Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1067
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1067 entitled: 


begs leave to report as follows:

     The purpose of this bill is to establish a mandatory
continuing education (CE) program for general agents, subagents,
solicitors, designated representatives, and nonresident agents
licensed to do business in Hawaii's insurance industry.  Among
other things the bill:

     (1)  Requires that to avoid being placed on inactive status,
          licensees must complete either 20 or 30 hours of
          Insurance Commissioner (Commissioner) approved CE
          courses within the 23 months preceding the time set for
          license renewal, the number of hours being dependent
          upon whether the licensee is authorized to sell
          insurance in one, or both of the groups of insurance
          specified in the bill;

     (2)  Provides for CE equivalents as determined by the

     (3)  Allows the Commissioner to penalize licensees who have
          submitted invalid or false certificates of course

                                 STAND. COM. REP. NO. 385
                                 Page 2

     (4)  Authorizes the hiring of a CE licensing assistant to
          administer the CE program;

     (5)  Increases licensing fees;

     (6)  Mandates that licensing fees and late penalties are to
          be paid into a newly created Insurance Licensing
          Administration Special Fund, to be used for the
          administration of the law and other licensing expenses.

     Your Committee received testimony in support of this measure
from the Department of Commerce and Consumer Affairs (DCCA),
Hawaii State Association of Life Underwriters (HSALU), Hawaii
Independent Insurance Agents (HIIA), and State Farm Insurance

     DCCA testified that it could strongly support the measure
because the bill provided resources needed to carry out the
program.  DCCA testified that a CE program would benefit the
public by keeping agents knowledgeable about current insurance
laws, regulations, and industry practices.  In addition, DCCA
stated that a CE program was needed as Hawaii was one of only
three states in the nation lacking CE, and local agents and
solicitors were thereby placed at a competitive disadvantage,
being unable to sell insurance in other states because their
licenses are not entitled to reciprocity.

     HIIA testified that the reciprocity agreements between
states with CE allow agents to obtain non-resident licenses
without having to take licensing exams, and recognize and accept
the resident state's continuing education courses and
requirements.  Although there was concern among members of HIIA
regarding the increased licensing fees, HIIA stated the
establishment of a CE program was the organization's priority.

     HSALU noted that the bill lacked an advisory committee to
approve courses and course providers, and urged the DCCA to
ensure during rulemaking that all lines of insurance be
represented to advise the Commissioner on courses and provider

     Your Committee agrees that the CE program established by
this bill is needed to support this State's insurance industry.
Your Committee has reviewed this measure and amended it for
purposes of style, clarity, and accuracy.  In addition, your
Committee has primarily technical questions concerning subsection
(f), on pages 7 and 8, which governs expenditures, and section 6,
on page 13, an appropriation provision, but believes that these

                                 STAND. COM. REP. NO. 385
                                 Page 3

questions would be most appropriately resolved by the Committee
on Finance.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1067, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1067, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,

                                   RON MENOR, Chair