STAND. COM. REP. NO. 1198

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1130
                                     S.D. 1
                                     H.D. 1




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

Sir:

     Your Committee on Health, to which was referred S.B. No.
1130, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO HEALTH MAINTENANCE
     ORGANIZATIONS,"

begs leave to report as follows:

     The purpose of this bill is to require health maintenance
organizations to file quarterly reports with the Insurance
Commissioner; and to impose penalties and other administrative
sanctions on health maintenance organizations that fail to renew
their certificates of authority in a timely manner.

     Your Committee finds that quarterly reporting and the timely
renewal of certificates of authority can help the Insurance
Commissioner to more effectively monitor the financial solvency
of health maintenance organizations.  With more and more
employers turning to health maintenance organizations as a means
of controlling or reducing health care costs, everything possible
must be done to ensure the continued solvency of health
maintenance organizations.

     Your Committee has amended this bill by replacing its
contents with the contents of House Bill No. 1068, H.D. 1, the
purpose of which is identical to Senate Bill No. 1130, S.D. 1.

 
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                                 STAND. COM. REP. NO. 1198
                                 Page 2

 
While the text of the House and Senate versions of these bills
are nearly identical, your Committee notes that the House version
specifically requires the monetary penalties imposed on
delinquent health maintenance organizations to be remitted by the
Insurance Commissioner to the Director of Finance and placed to
the credit of the general fund.

     As affirmed by the record of votes of the members of your
Committee on Health that is attached to this report, your
Committee is in accord with the intent and purpose of S.B.
No. 1130, S.D. 1, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 1130, S.D.
1, H.D. 1, and be referred to the Committee on Consumer
Protection and Commerce.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health,



                                   ______________________________
                                   ALEXANDER C. SANTIAGO, Chair

 
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