     294-3 Right to no-faulr benefits                              done wirh rhe specific legislative inrent of encaurag-
     294-4 Obligarion i o pey no-fault benefits                    ing parriciparion by all drivers in rhe no-fault in-
     294-5 Payment fian uhicb insurer                              surance system which thir chaprei establishes. For
   294-5.2 Prioriry o f insurance coversge                         chore persons truly ecananically unable ro afford
     294-6 Abolition of tori liability                             insurance, rhe legislacure har provided for chem under
     294-7 Righis of subragation                                   the public assistance provisions of thir cha2rer.
     294-8 Condiirons of operation and registration                Therefore, rbere is no valid resson for persons nor to
 129L-8.51 Verificaiion of insurance                               have inrvrence under rhir chsprer. IL 1973. c 203, pr
 (294-8.61 tinlai.fu1 use of no-feult insurhnce                    of $1; a L 1974, c 168, pi of 91; am L 1583, c 215;
                                                                             m
           idenrificerion card                                     '
                                                                  15
     294-9 Obligeiions upon ternination of insvrance
    294-10 Required policy coverage
    294-11 Required ap:zonal additional insurance                      5294-2 Definitions. As used in this chapiei:
    294-12 Prohibitions, penalry
1294-12.51 Vehicles wiih fewer than four viieels;                      (1)   "Accidental   ham"    meens bod11)- injury.
           specielry insurers not prohiblied                                 dearh. sickness, or disease caused by a
    294-13 tlocor vehicle insurance rarer                                    WLOI  vehicle accident to B person.
1294-13-11 Increase in premiums prohibited; when
    294-14 Insurers' iequiiemenrr                                      (2)   "Commirsionei" means The insurance ioseis-
    294-15 Inspection and eudir                                              sioner 8 % defined in seciion C31-31la)~
    294-16 Pvbl~csiionof premium rares
                                                                       (3)   "Criminal conduct" means: the comr:ssior of
           Pari 11, [Old] Repealed                                           an offense punirhsbis by imprisonmer;~ for
                                                                             more than one year; or the operailon or u % e
          Part 11. Joinr Underwriting P:an                                   of a m o c o i vehicle v i r h the specific i n t e n >
    294-20 J o ~ n runderriiring plen, esiablishoient                        of ceuszng injury or damage; or the opera-
    254-21 Board of governors                                                xion or use of s motor vehicle a s a ccn-
    29;-22 Joint undemiiiing plan risks, ei~gibiliiy                         v e r i e r v~iiioui a p o d falrh belief by the
    294-23 join^ ui~drrvriiingpien assigned claims,                          opriacor or user rhsi he i s legally er:iiieci
            eligibiiliy                                                      ro operate or u s e such vehicle.
    294-24 Joint undrrr-riring plan r a r e s
    294-25 Regulelions, revieu. appeilare procedure                    (4) "Injury" means aciidenral harm not resulrzilg
                                                                           in deaih.
         Psrr Ill. Geneis1 Provirions
    294-30 Cle~mani's eiioineg'r fees                                  (5)   "Insured     motor     vehicle"    means    B   motor
    294-31 Fieudulenr or frivolous claims                                    vehicle.
  294-31.5 Admznistrerii'e hearing on denla1 of claim
    294-32 Aibiiiarion                                                       (A)   Which   is insured vndri          s no-fsQir
    294-33 Discizminaraiy Pracrices Piohlbitsd                                     policy, or;
    254-34 Equitable allocsrion of burdens among insure^
    29i-35 Allocation of burdens                                             (B)   The w n e i of which is e self-insurer
  294-35.5 Drivers' edocarion fnnd underwriters' lee                               wirh respeci to such vehicle.
    294-36 Srarute of i~rnirer~ons
    254-37 Administration                                              (6)   "Insurer" means every person licensed io c n -
(294-37.51 Challenges ro no-fault law;                                       gage in the bvsinesr of makir.8 c o n i i a r r s of
           inrerveniion by attorney general                                  moror vehicle insurance snd includes re<:-
    294-38 Jurisdiriion                                                      procel or inrer-mrurance exchanges
    294-35 General penalry provision
1294-39.31 Fee in lieu of fine; defense                                (7)   "Monrhly earnings" aeans:
    294-40 Short title
    294-41 Seveiebilify                                                      (A)   In the case of e regularly eop1n:ed
                                                                                   person, ane-rvolfth of the erersge an-
               PART I. KO-FAULT INSLZASCE                                          nual cornpensacion before s t a r e and fed-
                                                                                   eral income taxes sr rhe rime of inlur:;
     $254-1              ( a ) The purpose of rhir ehap-                           or death;
rer is to creare e syste. of reparations for arclden-
tsl   ham    and   loss arising from motor vehicle                           (8)   In rhe case of a person regularly
accidents, to tompensate these drunages virhout ragard                             self-oployed, one-ruelfrh of the
to fault, and to limir tort liability for these                                    average annual earnings before stair
accidents.                                                                         and federal incane taxes ai =he ilme of
                                                                                   injviy or death;
     (b)    This   sysien of no-fault insurance can only
be truly effective, hwever, if all drivers partici-                          (C)   In the  case or ar: unemployed person o r
psre st Icerr to the extenr required by la..    The                                a  person noi regulerly en~loyed or
pubifc must realize, as the legislature dosr, that                                 self-employed, one-twelfth of t h e s n -
regardless of the txreaz ro whlch the driving of saioi                             ricipazed annual comptnsarlun bc      f
                                                                                                                         e:
vetl~lriis ail-ed 1% is a privilege, nor a righr.                                  state ar.d federa! incunnr i e x e r of r r i :
and t h a t d:iv>rg c e r r l c s virh ir a serious serial                         person paid from rhe rzmr ru;h        Fers.3rt
responstbiliry in the fona of an ability ro canpeilraie                            would reasonably have been expecred t o
adequaitly rhose vho are injured as a rcrulr of mior                               be iegvleily eployed.
                                                             51
  (8)    ''tloror vehiclei' means any vehicle of a type                business of repairing, servicing, or other-
         required ro be reg~rreiedunde; chapier 285,                   wise aainrainlng vehicles unless r h e c o n d v ~ r
         including a vehicle of a type with less than                  occurs   outside   rhe premises       of such
         four wheels or a trailer acteched to such s                   business.
         vehicle.
                                                                (13)   "ihner" means a person who holds the legal
  (9)    ''Moror                           n
                 vehicle eccidenr" means a accident                    title to e soror vehicle; except that in the
         BriSing out of the operation. mainrenance,                    case  of s motor vehtcle vhich is ihe r u b J e c i
         or use of a moror vehicle, including an ob-                   of a  recurzry agieemenr a i lease wirh B term
         ject d'
              i%
               e    or propelled by a motor vehicle.                   o f nor less rhan one year sirh t h e debtor o;
                                                                       lessee having =he iighi to possession, such
(10)    "So-feulr benefirs" virh respecr ro any ec-                    term means the debtor or lessee. Vheneie;
        cidentsl harc shall be subject to sn aggre-                    transfer of rirle ro B motor vehicle occurs.
        gare limit of S15,OOO per person or his + u i -                rhe seller shall be considered the owner un-
        vivoi and means:                                               til deizvery of the executed riile ro t h e
                                                                       buyer, f r w i-hich r l s e ihe bu)-er ha:ding the
         (A)    All appropriate end reasonable expenses                equirebie rirle shall be considered the
                necessarily    incurred    for medical,                m e * .
                hospital,     surgical,      professional
                nursing, dental, optmetric, mbulance,           (14)   "Person"   means,     *hen appropriate to the
                prorrheric services, prodvcrs and ec-                  context.    not      only   individuals,  bur
                comnadaiions furnished, x-iey and may                  CDipoiaTiOns,       firms, associaiians, and
                include any non-medical remedial care                  societies
                and riearmenr rendered in accordance
                with =he reaching$, faith or belief of          (IS)   "Reguletion" means any rule end regiilarion
                any group ~ h i c h depends for healing                promulgaied by the commissioner pursuant to
                upon spirituel means rhrough prayer;                   chapier 9 1

         (8)   All appropriate and reasonable expenses          (16)   "Self-insurer", virh respect to any moroi
               necessarily incurred for psychiatric,                   vehicle, means a person who has s s r l s f i e d
               physzcal, and occupational therapy and                  the iequiremenrs of section 294-Biai12).
               iehabiiiiarion;
                                                                (17)   '"Yirhaur regard to feuli" means tirespecrive
        (C)    Monihiy earnlngs loss measured by an                    of fault ss a c a u s e of accidental harm,
                                                                                                                 and
               amount equel ro the lesser of:                          vithoui application of the principle of lha-
                                                                       biiiiy based on negligence.
                (i)   5800 per month, or
                                                                (18)   "Person     receiving    public         assistance
               lii)   The monrhly earnings for the                     benefxts" mesnr en)- person receirzng bene-
                      period during which rhe eiridenrai               firs    consisiing of medical s e i s i c e i or
                      harm results in the inabiliiy ro                 direct cash payments through the depviimenr
                      engsge in available snd eppiopii-                of sorial ser\,ices m d h o u s ~ n g ,or benefits
                      are gainfvl scriviry.                            from t h e   Svpplemenrel    Securiry       Income
                                                                       program     under    the     social       security
        (D) All appropriate end reasonable expenses                    Adminisiration [ Z 1973, c 203, pr of 51; em
               necesrsiily incurred as s result of                     L 1934. c 168, p of 51; em L 1975, c 113,
                                                                                         :
               such eccidonral harm, including, but                    51; em 1 1976. c 80. ($1 to 3; am L 197i. c
               not limited ro, (i) expenses incurred                   166, $51, 2; sn, L 1979, c 68, $1; em L 1980,
               in obraining services in svbsiilurion                   c 86, $1 and c 234, $1; em L 1983, c 261,
               of rhose rhai the injured or deceased                   511
               person would have performed not for in-
               c a n e but for the benefit of himself or
               his family up io $800 per month, (ii)             5294-3 Qhr     co no-fault beneflrs. ( a )  If the
               funeral expenses nor ro exceed 51,500,       accident causing accidental harm occurs in this Siaie.
               and (iii) errorney's fees and c o s t s to   every person, insured under rhia chapiei, and his
               the      extent   provided   in    recrion   survivors. suffering loss iron, accidenial harm arising
               294-30(e);                                   out of rhe operarion, mainienance or use o f e moroi
                                                            vehicle has a righr to no-fault benefirs.
        provided rhat the tern, when spplied to a
        no-fault pclicy issued sr no cosr under the                (b)   If the accident cavsing accidental herin oc-
        piovirions of secrion 294-2l(b)(Z),    rhall        curs outside chis Srare, the following persons and
        noc include benefirs under rubparagrsphs            their survivors suffering loss from accidental harm
        (A).  (3;. kld (C) for m y FISD. zeceivin*          arising out of the operarion, meinrenence or use of a
        putlic srzistsnce banefirs.                         w i o r vehicle hare a righr to no-faulr benefirs:

(If)    "No-feuli policy" veanr m insurance policy               (1)   No-feult insureds; and
        vhich meets the reqvir-nrs     of renrion
        294-10.                                                  (2)   fhe driver and other ociupanir of an insured
                                                                       vehicle, other rhan a vehicle which is regu-
(12)    "q?eiaiion, maintenance, or use" when used                     larly used i the course o f the business of
                                                                                    n
        xirh respect io s mror vehicle includes                        transporring persons or property and vhich
        occupying. entering into and alighting from                    is one of fire or more vehicles under coe*on
        ii but doer not include condvcr in the                         mnership.
        c o v i s c of loeding or wloading rhe vehicle
        unless i h e sccidenisl hats, occurs in rhc im-          (c)   "nsxiiam limii". me %oral no-fault beae-
        eedxare piaxirsiiy of the vehicle, and does         fir* payable per person or on his deaih ta his sur-
        n : include conduct within iha course of s
         o                                                  vivor on arcourt e* accidental harm sustained by h i m
in any one moior vehicle accidenr shall be $25,000,                         received reasonable proof of the fact a n d
regardless of rhe number of moror vehicles involved or                      B ~ O U ~of benefits accrued, and
                                                                                      L                            demand for
policies applicable.                                                        payment thereof.      If the znsuiei elects z0
                                                                            deny a claim for benefits In whale or i n
     (d)   "Ho-fault insured" means:                                        perf. the insurer shall wich~nt h x r t y days
                                                                            norlfy rhe claimenr in uriring of den281 and
     (I)                                 n
           Person identified by neme as a insured in a                      ihe reasons for ihe denial              The denial
           no-fault policy complying with      seciion                                h:
                                                                            notice % a ] be prepared end malied by the
           29i-10; end                                                      insurer in tiiplicare copies and he i n
                                                                            format approved by rhe c o m ~ s s i o n e i . If the
     (2)   While residing in the same household with a                      insurer cannot p)  a- or den>-rhe clair fci
           named insured, the follwing persons nor                          benefirs because addirional information or
           identified by name as an insured in any                          loss documentation is need&, rhs lcsuisr
           other contract of no-fault policy complying                      shall, virhin the rhircy days, forraid the
           with this chapter: e spouse or orhei rela-                       ciaimani an       iremired lisr of all ihe
           cive of a named insured; end a minor in the                      required documents.
           custody of a named insured or of a relative
           residing in the same household virh e named                ( ) Amounrs of benefits which are unpa~drhiiiy
                                                                       1
           insured. A person resides in the same                          deyr afiei    rhe      insurer       has      received
           household if he urnally makes his home in                      reasonable proof of the fair and amount of
           rhe same family u n i t . even though he rem-                  benef~tsaccrued, and demand for payment
           parerily lives elsewhere. [ L 1973, c 203. pt                  ihereof. sfrei the expiiatzon of t h e thirty
           of $1; m L 2974, c 166. pr of 51; am L                         dngs, shall bear i n t e r e s t sr the r a t e of ane
           1975, c 113, 521                                               and one-half per cent per maorh.

                                                                      (5)   No     part of no-fsuli benefits paid shill be
     529b-4   Obl~gatiii t i pax no-fau1.r benefit*.                        sppl~edin any manner as arrorneg's fees i n
Every no-fauir and self-insurer rhali provide no-fault                      t h e c a s e of injury or dearh for rhich the
benefirs for accidental harm ss folloi-s:                                   benefirs are paid. The insurer shall pay.
                                                                            rubject to secrion 291-30, in s d d l i i o n t o
                                                                            t h e no-fsuli benefirs due, ell a r i o r n r y ' s
                                                                            fees and costs of serrlemenr or suit, nzces-
                                                                            $air ro effect rhe papent of say or all
           (A)   in  the case of injury arising our of a                    no-fauli benefirr            found dup u n d e r rhe
                 moior  vehicle accident io any person,                     c o n r r a c r . Any contract i n v~olsr~or, i h ~ s
                                                                                                                          of
                 including     the    ovnei.   opeiaioi.                    provision            shall     be     zllegal     and
                 occupant, or usei of the inrurpd motor                     unenforceablel and it shall c o i i s r i r u r e an
                 vehiiie, or any pedestrian (znciuding a                    unleuful and unethical a c r far a r : a ~ r o r n e )
                 bicyclisr), or any user or apeiaioi of                     to zolicir, enter into, or knoi~ngiy a z c r p r
                 e moped as defined in section 269-1 who                    benefrrs under any such c o n i i a c ~
                 svrieins sccidenrai harm as a result of
                 the opeierion, meinienanie, or use of                (6)   Any insurer who vzolefea rhe p r c ~ z s ~ o nof
                                                                                                                           s
                 the vehicle, the insurer shell pay.                        this section shell be rub~ect: o ihe piaui-
                 virhoui regard ro fauir, to the perron                     sions of rub+ecrions 294-39Cb) and ( c i . 11.
                 an amount equal zo rhe no-feuli bene-                      1973, c 203, pr of 51; am L i97i. i 168, p i
                 firs payable to the person as e resuli                     of 1 ; am L 1975. r 113, $ 3 , am L 1978, i
                 of rhe injury: or                                          175, 517; am L 1983, c 261, 521

           (B) In The       c e l e of dearh arising our of a
                 m r o i vehicie accident of any person.             5294-5 Peynent from which insurer; (a) A ila;m
                 including         the    a.nei,    opeisror.       no-fsult benefirs for eccidenral harm of s person
                 occupsni. o i user of rhe insured moror             is nor an ocrunanr of anv moror vehicle ~nrnlced
                             r
                 vehicle, o any pedestrian (inilud~nge          in an eccidenr may be made against t h e no-fa-It I n -
                 bicyclist), or any user or driver of e         svrer of any involved vehicle. The no-fault inruiei
                 moped as defined in section 219-1 who          sgeinsr whom rhe clsim is ssserred shall process end
                 sustains accidents1 hr   e. a s s result of    pay the claim as if vholly responsible, but the in-
                 rhe operarion, maintenance. or use of          surer shell rheresfier be enrirled to recover fioa the
                 the vehicle, iha insurer shall pay,            no-faulr insurers of all ether involved vehicles
                 virhovt regard ro fault, to the legel          proportionate conrribution for rhe beneflts paid end
                 repierentsrive of rhe person. for the          the cosrr of processing the claim.
                 benefit of the anrviving spouse and any
                 dependent, ss defined in secrion 152 of              (b)   All no-faulr benefits shall be pald iecan-
                 rhe Inrernel Revenue Code of 195/r, i?f        darily and net of any benefirs a person is enrirled to
                 the person, r r u o u n z equal to the         receive bciruse of rbe accidtnrel hsrm from vaik.ers'
                 no-fsufr benefirr paysblo to t h e spouse      compensation l a w s ; provided rhsi chis seclron r h a l l k
                 and dependeni as a rcsulr of rhe dreth         inapplicable to benefits payable to a survzving spouse
                 of rhe person, subjcci. however, to rhe        and any surviving dependenr as provided under section
                 provisions of section 294-2(10).               294-4.    If the person doer nor collecr such benefits
                                                                under the workers' compenserion less by reason of rhe
    (2)    Payment of oo-faulr benefits shall he made           conresr of his right to so coIlecr by the peisan or
           as rhe benefic* sccivc except rhsr in the            organiretien responsible for payment thereof, the ia-
           case of deach, papear   of rhe benefirs may,         jvird     person,      if   othtmise    eligible, shall.
           a t rhe option of the beneficiary, be rede           nevertheless, be cnrirled ro receive no-faulr benefirs
           imediaiely in s lump sum papenr.                     and upon peymcnt rhereof che no-faulr insurer shail be
                                                                tvbrogered ro the injured person's ixghrh to coiieii
    (3)    P e p n t of na-faulr benefirs rhall be made         avch benefirs
           v i r h ~ nttrrry days afiei the insurer has
      (c)  No papear of no.feuit benefits may be made                                 aggregate   limli   of no-fault              brdeflis
to the occupants of a motor vehicle orher than the in-                                ouriinrd in section 294-Z(10)                        ro
siried motor vehicle or r o the operator or user of e                                 such person are exhausted.
motor      vehicle   engaging in criminal conduct which
causer an+ loss.                                                         lhis section shall apply whether or not the ilriured
                                                                         person i5 enZztIed io receive no-fault benefits.
       (d)   The no-faulr insurance epplicsble on a pii-
mary basis la eccidenral harm to which this chapter                             ib) No claim may be made for benefzis under rhe
applies is the insurance on the vehicle occupied by                      uninsured motorist coverege by an injured person
t h e injvred person ax the time of rhe accideni. or, if                 egainsr an insvrer who has paid or in liable to pay
the    injured perron ir e pedestrian (including a                       no-fault benefits to such injured person unless such
biryciisr), :he insurenee on the vehicle which caused                    claim meers the requirements of the foregoing section
eccidenral     harm   to the pedestrian (including a                     (aI(1). (21 or ( 3 ) .
bicyclisrl.
                                                                              (c)   No provision of rhis chapiei shail be can-
     If there is no inzorance on the vehicle, any                        strued t exonerare, or in any manner to iin;i, r h e
                                                                                 o
other no-fsuir insurance appiirsble to the injured                       liability   of   any   person   in   ihe business of
person shall eppiy.                                                      menufectuiing, retsiiing, repairing, servicing, or
                                                                         otherwise maintaining motor vehicles. arising from a
     No person shall recover no-fault benefits from                      defecr in a motor vehicle ceused, or nor c,oireired, by
more t h e n one Insurer for accidence1 harm a+ a result                 an air or anis+ion in the manufacturing, rerailing,
of the same sicidenr. IL 1973, c 203, pt of 51; em L                     repairing, servicing. or other maintenance of a vehi-
1914, c 168, pr of 51; am L 1975, c 41, 5;; m L 1476,                    cle in rhe course of his business.
c 80, $4; a m L 1977, c 166, 53; em L 1918, r 33, 51;
am L 1983, i 261, 531                                                         (dl   No provision of this heirion shall be con-
                                                                         sirved ro exonerate, or in any manner r o limlr t h e
                                                                         criminal or civil lisbiiity, includzng special and
         4294-5.2 r n o , l l      cf iiiiiiice. c o v e r a g e . (8)   general damages. of     any   person   b.ho, in    the
If   B   iempurary substitute vehicle is made available r o              maintenance, operazzon, or use of any motor vehicie;
a customer by an a u r o repair shop regzsrered v z r h t h e
malor vehicle iegali industry hoard or s moroi vehicle                          (1)   Inteniionally c a u s e s injury or d a n a g r io n
dealer Iicenied by the motor vehicle industry liccns-                                 person or picperil-; or
ing board, while the shop c i dealer repairs or ser-
vices           r h e curroiner's insured motor vehicle, rhe                    (2:   Engages in crirninel condiic~i t i c l i c a u s e s in-
no-fsulr poiicl- of rhe cusromer's insured moror vehi-                                jury or damage ro person or property, o r
cle shall he prlmaiy over the policy an the temporary
s u b s r i r u r e vehicle.                                                    (3)   Engages in conducr resulting in p u n i t i v e or
                                                                                      exemplery damages~
         (b) In rhe e v e n t that s ruirlwei's insvred moioi
v e h x c l e is operared by e registered repsir shop i n t h e                (el   No provision of this secrlon shall be coii-
CDUISP of service or repair, or to veilfs repsiir, the                   rtrued ro abolish tort iiabiliiy w i t h r e r p e c i to
no-fault pn!;cy of i h e regiszered repair shop shell b e                property dsmsge arising from motor vehzrle ariidenrs.
primary over   rhe policy on the rusiomer's >nsuied                      I L 19i3, r 203. pr of 51; em L 1914. i 168, pi cf 51;
motor vehicle. l 1977, c 73, 41; sro L 1978, c 87, 51;
                l                                                        am L 1975, c 113, 54; am L 1976, c 200, pr of 51, am L
am L 1980, c 73. 521                                                     1917, c 166, 54; m L 1982, c 190, $2; r e e a i am L
                                                                                                                       rd
                                                                         1983, c 245, 5 j l

          529L-6 A -
                   i
                   on         of i o a i a b i l i i y . ( a ) T o r t
iiahiliry of she owner, operator, or user of a n in-                          5294-7 R&hzhzf subrogation. 'dhene\.er any per-
sured motor vehicle, or r h e opeieior or user of an                     son effecrs a r o i r llabziity recovery for scizdenral
uninsured motor vehicle who opereies or vres such                        heim, whether by suit or serilemenr, rhxch dupiicsies
vehicle ~irhoui reason t o believe it ro be an unin-                     no-fault benefits already peid under rhe provirions of
sured moror vehicle, with respect ro accidental harm                     this chapter, the ao-feulr insurer shall be svbiagaied
arising from moroi vehicle accidenir occurring in this                   to fifty per cent of the no-faulr henefiis, up to rhe
S i e r e . is abolished, excepr as to ihe follooing per-                meximum limit specified by seciian 291-3(c), paid ro
sons or their personal represenrarives, or legai                         loch person. J L 1973, c 203, pr of 51; am L 1974, c
guardians, and in the follwing circtimsrances:                           168, pt of $1; am L 1977, c 166, $5; em L 1978, c 53,
                                                                         011
         (11 Dearh occurs to ruch person in ruch e wlior
             vehicle srcidenr; or injury occurs ro such
             person vhich consists, in whole or in part,                      0294-8 Conditions of operation and regii~ratiix
             in a rignificani permanent loss of use of a                 (]I
                                                                          *()    No poison shall operate or use e mcior >-ehirle
             parr or function of rhe body; or injury oc-                 upon any public srreet, road, or highway of chis I r a t e
             curs to ruch person which corrrisrr of a                    sr any ti*= unless such -tor vehicle i5 insured at
             peroanenr and serious disfiguresenr vhich                   all i    s under a no-fault policy. Erery a n e r of s
             results is svbjcciian of the injured person                 -tor vehicle used or operered .r any rise vpon any
             to menisi or w t i o l a i suffering;                       public sireer, road, or hi8Ws)- of this Stare shall
                                                                         oblsin a oo-faulr policy upon such vehicle which
         (2)   injury oscvrr to such person in s moror                   provides the coverage required by rhis chepier end
               vehicle accident in which the mhmonr peid or              rhsll sainisin the no-faulr        a t all iimes far
               accrued exceeds the medical-rehebilitarivr                the enrire motor vehicle regisrisiicn period.
               lipit established in section 294-IO(b) for
               expenses provided in section 294-Z(10)iA)                        (2)   The requirements of this subsection mas be
               and (BI;                                                               razisfied bs any anti of e Dcrcr vehic!e
                                                                                      if:
         (3)   Injury occurs to such person in rvch an sc-
                                        f
               cidenr sod a s s resuii o such injury ihe
          (A)       Such   or-nerprovides e surety bond,       seciion 294-11, covering a motor vehicle skali not be
                            of    qualifications     as    e             by an insurer authorized to issue a no-fault
                    relf-insure;, or arher securities af-      policy unless:
                    ford~ng securiiy subsianrielly equiva-
                    lenr to rhar sfforded under e no-fault           (1)   The  principal operator of the vehicle daes
                    policy, providing coverage a t all times               nor have a license vhich permits rke opera-
                    for the enrire moioi vehicle regisfra-                 tor io operare rhe vehicle, or
                    rian period, es deieimined and approved
                    by the commissioner under regulations.           (2) The application is nor accompanied by a
                    and                                                  reasonable portion of rhe piemtun, a s derer-
                                                                         mined under ivles of the comxssaonei.
          (8)       The commi+sionei is sarisfied that in
                    c a s e of injury or death or properis          (c)   A no-fauli policy, including required OF-
                    damage, any cleimsnr would h a w the       rional eddiiional insurance meeting provxsicns of r e c -
                    same rights against such omer e s rhe      tion 294-11, once issued shall nor be canceled or
                    cleimanr would have had if e no-fault      refused renewal by an insurer except for:
                    policy had been spplicable co svch
                    vehicle.                                         (1)   Suspension or revocarion of the license of
                                                                           the principal opereioi to operaie the rype
     (b)   Any person who violates rhe provisions of                       of moror veh~cleinsured, or
subsection ( a ) shall be rvbject to the provisions of
subsection 294-39(al.                                                (2)   Failure to pay the premium for =he policy
                                                                           afcer reasonable demand rheiefoi.
     (    The provisions of this chapter shall nor sp-
ply to any vehicle ooned by or regxstered in ihe name               An insurer may refuse io renew optional addi-
of any agency of the federal government. jL 1913. c            tional coverage in excess of char vhlch the insurer 1%
203, pr of 81; am L 1974, c 168, pi of $1; am L 1975,          required to make available to the insured under s e c -
c 113, 55; am L 1978, c 91, $5)                                rion 294-11 where the insured is a member of a class
                                                               sex  forth in section 294-2Z(b)(l)(A)         or ( B j a r itre
                                                               time of rhe refusal to renew. In any c a s e of cancel-
     [§294-8.51    Verification of insurance        (a)        lation or refuse1 to renew, the insurer shall i o n r x n u r
Every insurer shall issue io iis insureds a no-fauir           ell no-fault and oprional eddirlonal coverag~s in
insurance iden:lficarion    card for each motor vehicle        farce, ro the daie of expirarxon, or far rhirry days
for which the basic no-fault coverage is vrxiten s h m -       follouing notice, vhichevei dsre fxrst o c c u r s . Kirhla
ing the name and make end rhe facrory or rerial number         fifteen deys of e cancellerion, the insurer shail
of the motor vehicle, policy number, names of rhe in-          refund the pro rare uneerned porrion, if a n y , of anj
sured and ihe insurer, and %he effective dazes of rov-         prepaid premiums.    In any c a s e of cancrllar~or or
eisge including the      expiration daie; provided.            refusal to renew, vrirren n o t l i e rhall be given r o t L e
however, ihai insurers of five or more motor vehicles          insured, nor less chan thirty days prior io ihe effec-
which are under common regisrered omership and used            rive dare of ihe rancellarlon or refusal r o i e n e v
in rhe regular course of business shall nor be                 The rancrllsr~on or refusal ro renei shall nor be
~equiredio indicaie ihe name of make and the factory           deemed valid unless suppaired by a ceitzficaie o f
or serial number of each maror vehzcle. The identifi-          mailing properly vaiidared by the United Sraies Portal
ceiion card rhall be in rhe insured m i o r vehicle st         service.
ell times and shall be exhibited to s leu enforcement
officer upon demand.                                                If rhe insurer has manifesred in r - r i r z n g an offer
                                                               to renew ra rhe named insured at least thiriy days
     (b)   The comirsionei of moror vehicle insurance          prior to the end of the policy period and ihe o f f e r 1%
shell issue    8   ceriifxrere of self       insurance         not acrepied before the expiration of the policr t e r n ,
periodically, a s necessary, foi use in each m o t o r         the policy shall lapse upan rhai explreiion dare and
vehicle insured under reciion 294-8(a)(2). IL 1978. c          this rvbsecrion shall nor apply. Noiciihsranding
91, 821                                                        other valid methods of acceptance, an offer shall be
                                                               deemed accepred as of the date of mailing of ihe
                                                               acceptance.   The dsre of mailing asy be evidenced by
     15294-8.6) Unlewful use of no-feult insurance             the pastmark or s certificare of mailing properly
identificsrion card. It rhall be a violetion of this           velidated by rhe Unired Srater Postal Service.
cha~lerfor any person who makes, issues, or knfxingly
                ~    ~




uses any ficritious, or fraudulently altered no-fault               (d)   An insurer may reject or refuse ro acrep:
znsurance idenrificsrian card, or any person sho               sddltional applications for, or refuse ro      rensi
displays or causes or permirs to be displayed a                no-fault policies:
no-fault insurance identification card knouing thar
the no-fault policy was cancelled as provided in sec-                (1)   If  rho com;nirsioner deieimines char ihe
tion 294-9. IL 1978, c 91, §lo]                                            financial roundness of %he insurer souid be
                                                                           impaired by the wiring of sddiiional pall-
                                                                           ties of ~ ~ J Y I ~ cor ;
                                                                                                 c
     5294-9     Ohlig*rianr     upon   termination  of
insurance. (a) Iln O*?Ier of a moror vehicle regis-                  (2)   The insvrer ceases ro write any new policies
tered in this Srare who fails to oainrsin insurance sr                                                        S
                                                                           of insurance of any kind in t h ~ r r e i r .
reqvired by section 294-8, shall immediately surrender
rhe regirtrerion certificate and license plstcs for                 ( e ) Whoever knowingly violates, or c o n s p ~ r e l to
rhe vehicle to the counry director of finance and              violate, the provisions of subreciion (b) or ( c j shell
shell not operaie or permit operation of the vehicle           be assessed e civil penairy in an amount nor ra exceed
in this Stare until .insurance has again been obtamed.         11,000 for each reparare violar~on. Each vlolsriar. of
                                                               subsection (b) virh respecr ro pol~~yholder eppli-
                                                                                                              or
     (b) Except as provided in subsection (d), an ap-          can? for insurance shell consritvie       e      separate
plicsrion for s no-fauii policy, including requiied            violecion.
                                        provisions of
opiional sddiriana: insurance ~ c t i n g
     (f)   The principles of law and equity regarding           policy shall make available to the insured rhe follow-
fraud and misrepresenraiion of materiel ferr shall ap-          ing optional insurance under the folioi-ing conditions:
ply vifh respecr io oprzonal additional coverages
xhiih ere in excess of chose which the insurer is                    (1)    At rhe option    of the insured, e v e r y insurer
required L O make available to inrvreds under section                       shall   offer     provisions   covering       loss
294-11. [L 1973, c 203, pt or 51; am L 19i4, c 168, pr                      resulting from   damage to rhe insured's motor
of 51; am L 1975, c 113. 56; em L 1976, c 80, 55; en L
                                                   r                        vehicle with     such deductibies        including
1978, i 91, $56 end 7; sm L 1982, c 178, 51; am L                           $250, as she      commissioner, by regn!arion,
1983, c 144, $11                                                            shall provide.

                                                                      (2)   At  the option of the insured, every insurer
     $294-10 Regvired policy coverege. ( a ) In order                       shell offer Lo compensare for darnag~, not
ro be e no-fauir policy, en insurance policy covering                       covered   by   no-fault   benefiis, f a rhe
s motor vehicle shall provide, in addition to the cov-                      inscred, his spouse, any dependents, or a n y
erage specified in reciion 294-4, insurance ro pay on                       occupanrs of the insuied's vehxcle.
behslf of the o m e r o any operator of rhe insured
                           r
maror vehicle using ihe moror vehicle virh the express                (3)   Additional coverages       end benefits i-lib
or implied permission of the named insuied, sums which                      respect to any injury, death, or any arher
the w n e i or opeiaror may legally be obligated to pap                     loss from moror vehicle accidents or loss
for injury, deaih, ar danage to properry of o r h e r s ,                   from opererian of 8 moioi vehicle.    Am in-
except property owned by, being transported by, or in                       sure: may provide for aggregate limits siih
the charge of the insured, shirh arise out of the                           respect to such add~iional coverage so long
ownership, opeistion, mainienance, or use of the m o i o r                  85    the basic liabiliiy coverages proladed
vehicle:                                                                    o r e not less rhan ihose required by section
                                                                            29L-1Oia)lI) and (2).
       (I) L~abiliry coverage of not less rhan $25,000
           for d l 1 damages sriszng out of occidental                (i)Terms,      conditions, exilusioni, end dedvrri-
           harm sustained by any anc person a s a result                    ble clauses consisieitt u l r h t h e requxred
           of any one accident spplirsble to each per-                      provisions of such ~ o l i i yand approved by
           son susiaining accidental harm eiising our                       the ronmirsioiirr who shall only a p p r o r e
           of ownership, mainienance, u s e , loading, or                   rermi, condliions. erciiisiocs, dedccable
           unloadlng, of rhe insured vehicle;                               clauses, coverages, end benefzis which a r e
                                                                            fair and equitable, and which iimii the
       (2)   Lisbiliry coverage of nor less rhan $10,000                    variety of coverage aiaiiable so a s ro give
             for all damages arlslng out of injury io or                    buyers of insurance reasonabie oppoiruniry
             desrrucrion of proper%)- including motor                       lo compere the cost of insuring w l r h v a r i o u s
             vehicles and including the loss of u s e                       insiiiers.
             thereof, but nor including property w n e d
             by, being risnspoiied by. or in rhe charge               (5)   At    appropris:ely    reduced premlcn T a l e s ,
             of the insured, as s result of any one s c c i -               no-fault insurers rhall offer each o f t h e
             dent ari3ing our of w e r s h i p , mainiensnce.               folioving dedurriisics applicable only to
             use. loadzng, or unloading. o f i h e insured                  claims of no-fault insureds and, in c a r e of
             vehicle.                                                       death     of   a    no-faclt insured, of his
                                                                            SUrYiYUrS:
     lb) The commissioner shall accumvlate experience
dais on e yeails barir for all mroi vehicle eccidenrs                       (A)   Deduciibies in the m o u n l r of 5130,
in the Sraie iesuliing in accidentel harm, and shsli                              5300, and $500 from all no-iauii bene-
rabvlere rhe emounts of benefits paid or reserved,                                firs orheiwiEe payable, except rhat if
hereinafier collecrively termed "rlaimr", for expenses                            ruo or mare no-fault insureds to whom
specified in secrion 294-Z(10)iA) and (81 for each of                             ihe deductible is epplicable under the
rhese eccidenis.    He shall perform such acruariei                               contract of insurance ere injured in
evaluations of this dere necessary ro determine,                                  the same sccidenr. rhe eggregace ernovnr
                                 n
annually, rhar specific flgvre i dollar vslue, b )e-                              of the deducrible spplicable ro all o f
vhich ninety per cent of ell "on-zero motor vehicle                               them shell nor exceed rhe specified
accident medical-rehabiIiterive claims sriling from                               deductible. vhich smounr vherc neces-
noior vehicle scridents occurring dvring the n e x t                              rery rhall be allocated equails among
no-faulr policy t e w yesr are ~xpectedto fell. This                              rhea; and
specific figure shall be utilized annually as rhe
medical-rehabilitative lisir for all accidenrr occur-                             Dedvctibles in the amounts of 5100.
ring dciing the next no-fault policy tern year for the                            5300, 5500, end $1,000 per eccidenr
purpose of secrion 294-6(.3)(2).                                                  fio~l all no-fauii benefiis oihewise
                                                                                  payable for injury ro a person chi=h
     (c)    For the pliposts of this section rho                                  occurs while he is opereXing ox is s
no-faulr policy term year rhall commence snnuslfg on                              passtngrr on s mior vehicle virh less
September 1, a d rciminerc the follwing Avgusr 31.                                than four wheels.
For each re- year rhr commissioner rhell make rhc
rabuiarian of data necessary for rhe compvrsrion or                  (b)   Any policf of insurance described in this
the medicel-rehahiliration limii dvring the period              section rhall contain a provision in accordanis Qirh
April 1 to narch 31 preceding the Seprember 1 star= of          regvlerions of the commissioner specifying the periods
the no-feulr policy term year. /L 1973, c 203, pc of            within which claims may be filed and actions a g s l n s r
I ; am L 1974, r 168, pi of 51; sm L 1975, c 113, $7;           the insurer mag be broughr. [L 1973, c 203. pr of $1;
am L 1980, r 103. 91 and c 234, $21                             am L 1971. s 168. pr of 51; am L 1977, c 166. 561

       l29i-11 Required optionel additional i n r u r e m            5294-12 Prohibiiions, enairv.            (a)   No insurer
(a)    In sddilion i o the no-fault coverages deiciibed         shell issue or ocfer io issu%palicy                  vhich h e
xx    s e c t i o n 29&-10 every insurer issuing s no-feult
reprerenrs is a no-fault policy unless such issurer                                     Such sraadaids may measure any differences
meets the requiremenis of ihir pair.                                                    among risks char can be demonsriared io h a v e
                                                                                        e probable efferi upon losses or expenses.
      lb)      Aoy insurer, sny general agent, agent,
                                  f
solicitor. or repieseniar~veo an insurer who ui-                                  15)               not be excessive. inadequate, or
                                                                                        R a t e s rhall
olares subrecrion la) shall be subjecr ro the provi-                                    unfairly discrinioa:ory.
sions of subsection 29L-39(1). 11933, c 203, pt o $1;
                                                 :
am 1 1 9 7 4 , c 168, pi of i l l                                                 16)   Rare  meking and regularloc of r a i e s far all
                                                                                        insurance subject io ihis c h a p ~ e r shail be
                                                                                        governed by chapter 431; ~ u b ) ~ c r , however,
                                                                                        to the follouing:

                                                   -           ~~   ~~-~                (A)    To assure rhe proper impiemenrarion znd
no-faulr insurance ~olicies for onlv               maror      vehicles                         evaiuarton of ihe chaprer ihe ccmrnis-
wirh fewer lhan four wheels. [L 1981.          c       56,   PI]                               sioner shall fully comply c i ~ h the
                                                                                               provlslons of section 431-1331;

     5294-13   %chicle insurance raies. (a)                                             1E)    Except as provided in subsection lj)
Excepr as oiherribr provided in rhis chaprer, all pre-                                         the commxssionei shall esiabilsh r a c e s
mium ieres for motor vehicle insurance shall comply                                            end shall conrider w ~ t h   orhe: relevant
uirh The provisions of the cesvalty rating lei cori-                                           facL015 loss experience in rhir S r s r e
teined in chapter 431.                                                                         and   rhe     inresrmenr income of the
                                                                                               insurers, end        insofar   as   section
     lb)   All piemlum races for w t o i vehicle in-                                           431-694 and section 431-691 are i n c a n -
surence shall be made in accordance with the following                                         fliii u l z h r h i s proi,~sion, r e c t i a i - i
provision5:                                                                                    431-694 anid 431-695 shall nor be appla-
                                                                                               cetie herein;
     11)   Due consldersiian shall be given ro past and
           prospecrive loss expeiience within                      itli                 1C)    To afford all m i e i e s r e d persons an op-
           S:aif,      LO cezas~rophehazards, if any, ro a                                     portufizr). io be heard the c o m . n ~ s s ~ o i ~ c r
           ressonable          margin         for    piofli         and                        shall, after notice i s pnbllshed pur-
           conilngencies, to dividends, ravings, or un-                                        suant ro chapter 91, hold a publlc
           absorbed       premium          deposirs   s l i o ~ e d or                         hearing     vhrnevei   rates ere to be
           returned by Insurers to rheir policytioldeis,                                       increased;
           members, or rubrri~beis, io                   pas1       and
           prospecilve          loss       experience wiihln t h e                      1D)    The zniiial r a r e a shsll be r e v i e x e d
           Sisie, reasonable margin fcr profii from and                                        prior   ro  Sepiembei I ,       1975,     and
           ranringrncles in rhe edminisiiarion of motor                                        thereafter shall be r e v i e w e d a t leair
           vehicle insurance sold wiihin ihe stair;                                                       two            nie     corm:slloizr
           pasr and prospecrive expenses i n ihe sale                                          ahell i s s u e a publlr sraieren; or a:
           end a d m ~ n i s r r a r i o n of notor vehicle ~ n -                              order approving the raies for ihe brnr-
           surance wirhin che Stere; and, oprionslli,                                          fit of ihe public;
           co pasr or prospecrive loss, ssle+ and a d -
           minisirdrive c o s t s experience in rhe naiioii                             1      The rommirsiooei rhall order L n s u i r i s
           or regionally, whenever such considersilri;                                         to rebate ro policyholders any e x c ~ i -
           *ill s e r v e ro reduce rates.                                                     rive profli reellled by 1nsviers fro"
                                                                                               rheir operations.
    12)    Due       coiisideiaiion shall be given ro ihe in-
           V e S T m e n i income from reserves end   unearned                  Ic)   Except to rhe e x r e n r necessary to merr i h r
           insurance          premiums   and   orher unearned              provisions of paiagreph ( 4 ) of subseci~on(b) of chis
           proceeds received on accouni of moroi vehi-                     section, uniformity snong xnsureir in any m a z i r r s
           cle insurance sold in =his Scare, end ail                       virhin rhe scope of this secilon is neiihei requlred
           orher fs:corz rhar may be deemed relevan:,                      nor prohibited.
           such          ar   bur no* limited t o rypes of
           vehicles, occupeiions, and invalvemeni in                             ld)      No manual of ciesrifirer~on,rule, rare,
           P85Z           &ccidenrs,    provided     h)
                                                    te.    ere             rating plan, designation of raring territories, or
           csiabllshed io hsve s probable effecr upon                      srsndard for waror vehicle insurance rhall be effec-
           lasses ox expense, or rates.                                    rive unless sppioved by the commissioner. The conmlr-
                                                                           sioner may accept from an advisor). oiganizarlcn Oaslc
    13)    Tne   systems of expense provisions included                                                                       ieriircriei,
                                                                           standards, manuals o f c l s a s ~ f ~ c a r i o n ,
           In rhe rares for use by any insurer or group                    endorrenienrr, fninr, and other maierials, nor dealing
           of insurers may differ from rhore of other                      wirh reies, for reference filings bs insurers.              The
           insviers or groups of insurers ro refiecr                       commisrianer shell hsve the p w e i ro s e t rates under
           rho iequiremenrr of the operaring meihods rf                    rhir chapter, pvrsvanr to and folla-ing t h e procedure
           any such insurer or grovp wirh respeci to                       under chapter 91, except as specifirslly provided
           any class of insururce, or virh respect to                      herein. The c-isszonei          shsll not s e t any r a c e r
           any rnbdivision or ccmbinsiion thereof for                      withour a public hearing ei vhich a11 sffscied and in-
           vhich subdivision or combinaiion separate                       terested parries have a full opportuniry to examine.
           expenre provisions are applicable.                              to c-enz,        m d T O present evidence on the impaii end
                                                                           spplicerion of the proposed eriablishmenr, or revisxao
    14)    Risks may be grouped b3- classificacians for                    of r a t e s . The comzssionei shall publish a noiice of
           rhe establishing of rates      and   minimum                    the d a t e . time, and place of the public hearing ar
           piemxums. Clesrification rates may be mod>-                     least ~ n c e in each o f rhree ruccsrsive weeks in a
           fled io prodace razes for individual risks                      nesspapei of general czrculerxon.
           in   accordance   with raring plans vhich
           esratl~rhsraodards for measuring variations                         lr)   Any person aggrieved by rhe spp1:iai:cn  as
           I n hazerdr or expense provisions. cr b r h .                   : him of a . clasrifirsf:or.
                                                                            c        ry                 rule, standard, rsie, a;
 rating plan made, follcmed, or adopted by an insurer                desirable for the purpose of evaluation, conparison,
 may make vrirten request to the conanissioner ro review             and study of the methods and schedules.
 ruch application end grant the relief requested. If
 rhe conmissioner finds that probable cause for the                       Norwirhrtanding this piohibiiion, the camis-
 c~npleint cxirts or chat rhe complsint charger a vi-                sianei shall, in his discretion, intervene ar any rime
 olaiion of this chaprei or any applicable piovisionz                to adjust ieres, for the no-fauli, mandatory, or
 of the casualty rering is&, he shall conduct e hesiing              optionel-additional coverages, being assessed by a:n-
 on the cwnplainr. me heering shall be s u b j e c t io the          or ell insurers, upon a finding rhat all or any raies
 procedure provided in section 431-JOS(a).                           are excessively high or unconscionably below the ac-
                                                                                                 le
                                                                     rual costs of provision of r l coveisge being assured.
     (f)   If the commissioner hes good cause to
believe rhet a classification, rule. standard, rate.                      In the estshiishmenr of their individuai rare
raring territory, or rating plan made, failooed, or                  schedules, each insurer shell conform fully to subsec-
adopted by an insurei does nor comply vith any of the                tion (b)ll), ( 2 ) . and ( )
                                                                                               4.
requiremenrs of this chsprei or any sppiiceble piovi-
sionr of rhe casualty rating law, he shall, unless he                      lk)   Korwithstanding any orhei law to the
has good cause to believe thar such nonceqiisnce is                  ranriary, no insurer shall agree, combine, or conspire
uilful, give norice, in writing, ro eech insurer star-               with any other private insurer or enrer inro. become a
ing rherein in vhsr manner and to what extent such                   member of, or psrticipare in any undersranding, pool.
noncomplieoce is alleged to exist end specifying                     or rrusi, to fix, control, or mainrain, direcily or
rheiein a reasonable rime, noi less then ten days                    indirectly, moror vehicle insurance r a t e s . Any viola-
rheieafrer, within which ruch noncmpl~ence may be                    tion of this section shall iubjeci the insurer and
corrected. Notices under rhis subsection shall be                    each of irr officers and employees invol~,ed to the
confidential sr berveen the commissioner end the par-                penalties of chapter LBO vlrhoui benefit of a n y exemp-
ties unless e heering is held as provided in rubsec-                 tion otherwise permiired by section 480-11. This sub-
tion i )
      g.                                                             section rhall nor apply to advisory oiganirar:ans
                                                                     referred to in seclion 431-700 shlch e r e nor involved
     (8)   If the commiss>oner has good c a u s e ro                 in rare making o n d ~ ithis
believe such noncomplience to be vil:ul, or if, r-irhin
the period prescribed by the commissioner in the                          (1)   hbrvirhstandlng subsection (j), commencing
notice, the insurer does nor make such changes as may               viih Sepieaber 1, 19i4, the commissioner shell enforce
be necessary to correir rhe noncompliance specified by              B   mandatory reducrion of nor less than ftfreen per
the commissioner or esrabllrhed to rhe satisfaction of              cent by each insurer. calculated as a perceniagr of
the commissioner rhei such ~ p e c i f ~ ~ d   noncompliance        the insurer's piemiwn Tor s comparable romblnatlon of
doer nor exist, then ihe cmissioner may proceed ~ a r h             inruience coverage in erfecr on January I , 9 3 on
e hearing which rhall be subject to the heering proce-              all moroi veh~cle rouereges, as piorlded in chis
dure provided in section 4 3 1 - 7 0 5 ( a ) .                      chapter, inclirdlng rhe basic no-fault policy. There
                                                                    $!>all be no exception to the r e q u l r c m e n r s of this
        (h)    If, sfrer s hearing conducted pursuant to            provision, unless the commissioner shall find r h a t the
subsection (b) or (el, the commissioner finds char the              use of ihe rates required herein by an i r l u r e r       be
complaznant       is  enritled lo relief or that any                inadequate to th? e x t e n t that such rates jeopardize
clsssificerion, rule, standard,           rare.    reting           the solvency of the inrurer required ro us* such
territory, or reting plan viole~er rhia chaprer or any              races. No r e t e £07 the insurance required by this
applicable provirions of rhe casualry raring leu, he                chapter shall be increased prior ro September I , 19iS.
shell issue en order granting ihe complainant's claim               unless rhe insurer proposing such r a z e increase shall
for relief or pr~hibiringthe insurer from "sing such                show that the rarer heroin ere inadequate e s stared
clarsifirarion,       rule,    rranderd, rate, raring               above
ierriroq-, or reting plan. The order shall conrein
the comissioner's findings of fecr and conclusions of                    fm)   Noti-ithsrsnding subsection (j) all insurers
) e x , including, as appropriate, a specificaxion of the           of any ootarcycle. aoioi scooter, or vehicle xith less
respecrs in vhich e violsrion of this chaprer or any                then four wheels shall provide e t e n per cent ieduc-
applicable provision of the cesuelry rating law exists              iion off the regulsr premium eech insvier essesses for
and shall specify a reasonable iime period within                   ruch policy, to the operator pvrchssing s no-fauli
rhiih the insvrer shall comply virh rhe r e w s of rhe              policy who has successfully completed e safe driving
order.      b y ruch order shall be subject to judicial             course approved by che direrror of rranspoireiion.
revi~win accordance with tho provisions of section
431-705(b).                                                               in) Norl;ithrtanding subrecrion (j) ar rhe oprion
                                                                    of each insurer all piemium rates on a no-fault ~oliiy
     ()
      i    The cammissioner shall periodically revie*.              for any motorcycle, motor scooier, or vehicle virh
and evaluate the moror vehicle insurance program                     less than four whesis may provide s discount of nor
described in this chaprer, including an annuel revier.              more than ten per cent ro ihe operaror purchasing a
of the preniv~lrstes, benefit psymenrs, and insurers'               no-faulr policy when the operator submits an sffldarir
lorr experirncc.                                                    to the insurer that he vill veer a safety heimei ihai
                                                                    is approved by rhc direcror of transpoiretion during
      (1) The c-isrimer               shall be prohibited f r a .   the operation of the insured vehicle; provided thar if
setting, mioraining, or in any way fixing rhc rates                 the insurer provides for a discount rhe insurer mas
charged by oro or vehicle ulavrers for =or             vehicle      provide for a surcharge of an mount eqvsl ro rhe
                      n
insurance isstled i canformiry wirh rhis chsprer ss                 discount for those operazors r-ho do nor svbmir sn af-
tither no-faulr inrirrance or as oprional additional                fidavit rhat they will        an          safer7 belmer
inrvrancc ucspt sr provided under section 294-23.                   during rhe oprstion of the insured vehicle.
Esch firs licensed to underwrite no-fauli insursnce in
the $ r a t e rhsll esrablirh it* o~ rere schedule. The                  No insured shall opeisre a vehicle insured under
c-irrionei        rhs?], h w e v e r , monitor and rvrvey =he       s no-fauli policy under rhir aPcrion vhich provides
several coPpanies rate making snrhods and sysrems.                  for a discounr for rhe use of a         helmei, unless
The c-issioncr        shell rtgvire of each insurer and of          rhe insvred is rearing en approved rsfery helmet. IL
each Self-insuirr any and all infomation, dare, in-                 1973, c 203, pr of 51; c @ L 19JL, c 168, pr of $1; m
                                                                                            %
tarnal uepoianda, srudies, and audits, he deems                     L 1975, c 113, $8; sm L 1976, c 80. 56 and c 114, $1;
 em L 1977, c 166, $7 and c 175. $1; am L 1919, c 146,          correspondence iela:ed in any way ro rhe insurer'$
 $1; am L 1980, c 271. $1; ern L 1982, c 173. $11                             in~urancebusiness in rhis Stare.
                                                                ~ O C O Ivehicle

                                                                        Eech insurer shall, not less frequently than
     [§294-13.11 M         e in premiums    rohibiied.          quarferly, report io the comlssianei the derail of
       Ho premium on any no-fault policylh
                                         :
                                        ls          n
                                               be i :           eeih claim received, claim paid, sppiicarion for and
creased as a result of any accident if the insured is           s a l e of a moror vehicle insurance policy, eaih ierai-
no% ar fault in rhe accident. An accidenr in which              nsrion end i e n e w a : refusal notice posied and of each
the insured war not a t faulr ahall nor be used in sny          cancellarion and refusal io r e n e w effected on boih
cay ro affeci any svbseqvenr increases ~n insurance             no-fault and optional additional insurance policy
premiums. / L 1983, E 16. PI]                                   trm+BLCionS.

                                                                      The cmissioner shall, in his discretion, cause
     5291-14        Insurers' requiiemenrs. ( a ) Prior to      an audlr ro be made of ell or any segmea: of *he r r o i n r
licensing an insurer ro transact no-faulr or the op-            vehicle insviance books end bvainess records of any
tional sddirionsl Dotor vehicle insurance business in           insurer by the staff of the division or by an indepen-
ibis S r a i e , the c-issionei:                                dent auditor. A copy of every audit, inrernal or
                                                                exrernel, performed by any insurer of any aspect of
      (1)   She11 effect e rhorough examinarion of the          its motor vehicle books and business records shsll be
            insurer's business experience,        financial     submitred   immediarely upon     completion ro        the
            soundness and general reputaiion es an in-          c-isrioner.
            surer in this and other r r a r e z .    In the
            discretion of rhe coounissioner, rhis exami-            The commissioner shall assess and colleci from
            narion mey include en examination of any or        each inrurei, self-insurer, and from every applicant
            ail the business records of rhe insurer, and       for B certificate of self-insurance or e license to
            an avdit of ell or any part of rhe insurer's       rranssct che moror vehicle no-fault and opaonal addi-
            moror vehicle insurance business, each ra be       tional insurance business in rhls Stare such portion
            performed by the rommxarionei's s t a f f or by    of rhe full c o s t s of every    sud:r,    inspection.
            independent consulranrs. So license shall          exeminstion, visirsiion, and orher senice related ro
            be issued until the cornmissloner is saris-                                             hi or any o r h e r
                                                               aro~orvehicle insurance required by i:
            fied er to the b u s m e s s experience, flnan-    chapter, or performed by rhe iornm~ssioner in his
            cia1 solvency, and the econorl:c soundness of      discieiion unde; rhis chapter or chapter 631, st he
            t h e insurer; and                                 deems equitable in rhe rendering of such s e i n ~ c r . The
                                                               charges shall be collecred end paid inio rhr genera!
      (21   Shall require of eaih insurer, and determine       fund of this S r a t e .
            rhei sai~sfaciory aiiangeresrs heve been
            made for. ihe provision of e cornpiere sales             Any insurer falling to iepoii informarion in the
            m d clelms service offlie in t h e Stare.          manner  and within    the   time     required        bp   the
                                                               com~ssionei, or failing fully to cooperace c l r h ihp
     (3)    Sotiiithsiandiag a n y o t h e r requirements of   commissioner end his rraff in t h e fulf>llmezir o f t h e i r
            this section or of chapter 431, m a y require      duiies under rhis chapter and chaixei 431 shall he
            a bond in e reasonable amount andrirh              subject to the penalty provided in s e c t i a i i ~31-707 / L
            deposirs or sureties determined in his             1973, c 203, pi of 51; am L 197i. i 108, pr of 51)
            discretion of any applicant for a license
            hereunder. The conmissioner may. ar any
            iime, make and enforce such a requiremeni of            52%-16    &biice~ion of premium r a c e r The cam-
            any licensed insurer or self-insurer.              missioner shall publish emually in s newspaper of
                                                               general circulation in the Srarr a 1~s: of all motor
     (bl   The cmissiooer m a y , prior to issuing s           vehicle insurers uiih representative annual prernlums
certificate of relf-insurance r o any person, require          for maror vehicle insurance. / L 1973, c 203, pi of 51;
rhe applicant t o provide for e cornpiere cleimr reri.ice      sm 11974, c 168, pi of 51; m, L 1980, c 5 . 51: am L
office and an officer for the purpose of service of            1983, c 2, 51;
process in rhis State.

     (c)    The c-issioner     shall promulgaie reguls-                     PART 11. J O I M DhUiRL'RITlKi P U S
Zions t o permir any licensed healrh insnrer ro secure
a license co engage in the business of moror vehicle                 $291-20       Joinr undervriting plan, esz8blxshmenc.
insurance io provide only Chore no-faulf benefirs              (a)       A joint undesriiing plan is esrsblirhed consrsr-
described in section 294-2(10l(h) and iE) and oprional         ing of all inrurcis aurhorired to = r i t e and engage in
major medical coverages. IL 1473, c 203, pt of §I; am          % = i c i n g automobile insurance in rhis Slste. Each in-
L 1974, r 168, pt of $11                                       surer shall be a member of rhe plan and shall mainrain
                                                               menrberrhip as s condxiion of irs licensuir zo t r a n s a c i
                                                               such insUx'mce in rhis State.
        /294-15   Inspection and sldir. Esch insurer
licensed i a rranracr mcor vehicle no-faulr or op-                  The cmisrioner shsll establish and maintain a
tional addiiional insurance businesses in this Scsre           joint underwriting plan bureau in the dirisxon of
ahall provide the cmirrioner virh periodic reporrs             motor vehicle insurance to receive, assign, and super-
On every aspect of rhe no-fault and the options1 addi-         vise the servicing of all assigned claims and s
                                                                                                             !l      ap-
t i m e 1 insurance business she insurer transacts in she      plications for joint undewriring plan coverage. The
State,     including, bur not limited to, reporrs on the       commissioner shall sdapr regulations for rhe opeieixon
insesimcnr, reserve, reinsurance, loss and profit              of the bureau, the arsignmeni of applicarions for
rxperirncr, rate rak~ngm d schedules, clsiss received          joint unde=riiing plan coverage and esrigne3 claims.
and paid.                                                      and the inspeerion, rupervisiaa, and mainrenencs of
                                                               this service OD a fair m d equitable basis in a c c o r d -
     Tha cammissioner shall have rhe right and the             ance virh this chaprer.
dnt? of visiraiion, iaspecrion. and andir of all busi-
ness records, including irireinsl memoranda, avdiis and
     All costs incurred in the operation of t h e joint                  6294-22       Jainr  under*iiringgian          risks,
underr-riting plan bureau and the operation o f rhis                eli~:ibiIiix. ( e l The cornmissloner shall establish
plan including adminisr:a:ive, staff, end conrultaiive              clarsifiiaiions of eligible persons and uses fur which
cosrs as provided in seilian 294-18, end claims paid.               the joinr underwiring plan shall provide bozh the
excepting essigned claims as provided in section                    required no-fault policies end any optlarial add;rional
294-23(d), shall, under regjlerions to be established               insurance an eligible person or user appizes fo;. The
by the commirsioner, be s;locared fairly and equitably              commissioner mav further refine the defiil>txnns o r h e
                                                                                                                         f   -   ~~




among the no-fauli insurers.                                                                                         i
                                                                    clsssificationr oiavided far in subsection (. b . .    The
                                                                    commissioner     rhall,  by     regulation.    establish,
     (b)   n e bureau shell promptly assign e a c h claim           implement, and superrise t h e joint undewriting plan.
and application and notify the claimant or appliienl                through the bureau, assuring that insurance for naiar
of the identity and address of the essignee of the                  vehicles rill be conveniently        end    expedirio~si~
claim or epplicarion. Claims and sppliceiicns shall                 afforded, subjecr only to paymeni or provision for
be   assigned so a s to minimize inconvenience to                   payment of the premium, to ell applicants for in-
ciaimantr end applicants. The ersignee rhereafrer has               surance required by rhis chapter to provide iiisurance
righis and obligarions as if it had issued no-fault,                for payment of na-faulr end tori liabxliiy insurance,
mandatory public liabi1i:y and property damage poli-                or   options! additional benefits, end who cannot
tier ccmpiging v i i h this chaprer egplicsbJe to rhe ec-           reasonably obtain insurance at rarea nor in excess of
cidenral h e m or o i h e r damage, or. in case of finan-           those applicable to applicants under the plan.
cial inability of a no-fauir insurer or self-insurer
to perform its ablzgarions, as if rhe assignee had                       (b) The plan shall provide all no-faulr bene!its
vrirten the eppliiabie no-faulr insurance, undertaken               and services, end tort liability coverage, ro the
the self-insurance, or lsrfully obligated itself ro                 limits and coverages specified in part 1 for aii
pay no-faulr benefits f L !97L, r 168, pi of § I ]                  classes of persons. motor vehicles, and motor veh,rle
                                                                    uses specified in rhis section upon rhc payment c f
                                                                    premiums as provided in sectlon 294-24, e r f o l l o i :
        529i-21      Board o f govc:nnns.       ( a ) A board of
governors, heiexnafrei referred ro 8s rhe board, shall                   (1)   The plan shall piov,de na-faulr beneflrr and
be esiablishrd by the com,issioner eithin the bureau                           policies for each of the folloving ciasses.
for ihe purpose of pioi.id:ng expertise end consulia-                          end each class shall be able ro secure a
i l o n an all m a t t e r s perrszning ro the operetion of the                no-fault and torr liab~liry po:>iy   through
bureau and ihe p : r r         underiiiriny. plan.    The board                ihe plan:
shall be composed of rxo persons from, and menbcrs or
represenracivrs            of,   each    of    the     folloxing                (A)     All moro:    vehicles owned by 1xici:srd
Bssoiiations. groups, or organizations, eppoxnred by                                    assigned    risk    drivers    as    the
ihe Eommlssionei far terns of rio years each:                                           commissioner, by rules, shall define
                                                                                        The commissioner shall regulate the
     (1)   Two   m e m b e r s of, and nominated        by,   the                                                    h
                                                                                        class in accordance ~ i i rhr genera:
           Aneizcan Insurenip A s s a c > a r ~ o n ;                                   prectice of the indusiry, the spyl>rs-
                                                                                        bie results, if eny, of his exaelnaiion
     (zj   Tua   members of, and nominated by,                ?be                       of the inaxor vehicle insurers' buslnesc
           American Xilruel Insurance Alliance;                                         records end experience, and any zpplx-
                                                                                        cable snd scieniif~callycredible go\-
     (3)   Two members of, end           nominated by. rhe                              ernmenial or acedemic srudiei of the
           National  Association           of    independent                            mulri-aciidenr or high-risk aurnmobije
           Ins*i~is;                                                                    driver

     (A)   Two members, not affiliated rilh the forego-                        (B) All       m i o i vehicles owned by licensed
           ing   organirar>ans, nominated     by   such                                 dilveis ronvicred cithin rhe thiiry-sxx
           non-sff~lisred insurers;                                                     months imediarely preceding the dare
                                                                                        of epplicarion, in any jvrisdict~on of
     (5)   Two members, csch a self-insurer under rhis                                  sny one or more of ihe offenses of. or
           cheptai, and nomlnsred by all the ceriified                                  of rhe offenses cognate to:
           self-insurers in the Srare;
                                                                                        ( i f Heedless and careless driving
     (6)   Two members each, to be selected by the corn-
           missioner or nominared by each of the c l a s -                             fii)   Driving uhile license svspended or
           sifications    provided   for   in   serrion                                       revoked,
           294-22(b).
                                                                                      (iii)   Leaving the scene of an sccideni,
     (b)   The commisrionei shali provide, after ron-
sultarion wiih the board, in the budget of the bureau.                                 (iv)   nanslaughter. if resulting from
fvndr sufficient lo reimburse rsrh wmber of rhe board                                         the operation of a -tor vehicle.
for tbr scrual cosrs of rranrporretion, ovcrrright
bouriq, forf, snd oxhex incidenial costs of errendins                                  (v)    Driving under rhc influence of an
to the business and =*rings o f zhe board. Orhewise,                                          inloxicaring liquor el prorided in
the members shall serve without cwpcnsarion.                                                  section 291-4 or any drug. except
                                                                                              marijuana, as provided in seczion
      (c)  Tbe board rhali elect its rhairmsn and                                             291-?.
vict-chairman annilally. The first e t i i n g of the
board shall be convened by rhe coarnissioner siihin                            (C)     All   cmeirial      uses, fiisr class.
sixrgdays of the effective dsrr of this cheptor~                                       defined as any c-ercxal    use ensaged
Theresfier. the bosrd stall meez a i its discrerion.                                   in the rrnnspnir of passengers fox hire
but nor less frequently ihen guaiierly. IL 1974, c                                     or grscuiiously.
168. pr of $I; sm L 1976, c 8 0 . 511
                                                                               (D) All       c m e r c i a l uses.   second class,
                                                                                       defined as sny c-erriel,        business. or
                                .I
            insrirutional use o r h e r than rhe trans-
            pori of passenger^       described in sub-
            peragraph (C) or the exclusive u s e of a
                                                                     insurer in conformance with section 29b-11,
                                                                     for each class except thar defined in para-
                                                                     graph (Z)fA), as t h e commissioner. by rules,
            vehicle for damesric-household-familial                  shall provide. [L 1974. c 168, pr of 5 1 ; am
            purposes                                                 L 1975, c 113, $9; am I 19?6, r 60, 5 8 : am L
                                                                                             .
                                                                     1980, c 11, 01 and r 113, 51; em L 1932, r
      (E) All    ~rorcycler, moroi scooiers, and                     5 6 . $11
            vehicles vlih less ihan four wheels
            required to be regisrered vnder chapiei
            266.                                               525L-23 JoinL underuriiine pian assigned cliimmm
                                                                    eligibility. ( a )   Each person rusraining
(2)   The p.
           1n  shall provide no-fault benefirs and                  accidental     harm,     or     his    legal
      policies for all classes of persons, motor                    represenrarive, may, except a s proelded iii
      vehicles, and motor vehicle uses, sr the                      subsection (b) of this section. obtain rhe
      premiums specified vnder recrion 294-24, sr                   no-fsulr benefit6 through the plan =henever:
      the options of the w?iers, for the folloving
      classes, which the E-irsianei,     by ruler              (I)   No  insurance benefirs under no-fauli poli-
      shall fuirhei define and regulere:                             cies are applicable io rhe ercidenral harm;
                                                                     or
      (A) All licensed drivers receiving public
          assistance benefits conslsring of medi-              (2)   No rvch insurance benefit* applicable to rhe
          cal services or direct cash pailnents                      accidenral harm can be identified; or
          through rhe deperioenr of social ser-
          vices and housing, or benefits from rhe              (31   The only identifiable insurance benefits un-
          supplemenial security income program                       der no-fault policies sppl>cable ra the ac-
          under         the      Social    Securiry                  cidencel harm will no% be paid in full
                             ~         the licensed
          Adt~znistiai~on; r o r ~ d e d                             because of financial inabiliry of one or
          drivers ere tho role regisrered a n e r r                  more self-lnsurcir or insurers ro fulfill
          of the moror vehicles to be insured;                       their obligsrions.
          provided further that not more rhan onc
          vehicle per public sssisrence unit                   (bl A person, or his legal represenratire, shall
          shsll be insured vndei his rhaprer un-          be dzsquallfied from ieceivlng benefzrs ihraugh ihe
          less extie vehlcler ere approved bi- the        plan, if:
          deparrment      of   social services and
                      g
          h ~ u s ~ nas being necessary for medical            (1)   Such person is dirqualifled for crlmlnal
          or employmeni purposes.                                    conduct under s e c t ~ o n2 9 i - i ( c ) from r e r e x i , -
                                                                     ing the no-fault benefiis, or
      (Bj   Any   licensed physically handicapped
            driver, lni1"dlng drivers viih any au-             (2)   Such person w a s :
            dilory linliaiion.
                                                                     (A)   The m e i or registrant of an unxnsurrd
           Each ceregoiy of driver-wnei under                              or insuzed motor vehicle ei the rime of
      rubparegraph (A) or ( 8 ) may secure no-fault                        its involvement in the eiciderit ouc of
      coverage    through      rhs   plan  ar     the                      which such person's eccldenrai harm
      individual's option, provided any p i e v l o u s                    arose, or
      no-faulr policy has explied or. has been
      canceled Any person becoming eligibie for                      (B) The operator or any pesrenger of such a
      plan coverage under subparagraph (A) shall                           vehicle ar such t i m e w i t h reason to
      first exhauli ell p a ~ d coverage under ens                         believe ther such vehicle =as an unln-
      no-faulr policy then in force before becom-                          suied lmror vehicle.
      ing el~giblefor plan coverage.
                                                               (r)   Any person eligible for benefirs under chis
           b y   person   eligible or       becoming      section, or who becomes eligible to file s claim or en
      aligible, under ruler     adopted     by    rhe     ecrion againsr the manderory public liabiliry or
      commissioner, under subparagraph ( B ) , say ar     property damage policies, shall, upon the bureau's
      sny rime elect coveiege under the plan and          deierminaiion of svch cligibiliry, be enriiled io:
      terminare   any   piior   prlvare insurer's
      coverage                                                 (1)   The full no-fsulr benefits ss if such victim
                                                                     had been covered as M insured B L the time
            A certificate rhall be issued by r h e                   of che accidenr producing the accidenral
      depairmenr of social services and housing                      harm.
      iodicaciog that the person zs s bone fide
      public srsisiance recipienr as defined in                (2)   The rights of claim and action egainsr the
      subpsrsgiaph ( A ) . The cercificsrt s t ~ l lbe               inscrl?r. asrimed vndcr section 29<-2O(b).
      delmed a policy for the purposes of chapter                    virh reference to the mandatory public l i a -
      431 upon the irsoance of s valid no-fsulr                      biliry policy for accidental herm, end wiih
      insurance idenrifirsrjon cerd pursuant ro                      refareace to the mandarory,properiy damage
      section 291-8.5.                                               policy for propariy demage susisined.

(3) Under the joint underwriting plan, all basic               bny claims of an eligible assigned clsimanr
    no-feulr coverages, inc1ud:np    the   basic          against rirhci *andaterg public liability or property
    no-fault palicy, rhe mandatory $25.000 pu-            daasge I        , or fbc basic oo-fsuli policy, shall
    blic liabiliry snd rhe $10.000 properry               be filed with the insurer assigned m d shell be sub-
    damage policies a h d l be offered by every           jeci to el1 spplirable condition$ and provisions of
    icsurer io rech eligible applicant ssripled           paris 1 and 111 of this chapter, except that the dare
    by the burcau. lo addition, oprional addi-            of norifirar~on of the assiment rhall, where
    iional rouerages rhail be offered by every
~pplicable. be aubstirured for the date of        the   sici-                 convictions.   end   invalvemenr   in   ps
                                                                                                                       a:
dent for purposes of section 294-36.                                          accidents, provided :hey are established io
                                                                              have a demonsrrable effecr upon lcrses or
      (d)     By   reguletion, promulgaied      by   the                      expense. No riendaid or razing plan shall
comisaioner, each self-insurer rhail be assessed its                          be based, in whole or in part, diieirly or
equitable proiarion of ell costs and claims paid undei                        indireiliy, upon     race,   creed, ethnic
rhir section, annually. No claim shali be ess~gnedto                          exiracrion, age, s e x , length of driving
eny self-insurer for servicmg.         Proration for In-                      experience. ciedit bureau raring, or marital
surers and relf-insurers shall be founded upon e pro                          siaius.
rara disrriburion for each premium dollar actually or
theoretically received. Self-insureis shall be as-                      (3)   Raies shall not be excessive, inadequate, or
sessed   that prorezed asovnt based upon the *oral pre-                       unfairly disciiainarory.
mium cost for the coverage and vehicles stared in iis
cerrificate of self-insurance, a s if ihe srlf-insrrrei                   (b) The romi+sioner shall periodjcally s e i raze
had sold such coverage at t h e premium razes applicable          schedules, but nor less frequently rhan annua:ly,     for
under section 294-24.                                             all classes, in accordance virh rhis parr and the fol-
                                                                  > w i n g criteria, se t h a r the rota1 premium income,
        (e)   If s person qualifies for essignment or             from all plen ahitor vehicle insurance, when conbined
benefirs under this secrion, rhe joinr underirlring               with the investment income, shall annually fund               ihc
plan or m y insurer r o whom the claim is assigned by             c o s t s of all joinr underwriting plan clah%es,             the
rhe plan shall be subiogared to the righrs of such                joinr underwriting assigned claims plen, end t h e            ad-
person and shall have a c l a m for relief or e cause of          minisrrarian of the planr. The commissioner shall             es-
action, separare from that of such persass, to rhe e x -          tablish r a t e s for ihe f o U a i n g classes ~ i i h r n   the
l e n f that:                                                     restiicrxonr stared:

      (1)   I r has paid no-fault benefiis; and                         (1)   nororcycles end motor scooters shall be a s -
                                                                              sessed a piemaurn r a t e n o t in e x c e s s of rhar
      (2)   Eienenrs of damage compensaied lac by the                         assessed rhe same driver for automobile
            plan vith ieference to the mandatory public                       coverage; virh pio\,isiois for dedorr;ble
            lisb~lity policy for eciidenral harm end                          no-fault pollcirs of $100. $300, $500. end
            ultli reference lo t h e rnandsrory properly                      $1,000;
            damage polxcy for propriry damage sustained
            are paid /I. 1974, i 168. pr o f 5 3 ;      ern L           (2)   For  rhe licensed public esslriance diivri,
            1 9 7 7 , c 166, 5 8 ; em L 1976, c 33, 521                       er defined ec   section ZPL-?:(bj(?j(A),  no
                                                                              premiwn shall be assessed for rhe basic
                                                                              no-fault, the mandarorg public liability or
         0294-24 J C C C ~n~ddd~r:i:igpi~~-h5_ ( a ) The                      the mandaiory properr). damage pol~iies;and
iafing rules. iefxnemenr of ciars:fxcst~ons, r n r e r .                      all polirles shall conf";m io the pror,sioos
rerang plans, teiiitarles, and                 farms for u s e                of serrion 29L-zZ(b)(Z);  and
undei r h r l o l n r underwriting plan shall be errabllahed
by the commissioner afror consuliar>on r-lth the bcard~                (3)    For the phyriceliy limlred driver drfiiled a t
All racing rules, clersificsrion srsndards and rules,                         section 294-22(b)(Z)(E), no rate shall be
r a t e s , iaizng plans, territories, and pollcy forms far                   set   hxgher rhen rhar sssessed a cornparahie
use in t h e provision of all motor veh~cle Insurance                         driver r-xtbout i>miiaiian, except rhar a
issued vnder the joinr underwriting plan shall be made                        higher rare may be surcharged undei any ap-
end promulgsied by the commissioner in accordance with                        pliceble rcandaid confoimzng viih seciion
the foilouing provisions:                                                     294-2l(e)(2).

     (1)    Consideration shall be given to ihe plan's                 T h e commissioner shell set various systems and
            pssr and prospecrive loss experience within          schedules of rates bared upon the risks involved, ihe
            the S i a t e ; ranfingencier in the ad-inirrre-     experience vith vsrious exposures. uses, and dravers,
            rion of m r o r vehicle insurance sold; pest              a.
                                                                 and m) include the erteblisholenr of surcharges for
            and prospective expenses in the sale and ed-         specific i s , drivers. and user, for each of r h e
            minzstration of motor vehicle insurance; in-         enumerated classes except the classes limiied under
            c a e f r w investments of premiums end orher        paragraphs (2) and ( 3 ) .
            procaedr received on sccovni of joini undei-
            writing plan moror vehicle insurance sold;                c     The commissioner shall, in t h e same manner
            and all other feciars demonstrated to be             as wrder s*b;hretriai (b), rer r s r e s for a )
                                                                                                               n . oprional
            rrlevanr by s cvrrrnr acrvaiially round              addirionsl coverages rhe plan shell offer.
            study of the definable risks           involved,
            piovlded rhsr no premium isre shall exceed                (d)   h r i n g any prc~ivmgear, or in any subse-
            the rrwparsbl~rate not under the plan by s           quent premium yesr, the E-irsioner    may adjust en).
            facrar of -re rhan rue.                              rere ro reflect m y excess            charged. ne may
                                                                 order s itfund io any clsrs. [L 1974. c 168. pr of $1;
     (2)    Raring tcrrirorier pay be rrtsbljshtd aod            ma L 1975, c 113, $10)
            risks may h grouped by clasrificarions for
            the   cstsblishing of iaros snd minimum
            premiums. The c-issioner    may by regula-                 529C-25     Beelstions,      rcviev,
            lion provide for a uniform clsssifiiazion of         procedure. The c-isrion.r     shall make and promulgarc
            risks and isting rerritorier for rhc vaiiour         ell necessary m d approprisre rtgvlarzans for rhrr exe-
            coverages.    Clsssificarion r a r c s may be        cvtion of his duties under rhis pair. Any final rul-
            aadified ro produce rslcs in accordance vith         ins or dir;.o%iiion by ibr bureeu, or by any asxignrd
            raring planr uhich .srablirh standards for           insurer or by a self-insurer, shell be appealed io =he
            meesvring variations in hersids or expense           r-irrioner.                     r
                                                                                 Adminisirsri~~r v i t x , and the irgula-
            provisions, or both.     Such srsndards nay          Zions prmulgated therefor by the commxrrloner, shall
            measure any differences smong risks includ-          ccnfoim ro cha~ter 9 1 .    Jvdiiial zcuiew rhlll be
            ing   vahiclts, occuparions, past risffii
evslleble to any person eggireved          as             i
                                                provided in chap-            (di   neC O ~ ~ ~ may Sa s ~e sO <he~cosr of <he
                                                                                                     S    s s ~     ~
ter 51.                                                                 hearing upon eiiher or both of rhe parties.

      The provisions of ell orher parts of chis chapter                      (e)   The comisr*anei's final order may be sp-
apply co the joint underwriting plan, ~heiher d ~ r e c t               pealed in rhe manner p:orlded for by chapiei 91. ji
reference is made or nor, unless in conflict with the                   1980, c 234. $5; em L i983, c 261. 5 1
                                                                                                            6
provisioiis, of this pair. J L 19jL, r 168, pi of 51)

                                                                             529i-32 Arbitraziii. Any dispilie relazing c o s
                 PART 111. GENERAL PROVISIOXS                           no-fsslr policy may be rubmitred to an eibiriaiai upon
                                                                        uiirren request filed by a cleimant or i n s u r e r w r
                                                                                                                              :h
      $294-30 W r ' s airoinev's fees.       (a1 A per-                 the clerk of the circuit courr in the circuit where
son making s claim for no-feulr benefirs    may be al-                  the accident occurred. Any fee or cosr of rhe arbi-
l w e d an &-aid of e reasoneble + w for attorney's fee,                trator shall be borne equally by the parties unless
based upon ecrual rime expended, which rhall be                         orhercise allocated by the arbiriaioi. The adminis-
treated separately from rhe cleim and be paid direcrly                  risrive fudge of each clicuir couii shall maintam a
by the insurer to the attorney, and all reesanable                      current list of persons qualified and willing to a c t
coats of suit in en action broughi against an insurer                   as aibitrarorr end shall. wiihin ten days of che dare
rho denies all or part of a claim far benefits under                    of filing of e requezi for erbitrarion, eppoinr an 8 1 -
the policy unlesr the court or the canmissioner, upon                   biirstar from such list to hear and dereimine t h e
judiclal or adminisirerive proceedings, respectively.                   claim. Excepi es orhemire provided herein. rhr erbi-
determines that the claim was fraudulent, excessive,                    rration shall be in accordance xirh and gorerned by
or frivolous.                                                           the provisions of chapter 658. An appeal may be t a k e n
                                                                        fiom any judgment of the arbitretor to the circuit
     lb)   A person suing in tort, as permitied under                   conri in rhe manner provided for in Rule 72 of the
this chapter. may enter into any arrengemeni virh an                    Haveii Rules of Cxvil Procedure. [ I 3973, c 203, pr of
atrorney. IL 1573, i 203. pr of $ 3 ; reenaired L 1574,                 PI; reenacted 1 1 9 7 4 , c 168, pr of 51)
c 168. pi of 51; em L 1977. i 166. 55; em L 1583, c
201, 541
                                                                              5294-33 LI~x~lmii<tor.y                 p                 d.
                                                                                                       p ~ ~ c x i i i s~ o h ~ h ~ c i ho
                                                                        insurer shall base any szandard or r e i l n g plan, h i i
        5254.31    Fzauddleni OT frivolour claims. i'lrhin              vhole or in pair, diicirly or indirect]>-,u p o n race,
the disrre~xonof the court or the commissioner, upon                    creed, erhnlc extraction. sgr, s e x , length of driving
judicial or adm~niiriaiiveproceedings, respecrively,                    expeixence, credit barenu r a i z n g , or maizrai s i a i u s .
an insurer or self-insurer may be sllih-ed an sward of                  [I. 3933, r 203, pi of 51, ieerxacred L 19i4, c 168, pt
B    ressonable sum a s siiorney's fee, based upon ecrual               of §I]
time expended, and ail reasonable costs of suir for
ics defense against s person making claim againsr t h e
insurer or relf-insurer where the claim is determined                        529;-3L    &p&$bli    ailo~~~iiii ?ffbbLensg?s&
by 'e  h     couir or the commxssionei io be I r a u d u l e i l i 0:   insurers.    (a)    lniurer~ end self-~niiireri p a r l n g
frzuolous, and %he srrorney's fee and ell reasoneble                    no-fault or ouiional sddriional benefits are enixrled
c o s r ~ of S U Z ~$0 awarded may be treated as an offser              to pioporiionare reimbursemeni from orhei insiirers and
egsinsr any benefirs due or to become due to rhr                        self-insureis ro assure rhai the ellocar~snof rhe
person. IL 1973, c 2 0 3 , pt of 5i; reenacted L 197L. c                financial bvrden of losses will be reasonably can-
168, pr of $1; sm L 1978, c 121, 51; am L 1983, c 201,                  sisrenr viih the propensities of different vehzcles ro
$51                                                                     effect probabiliry and reveriry af injury io persons
                                                                        because che vehicles ere of different veighr or have
                                                                        different devices for the proreition of occupants,
     $294-31.5   Administt~tite hearing on den+ai.p_f                   orher differenr rhaiaireiistics, or different regular
        (e)  If a claimant objecis to the deais! of                     use+. Insurers paying no-fsulr benefirs for loss
benefits by sn insurer or self-insurer pursvaar ro                      arising Iran injury to persona, end self-insurers, in-
section 29;-4 end desires an administrative hearxng                     clvding ihose sho ere neruiei persons bearing equiva-
thereupon, rhe clelmanr shall file with the commis-                     lent losses aiisimg fiom their w n injuries, a r e en-
sioner ruo copies of rhe denial, a wririen request for                  rirled i o proporiianeie reimbursement from insurers or
review and e wriiren statement $erring forth specific                   self-insurers of other involved vehicles.
reasons for the claimanits objeciions. n e documenrr
must be filed wirhin rixry days sfrer the d e i e of                         (b)   Insurers shall mainrein in accordance viih
denial of rhe claim.                                                    regulaiions of the comm~~sionei   sratasiicei records
                                                                        from yhich can be determined rhe propensities of
      (b) The caanissioner shall nor reviev any denial                  diffeieni vehicles to affect probebilits and sel'eili?
of benefirs vhere the disputed mount exceeds 55.000                     of injury Lo persons.
sr of the dare of ihe denial; provided char if the
amovnt in dispure cxeeeds $5.000 due solely i o an                           !l
                                                                              c    Vhen ths c-issioner    derereines t h a t sde-
iilsurer's or self-insurer's noncwlirnce with section                   quete suppoicixg informarion is sra&iatir. ha may es-
29L-4, then the claim rhall remain within the juris-                    rabiirh by iegulsiion and meiniaxn s system under
diction ef the c-irsioner.                                              which righis of ieimburreneni are dsrermined through
                                                                        pooling, reinsurance, or oiher form of rcsllocaiion
     !c)   m e commirsioner *hail cooduct s bearing to                  procedure in lieu o f csre-by-case ieimbursemeni. The
review the denial of benefirs in conformity with chap-                  system may     apply     ro   (1) all    iosaiers  and
rer 91. The commissioner shall hsre 811 rbe p s e r s ro                relf-insurers, or ( 2 ) ell insurers and self-lnsureri
sonduci s bearing as set fairh i serrien 92-16.
                                     n                                  excepi rhose who are parries t o ar: sgicemrac eniezed
Afcer graniing en ~pporz~nicy hearing ro the in-
                                 for                                    into under this svbstciion and 4pprol.ed by        the
sorer and ciaimanr, the c-isrioner    rhall affirm the                  c-issroner.     Two or more insurers or relf-insurers,
denial or reject the denial and order rhe payment of                    vilh approval of the c-issioner,    may enrei into sn
benefits as the fsirt may warrant.                                      agreement for settiemeni of their rights of propor-
                                                                        tioneie reimbur~emeutthrough a system of pooling,
reinsurance, or other realloisti~nprocedure in lieu                    9294-36 Stazure of limitatjons. ( a ) So ~ " i r
o f case-by-case reimbursement.                                   shall be brought on any coniiact providiirp. no-faulr
                                                                  benefirs or any conirecc providing optional addiricnal
     (d) The c-irsionei       may not approve or e s t a -        coverage more than:
blish cere-by-case proportionate reimbursesent on the
basis of faulr in csscs involving only privsiely a m e d               (1)   Two years from the date of the m o i a i vehicle
passenger motor vehicles designed io carry ten or                            arcidenz upon vhich rhe c l a i m js based; or
fewer passengers.
                                                                       (2)   Tro yesrs afrer rhe last payment of no-fault
      !e)  All clpiims for case-by-cese propoiiionare                        or optional eddirional benefzis; or
reimbursement     beiseen      insurers     inclvding
self-insurers, if not settled by agreement, mag be                     (3) Tuo years     a f t e r the entry of a final order
settled through arbitretion or lirigarion.                                   in arbitrarion; whichever is the last to
                                                                             occur
        (fl   In order further to reduce the incidence of
r a r r liabiliiy arising under rhis chapter, and io sie-              (bl h'o suit arising our of a motor vehicle acci-
bilize ihe numberr and e m o u r s of claims srising under        dent shall be brought in tort more ihan:
%he join% undewriting esrigned claims plan, in t h e
event any inrvrer becomes unable fully to meer and                     (1) Two years a f c e r the dare of rhe motor vehi-
fund irs obligarions under this pair, or becomes                           cle accident upon r-hlch rhe claim i s based;
insolvent, ell other no-fault insurers shall guarantee                       OI
rhe ovZstsnding policies and claims obligations of the
defaulting insurer, in an equitable dirtiiburion of                    (2)   Two years a f r e r the dare of ihe Iari psprncni
such policies and clairns bered upon the slnounr of pre-                     of no-feulr or ~piioiiai edditional benefxis;
mium revenue or the value of policies uiitten, includ-                       whichever is the lerer. / L 1973, c 203. pr
ing both no-faulr. olandatory. end oprionai-addirionnl                       of $1; reenacred L 1914, i ib8, pr of § I ;
insurance policies viiiten thsr year, ar i h e cornis-                       r . L 1983, c 245, $6)
                                                                              e
slonei rhall, by regulation, provide.       This guarani?
st,ali be effected virhour increase in any rsie for any
such policy being guaranieed, and virhout requiring                   4294-37 Administration    [in] order to c a r r y our
duplicate payment of eny premium bj- sny insured. / L            rhe prouirlonr and fulfill the purpose of this chapier
1973, c 203, pt of 51; en L 1976, i 168, pt of $11               the cornmissloner shell:

                                                                       (11 Consult isirh iepresenrarives of t h e prlraze
                              f&__
          4294-35 Allocarion oue.
                               &d5          The conmissioner               insurance business, such orher        persorr,
shall uirhxn iuo years after the effeciive date of                         public end consumer organizaiions, and sgen-
t t i i s chapier cslabiish a aysrern of prDportiDliare ieim-              cies of the federal, state, or local govern-
bursemeni as svrhorized by the pioviaions on equitable                     menrr as he deems necessary;
allocation of burdens among insurers end self-insureis
under reciion 294-3Llc). IL 1913, c 203, pr of 51; am                  ( 2 ) Adopt, amend, and repeal r?ach rules, pur-
L 6         , c 168, pr of 51; an L 1975, r Ii?, 511; em L                   suant t o chap~er91, a s h~ deems necessary;
3983, c 201, $21                                                             such rules -BY. in addition io carrying our
                                                                             snd fulfilling the purposes of this chapter,
                                                                             esrabfish standards f o r the prompt, fair,
     $294-35.5 Drivers' educ8tlon f f ~ d underrriierr'                      and eqeitable disposiiion of ell clams
      ( 8 ) There is assessed end levied opon each  in-                      arising our of motor vehicle accidents; and
surer end self-insurer, ss defined in secTion 296-2, e
drivers' education fuad underwriters' fee of one do]-                  (3)   AppouIr surh personnel es necessary for the
lar per year, on each motor vehicle insured by each                          performence of his funcrions under rhis
insorer or self-insurer. This fee is due and payable                         chsptei. All personnel appeznied under rhzs
in full on ur snnuel basis by mems and st e rime lo                          section shall be subject ro chaprers 76 end
be determined by the commissioner.                                           77. [L 1973, c 203, pi of 51; reenaired L
                                                                             1974. c 168. pt of $1; sm L 1979. c 160. PI]
      (h)       ?he      c-issioner      shell deposit fhere
underr-liters' fees into a special drivers' education
fvnd acionnr which shell be allocated for the fiscal                     [5294-37.3) Challenges ro no-fault 1 - m -
pear 1977-18 and the fircel yesrs rhereafrer, fifty              venrion by srtorney g e n e s   The airorney general
per rrnr co the c-irsionei            vhich shall be expended    shall intervene, a i the request of the c-issioner.
for :he operation of the driver cducarion progras                in any case befor. m y sppellace court in chis S t a t e
provided for in section 286-128b) and fifiy per cent             in uhich the conrrirutionslity or r.alidirg of rhis
to rhc superinrendenr of the depaiiment o f cducsrion            chapter or any part rhercof is ar issue, m d may sp-
t o rupporr the driver tdvcerion progra. a b i n i r r c r e d   peel to rhe hired Srsrer supreme court, if necessary.
by rhr d e p s r t u n c for high scboci rrudmts: pr-ided        ro obtain s final dcrermination of any care. [L 1983,
rhar all f w r received, vndrr secrion 294-35.S(a),              c 2 1 5 , 521
uhich srs derived f r m mrorcgclts. =tor rcnnrers. or
similar ri=hicles, shall bc expcnded by rhc hiversiry
of Hawaii = a r
             -iy           college empfo)?nnt training office         129L-38 Jurisdirrio. h y person mey bring ruir
for the optrarion of s driver cducarion progrsm for              for breech of uty cnnrrecivel obligation assumed by an
operators of oororcyclcs, m r o i r r w i e r s , or similsr     insurer under a policy of insvrance conreining surh
vehicles.                                                        mandatory or oprionsl provisions in any stare court of
                                                                 competent jurirdicrion. ( L 1973, c 203, p of $1;
                                                                                                               t
        (c)     Tbc r-issioner of lmror vehicle insurance        rcenacred L 1914, c 168, pr of $1)
rhall make ell necessary rules end regvlsrions for rhr
               of
~ e c u t i o n this recfian and rhe distribution of =his
fund. 1 1975, c 113, $14; a;l L 1980, c 271, 42; am L
          1                                                           9296-39 General pcneliy grovision.      (a) Any
1981. c 6 . PI]
             6                                                   person subject t o %he provir~ons of =his chapcer in
                                                                 rhe capeciry of the operetor, amti, oi resistrani of
s motor vehicle in rhis S t e r e , or registered in rhis         (c)    No person shall be required to pay r h e fee
S r a C e , uho vxolarer any applicable provision of rhis    in subsection (a1 if the person can show proof of hay-
~h~pier,     shall be rubjecr LO cirsiion for surh viola-    ing been convicfed in a prior criminal proceeding for
tion by any county police department in a form and           failing Lo hsve no-fauli insurance coverage on the
manner approved by ihe violations b v i e a u of the dis-    dare of ihe aicidenr which is rhp subject of rhc i a r r
zriil court of the first circuit. Notuirhsranding any        acrion. I L 1983, c 245, 531
pioi.ls~onof t h e Kai-aii Penal Code, each violarion
shall be deemed a reparare offense end shall be rub-
jecr to a fine nor less rhan $100 nor more than 52.000             5294-40 Shori ritle. This chapter sha!! be
and such fine shall nor be suspended.                        known and may be rired as the "Havaii no-faulz i s i "
                                                             I L 1973. c 203, pr of 51; renumbered L 1914, c 168, pr
     In the case of muliiple violarions the courr            of 411
sbail in sddirian ~o any ocher penalty, impose the
f~llwing  penalries:
                                                                    5294-41 Severability.     (a)  Except as provided
     (1)   Impiisonmenr of not more than rhiriy days;        in subsection (b), if any provision of this cha;tcr or
           or                                                the applicstion thereof ro any person o rircumstanre
                                                                                                       r
                                                             is held unconsiirurionsl, t h e remainder of chis chap-
     (2)   Suspension or revocation of driver's license      ter and the appliriliion of such provision ra oiher
           of rhe driver and of the registered owner;        persons or circumstances shall nor         be        effezied
           or                                                thereby, and ir shall be conclusively presumed ihar
                                                             t h e legislarure would have enacted ihe remalndei of
     (3:   Suspension or revocation of the morar vehi-       this chaprer withour surh invelld or u n c o n s r i i u r i o i i a i
           cle regisiretion plares of ihe      vehicle       provision
           involved; or
                                                                   (bi    In rhe event section 294-6(a) is held c a n -
     (A)   Impoundmenr, or impoundment and sale, of the                       invalid,
                                                             ~ ~ i t ~ ~ i o n ~ l l y r h e n ir is the intent of the
           moror vehicle for rhe costs of srorage and        legislature that the follaiog sections only ahall be
           other charger incident ro seizure of l i  te      voided: sections 29A-3, 291-4, 294-5, 29L-8(a)(l),
           vehlrie; or any other cost involved pursuant      and recrion 29L-12. I t shall be conclusively presumed
           ro secikon 294-13; or                             thsr the legislarure would hsve enacted ihe reminder
                                                             of rhis chhprer virhoui such invalid or unrons:xru-
     (5)   Any combination of such penalties                 tionel provlrion. IL 1974. c 168. pi of §!I

     (b) Any person, in t h e cspaciiy of B licensed or
unlicensed moror vehicle insurer, general        egcnr.
egeni. ~oliciioi, or other repieseniarlve, who r i -
olarss an! provtrion of chis chapter shall be assessed
a   civil penalty n: o   t o exceed $5,000 f o r each
rzolaiion.

      ( c ) Any person, in the cepscity of e licensed or
unlirsnsed morar vehicle insurer, general          agenr.
spent. solicitor, or a r h e r represenrerive. $ h knot-
                                                .o
ingly violates any provision of rhis chapter shall be
assessed s civil penalty of nor less rhan $3.000 and
nor i o exceed $10.000 for each ciolarion.

     id)   (1)   Vioiarionr of suhiectionr (b) and (c)
           shall be subject ro the construcrion ihar
           each repetition of such a c t shall consriiure
           a separate vtoleiion.

           (2) The imposition of any civil penelr). un-
           der subsections ( e ) . (b), or (c) shall be in
           addition LO, end shall noi in any osy Iimir
           or affeir rhe applicarian of, any ocher
           civil or criminal penslcy, ar public sefeiy
           condition or requirement, provided by leu.
           I L 1971. i 168. pr of 41; em L 1975. c 113,
           512; am L 1978, c 91, 98; am L 1980, c 234,
           131

                                   f
     15294-39.31 Fee i lieu o fine; defense. ( a )
                           s
*ny person bringing en action in tort under *his cbap-
rer vho was vninsured at the Lime of rhe accidenr
shall pay s fee of $1,000 in lieu of any fine which
could have been levied s* s crimieal penalty for fsil-
ing ro obiain r h e no-feuli inrvraare cover88e required
by this cheprer.

     (h)   The fee required under subsection ( a ) shell
be paid by rhc person directly, or deducred from any
settlemenr or verdict received. or both.
                                                    Appendix C

                       SURVEY OF REGISTERED MOTORCYCLE OWNERS



          T o o b t a i n i n f o r m a t i o n about t h e m o t o r c y c l e population i n Hawaii a n d
v i e w p o i n t s a b o u t t h e n o - f a u l t issue,    the         Bureau     sent a c o n f i d e n t i a l
q u e s t i o n n a i r e t o 800 randomly selected r e g i s t e r e d motorcyclists w i t h t h e i n t e n t
o f e l i c i t i n g a t least 400 responses f o r a response r a t e o f 50 p e r c e n t .
S e v e n t y - t h r e e o f t h e questionnaires mailed o u t w e r e r e t u r n e d because
f o r w a r d i n g addresses o f t h e r e g i s t e r e d motorcyclists were n o t available.
Nevertheless, o f t h e 727 questionnaires t h a t w e r e d e l i v e r e d , t h e Bureau
r e c e i v e d 324 responses f o r a response r a t e of 45 p e r c e n t .              A sample of 400
w o u l d have l i m i t e d t h e sampling e r r o r t o $5.0 p e r cent; b u t w i t h t h e 324
responses, t h e sampling e r r o r i s calculated a t 25.5 p e r c e n t .                    T h i s means
t h a t i n t h e w o r s t case s i t u a t i o n w h e r e 50 p e r cent responded "yes" on a
q u e s t i o n a n d 50 p e r c e n t answered "no", t h e t r u e value of t h e response w i l l
b e somewhere i n s i d e t h e i n t e r v a l 44.5 t o 55.5, 95 p e r c e n t of t h e time.

         A c c o r d i n g t o a u t h o r i t i e s on s u r v e y i n g methods, t h e response r a t e f o r
m a i l s u r v e y s a r e f r e q u e n t l y v e r y low a n d a r e t u r n of between 3 0 t o 50 p e r
c e n t i s usual.              Since t h e s u r v e y r e s u l t s a r e b e i n g used o n l y t o i n d i c a t e
g e n e r a l o b s e r v a t i o n s about t h e m o t o r c y c l e population, t h e B u r e a u believes
t h a t t h e response r a t e of 45 p e r c e n t w i t h a sampling e r r o r o f Z5.5 p e r c e n t
is sufficient f o r the purpose of this study.

           In a n a l y z i n g t h e s u r v e y responses, t h e B u r e a u i s aware t h a t c e r t a i n
responses may n o t b e accurate because r e s p o n d e n t s may have been a f r a i d t o
t r u t h f u l l y answer q u e s t i o n s c o n c e r n i n g w h e t h e r t h e y h a d i n s u r a n c e o r h a d
b e e n i n v o l v e d i n accidents even t h o u g h t h e y w e r e t o l d t h a t t h e q u e s t i o n n a i r e
was c o n f i d e n t i a l .      T h e B u r e a u also is aware o f possible attempts t o skew t h e
responses as many o f t h e questionnaires received were e i t h e r u n a u t h o r i z e d
photocopies of t h e B u r e a u q u e s t i o n n a i r e o r questionnaires mailed i n envelopes
o t h e r t h a n t h e B u r e a u ' s o f f i c i a l r e t u r n envelope.             I n o r d e r t o maintain t h e
i n t e g r i t y o f t h e random sample p o p u l a t i o n t h a t was systematically obtained,
the        B u r e a u c h e c k e d each               questionnaire               returned     and      eliminated   all
q u e s t i o n n a i r e s t h a t w e r e o b v i o u s l y u n a u t h o r i z e d photocopies. Since t h e r e was
a s l i g h t p o s s i b i l i t y t h a t t h e B u r e a u c o u l d h a v e missed p r o v i d i n g r e t u r n
envelopes t o all respondents, r e t u r n e d questionnaires i n u n o f f i c i a l envelopes
w e r e o n l y d i s q u a l i f i e d i f t h e q u e s t i o n n a i r e also was a n u n a u t h o r i z e d
photocopy.

     C e r t a i n q u e s t i o n s a r e of l i m i t e d         value      because       of     errors       in    the
questionnaire.        Those questions i n c l u d e :

        (1)    Item l l l A ( 1 ) c o n c e r n i n g t h e t y p e s of i n s u r a n c e coverage i n t h e
               motorcyclist's policy.                T h e c h e c k - o f f i n s t r u c t i o n s h o u l d have
               read "check all a p p r o p r i a t e " i n s t e a d of "check one".                           While
               some respondents answered c o r r e c t l y d e s p i t e t h e i n s t r u c t i o n ,
               o t h e r s w e r e o b v i o u s l y c o n f u s e d i n t r y i n g t o decide w h i c h one
               answer was t h e most a p p r o p r i a t e .
(2)   I t e m l l l A ( 3 ) c o n c e r n i n g t h e amount of d e d u c t i b l e o n t h e
      personal i n j u r y p r o t e c t i o n c o v e r a g e . T h e f i r s t o p t i o n of "$50"
      should h a v e been "no d e d u c t i b l e " .            T h e B u r e a u believes t h a t
      people i n g e n e r a l are n o t v e r y familiar w i t h d e d u c t i b f e s as
      applied          t o personal i n j u r y           protection benefits               and t h e
      r e s p o n d e n t s may have been t h i n k i n g more i n t e r m s of collision
      a n d comprehensive d e d u c t i b l e s .           However, t h e l i s t i n g o f a $50
      o p t i o n may have f u r t h e r misled respondents s i n c e t h e r e i s n o
      $50 d e d u c t i b l e f o r personal i n j u r y p r o t e c t i o n coverage.
                                           SURVEY OF MOTORCYCLISTS


I.   Personal date (check one for each question)

     A.   Age:

                     (a)       3% bela. 18 years                      ( e ) m 41      - 50 years
                     (b)=%        - 21 years
                                    18                                (   f     ) 51 - 55 pears
                                                                                    ~
                     ( c ) m z 22 - 30 years                          (~)-zJ%e r 55
                                                                            ov            years
                               ) 31 - 40 years
                     (     d       ~
                                                                          -   .6% no response

     8.   Personal Status:

          (      h           ~
                         ) Civilian          1)
                                             (-        Military               .6% other

     C.   Employment Status:

          ( j ) S %Employed                            I=
                                                      ()             Retired    2no response
           k-
          ()               tinemployed                %
                                                      &
                                                      )
                                                      m
                                                      (              Studenr

     D.   Do you also own            s vehicle wirh four or more wheels?

          ( n ) a Yes                     01.%
                                         ( 1 5 4K O    -no
                                                       .3%            response

     E.   You are currently driving your mororcycle with e :

          ( p ) m nororcycle learner's permir for the State of Havsii
                    ~
          ( q ) permanenr Hawaii state moiorcycle operator's license
          ( r ) m Permanent oororcycle operator's license from anorher Srere

     F.
                 -
              2.5% no response
          Have you reken s highway safeiy course for driving motorcycles in
                                     1(
          Hawaii? ( s ) l ~ l $ yes -'     no          no reswnse


11. nororcycle dsra

     A.   Type of motorcycle owned- (check one)

          (u)-             under 125 CC's                    (Y)-%        361    -   1,000 CC'5
          (v)-                  -
                           126 360 CC's                                   over 1,000 CC's

     B.   Use of motorcycle: (check one)

           y2
          ()=      pleasure use only
          (l
          z*
           )       driving ro school or work only
          (a)63.D% a11 of the above

     C.   How long have you been dr~vinga mororcycle?

          (b)&%under                1 year                   ( e ) l m 6 - 9 years
          (c)A%l      - 2 years                              (2
                                                              f-
                                                              )        10 - 15 years
          ( d ) m % 3 - 5 years                              ()-
                                                              g2       over 15 years

     D.   (I) Have you ever been involved in a collision with a :                           (answer ell)

                     movlng vehicle           ( h ) U yes      (-
                                                               i)   no
                     pedesrrian               (    3   ) yes
                                                           ~    k
                                                                )
                                                               (-   no
                     non-moving object        1
                                              (-)        yes    m_
                                                               ()   no
                                                  71.6% no response
          (2)        If you answer yes to any of -hove, how many times were you
                     involved in collisions? (check one)

                     (n)m%once                         p=
                                                      ()             three times
                     ( o ) a % twice                  (q)=           over three

          (31    Hoc w e r e your medicel, rehabilitation, and other out-of-posker
                 expenses caused by the accident paid? (check one)

                     ( r ) ~ % m o t o r c y c l e no-fault insurance
                     ( s ) U % t h e military covered everything
                     ( t ) x % I paid for everything
                     ( u j u % o t h e r (hpecifyj p a x indicated no                      .
                                                                                     . . . - --* . Or
                                                      t h t other vebzcle be2:vg a t f a u l t paid or : h t
                                                      h e a l t h insurance covered i n j u r i e s
Ill. Insurance Data

     A.   Is your motorcycle insured?              (v)=Pyes           (u)=%no   L   n   o response

          (1)     If yes, what is covered by your insurance? (check one)
                  (x)x%personal injury prorection (for yourself and your
                            passenger)
                   y=
                  ()%       liability protection (for bodily injury and properry
                               ~




                            damage to another person when you are et fault and suedj
                  (z)=%collision       expenses (for damages to your motocycle)
                  ( e ) z % casprehensive expenses (for damages caused things other
                            than collision such a s , fire, flood, theft, etc.)

          (2)    H w much do you pay a year for your insurance? (check one)
                                                            $451 - 550
                  ( b ) E % less than $250
                  ( c ) G % $251   350
                  ( d ) x X $351 450
                                         -
                                         -
                                               (f)x%$551
                                                          ( e ) e %
                                                                   650
                                               ( g ) z % o v e r $651
                                                                            -
          (3)     rt
                                                              -
                                                     9.6% no response
                 = a is the deductible amount for your no-feult coverage? ( H w
                 much must you pay on a claim before the insurance company makes s
                 payment)? (check one)

                   h=
                  ()%              $50             (k)2.2q500
                          $100
                  ( i ) e %                        ( > ) A % $1000
                  ().%
                   jso             $300                 2.1% no deductible

    B.    Do you have      e
                                                       -no response
                                                       29.6%
                                   health or accident insurance plan?

           m=
          ()%            yes         ().%
                                      nrS     no          -no reswnse
                                                          1.9%

          If yes, what is the nene of the plan?               (check one)

          ( o ) u % XYSA
                   z
          ( p j ~ Kaiser
          (  q  ) Orher (specify) ?ny
                     ~                              indicated military coverage; others indicated
                                               ~ l a n ssuch as Aetna, T?
                                                                        -
                                                                       r,      G=Llre,       and
          Who pays for the plan?             (check one)                                 Prudential

          (r)-       your employer (includes where bath worker and employer
                     share cost)
          (s)*%      your spouse's employer
          (t1.90 your parent's employer
          (u)=       yourself (employer doesn't pay anything)
          ( v ) z % orher (specify)    a few indicated self-insured
                -
               21.9% no response

IV. Lxclurion of notorcycles from No-fault

    A.    If mororcycles are excluded from the personal injury protection
          insurance requirement and required only to be covered by liabiliry
          insurance, h w will you take care of the personal injury expenses for
          you and your passenger in the event of an accident? (check one)

          ( w ) s I will claim medical expenses rhrough my current health
                  insurance or accidenr insurance plan
          (x)=    1 will sue the other driver
          (~18.6% I sill buy a new accident insurance policy to cover personal
                  injury losses
          (z)-    IPy expenses in case of injury will be covered by
                  the militsry
          (a)-    I will pay my a?i expenses
          (b)i,lr Other (specify)
                 9
                1 S no response
    B.    Do you want mrorcycIes excluded from the requirement of maintaining
          personal injury no-faulr insursnce? (c)6B.Z% y e s  d)
                                                               =
                                                              (:       no
                                                                                -
                                                                  3.19 no resmose
The following a r e some of t h e g e n e r a l comments m a d e b y r e s p o n d e n t s :

         1 . "l!y m o t o r c y c l e has been parked f o r 7 months because 1 f e e l
t h a t t h e n o - f a u l t i n s u r a n c e i s u n n e c e s s a r y and I r e f u s e t o pay o v e r
$400 p e r y e a r f o r i n s u r a n c e on a KZ-1000 when 1 seldom d r o v e o v e r
                                                                                   y
150 m i l e s p e r week. I f n o - f a u l t w a s n ' t r e q u i r e d , m i n s u r a n c e would
c o s t about $250 p e r y e a r which I f e e l is r e a s o n a b l e a t l e a s t f o r t h e
s t a t e o f Hawaii."

          2.       "The        c u r r e n t p r i c e s f o r m o t o r c y c l e f u l l coverage i s
                                                        y
r i d i c u l o u s - - f u l l coverage f o r m c y c l e i s a p p r o x . $1100.00 and t h a t
i s e x a c t l y what t h e m o t o r c y c l e i s w o r t h .           I pay more i n s u r a n c e on
n o - f a u l t i n s u r a n c e f o r m m o t o r c y c l e t h a n I do f o r t o t a l coverage on
                                             y
  y
m new c a r . "

     3.         "As w i t h most r i d e r s , I d o NOT l o a n my m o t o r c y c l e .   I must
however,                                                    y                             y
                c a r r y two p o l i c i e s , one f o r m c a r and one f o r m b i k e .
The r e a l      b e n e f i t w i l l come when r i d e r s a r e i n s u r e d , and when s u c h
coverage        can b e added on t o automobile p o l i c i e s . "

          4.      " ~ n s u r a n c e is far t o o e x p e n s i v e - - m o t o r c y c l e s a r e choseil a s
t r a n s p o r t a t i o n by many b e c a u s e of ECONOEIY."

       5 . "1 own 4 m o t o r c v c l e s and have m a i n t a i n e d Hawaii no f a u l t i n
t h e p a s t however t h e r a t e s a r e p r o h i b i t i v e compared t o what I pay
       y
f o r m car ridiculous!"

           6.        " N o t o r c y c l i s t s pay e x o r b i t a n t r a t e s b e c a u s e n o - f a u l t
p e n a l i z e s t h e m/c d r i v e r (who is s t a t i s t i c a l l y v e r y u n l i k e l y t o b e
a t f a u l t and almost never c a u s e s i n j u r y t o a n o t h e r m o t o r i s t ) f o r t h e
incompetence of t h e a t - f a u l t d r i v e r wtio i s r e s p o n s i b l e f o r t h e
i n j u r y t o t h e more exposed m/c d r i v e r .                     Experienced m o t o r c y c l i s t s
a l s o pay e x c e s s i v e r a t e s because of t h e h i g h e r i n j u r y r a t e of t h e
i r ~ e x p e r i e n c e d m/c d r i v e r s and t h o s e who assume t h e r i s k of d r i v i n g
w i t h o u t a h e l m e t . T h i s "averaging" is making t h e c a u t i o u s d r i v e r
pay f o r t h e s i n s of h i s r e c k l e s s b r e t h e r e n .
           I t i s t o t h e d e t r i m e n t of t h e e n t i r e d r i v i n g p u b l i c t h a t t h e
economic burden does not f a l l upon t h o s e r e s p o n s i b l e f o r t h e l o s s o r
damage, and r e s p o n s i b l e b e h a v i o r i s n o t l i k e l y t o r e s u l t from t h e
3,
   a v e r a g i n g " o f t h i s burden.
           "NO-FAULT" p e r p e t u a t e s economic i n j u s t i c e and i r r e s p o n s i b l e
behavior."

         7.     "1t alarms m e t o t h i n k t h a t t h a t hardware s h o u l d b e b e t t e r
t a k e n c a r e of t h a n p e o p l e . Given any c r a s h , t h e most obvious h most
immediate damage is t o t h e v e h i c l e s . However, c h e s e c o s t s i n i t i a l l y
h i g h b u t t h e y a r e f i n i t e . The c o s t of p e r s o n a l i n j u r y i s s u b j e c t t o
i n f i n i t e f l u c t u a t i o n and n o t r e a d i l y a c c o u n t a b l e . Wouldn't i t b e a
w i s e r c o u r s e o f p r e v e n t i o n t o g u a r d a g a i n s t t h e unknown r a t h e r t h a n
t h e known?
         In a d d i t i o n m o t o r c y c l e s i n v o l v e d i n i n u l t i v e h i c l e a c c i d e r ~ t sa r e
almost never a t f a u l t t h u s t h e g u i l t y p a r t y ' s i n s u r a n c e w i l l cover
m a t e r i a l damage.            I t d i d i n my a c c i d e n t .       I therefore beiieve i t
unnecessary           for      motorcycles            to     carry        collision         6:       liability
insurance.
           ,,

          8.      "Stopped u s i n g m o t o r c y c l e s e v e r a l months                         so     let
i n s u r a n c e l a p s e . Also l i k e t o s e e h e l m e t s r e q u i r e d a g a i n .
                                                                                              agF:
         9.     "Note--No f a u l t s h o u l d be a s i s BUT--prices a r e t o o h i g h .
Can you d o something about t h e p r i c e s i t s h o u l d b e governed by
u s a g e , a g e , & number o f a c c i d e n t s . "

       10. "But I would s u g g e s t [ e x c l u s i o n ] o n t y f o r s m a l l b i k e s . You
must remember t h e r e a r e some c r a z i e s r i d i n g muscle-type b i k e s .
These v e h i c l e s a r e t h e r o l l i n g e q u i v a l e n t of a c a r . The horsepower
& weight a r e e q u i v a l e n t t o a honda c a r o r a f i a t 850.                 Tire size
g e t s c l o s e t o o . And o f c o u r s e man is a t t h e w h e e l . "

    11. "A d i s t i n c t i o n s h o u l d be made between t h o s e who always wear
a helmer and t h o s e who d o n o t .              Premiums s h o u l d be a d j u s t e d
accordingly."

       1 2 . "Yes, [ m o t o r c y c l e s s h o u l d b e e x c l u d e d ] i f i t does n o t r a i s e
t h e r a t e s (of p e r s o n a l i n j u r y ) s i g n i f i c a n t l y , i n which c a s e I would
         y MA
t r y m H S plan.
          I t h i n k , i f anything, t h e requirement f o r l i a b i l i t y p r o t e c t i o n
( t o cover b o d i l y i n j u r i e s t o t h e p e o p l e i n t h e o t h e r c a r o n l y )
should b e dropped, s e e i n g a s how i n an a u t o - c y c l e a c c i d e n t t h e
c y c l i s t is almost always s e r i o u s l y i n j u r e d arid t h e a u t o p a s s e n g e r s
almost n e v e r i n j u r e d (from t h e m o t o r c y c l e ) .
                                                                          ,*

        13. "I, l i k e many o t h e r Hawaii m o t o r c y c l e owners, r i d e w i t h o u t
i n s u r a n c e due t o t h e e x o r b i t a n t c o s t of d o i n g s o .              The c o s t of
i n s u r a n c e h e r e would buy me a new m o t o r c y c l e e v e r y 4 - 5 y e a r s .                     I
r e c e n t l y r e t u r n e d from a t t a i ~ i l a n dv i s i t , where t h e c o s t of i n s u r i n g
my motorcycle was o n l y $300 a y e a r ! S a f e d r i v i n g h a b i t s a l o n g w i t h
a c l e a n r e c o r d seem t o b e i r r e l e v a n t t o s e t t i n g r a t e s . The m a j o r i t y
o f t h e S t a t e l e g i s I a t u r e d o e s n ' t a p p e a r t o s u p p o r t an a l t e r n a t i v e t o
g a s - g u z z l i n g , s p a c e consuming a u t o m o b i l e s , an a t t i t u d e p a r t i c u l a r l y
l a m e n t a b l e c o n s i d e r i n g H o n o l u l u ' s burgeoning t r a f f i c c o n g e s t i o n .
One o n l y h a s t o view t h e s i t u a t i o n i n Hong Kong t o f o r s e e o u r f u t u r e
here in t h e islands.                   When w i l l common s e n s e p r e v a i l ? Mahalo f o r
listening.               I hope t h i s s u r v e y w i l l accomplish more t h a n s p e n d i n g
t a x p a y e r ' s money & t a k i n g up computer memory s p a c e . "

        14.      "I p r e s e n t l y own a 1 9 i 8 Yamaha 400XS (400 c c ) and 196i
Harley-Davidson S p o r s t e r (900 c c ) .                 I am p a y i n g $ 2 7 1 f o r m Yamaha
                                                                                                 y
                         y
and $471 f o r m H a r l e y .             T h i s seems t o be r a t h e r u n f a i r c o n s i d e r i n g
I use t h e Harley o n l y h a l f a s o f t e n a s t h e Yamaha.
          I c o u l d s e e p a y i n g t h i s h i g h e r p r i c e i f i t was w a r r a n t e d b u t a s
f a r a s I know s t a t i s t i c a l l y t h e s m a l l e r J a p a n e s e m o t o r c y c l e s a r e
i n v o l v e d i n most of t h e a c c i d e n t s . I t is u n f a i r t h a t t h e owners of
t h e l a r g e r motorcycles must subsidize t h e m i s t a k e s of o t h e r s . "
                                                                                                .          .a
                                                                                                    r"<"~ -,    Wz3    -**     ,

                     Appendix     o   i    NO-FAULT INSURANCE                                                                      I


                                                                                                                                   !
                                                                               COVERAGES
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                                                                                                          4
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                                          X Z S D X U*-     I I D I W l (F*IllICI(   mt(X<rUI i l D StL1 YlZW W i P   Urn R-




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'i.n-zUinurrslC,Cua
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L.*     kmLl UM-           *m
                                                      @@b            December 12, 1 9 8 3



S t a t e of Hawaii
Motor Vehicel Insurance Division
1 0 1 0 Richards Street
Honolulu, Hawaii 9 6 8 1 3

Attn:          Mr. Tanaka



Dear Mr. Tanaka.

T h e consumers of motorcycle insurance a r e being mislead b y the
state that motorcycle insurance i s available through approximatc,iv
one hundred thirty four companies that have rates filed.

"It pays to shop around" is an understatement. I have known
for some time that those insurance companies that have rates
filed, are required formalities.  Rates are not available by
the agents that represent the insurance companies.

I recently made my own survey of twenty companies that were
picked of the one hundred thirty-four companies for their com-
petitve rate. O f the twenty:
               2       companies had rates to quote
               2       have withdrawn from Hawaii
               2       had t o write to the mainland for quotes
               10      had no rates to quote
               3       n o rates for motorcycles-only commercial agents
               -
               1
               20
                       n o rates t o quote-handled only claims
                       total
Myself a s well a s other motorcycle owners in the state request
that the Motor Vehicle Insurance Division make an investigation
of all vehicle insurance carriers licensed in Hawaii if they
i n fact:
               1)      Have rates available to quote
               2)      If they will write coverage
               3)      What i s their intent and future in their responsibilities
                       a s required by the Hawaii No-Fault

T h e problem lies with the insurance companies filing rates wtih
the state and not with the authorized agents. The state has
t o enforce, that rates be readily available a t the agents place




 n:-.-i~..-*    .
               6.   *rournnucQv unrnRs LTD. 818 l*.i[si   Rd. tfonohrtu. Hawaii (808)536-7023 Tcfsx: 723 8r21 SUZK!HR
of b u s i n e s s a n d a q u o t e b e g i v e n w i t h i n a r e a s o n a b l e time.
I f o n l y t h e l a w w o u l d b e e n f o r c e d may b e c h a n g e w o u l d t h e n c o m e
sooner.

I n a d d i t i o n t o t h e above I would l i k e t o i n q u i r e what t h e c r i t e r i a
i s when a company a s k s f o r r a t e i n c r e a s e s .     Are t h e l o s s e s s u b -
s t a n t i a t e d w i t h documented p r o o f ? The q u e s t i o n h a s been asked
many times b u t h a s n o t b e e n a n s w e r e d .

Your prompt i n v e s t i g a t i o n c o u l d l e a d t o a n s w e r s t o t h e problems
m o t o r c y c l i s t a r e f a c e d with. I t may i n t u r n make e v e r b o d y m o r e
law a b i d i n g .



S i n c e r e l y Yours,




CC:    J o h n K i n e r , H o n o l u l u I n s u r a n c e Agency
       Tim L y o n s , H a w a i i B u s i n e s s L e a g u e
       Russ Lynch, S t a r B u l l e t i n
       Susan Caveria. L e g i s l a t i v e Ref. Bureau
       H a w a i i M o t o r c y c e l Dealer A s s o c i a t i o n

ANM: j bm
GEORGE R. AU1"OS"I
     00*Y3"




                                            STATE O F H A W A I I
                                                INSURANCE DIVISION
                              M P A R T M M T OF COMMERCE AND           CONSWE4   AFFAIRS
                                                   P. 0 .   mx   ,st.
                                             HOWOLULU. HhWA11 -871-3514




                                            December 19, 1983




         Mr. Alfred N. Montgomery, Jr.
         President
         Montgomery Motors, Ltd.
         818 Iwilei Road
         Honolulu, Hawaii 96817
         Dear Mr. Montgomery:
                     Thank you for your letter of December 12, 1983.
             The results of your recent survey as outlined in your
        letter is of great concern to our office and is a blatant
        violation of the No-fault Law's provisions relating to the
        take-all-comers and complete sales office requirements imposed
        upon all insurers licensed to transact motor vehicle insurance
        business in Hawaii. Insurers guilty of such violations are
        subject to maximum penalties ranging from $5,000 to $10,000 per
        violation. As you may know, we have prosecuted those insurers
        found guilty of violating such requirements.
             To this end, Mr. Allan Gushiken, our chief investigator,
        will contact you in the near future to obtain the identities of
        those insurers involved in your survey as well as any other
        appropriate information which will enable us to commence with a
        complete investigation of this matter. Please be assured that
        should the investigation disclose insurer violations, prosecution
        will follow seeking maximum penalties.
             With respect to your request that we make an investigation
        of all licensed motor vehicle insurers in this State, our current
        work priorities and resource limitations make such an undertaking
        impractical at this time. Numerous bulletins have been previously
        issued to insurers and their agents as to the statutory
        requirements and the penalty provisions for violation. In your
        particular case, it is preferable that we focus our efforts on
        those insurers/agents alleged to be in violation with statutory
        provisions.
M r . A l f r e d N . Montgomery, Jr.
December 1 9 , 1 9 8 3
Page 2



          AS t c your i n q u i r y r e l a t i v e t o r a t e i n c r e a s e s , p l e a s e be
aware t h a t all such f i l i n g s are r e q u i r e d t o be accompanied w i t h
c o m ~ l e t a c t u a r i a l review and j u s t i f i c a t i o n . T h i s i s s u e h a s
                 a
been d i s c u s s e d a t l e n g t h d u r i n g numerous l e g i s l a t i v e h e a r i n g s ;
we have a l s o met on s e v e r a l o c c a s i o n s w i t h members o f t h e
Motorcycle D e a l e r s ' A s s o c i a t i o n a s w e l l a s M r . John Kiner o f t h e
Honolulu I n s u r a n c e Agency w i t h r e s p e c t t o p o s s i b l e f i l i n g of
p r e f e r r e d m o t o r c y c l e i n s u r a n c e r a t e s . To t h i s e n d , we have
provided various s t a t i s t i c a l data a v a i l a b l e i n our o f f i c e t o
allaw f o r t h e f i l i n g o f such r a t e s ; however, numerous o t h e r
c o n c e r n s , such a s t h e l e v e l o f b e n e f i t s r e q u i r e d by s t a t u t e , have
p r e c l u d e d such a f i l i n g t o d a t e . Enclosed f o r your p e r u s a l i s a
copy o f o u r l a t e s t annual r e p o r t c o n t a i n i n g a d i s c u s s i o n on motor
v e h i c l e insurance r a t e f i l i n g s .
       Again, thank you f o r b r i n g i n g t h i s m a t t e r t o o u r a t t e n t i o n .




                                                  HIRAM Y     . TANAKA
                                                  A c t i n g I n s u r a n c e Commissioner

Enclosure
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