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. 598, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to preserve state oversight of insurance sales by banks.

The Commissioner of Financial Institutions testified in support of this measure.

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLBA) mandated the adoption of federal rules protecting consumers in retail sales of insurance products or annuities by depository institutions. The Act further provided that federal rules adopted thereunder preempt comparable state laws where the federal rules provide greater consumer protection than state laws.

Your Committee finds that the State has an interest in maintaining regulatory oversight of insurance transactions involving banks within its jurisdiction. Therefore, in order to clarify the State's intent that insurance sales by banks be subject to state oversight under the comprehensive regulatory scheme codified in the state insurance code, this measure repeals specific requirements in the code of financial institutions relating to insurance sales by banks and provides that these transactions are subject to the requirements of chapter 431, Hawaii Revised Statutes.

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. 598, H.D. 1, and recommends that it pass Second Reading and be placed on the calendar for Third Reading.