Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Consumer Protection and Commerce and Judiciary and Hawaiian Affairs, to which was referred H.B. No. 2655 entitled:

beg leave to report as follows:

The purpose of this bill is to protect the state's captive insurers by requiring that all nonpublic information, not only financial records, of a captive insurance company be held confidential by the Insurance Commissioner (Commissioner).

The Department of Commerce and Consumer Affairs testified in support of this measure. An attorney supported this measure with suggested amendments. The Office of Information Practices (OIP) submitted testimony in opposition to this measure.

Your Committees find that the design and structure of a captive insurance program is unique to each captive. In many cases, the design and structure can be considered proprietary information, which if disclosed, may result in competitive harm to the captive and its owner. Requiring the Commissioner to subject all nonpublic information to confidential treatment will help ensure a captive insurance program's fiscal viability.

Your Committees recognize the concerns expressed by the OIP about new confidentiality statutes. However, your Committees believe that this measure does not constitute a true confidentiality statute because the Commissioner still retains the discretion to disclose information if the Commissioner determines that the interest of policyholders, shareholders, or the public will be served by making the information public.

Your Committees have amended this measure to address OIP's concerns by:

Your Committee has also made technical nonsubstantive amendments for purposes of clarity, consistency, and style.

As affirmed by the records of votes of the members of your Committees on Consumer Protection and Commerce and Judiciary and Hawaiian Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2655, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2655, H.D. 1, and be placed on the calendar for Third Reading.