CONFERENCE COMMITTEE REPORT NO. 161

                            Honolulu, Hawaii
                                            , 1999

                            RE:   S.B. No. 1127
                                  S.D. 1
                                  H.D. 3
                                  C.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 1127, S.D. 1, H.D. 3, entitled:  

     "A BILL FOR AN ACT RELATING TO INSURANCE," 

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 of this measure is to assess the health
insurance industry for the costs incurred by the State in
regulation of the industry by establishing a health insurance
revolving fund.  

     Your Committee on Conference recognizes that an insurance
regulation fund consolidating most of the Insurance Division's
("Division") special and revolving funds is being established in
S.B. No. 1129, S.D. 1, H.D. 3, which will allow the Division to
attain self-sufficiency,  primarily through assessments and
collection of fees.


 
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     Upon further consideration, your Committee on Conference has
amended this bill by:

     (1)  Deleting the provisions relating to the health
          insurance revolving fund, since the insurance
          regulation fund is being established as stated above;

     (2)  Providing a means of assessing most of the health care
          industry for the costs of regulating the industry,
          whereby the plans are assessed on a pro rata basis;

     (3)  Establishing an assessment schedule where:

          (A)  For the fiscal biennium 2000-2002, a flat rate of
               $10,000 for the first 70,000 private,
               nongovernment members and an additional assessment
               on a pro rata basis for any membership over
               70,000; and 

          (B)  For each year thereafter, on a pro rata basis;

     (4)  Establishing a ceiling of $1 million on the annual
          assessment; 

     (5)  Allowing the insurance commissioner ("commissioner") to
          suspend any assessment if the commissioner determines
          that the assessment may cause an entity to reach
          insolvency or other financial difficulty; and

     (6)  Referencing the insurance regulation fund, rather than
          the health insurance revolving fund, to reflect the
          above.  

     Your Committee on Conference has provided the Insurance
Division with a $1 million ceiling to cover the actual costs of
regulation and other general administrative duties.  It is your
Committee's intent that if the Insurance Division does not use
the entire amount in any given year, the remainder shall be used
to reduce the following year's assessment to reach the $1 million
ceiling.

     Your Committee on Conference is in accord with the intent
and purpose of S.B. No. 1127, S.D. 1, H.D. 3, as amended herein,
and recommends that it pass Final Reading in the form attached
hereto as S.B. No. 1127, S.D. 1, H.D. 3, C.D. 1.

                                   Respectfully submitted,


 
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MANAGERS ON THE PART OF THE        MANAGERS ON THE PART OF THE
            HOUSE                             SENATE
                                   
                                   
                                   
______________________________     ______________________________
ALEXANDER C. SANTIAGO, Co-         BRIAN T. TANIGUCHI, Co-Chair
Chair                              
                                   
                                   
                                   ______________________________
______________________________     BRIAN KANNO, Co-Chair
RON MENOR, Co-Chair                
                                   
                                   
                                   ______________________________
______________________________     CAROL FUKUNAGA, Co-Chair
DWIGHT Y. TAKAMINE, Co-Chair       
                                   
                                   
                                   ______________________________
______________________________     ANDREW LEVIN, Co-Chair
JERRY L. CHANG, Member             
                                   
                                   
                                   ______________________________
______________________________     DAVID MATSUURA, Member
MARK MOSES, Member                 
                                   
                                   
                                   ______________________________
                                   WHITNEY T. ANDERSON, Member


 
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