STAND. COM. REP. NO.1160

Honolulu, Hawaii

, 2003

RE: H.B. No. 1163

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 1163 entitled:

"A BILL FOR AN ACT RELATING TO DENTAL INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to extend for another year the Insurance Commissioner's authority to examine, supervise, rehabilitate, and liquidate insolvent dental insurers.

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

Act 132, Session Laws of Hawaii 2001, Regular Session (Act 132) made dental service corporations and dental service organizations subject to the Insurance Commissioner's enforcement, examination, supervision, rehabilitation, and liquidation powers. Prior to Act 132, not all dental plans were subject to regulation by the Insurance Commissioner (Commissioner), and the granting of such authority was necessary to allow the Commissioner to protect consumers from the imminent failure of one particular dental insurer.

Under Act 132, the Commissioner's authority was established temporarily for a one-year period to allow the Commissioner to respond to the dental insurer's insolvency, and was scheduled to sunset on July 1, 2002. The Act was extended an additional year under Act 219, Session Laws of Hawaii 2002, to allow the Commissioner, who served as liquidator in the insurer's liquidation proceedings, to see the proceedings through to their conclusion. This measure extends the Commissioner's oversight for another year, until July 1, 2004.

Your Committee has amended this measure to exempt dental insurers from triennial examinations by the Commissioner, and to, instead, authorize discretionary examinations. Your Committee finds that problems with dental insurers are infrequent and that the funds required to conduct triennial examinations of all dental insurers would be better spent to examine specific insurers whose operations warrant an examination.

Your Committee also made a technical amendment to reflect preferred drafting style.

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 H.B. No. 1163, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1163, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,

____________________________

RON MENOR, Chair