Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Commerce, Consumer Protection and Housing and Health and Human Services, to which was referred S.B. No. 589 entitled:

beg leave to report as follows:

The purpose of this measure is to regulate dental insurers under the Insurance Code.

The Insurance Commissioner (Commissioner) and Hawaii Medical Service Organization testified in support of this measure with amendments.

Currently, dental service organizations are required to register with the Department of Commerce and Consumer Affairs, but are exempt from the Insurance Code. Your Committees find that these entities, which provide contracts of indemnification for dental health treatment and which act essentially as insurers, should be regulated in the same manner as other insurers.

This measure brings dental service organizations under the regulatory umbrella of the Insurance Code by requiring dental service organizations to register with the Commissioner and to comply with the requirements of part 10A of the Code relating to accident and sickness insurance contracts. This measure also repeals the Dental Service Organizations Act.

Your Committees further find that the Commissioner supports the regulation of dental insurers, but proposes that it be effected by amending existing Code provisions, rather than creating a new section relating to dental insurance coverage, and further proposes that dental service corporations also be regulated under the Code. Therefore, your Committees have amended this measure:

As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection and Housing and Health and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 589, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 589, S.D. 1, and be placed on the calendar for Third Reading.