STAND

STAND. COM. REP. NO.273

Honolulu, Hawaii

, 2003

RE: S.B. No. 614

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 614 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to create and fund a health insurance fraud investigations unit within the Insurance Division and establish immunity from civil liability for reporting health insurance fraud.

State Farm Insurance Companies and the Hawaii Medical Service Association testified in support of this measure. The Department of Commerce and Consumer Affairs and the Hawaii Medical Association supported the measure's general intent. The Consumer Lawyers of Hawaii submitted comments on the measure.

Insurance fraud is presently prohibited under the motor vehicle insurance laws and is subject to investigation by an insurance fraud investigations unit. This measure creates a similar unit for the investigation and prosecution of health insurance fraud. In addition, this measure provides for immunity from civil liability for persons who report health insurance fraud, except where the person has acted with malice or committed perjury.

Your Committee has amended this measure by:

(1) Expanding the definition of "malice" to include acting with reckless disregard with respect to the falsity of information being reported;

(2) Deleting references to section 431:10C-307.7, Hawaii Revised Statutes with respect to the definition of "insurance fraud", and providing that the term means to knowingly present, or cause or permit to be presented, with the intent to defraud, any false information on a claim; and

(3) Making technical, nonsubstantive amendments for clarification.

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. 614, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 614, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,

		____________________________ RON MENOR, Chair