STAND. COM. REP. NO. 653

Honolulu, Hawaii

, 2005

RE: S.B. No. 754

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 754 entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to conform the insurance code to federal law and national standards.

The Department of Commerce and Consumer Affairs testified in support of this measure. The American Council of Life Insurers presented comments.

In 2001, the State enacted the Producer Licensing Model Act in compliance with the federal mandate of the Gramm-Leach-Bliley Act. In the following three years, the Insurance Division continued to bring the insurance code into compliance with federal law and national standards. This measure continues those efforts, and among other things:

(1) Requires the examination of domestic insurers every five years, rather than every three years;

(2) Authorizes extended suspensions of an insurer's certificate of authority;

(3) Repeals the requirement that adjusters and independent bill reviewers maintain an office in the State;

(4) Repeals the one-year limitation on license suspensions for adjusters and independent bill reviewers;

(5) Prohibits adjusters from receiving compensation on a contingency fee basis;

(6) Authorizes the electronic filing of policy revisions that alter coverage and requires a filing to include an analysis of a revision's impact on rates;

(7) Clarifies the scope of a liquidator's authority prior to and during a hearing;

(8) Streamlines the process for the liquidator's recovery of unpaid premiums by authorizing the recovery of unpaid premiums owed to the insolvent insurer and establishing original jurisdiction to determine premium collection cases in the liquidation court; and

(9) Makes amendments to conform to the Interstate Insurance Product Regulation Compact.

By bringing the insurance code into further alignment with federal law and national standards, your Committee finds that this measure will promote greater efficiency and consistency in the administration of the insurance laws.

Your Committee has amended this measure:

(1) To retain the requirement that adjusters and independent bill reviewers maintain an office in this State;

(2) To remove the proposed prohibition on contingency fees for adjusters; and

(3) By making technical, stylistic amendments.

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. 754, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 754, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

RON MENOR, Chair