Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Consumer Protection and Commerce and Judiciary, to which was referred H.B. No. 2411 entitled:

beg leave to report as follows:

The purpose of this bill is to:

Your Committees heard testimony in support of the bill from the Insurance Division of the Department of Commerce and Consumer Affairs and NAIFA Hawaii. State Farm Insurance Companies submitted testimony in opposition to Section 1 of the bill. American Council of Life Insurers commented.

Your Committees note that objections were raised to the provision in the bill requiring property insurers to give the State Insurance Commissioner 13 months written notice, including a statement of reasons prior to discontinuing the writing of property insurance. The concern was raised that the requirement would force insurers that desire to withdraw from the market to continue to write policies, and discourage some companies from entering the Hawaii market. It was argued that a decision not to write new policies, if intended to avoid an unacceptable increase in loss exposure, would be in the best interest of current policyholders.

The Insurance Commissioner developed compromise language, requiring the withdrawing insurer to negotiate with the Insurance Commissioner to ensure that the interests of the current policyholders are adequately protected. Your Committees agree that this reflects a more appropriate balancing of the interests involved.

Your Committees have amended this bill by:

As affirmed by the records of votes of the members of your Committees on Consumer Protection and Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2411, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2411, H.D. 1, and be referred to the Committee on Finance.