Honolulu, Hawaii



RE:    H.B. No. 94

       H.D. 1

       S.D. 2




Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii




     Your Committee on Judiciary and Labor, to which was referred H.B. No. 94, H.D. 1, S.D. 1, entitled:




begs leave to report as follows:


     The purpose of this measure is to establish consumer protections in life settlement contracts where the owner of a life insurance policy transfers the death benefit or any portion of the policy for compensation that is less than the expected death benefit, but more than the surrender value of the policy.


     Your Committee received testimony in support of this measure from the Life Settlements Institute.  Comments were received from the Department of Commerce and Consumer Affairs, the American Council of Life Insurers, and the National Association of Insurance and Financial Advisors.


     This measure regulates life settlement contracts involving life insurance policies.  A life settlement contract is a written agreement entered into between a provider and an owner establishing the terms under which compensation or any thing of value will be paid, and is less than the expected death benefit of the owner's policy or certificate, in return for the owner's assignment, transfer, sale, devise, or bequest of the death benefit or any portion of the policy or certificate for compensation where the minimum value of the contract is greater than a cash surrender value or accelerated death benefit available under the policy or certificate at the time of an application for a life settlement contract.


     Your Committee finds that the potential for deception, misrepresentation, and loss of the full benefit of the value of the policy warrants a law to regulate these instruments in the interests of protecting consumers.


     Your Committee has amended this measure by changing the effective date to July 1, 2050.


     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 94, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 94, H.D. 1, S.D. 2.


Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,