Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1127
                                     S.D. 1
                                     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 Health, to which was referred S.B. No.
1127, S.D. 1, entitled:


begs leave to report as follows:

     The purpose of this bill is to assess the health insurance
industry the costs incurred by the State in regulating the

     The bill also establishes a health insurance revolving fund
and makes an appropriation therefrom for the purposes of this

     Your Committee finds that the costs of regulating the health
insurance industry has been funded in the past by assessments
made on other types of insurers.  This bill will not only provide
equity to non-health insurers but will also allow the insurance
division to become more self-sufficient in its operations.

     Your committee has amended the bill by:

     (1)  Replacing the "pro rata" method of assessing insurers
          with a "per private, nongovernment membership basis";

     (2)  Reducing the annual assessment cap to $500,000;

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     (3)  Requiring justification for any assessment increases;

     (4)  Reducing the one-time assessment imposed on mutual
          benefit societies to $500,000;

     (5)  Repealing the proposed provision that assesses mutual
          benefit societies $200,000 for reimbursement to the
          motor vehicle insurance revolving fund; and

     (6)  Reducing the amounts appropriated from the health
          insurance revolving fund to $500,0000.

     As affirmed by the record of votes of the members of your
Committee on Health that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
1127, S.D. 1, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 1127,
S.D. 1, H.D. 1, and be referred to the Committee on Consumer
Protection and Commerce.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health,

                                   ALEXANDER C. SANTIAGO, Chair

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