STAND. COM. REP. 3090

Honolulu, Hawaii

, 2004

RE: H.B. No. 2411

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 2411, 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 update and streamline the insurance laws.

The Department of Commerce and Consumer Affairs, NAIFA Hawaii, Hawaii Insurers Council, and an individual testified in support of this measure. State Farm Insurance Companies opposed section 1 of the measure, as received.

In 2001, the State adopted the Producer License Model Act (PLMA) pursuant to the federal mandates established in the Gramm-Leach-Bliley Act (GLBA), and over the following two years, continued to amend the insurance laws to conform to federal requirements.

This measure makes additional amendments throughout the insurance code to ensure conformity with the PLMA and GLBA, and makes other changes for the purpose of making the insurance laws more efficient and comprehensible, less burdensome, and technically correct. Among other things, this measure:

(1) Authorizes the destruction of self-insurance applications, registration documents, and certificates of compliance and deposits after one year of retention;

(2) Repeals the public notice requirement for certification of foreign insurers in designated states;

(3) Authorizes the Insurance Commissioner (Commissioner) to waive publication and notice requirements for withdrawal by an insurer;

(4) Clarifies that redomestication may include domestications occurring in other states of the United States branch office of an authorized alien insurer;

(5) Authorizes the Commissioner to provide notice of revocation or suspension of an insurer's certificate of authority to other state insurance departments through the National Association of Insurance Commissioners' data base;

(6) Reduces the licensing fee for resident producers from $75 to $50;

(7) Authorizes the Commissioner to appoint advisers to review captive applications; and

(8) Repeals duplicative provisions and corrects statutory references.

Your Committee finds that this measure will help to modernize the State's insurance laws, ease filing requirements for insurers, and bring Hawaii's laws into conformity with federal law and national standards.

Your Committee has amended this measure by replacing its contents with the language of a substantially similar measure, S.B. No. 2886, S.D. 1. As amended, this measure:

(1) Deletes language that requires an insurer withdrawing from the State to negotiate a plan of withdrawal with the Commissioner; and

(2) Makes numerous technical, nonsubstantive changes to correct terminology, to accurately reflect the language of the Hawaii Revised Statutes, and to reflect preferred drafting style.

Additionally, this measure was amended to exempt health insurance policies for self-employed individuals from the laws establishing mandatory benefits and coverage.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2411, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2411, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

RON MENOR, Chair