Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1059 entitled:

begs leave to report as follows:

The purpose of this bill is to give the Hawaii Health Systems Corporation (HHSC), Department of Health (DOH), and University of Hawaii John A. Burns School of Medicine (JABSOM) a viable and cost-saving alternative for obtaining medical malpractice and hospital professional and general liability coverage for their medical staff by:

Testimony in support of this bill was received from the Insurance Commissioner, DOH, JABSOM, HHSC, Healthcare Association of Hawaii, and the medical staffs of Maui Memorial Health Systems Corporation, Hilo Medical Center, Leahi Hospital, Kona Community Hospital, Kauai Veterans Memorial Hospital, and Samuel Mahelona Memorial Hospital.

Your Committee finds that the escalating costs of premiums, lack of insurers providing coverage in Hawaii, decreased limits of available coverage, and increased coverage restrictions make it essential to establish a captive insurance company in Hawaii to insure and control state exposure to the liability risks of HHSC, DOH, and JABSOM.

Your Committee further finds that Farmers Insurance, the primary insurer for hospital malpractice, which provided malpractice insurance to HHSC, has ceased offering coverage in Hawaii and in every other state.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1059 and recommends that it pass Second Reading and be referred to the Committees on Health and Higher Education.