STAND. COM. REP. NO. 3371

                                   Honolulu, Hawaii
                                                     , 2000

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




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 2472, H.D. 2, 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 clarify several aspects of
the insurance code.

     Specifically, this bill does the following:

     (1)  Defines a "stock insurer";

     (2)  Prohibits agents and solicitors from engaging in
          insurance without an appointment;

     (3)  Establishes minimum time periods for notices of
          cancellation or nonrenewal;

     (4)  Includes certificate of authority applications as
          documents that may be destroyed by the Commissioner one
          year later;

     (5)  Extends records confidentiality to complaints and
          investigation reports;


 
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     (6)  Changes the boundary dates in the insurance regulation
          fund for attorney positions covered under the civil
          service laws and for the commencement date of the
          Insurance Commissioner's provisional authority to make
          assessments;

     (7)  Changes the source of tax refunds from the insurance
          regulation fund to the general fund;

     (8)  Raises the minimum amounts to be held by unauthorized
          alien insurers in irrevocable trust funds in order for
          brokers to place insurance with them;

     (9)  Strengthens the civil penalties for unlicensed
          activities;

    (10)  Allows prima facie rates to be used without actuarial
          justification if the sixty per cent loss ratio extends
          over the most recent three years;

    (11)  Closes the dollar amount gap between insurance fraud
          misdemeanors and insurance fraud class C felonies by
          inserting the sum of $300 as a misdemeanor;

    (12)  Deletes the requirement that insurers file registration
          statements with the National Association of Insurance
          Commissioners;

    (13)  Strengthens the penalty against insurers for late
          registration filings;

    (14)  Strengthens the penalties against individuals for
          improperly reported transactions, and against insurers
          for wilful violations; and

    (15)  Substitutes the general fund for the insurance
          regulation fund as the fund to which unclaimed funds
          are deposited upon a liquidation.

     Your Committee finds that these various housekeeping changes
are necessary to clarify the responsibilities of those engaged in
the business of insurance and its regulation.

     Your Committee has amended this measure by retaining the
boundary dates in the insurance regulation fund of July 1, 1999,
for attorney positions covered under the civil service laws and

 
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June 28, 1999, for the commencement date of the Commissioner's
provisional authority to make assessments.

     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 H.B. No.
2472, H.D. 2, S.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, 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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