REPORT TITLE:
Hawaii Insurance Exchange


DESCRIPTION:
Requires, upon the passage of SB2802 or HB1869, the department of
accounting and general services to perform a feasibility study on
the concept of using a captive insurance facility as a funding
mechanism by the single employer-union health trust fund to fund
or finance current and future public employee health benefit
obligations of the State and the counties.  (SB3193 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3193
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                H.D. 2
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE HAWAII INSURANCE EXCHANGE.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that adequate financing of
 
 2 the current and potential employee benefit obligations for
 
 3 existing and future state and county employees is of critical
 
 4 importance.  A captive insurance facility may be an effective
 
 5 funding or financing mechanism for a single employer-union health
 
 6 trust fund.  Moreover, a captive insurance facility may be a cost
 
 7 effective financing mechanism that will result in cost savings to
 
 8 the State.  Unlike previous proposals, it is not the intent of
 
 9 this Act that the captive insurance facility serve as an
 
10 alternative to the employer-union health trust funds.  Rather,
 
11 the purpose of this Act is to require, upon the passage of Senate
 
12 Bill No. 2802 or House Bill No. 1869, in any form, that the
 
13 department of accounting and general services perform a
 
14 feasibility study on the concept of using a captive insurance
 
15 facility as a funding mechanism by employer-union health trust
 
16 funds to fund or finance current and future public employee
 
17 health benefit obligations of the State and the counties.  
 
18      SECTION 2.  The department of accounting and general
 
19 services shall perform a feasibility study on the concept of the
 

 
Page 2                                                     3193
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 formation and implementation of a captive insurance facility to
 
 2 be incorporated by the employer-union health trust fund as a
 
 3 mechanism for funding or financing current and future public
 
 4 employee health benefit obligations of the State and the
 
 5 counties.  The captive insurance facility shall be called "The
 
 6 Hawaii Insurance Exchange".  The study shall analyze the costs,
 
 7 benefits, risks, and rewards of using a captive insurance
 
 8 facility in this manner.  If the department finds this concept to
 
 9 be feasible, the study shall include the preparation of proposed
 
10 implementing legislation.  The public employees health fund and
 
11 the department of commerce and consumer affairs shall cooperate
 
12 fully with the department of accounting and general services in
 
13 the conduct of the study.
 
14      SECTION 3.  The department of accounting and general
 
15 services shall submit its report and proposed legislation, if
 
16 any, to the legislature no later than twenty day prior to the
 
17 convening of the regular session of 2001.
 
18      SECTION 4.  This Act shall take effect on July 1, 2000;
 
19 provided that either S.B. No. 2802, in any form, or H.B. No.
 
20 1869, in any form, is passed by the legislature, Regular Session
 
21 of 2000, and becomes an Act.