STAND. COM. REP. NO. 2044

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 2853

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

 

Sir:

 

     Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2853 entitled:

 

"A BILL FOR AN ACT RELATING TO INSURANCE,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to:

 

     (1)  Adopt the National Association of Insurance Commissioners' Risk Management and Own Risk and Solvency Assessment Model Act;

 

     (2)  Apply certain requirements for risk-based capital and severability and notice provisions to risk retention captive insurance companies; and

 

     (3)  Adopt the National Association of Insurance Commissioners Model Risk Retention Act.

 

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs, American Council of Life Insurers, National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America, and Hawaii Medical Service Association.  Your Committee received comments on this measure from the Office of Information Practices.

 

     Your Committee finds that the National Association of Insurance Commissioners has required all states to adopt its Risk Management and Own Risk and Solvency Assessment Model Act by January 1, 2018, to maintain accreditation with the National Association of Insurance Commissioners.  The Risk Management and Own Risk and Solvency Assessment Model Act has been adopted in thirty-five states and reflects a reasoned approach that enhances insurer solvency and risk management, while also protecting consumers and market competition.  Accordingly, this measure adopts the Risk Management and Own Risk and Solvency Assessment Model Act, which will enable the Insurance Division of the Department of Commerce and Consumer Affairs to retain its accreditation and adopt updated rules prior to the 2018 deadline.

 

     Your Committee further finds that this measure makes other amendments to the insurance code for purposes of maintaining National Association of Insurance Commissioners accreditation, including applying supplemental provisions, rules, and exceptions for risk-based capital and severability and notice provisions to risk retention captive insurance companies and adopting the National Association of Insurance Commissioners' Model Risk Retention Act.

 

     Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2853, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2853, S.D. 1, and be referred to your Committee on Ways and Means.

 

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

 

 

 

________________________________

ROSALYN H. BAKER, Chair