Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 131
                                     S.D. 3
                                     H.D. 2

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


     Your Committees on Consumer Protection and Commerce and
Labor and Public Employment, to which was referred S.B. No. 131,
S.D. 3, H.D. 1, entitled: 


beg leave to report as follows:

     The purpose of this bill is to increase the availability of
private long-term care insurance policies by requiring employers
to offer long-term care insurance to their employees, and to
expand regulatory authority over long-term care insurance.  More
specifically this bill:

     (1)  Requires that employers offer long-term care (LTC)
          insurance to employees;

     (2)  Enacts portions of the National Association of
          Insurance Commissioners (NAIC) Long-Term Care Insurance
          Model Act and Model Regulation, with an emphasis on the
          Model Regulation provisions that increase consumer
          protection, and conforms Hawaii's LTC insurance
          statutes to the Model Act; and 

     (3)  Appropriates funding for the Insurance Division to hire
          a qualified LTC insurance actuary and additional staff
          to adequately review LTC insurance filings;

                                 STAND. COM. REP. NO. 1433
                                 Page 2

     (4)  Appropriates funding for an actuarial study to
          delineate an appropriate and affordable LTC financing
          program; and

     (5)  Extends the sunset date of the Joint Legislative
          Committee to June 30, 2000.
     Your Committees received testimony in support of this bill
from the Department of Commerce and Consumer Affairs (DCCA), the
Hawaii State Commission on the Status of Women, the Hawaii
Coalition for Affordable Long Term Care, AARP, Healthcare
Association of Hawaii, the Policy Advisory Board for Elder
Affairs (PABEA), AlohaCare, Hawaii State Teachers Association
(HSTA), Faith Action for Community Equity (FACE), Maui Economic
Opportunity (MEO), and a few concerned individuals.

     The Executive Office on Aging and Hawaii Long Term Care
Association supported the measure with suggested amendments.

     State Farm Insurance Companies, Hawaii State Association of
Life Underwriters (HSALU) and Benefit Services of Hawaii, Inc.
opposed this bill as presently drafted.  Testimony in opposition
to this measure was received from Bank of Hawaii, the American
Council of Life Insurance (ACLI) and the Health Insurance
Association of America (HIAA).

     Hawaiian Electric Company, Inc. submitted concerns regarding
the bill.  Comments were offered by the Administrator of the
Hawaii Public Employees Health Fund.

     Your Committees find that, in light of the many serious
concerns regarding this bill, the more prudent approach would be
to establish mechanisms to further study these concerns, in order
that future legislation may be part of a comprehensive and well-
designed scheme.  Accordingly, your Committees have deleted
portions of the bill from sections 2 through 11, and retained
provisions pertaining to regulatory funding, actuarial study and
the JLC sunset date and reporting requirements, and have
otherwise amended the bill, as follows:

     (1)  Rephrasing the purpose of the bill;

     (2)  Providing that the Joint Legislative Committee on Long-
          Term Care, in consultation with the Insurance
          Commissioner, shall hold hearings and report back to
          the legislature on various issues including, but not
          limited to:

                                 STAND. COM. REP. NO. 1433
                                 Page 3

          (a)  The adoption of the July 1998 National Association
               of Insurance Commissioners Long-Term Care
               Insurance Model Act and Model Regulation;
          (b)  Compliance with the Health Insurance Portability
               and Accountability Act of 1966; and

          (c)  Preemption of employer mandate provisions by the
               Employee Retirement Income Security Act of 1974.

     (3)  Inserting provisions for funding the Managed Care
          Demonstration Project; and

     (4)   Leaving the effective date blank, in order to assure
          that this measure receives further discussion in
          conference committee.

     As affirmed by the records of votes of the members of your
Committees on Consumer Protection and Commerce and Labor and
Public Employment that are attached to this report, your
Committees are in accord with the intent and purpose of S.B. No.
131, S.D. 3, H.D. 1, as amended herein, and recommends that it be
referred to the Committee on Finance, in the form attached hereto
as S.B. No. 131, S.D. 3, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Consumer
                                   Protection and Commerce and
                                   Labor and Public Employment,

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