STAND. COM. REP. NO. 1369

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1130
                                        S.D. 1
                                        H.D. 1




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

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 1130, S.D. 1, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO HEALTH MAINTENANCE
     ORGANIZATIONS,"

begs leave to report as follows:

     The purpose of this bill is to require health maintenance
organizations to file quarterly reports with the Insurance
Commissioner and to impose penalties for noncompliance.

     In particular, this bill provides that if certain fees
relating to a health maintenance organization's certificate of
authority are not paid before or on the extension date of the
certificate, a penalty is to be imposed in the amount of fifty
per cent of the fee.  If the fee and the penalty are not paid
within thirty days following the extension date, the commissioner
may revoke the certificate of authority and may not reinstate the
certificate of authority until the fee and penalty have been
paid.  The bill further specifies that all penalties, in addition
to fees, are to be remitted by the Insurance Commissioner to the
Director of Finance and placed to the credit of the general fund.

     Your Committee received testimony in favor of this measure
from the Department of Commerce and Consumer Affairs.


 
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     Your Committee agrees with the intent of this bill, and
finds that quarterly reporting and the timely renewal of
certificates of authority will assist the Insurance Commissioner
in monitoring the financial solvency of health maintenance
organizations in a more effective manner.  As increasing numbers
of employers turn to health maintenance organizations as a means
of controlling or reducing health care costs, all possible
measures must be taken to ensure the continued solvency of these
organizations.

     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 S.B. No. 1130, S.D. 1, H.D. 1, and recommends that it
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

 
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