STAND. COM. REP. NO. 31

Honolulu, Hawaii

, 2005

RE: S.B. No. 751

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 751 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 State's insurance laws.

The Department of Commerce and Consumer Affairs and Hawaii Independent Insurance Agents Association testified in support of this measure. The American Council of Life Insurers presented comments on the measure.

This measure makes numerous housekeeping amendments to the insurance code to effect greater consistency within the insurance code, bring state law into compliance with federal laws and national standards, and, generally, to improve the efficiency of the Insurance Division's operations. Among other things, this measure:

(1) Conforms provisions relating to personnel that may be employed by the Insurance Commissioner (Commissioner);

(2) Defines "gross premiums" within the context of the laws relating to unauthorized insurers;

(3) Makes discretionary, rather than mandatory, the penalty for failure of a surplus lines broker to file an annual statement or remit premium taxes;

(4) Organizes into one section the definitions relevant to the laws regulating adjusters and bill reviewers;

(5) Establishes additional reporting requirements for adjusters and independent bill reviewers;

(6) Repeals the requirement that a limited lines credit insurer provide a program of instruction to persons selling, soliciting, or negotiating this type of insurance;

(7) Authorizes reciprocal licensure for nonresident surplus lines brokers;

(8) Reduces the time period for the electronic submission of certificates of completion to the Division by continuing education course providers;

(9) Clarifies that for license renewal purposes, no credit shall be accepted for a continuing education course that was conducted by a course provider who did not hold a valid provider certificate at the time of the course offering; and

    (10) Clarifies that surplus lines brokers are subject to Hawaii law, rather than the law of the broker's state of domicile.

Your Committee finds that this measure will facilitate the administration of the insurance code by the Division and compliance with the laws by licensees.

Your Committee has amended this measure by making technical changes for purposes of clarity and consistency, to reflect preferred drafting style, and to correctly reflect the language of the Hawaii Revised Statutes.

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 S.B. No. 751, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 751, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________

RON MENOR, Chair