Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2723, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to merge the insurance regulation fund into the compliance resolution fund.

Your Committee finds that the Department of Commerce and Consumer Affairs is self-supporting and draws its funding through the compliance resolution fund. The Department's Insurance Division is funded through the insurance regulation fund.

Your Committee finds that the merger of these two funds will provide greater efficiency in the administration of departmental funds, while not adversely affecting the Insurance Division's regulatory role or authority.

Your Committee finds that the compliance resolution fund has sub-accounts for each division, so the same fiscal accounting for the Insurance Division's special fund revenues and expenses will remain unchanged. Moreover, there is no cross-subsidization between regulatory programs within the compliance resolution fund, so the Insurance Division's funds will remain intact.

Finally, your Committee finds that with one compliance resolution fund, the fund's annual report will cover the entire department and eliminate the need for a separately filed insurance regulation fund report, thereby making the substantive and fiscal information on insurance in the compliance resolution fund report more comprehensive.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2723, S.D. 1, and recommends that it pass Third Reading.