Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 3040 entitled:

begs leave to report as follows:

The purpose of this measure is to clarify the definition of "nonpublic financial information" under the captive insurance company law.

Testimony in support of this measure was received from the Insurance Commissioner, Bank of Hawaii, Hawaii Captive Insurance Council, and Becher Carlson Risk Management, Inc. Testimony in opposition was received from the Office of Information Practices (OIP).

According to testimony of the Insurance Commissioner, this measure would clarify the provisions relating to confidential treatment of information relating to a captive insurance company by making all nonpublic information subject to confidential treatment.

Your Committee finds that captive insurance companies incur more confidential proprietary information (nonpublic financial information) because their business operations are more akin to a private company than an insurance company. Current law requires captive insurance companies to disclose such nonpublic financial information to the Insurance Commissioner.

Your Committee has amended this measure on the recommendation of the OIP, with the concurrence of the Hawaii Captive Insurance Council, to ensure that only nonpublic records under chapter 92F, Hawaii Revised Statutes, can be disclosed to the Insurance Commissioner who in turn can disclose the same to other insurance departments 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. 3040, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3040, S.D. 1, and be referred to the Committee on Judiciary.