REPORT TITLE:
Long Term Care


DESCRIPTION:
Provides tax exemption for premiums received by insurers for
long-term care insurance coverage.  Requires mutual benefit
societies selling long-term care policies to pay guaranty
association assessments.  (HB352 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        352
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO INSURANCE.



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

 1      SECTION 1.  Section 431:7-202, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (a) to read as follows:
 
 3      "(a)  Each authorized insurer, except with respect to all
 
 4 life insurance contracts, ocean marine insurance contracts, and
 
 5 real property title insurance contracts, shall pay to the
 
 6 director of finance through the commissioner a tax of 4.265 per
 
 7 cent on the gross premiums received from all risks or property
 
 8 resident, situated, or located within this State, during the year
 
 9 ending on the preceding December 31, less return premiums (but
 
10 not including dividends paid or credited to policyholders), and
 
11 less any reinsurance accepted (the tax upon such business being
 
12 payable by the direct writing insurer)[.], except that the
 
13 calculation of gross premiums shall exclude premiums received
 
14 from long-term care insurance policies or contracts.
 
15      All premiums written, procured, or received in the State
 
16 shall be presumed to have been from risks or property resident,
 
17 situated, or located within the State.  This presumption may be
 
18 rebutted as to any premium:
 

 
Page 2                                                     352
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  By showing that it has been properly allocated or
 
 2           apportioned and reported as a taxable premium of
 
 3           another state or other appropriate taxing authority; or
 
 4      (2)  By facts as to the residence, situation, or location of
 
 5           the risks or property, conclusively showing the
 
 6           nontaxability of the premium."
 
 7      SECTION 2.  Section 431:16-205, Hawaii Revised Statutes, is
 
 8 amended by amending the definition of "member insurer" to read as
 
 9 follows:
 
10      "(g) Member insurer means any insurer licensed or who holds
 
11           a certificate of authority to transact in this State
 
12           any kind of insurance for which coverage is provided
 
13           under section 431:16-203, and includes any insurer
 
14           whose license or certificate of authority in this State
 
15           may have been suspended, revoked, not renewed, or
 
16           voluntarily withdrawn, but does not include:
 
17           (1)  A nonprofit hospital or medical service
 
18                organization[;] unless the organization offers
 
19                long-term care insurance;
 
20           (2)  A health maintenance organization;
 
21           (3)  A fraternal benefit society;
 
22           (4)  A mandatory state pooling plan;
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (5)  A mutual assessment company or any entity that
 
 2                operates on an assessment basis;
 
 3           (6)  An insurance exchange; or
 
 4           (7)  Any entity similar to any of the above."
 
 5      SECTION 3.  Section 432:1-102, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "�432:1-102  Applicability of other laws.(a)  Part III of
 
 8 article 10A of chapter 431 shall apply to nonprofit medical
 
 9 indemnity or hospital service associations.  Such associations
 
10 shall be exempt from the provisions of part I of article 10A;
 
11 provided that such exemption is in compliance with applicable
 
12 federal statutes and regulations.
 
13      (b)  Article 2 and article 13 of chapter 431, and the powers
 
14 there granted to the commissioner, shall apply to managed care
 
15 plans, health maintenance organizations, or medical indemnity or
 
16 hospital service associations, which are owned or controlled by
 
17 mutual benefit societies, so long as such application in any
 
18 particular case is in compliance with and is not preempted by
 
19 applicable federal statutes and regulations.
 
20      (c)  Part II of article 16 of chapter 431 shall apply to
 
21 that portion of the operations of a nonprofit medical indemnity
 
22 association or hospital service association that offers long-term
 
23 care coverage."
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 4.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 5.  This Act shall take effect upon its approval.