STAND. COM. REP. NO. 862-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2472
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
2472, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this bill is to make housekeeping amendments
to chapter 431, Hawaii Revised Statutes (HRS), the Insurance Code
(Code), by:

     (1)  Defining "stock insurer" under the Code;

     (2)  Clarifying when an appointment when an insurer is
          required to engage in the business of insurance in the
          State;

     (3)  Establishing cancellation and nonrenewal notice
          requirements for policies;

     (4)  Clarifying whether certain documents including federal
          materials are subject to confidentiality requirements
          or sharing, and specifying when certain records can be
          discarded;

     (5)  Making technical amendments regarding the Insurance
          Regulation Fund (Fund) and clarifying that a premium
          tax refund is to be paid out of the general fund, which
          receives the premium taxes, rather than the Fund;


 
 
                                 STAND. COM. REP. NO. 862-00
                                 Page 2

 
     (6)  Increasing the financial responsibility requirement for
          unauthorized alien insurers;

     (7)  Properly citing the provision governing adjuster
          licensing, increasing the civil penalty provision for
          failure to be licensed, and clarifying penalties
          available;

     (8)  Clarifying that prima facie rates can be usable without
          actuarial support, provided that a loss ratio for the
          most recent three years is at least sixty percent;

     (9)  Removing the ambiguity in the insurance fraud penalties
          so that misdemeanors include fraud of up to and
          including $300 in benefits;

    (10)  Removing the erroneous requirement that insurers file
          their registration statements with the National
          Association of Insurance Commissioners;

    (11)  Making the penalty provisions for insurer failure to
          file a registration statement consistent with other
          penalty provisions in the Code;

    (12)  Clarifying that unclaimed funds are to be paid out of
          the general fund, which receives the unclaimed funds;
          and

    (13)  Clarifying that assessment of insurers and other
          entities paid into the Fund under section 431:2-215,
          HRS, includes fraternal benefit societies.

    The Department of Commerce and Consumer Affairs testified in
support of this measure.  The American Council of Life Insurers
testified in opposition to the measure.  The Hawaii State
Association of Insurance and Financial Advisors and the Hawaii
Independent Insurance Agents Association submitted comments on
the measure.

    Your Committee has amended this bill by making technical,
nonsubstantive amendments for clarity, consistency, and style.

    As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
2472, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 2472, H.D.
2.


 
                                 STAND. COM. REP. NO. 862-00
                                 Page 3

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair