STAND. COM. REP. NO. 384

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1066
                                     H.D. 1




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

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1066, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to amend various provisions
of the Insurance Code by:

     (1)  Increasing fines for the violation of the Insurance
          Code from not less than $10 nor more than $1,000, to
          not less than $100 nor more than $10,000;

     (2)  Rewriting a licensing provision applicable to fraternal
          benefit society agents to clarify applicability; and

     (3)  Ensuring that mutual benefit society policies are
          readable by requiring they meet the standards of the
          Flesch Reading Ease tests.

     The Department of Commerce and Consumer Protection and
Commerce (DCCA), Kaiser Permanente, and Hawaii Medical Service
Association (HMSA), testified in support of this bill.  HMSA
testified that although the Flesch Reading Ease requirements were
duplicative of those under existing law, they supported the
intent of the law.  DCCA testified that:

 
 
 
 
 
                                 STAND. COM. REP. NO. 384
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     (1)  Increased penalties are appropriate, especially in
          light of recent violations of the Insurance Code that
          had merited fines in excess of the existing $1,000
          maximum;

     (2)  Amendments to the fraternal benefit society agent
          licensing law are necessary to eliminate uncertainty as
          to the type of license that is obtained under section
          432:2-609; and

     (3)  Easy reading requirements are already applicable to
          insurance policies other than those of mutual benefit
          societies and health maintenance organizations, which
          should not be exempt.

     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. 1066, 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