House-Senate
panel tries again on
no-fault reform

Some differences remain,
but the sides aren't done talking yet

From staff and wire reports

House and Senate negotiators have begun the state Legislature's third attempt in as many years to reach a deal to reform the nation's second-most expensive automobile insurance system.

Legislators from both sides met for about an hour yesterday, outlining their approaches to lowering auto insurance costs by as much as 35 percent.

"Obviously, we have some areas of disagreement," said Sen. Rosalyn Baker, co-chairwoman of the Commerce, Consumer Protection and Information Technology committee. Both sides agreed to meet again later this afternoon.

Earlier this session, the House passed a bill that would repeal the state's 24-year-old no-fault law and replace it with a tort-based system in which auto accident victims could sue drivers who caused their accident.

The Senate's plan aims to reduce litigation costs by allowing accident victims to sue at-fault drivers only in cases where there are serious and permanent damages. This so-called verbal threshold would replace the current $13,900 medical-bill threshold that accident victims need to reach before they can sue.

Under no-fault, the injured party's insurance pays medical costs.

Both sides also want to control medical costs through managed care. The House plan shifts the medical coverage for auto accidents to the state's prepaid healthcare system, which is largely paid for by Hawaii employers.

The Senate wants auto insuers to contract with health-care providers to administer all medical benefits. Those costs would not be paid by employers.