Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1127
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1127 entitled: 


begs leave to report as follows:

    The purpose of this measure is to establish a health
insurance revolving fund to be administered by the Insurance

    The Insurance Commissioner and the American Association of
Retired Persons presented testimony in support of this measure.
State Farm Insurance and the Hawaii Medical Services Association
presented testimony in support of the measure with proposed

    Your Committee finds that the Insurance Division needs
specialized staff to monitor and regulate the health care
industry.  Your Committee further finds that, like the motor
vehicle industry, the health care industry should pay to cover
the costs associated with the work performed on their behalf by
the Insurance Division.  This measure would establish a special
fund for this purpose.

    Your Committee heard several measures which propose to assess
certain health insurers for staff and other costs of regulating
health insurance.  Your Committee is concerned that total funding
for health insurance regulation may become confusing if various
amounts are proposed through different measures.  Accordingly,

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                                   STAND. COM. REP. NO. 407
                                   Page 2

your Committee has amended this measure to indicate a sum which
reflects the total cost to regulate health insurance and fund
various programs related to health insurance. 

    Specifically, your Committee has included funding from S.B.
No. 1452 and S.B. No. 131 so that your Committee on Ways and
Means understands the total cost for health insurance regulation.
Although this amount seems high, the assessment is necessary in
order to directly help the health insurance industry deal with
unscrupulous competitors and provide the consumer with a higher
degree of protection.

    Finally, your Committee finds that the motor vehicle
insurance revolving fund should be reimbursed by the health
insurers for costs used from the fund to date to pay for the
regulation and monitoring of the health insurance industry.
Therefore, your Committee has also amended this measure by adding
a new section that would authorize the Insurance Commissioner to
assess health insurers to reimburse the motor vehicle insurance
revolving fund.

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

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

                                   BRIAN KANNO, Co-Chair

                                   BRIAN T. TANIGUCHI, Co-Chair

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