Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 2095 entitled:

begs leave to report as follows:

The purpose of this measure is to ensure that purchasers of annuities understand certain basic features of annuities.

Testimony in support of the measure was submitted by the National Association of Insurance and Financial Advisors and the American Council of Life Insurers. The State Insurance Commissioner opposed the measure. State Farm Insurance Companies offered comments recommending substitution of the language of H.B. No. 2434.

Your Committee finds that this measure will adopt the model Annuity Disclosure Law drafted by the National Association of Insurance Commissioners and adopted by eight other states in its current form, and by ten other states in its predecessor form. The law applies only to fixed and not variable annuities, and requires that information about guaranteed and non-guaranteed elements of the annuity contract be given to consumers in a "disclosure document" along with a "buyers guide" at the time of application.

Your Committee has amended the measure to:

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. 2095, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2095, S.D. 1, and be placed on the calendar for Third Reading.