Report Title:

Hospital and Professional Liability Risk Financing

Description:

Requires the Hawaii Health Systems Corporation to organize a domestic captive insurance company to provide malpractice coverage to the Department of Health, the John A. Burns School of Medicine, and other governmental entities or quasi-governmental entities of the State involved in the provision of health care. (SD1)

THE SENATE

S.B. NO.

2957

TWENTY-SECOND LEGISLATURE, 2004

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO HOSPITAL AND PROFESSIONAL LIABILITY RISK FINANCING.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the cost to purchase medical malpractice and hospital liability coverage continues to rise and that stability in risk financing is needed for Hawaii health systems corporation, the department of health, and the John A. Burns school of medicine. The escalating costs of premiums, the lack of insurers providing hospital and medical malpractice liability coverage in Hawaii, the decreasing limits of coverage available, and coverage restrictions make it important to establish a captive insurance company to insure and control exposure to these liability risks.

SECTION 2. The purpose of this Act is to direct Hawaii health systems corporation to organize a domestic captive insurance company to be created by the Hawaii health systems corporation, which, when established, shall provide malpractice coverage to the department of health, the John A. Burns school of medicine, and other governmental entities or quasi-governmental entities of the State of Hawaii involved in the provision of health care. To organize the captive insurer, Hawaii health systems corporation shall prepare a formalized business plan and application to be submitted to the insurance division for review and approval, and a formalized financial plan to be submitted to the director of finance for review and approval.

SECTION 3. Notwithstanding section 43l:19-10l, Hawaii Revised Statutes, as it defines "affiliated company," medical malpractice insurance coverage may be provided by the captive insurer to other governmental entities of the State of Hawaii, quasi-governmental entities of the State of Hawaii, other healthcare entities financially associated with the State of Hawaii, and the physician providers who are employees or on the medical staff of such entities.

SECTION 4. This Act shall take effect on its approval.