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 S.B. No. 1071 entitled:

begs leave to report as follows:

The purpose of this measure is to establish minimum levels of bonding and errors and omissions coverage requirements for managing general agents and reinsurance intermediary managers.

Your Committee heard testimony in support of the measure from the State Insurance Commissioner.

Your Committee finds that the Insurance Division of the Department of Commerce and Consumer Affairs receives requests for clarification of the bond and errors and omissions insurance policy requirements for managing general agents and reinsurance intermediary-managers. Under the current statutes, each request must be considered individually. These requests utilize a large amount of resources that are disproportionate to the benefits achieved. Standardization would facilitate compliance with the law without weakening protection of consumer interests. The proposed bond and policy minimum limits are within the range of similar requirements in other states.

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 S.B. No. 1071 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.