Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

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. 589, S.D. 1, H.D. 1, entitled:

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

The purpose of this measure is to provide the Insurance Commissioner (Commissioner) with the bare minimum tools necessary to deal with a dental service plan near financial failure.

This measure brings dental insurers under the regulatory umbrella of the insurance code by repealing the Dental Service Corporations Act and Dental Service Organizations Act, expanding the definition of disability insurance under the code to include dental health problems, establishing capital and surplus requirements for dental health insurers in the code, and by making other conforming amendments.

Your Committee has amended this measure by replacing its contents with language that:

Your Committee recognizes that Hawaii has been well served by dental service plans like the Hawaii Dental Service (HDS) which have continuously provided Hawaii's consumers with much needed coverage and care. These dental service plans have been an integral part of Hawaii's past and will continue to play a critical role in maintaining the health and well-being of Hawaii's citizens in the present and in the future. These plans have historically shown prudence and responsibility in the governance of their financial resources in meeting their service goals, and there are no indications that they will change this corporate philosophy in the future.

Your Committee, mindful of the application of equal protection laws to its corporate citizens, finds it necessary to recommend the enactment of a law of general applicability for the protection of Hawaii's citizens should a dental service plan not meet the standard of plans referenced above. This proposed law is temporary in nature and has a one-year drop dead clause to enable the Legislature to evaluate this law's efficacy and continued necessity.

It is the explicit intent of the Legislature that this measure is only intended to allow the Commissioner to investigate an insurance company that is currently in distress. It is the explicit understanding and agreement with the Commissioner and the Legislature that the Commissioner will not use this measure to subject any other insurance carrier to any regulatory intrusions of any kind.

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. 589, S.D. 1, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 589, S.D. 1, H.D. 1, C.D. 1.