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. 2917 entitled:

begs leave to report as follows:

The purpose of this measure is to ensure continuation of health insurance rate regulation in this State.

Specifically, this measure repeals the sunset date from Act 74, Session Laws of Hawaii 2002, as amended by Act 3, Session Laws of Hawaii, relating to health insurance rate regulation.

Testimony in support of this measure was submitted by the State Insurance Commissioner, the Department of Commerce and Consumer Affairs; Hawaii State Teachers Association; The Hawaii Business League; Summerlin Life & Health Insurance Company; the Hawaii Chapter, American Physical Therapy Association; and one concerned citizen. Testimony in opposition to this measure was submitted by Hawaii Pacific Health and Kaiser Permanente. Comments were submitted by the Hawaii Medical Service Association.

According to the State Insurance Commissioner, since the start of rate oversight, the Insurance Division has made reductions to six different rate filings, thereby saving Hawaii consumers at least $18,000,000. The Commissioner also reports that through rate oversight, the division has detected simple errors, unsupported rate factors, and deviations from established methodologies. Finally, the Commissioner reports that this oversight has not caused large additional costs for administration.

Your Committee finds and is in agreement with the Insurance Commissioner that health insurance rate regulation has operated well. Your Committee further finds that health insurance rate regulation provides benefits to consumers and to a competitive health insurance marketplace.

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. 2917 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.