CONFERENCE COMMITTEE REPORT NO.78

                            Honolulu, Hawaii
                                            , 2000

                            RE:   S.B. No. 2729
                                  S.D. 1
                                  H.D. 2
                                  C.D. 1




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

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

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 2729, S.D. 1, H.D. 2, entitled:  

     "A BILL FOR AN ACT RELATING TO SERVICE CONTRACTS," 

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this measure is to protect service contract
holders in the State by creating a regulatory framework governing
the sale, terms, and administration of service contracts sold to
consumers.

     Your Committee believes service contract legislation will
benefit both consumers and existing service contract providers
by:

     (1)  Protecting consumers and providing a means by which
          they will be made aware of their rights when they enter
          into service contract agreements; and

 
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     (2)  Providing a regulatory framework that is clear,
          concise, and uniform for those service contract
          providers who wish to offer service contracts to
          consumers in the State.

     Under current law, service contracts are considered
insurance contracts and fall within the purview of the insurance
code.  Your Committee finds that both consumers and service
contract providers are better served if service contracts are
removed from the insurance code's stringent requirements that
could hinder the industry's development and placed within the
framework set forth within this measure which resembles measures
adopted by other states.  In addition, a more comprehensive
framework, which is based on an amended version of the Model
Service Contract Act, would provide expanded protection for
consumers not currently found in existing law.

     Your Committee has amended this measure to:

     (1)  Require service contract providers to provide consumers
          with a written copy of the service contract's basic
          terms and conditions at the physical point of sale,
          except for offers or sales consummated by telephone,
          mail, or electronic media; 

     (2)  Establish a $75 registration fee and $75 services fee
          for service contract providers; and

     (3)  Make the Act effective on July 1, 2000, and applicable
          only to service contracts and contractual liability
          insurance policies in effect after June 30, 2000.
 
     As affirmed by the record of votes of the managers of your
Committee on Conference that is attached to this report, your
Committee on Conference is in accord with the intent and purpose
of S.B. No. 2729, S.D. 1, H.D. 2, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as S.B. No. 2729, S.D. 1, H.D. 2, C.D. 1.


 
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                                   Respectfully submitted on
                                   behalf of the managers:

  ON THE PART OF THE HOUSE           ON THE PART OF THE SENATE




_____________________________     _______________________________
Rep. RON MENOR                    Sen. BRIAN T. TANIGUCHI
Co-Chair                          Co-Chair



_____________________________     _______________________________
Rep. BRIAN Y. YAMANE              Sen. BRIAN KANNO
Co-Chair                          Co-Chair

 
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