STAND. COM. REP. NO. 156-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2986
                                     H.D. 1




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

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 2986 entitled: 

     "A BILL FOR AN ACT RELATING TO THE STATE RISK MANAGEMENT AND
     INSURANCE ADMINISTRATION,"

begs leave to report as follows:

     The purpose of this measure is to grant the state
comptroller sufficient authority to establish a captive insurance
company, that will be owned by the State in order to insure the
general liabilities of state agencies pursuant to chapter 41D of
the Hawaii Revised Statutes.

     Testimony in support of this measure, with proposed
amendments, was submitted by the Department of Accounting and
General Services (DAGS).

     Testimony commenting on this measure was submitted by the
Department of Commerce and Consumer Affairs.  

     Your Committee finds that the State will save money under
the proposed scheme since the state-owned captive insurance
company will allow the State direct access to the discounted
premium rates available in the reinsurance market.

     Your Committee has amended this measure to be consistent
with the amendment proposed by DAGS to ensure that the
establishment of a captive insurance company is an option and not
mandatory.  Technical, nonsubstantive amendments have also been

 
 
                                 STAND. COM. REP. NO. 156-00
                                 Page 2

 
made by your Committee for purposes of clarity, consistency, and
style.  

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 2986, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2986, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair