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. 649 entitled:

begs leave to report as follows:

The purpose of this bill is to toughen the criminal penalties imposed on individuals who repeatedly commit insurance fraud by including felony insurance fraud offenses among the felony violations that are subject to mandatory minimum sentencing under the criminal repeat offender statute.

Testimony in support of the measure was received from the Department of Commerce and Consumer Affairs. The Office of the Public Defender offered comments.

Your Committee finds that insurance fraud in Hawaii's health insurance market alone, results in millions of dollars in annual losses, and results in higher insurance premiums for everyone. Further, according to the National Insurance Crime Bureau, many violent or organized criminals are committing insurance fraud as a way to make quick money to fund further criminal activity, and many white collar criminals see insurance fraud as a low-risk, high-reward crime with little consequences. This bill will help to deter and appropriately punish these multiple offenders.

There is concern, however, that the manner in which the measure is currently drafted is not consistent with the repeat offender law. In light of this, your Committee has amended this bill by providing an effective date of July 1, 2099, and requests that the Committee on Judiciary more closely examine this concern.

Technical, nonsubstantive amendments were also made for clarity, consistency, and style.

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. 649, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 649, H.D. 1, and be referred to the Committee on Judiciary.