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. 214 entitled:

begs leave to report as follows:

The purpose of this bill is to reduce unnecessary regulatory burdens on insurers and consumers by exempting rate filings that are lower than the last set of filed, approved rates, from the prior approval of the Insurance Commissioner.

Your Committee has received testimony in support of the bill from the Department of Commerce and Consumer Affairs and State Farm Insurance Companies. Testimony in opposition to the bill was received from the Employers' Chamber of Commerce.

Your Committee finds that this bill will allow certain insurers at the beginning of the next policy period to immediately implement rates without the Insurance Commissioner's approval when those rates are lower than the ones approved for the preceding year. Concerns were raised, however, on whether the lowered rates must be for the same benefits as rates filed in the preceding year because the measure did not contain specific language regarding this issue.

Accordingly, your Committee has amended this bill by adding language clarifying that lowered rates may be implemented without

the prior approval of the Insurance Commissioner only if they are for benefits equivalent to those covered under the rates filed and approved in the immediately preceding year.

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. 214, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 214, H.D. 1, and be placed on the calendar for Third Reading.