STAND. COM. REP. 84

Honolulu, Hawaii

, 2003

RE: H.B. No. 1162

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1162 entitled:

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

begs leave to report as follows:

The purpose of this bill is to increase the Insurance Division of the Department of Commerce and Consumer Affairs'(DCCA) ability to investigate, prosecute, and reduce motor vehicle insurance fraud. This bill:

    1. Reflects a change in DCCA organizational structure by removing references to insurance investigation "unit" and replacing these with "branch";
    2. Allows investigator assistants and auditors to serve process and apply for and execute search warrants;
    3. Authorizes the branch to retain auditors, accountants, paralegals, and other professionals by contract or otherwise; and
    4. Allows the branch to present public and industry-wide educational programs as one of the methods to combat insurance fraud.

 

 

Testimony in support of this measure was received from DCCA.

Your Committee finds that motor vehicle insurance fraud continues to burden law-abiding purchasers of automobile insurance in Hawaii, and that the costs of illegal claims are reflected in insurance premiums.

Your Committee further finds that the insurance fraud investigation branch is divided into an investigation section that investigates individual fraud, and an audit section that investigates medical provider and business fraud. Although investigation of both types of fraud requires the use of subpoenas and warrants, only the investigation section has the authority to apply for and execute search warrants and act as process servers. Since detailed knowledge of a case is needed to execute a warrant effectively and investigators must spend significant amounts of time reviewing the audit section’s often highly complex cases, this has resulted in wasted resources and delays that may compromise a case by allowing record tampering or destruction. This bill would resolve that problem.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1162 and recommends that it pass Second Reading and be referred to the Committee on Finance.

 

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

 

____________________________

KENNETH T. HIRAKI, Chair