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. 3222, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to establish coverage limitations on naturopathic treatment provided as a personal injury protection (PIP) benefit under a motor vehicle insurance policy.

The Hawaii Insurers Council, State Farm Insurance Companies, and eight individuals testified in support of this measure. The Department of Commerce and Consumer Affairs offered comments on the measure.

When the State enacted the motor vehicle insurance reform law in 1997, alternative health treatments such as acupuncture, chiropractic, and naturopathy were no longer included as mandatory PIP benefits. Acupuncture and chiropractic have since been reinstated as PIP benefits, but are subject to coverage limitations.

In December, 2000, the Insurance Division, in response to House Concurrent Resolution No. 131 (2000), issued a report entitled "Actuarial Analysis of the Utilization and Rate Impacts or Reinstating Naturopathy Among the Personal Injury Protection Benefits in Motor Vehicle Insurance". This report found that reinstating naturopathy as a PIP benefit would have a minimal impact on insurance premiums.

This measure reinstates naturopathic treatments as a PIP benefit, subject to a limitation of thirty visits at a maximum of $75 per visit. Your Committee finds that establishing naturopathic treatment as a mandated benefit will provide policyholders with greater treatment options without significantly affecting insurance costs.

Your Committee has amended this measure by making a technical, stylistic change.

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. 3222, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3222, S.D. 2.