Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 2414 entitled:

begs leave to report as follows:

The purpose of this measure is to extend for another year the Insurance Commissioner's authority to monitor the solvency of dental service organizations and dental service corporations.

Testimony in support of this measure was received from the Insurance Division of the Department of Commerce and Consumer Affairs.

Act 132, Session Laws of Hawaii 2001, Regular Session, enabled the Department of Commerce and Consumer Affairs (Department) to protect the interests of consumers by shutting down insolvent dental insurance plans that failed to pay claims, and by pursuing claims against the principal agents of these plans to recover assets on behalf of the policy holders and providers. Without Act 132, the Department would not have been successful in seizing and beginning liquidation proceedings against Hawaii Dental Health Plan (HDHP).

Since the time of its enactment, Act 132 has allowed the Department to file civil actions to investigate and pursue the principal organizers of HDHP assets that were suspiciously funneled out of HDHP bank accounts. Your Committee finds that an extension is warranted to enable the Department to bring the liquidation proceedings to a conclusion.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2414, and recommends that it pass Second Reading and be referred to the Committee on Commerce, Consumer Protection and Housing.