STAND. COM. REP. NO. 654

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1128
                                        S.D. 2




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

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 1128, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this bill is to increase fines for insurance
law violations, and conform disclosure requirements for mutual
benefit societies and health maintenance organizations.

     In addition, the bill requires fraternal benefit societies
to be licensed in accordance with the provisions governing
solicitors in chapter 431, article 9.

     Your Committee finds that the current range of fines for
insurance law violations are too low and fail to be an effective
deterrent, ranging from $10 to $1,000 per violation.  The
proposed scheme, of $100 to $10,000, should be more effective in
assuring compliance with the law.  Your Committee also finds that
mutual benefit societies and health maintenance organizations
should be held to the same standard as insurers in respect to the
readability of insurance contracts.  This will assist Hawaii
consumers in obtaining the health care they need.

     In addition, your Committee finds that clarifying the law
relating to fraternal benefit societies will reassure them that

 
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                                   STAND. COM. REP. NO. 654
                                   Page 2


they are able to obtain additional licenses under chapter 431,
article 9.

     Your Committee has amended the bill by providing a limited
savings clause for violations of the insurance law that occur
before the effective date of the Act so that the new schedule of
fines will only apply to acts occurring after the effective date
of the Act.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
1128, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 1128, S.D.
2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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