Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 593, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to make housekeeping amendments to the Insurance Code (Code) by correcting incorrect cross-references contained in statutes relating to the replacement of life insurance policies and amendments. Additionally, this measure reconciles different deeming provisions in the Code by clarifying that requests for the approval of the Insurance Commissioner (Commissioner) are deemed granted on the thirtieth calendar day following the request if the Commissioner does not affirmatively grant or deny the approval, except as provided otherwise in the Code.

Your Committee has amended this measure by replacing its contents with language that establishes the salary of the Chief Deputy Insurance Commissioner (Deputy Commissioner) at not more than ninety-five per cent of the Commissioner's maximum salary, subject to state law that authorizes salary increases based on merit.

The Commissioner testified in support of this measure, as amended.

Your Committee finds that this measure is necessary to correct an error made by the Administration in advertising the Deputy Commissioner vacancy. The Administration's failure to list a salary range for the position precluded the payment of compensation commensurate with the responsibilities of the individual hired as Deputy Commissioner and consistent with compensation levels paid to other employees in similar managerial positions.

Your Committee notes that this measure does not establish a permanent legislative mandate in the Hawaii Revised Statutes and reflects a one-time arrangement that will be placed in the Session Laws rather than in the Hawaii Revised Statutes. The above notwithstanding, your Committee further notes that the enactment of laws setting salary ceilings or formulas for managerial employees of the State is not without precedent.

Currently, there are various compensation provisions in the law that establish the salaries of administrators and managers at ninety-five per cent of executive salaries. For instance, section 431:19-101.6, Hawaii Revised Statutes, sets the salary of the Captive Insurance Administrator at not more than ninety-five per cent of the Commissioner's maximum salary. By adopting the same salary ceiling for the Deputy Commissioner, this measure provides for the more consistent and equitable compensation of State managers.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 593, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 593, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.