Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 756 entitled:

begs leave to report as follows:

The purpose of this measure is to establish an expedited certification process for a foreign health maintenance organization (HMO).

The Department of Commerce and Consumer Affairs and Kaiser Permanente testified in support of this measure.

Your Committee finds that Hawaii's health insurance market is served by a small number of health insurers, mutual benefit societies, and HMOs. This measure would facilitate the entry of more HMOs into the Hawaii market by establishing an expedited process for the certification of a foreign HMO. A foreign HMO is an entity that operates as a domestic HMO in another state under a certificate of authority issued by its home state. Therefore, the foreign HMO has already met the necessary requirements to operate in its home state and has been subject to scrutiny and examination by a regulatory authority.

More specifically, this measure authorizes the Insurance Commissioner (Commissioner) to waive the filing by a foreign HMO of any information required to be filed in an application for a certificate of authority. This "fast track" certification process is similar to that available to foreign insurers under the insurance code. The Commissioner would retain the right to require the foreign HMO to submit to the certification process if determined to be in the public interest. Your Committee further finds that this measure would foster competition in the State's health insurance market and provide Hawaii's consumers and employers with greater choices in healthcare coverage.

Your Committee has amended this measure:

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. 756, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 756, S.D. 1, and be placed on the calendar for Third Reading.