STAND. COM. REP. NO. 1314-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2562
                                     S.D. 1
                                     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 S.B. No. 2562, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Reorganize existing confidentiality law regarding
          nonpublic financial information of captive insurance
          companies;

     (2)  Remove the class 4 exemption from filing a risk based
          capital report with the national association of
          insurance commissioners; and 

     (3)  Give the Insurance Commissioner discretion in the
          method of accounting to be used in writing a statement
          of financial condition.

     Testimony in support of this measure was submitted by the
Insurance Division of the Department of Commerce and Consumer
Affairs, Hawaii Captive Insurance Management Inc., Hawaii Captive
Insurance Council Corporation, and a private attorney.

     Testimony in opposition to this measure was submitted by an
individual.


 
 
                                 STAND. COM. REP. NO. 1314-00
                                 Page 2

 
     Your Committee finds that passage of this measure will
simplify and enhance the confidentiality and financial reporting
requirements for U.S. and foreign owners of captive insurance
companies licensed by the Insurance Division.

     Your Committee has amended this bill by replacing its
contents with the substantive provisions of H.B. No. 2219, H.D.
1, a similar bill that was reported from your Committee on
Consumer Protection and Commerce earlier in this session.  This
amendment gives the Commissioner the discretion to fulfill the
auditing requirement by an independent certified professional
accountant or other qualified professional and makes various
nonsubstantive changes for style and clarity.

     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 S.B. No. 2562, S.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 2562, S.D. 1, H.D. 1, and be placed on the
calendar for Third Reading.

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



                                   ______________________________
                                   RON MENOR, Chair