CONFERENCE COMMITTEE REP. NO. 102

 

Honolulu, Hawaii

                 , 2017

 

RE:    S.B. No. 885

       S.D. 2

       H.D. 2

       C.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sirs:

 

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 885, S.D. 2, H.D. 2, entitled:

 

"A BILL FOR AN ACT RELATING TO THE STATE RISK MANAGEMENT AND INSURANCE ADMINISTRATION,"

 

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

 

     The purpose and intent of this measure is to permit the Comptroller to acquire risk management, investigative, claims adjustment, actuarial, and other services on a fixed fee basis by exempting a broker submitting a proposal in response to such a fixed fee solicitation and the broker's performance of the activities in accordance with the proposal from certain provisions of the Insurance Code.

 

     Your Committee on Conference finds that providing the Comptroller with the option to hire an insurance broker on a fixed fee for service basis rather than the current commission basis by enabling the broker to accept a flat fee from the State will result in better value to the public through lower costs of acquiring and insuring State property and liability risks.  Your Committee on Conference further finds that it is in the best interest of the public to give the Comptroller flexibility in choosing a compensation model that is most cost-effective under the prevailing economic environment at the time when procuring insurance for the State.  Your Committee on Conference notes that the current arrangement of the state insurance broker being compensated on a commission basis by the insurance companies from which the State purchases insurance could present a conflict of interest or at minimum the appearance of a conflict of interest.

 

     Your Committee on Conference has amended this measure by inserting an effective date of July 1, 2017.

 

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 885, S.D. 2, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 885, S.D. 2, H.D. 2, C.D. 1.

 

Respectfully submitted on behalf of the managers:

 

ON THE PART OF THE HOUSE

 

ON THE PART OF THE SENATE

 

____________________________

ROY M. TAKUMI

Co-Chair

 

____________________________

DONNA MERCADO KIM

Chair

____________________________

TY J.K. CULLEN

Co-Chair

 

____________________________

ROSALYN H. BAKER

Co-Chair

 

 

____________________________

BRIAN T. TANIGUCHI

Co-Chair