RESOLUTION

WHEREAS, the Auditor has developed considerable expertise over the years in the field of casualty insurance ratemaking, most notably through its 1993 report on insurance ratemaking procedures under article 14 of the insurance code and its 1992 report on the insurance rate increase request submitted to the Insurance Commissioner by a particular automobile insurer; and

WHEREAS, medical malpractice insurance is merely another form of casualty insurance, like automobile insurance, and its ratemaking procedures, like most other forms of casualty insurance, are governed under article 14 of the insurance code; and

WHEREAS, there is concern that the costs of medical malpractice and hospital professional and general liability coverage may be on the rise, which may result in increased costs of premiums, the withdrawal of insurers from the local market, decreased limits of available coverage, and coverage restrictions; and

WHEREAS, a possible countermeasure for segments of medical malpractice insureds to consider is restructuring the market in a manner most suitable to them, such as forming a captive insurance market solely for medical malpractice insureds if their risks are considerably lower than other insureds in the market; and

WHEREAS, the present laws on captive insurance authorizes captive insurance companies to engage in all types of casualty insurance; and

WHEREAS, no single public agency outside of the Insurance Division is more qualified than the Auditor to study the technical issues pertaining to medical malpractice insurance rates and the formation of captive insurance companies to provide medical malpractice insurance coverage; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, the House of Representatives concurring, that the Auditor is respectfully requested to study whether medical malpractice insurance rates in the private sector have increased over the years and whether it is feasible for the State to establish a captive insurance company for medical malpractice insurance; and

BE IT FURTHER RESOLVED that the Auditor is requested to submit findings and recommendations, including any proposed legislation, to the Legislature not later than twenty days before the convening of the Regular Session of 2006; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor and the Insurance Commissioner.

Report Title:

Auditor; Medical Malpractice Insurance