Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2889 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.

The Department of Commerce and Consumer Affairs testified in support of this measure.

Act 132, Session Laws of Hawaii 2001, Regular Session (Act 132) granted the Insurance Commissioner the temporary authority to examine, supervise, rehabilitate, and liquidate dental service corporations and dental service organizations, in order to allow the Commissioner to protect consumers from the imminent failure of one of the State's dental insurers.

The Commissioner's authority was established for one year under Act 132, but subsequently extended after liquidation proceedings were initiated against the insurer. As amended, Act 132 is scheduled to sunset on July 1, 2004, and this measure proposes to continue the Commissioner's authority until July 1, 2005. Your Committee finds that an extension is warranted to enable the Commissioner to bring the liquidation proceedings to a conclusion.

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. 2889 and recommends that it pass Third Reading.