Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Legislative Management, to which was referred H.B. No. 2071 entitled:

begs leave to report as follows:

The purpose of this bill is to require the oversight council of the Hawaii Employers' Mutual Insurance Company to use the State Auditor to report on whether the company is fulfilling its express statutory purposes.

Your Committee finds that the express statutory purposes of the Hawaii Employers' Mutual Insurance Company require that the company provide workers' compensation coverage to employers at the highest level of service with the lowest possible cost, and to be responsive to each policyholder's experience, practice, and operating effectiveness.

Your Committee finds that the company is subject to a number of audits on a regular basis to ensure that it meets its statutory objectives. However, your Committee finds that despite the current level of audits, the company writes a major portion of the workers' compensation market at ratios-to-surplus far above acceptable levels. Accordingly, your Committee concludes that another level of oversight is necessary to further ensure that the company fulfills the purposes for which it was statutorily created.

As affirmed by the record of votes of the members of your Committee on Legislative Management that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2071 and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection and Commerce.