CONFERENCE COMMITTEE REP. NO. 26

Honolulu, Hawaii

                 , 2009

RE:    H.B. No. 262

       H.D. 2

       S.D. 2

       C.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Sir and Madam:

     Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 262, H.D. 2, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE FRAUD,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this bill is to strengthen efforts to address insurance fraud by:

(1) Replacing the Department of Commerce and Consumer Affairs' (DCCA) Insurance Fraud Investigations Unit with an Insurance Fraud Investigations Branch (Branch) with the expanded authority to prevent, investigate, and prosecute insurance fraud beyond motor vehicle insurance, to include all lines of insurance except workers' compensation;

(2) Establishing criminal and administrative penalties, and a civil cause of action, for insurance fraud in all covered lines of insurance and for different types of insurance fraud, including fraudulent applications, claims, and sales; and

(3) Directing the deposit of fines and settlements resulting from insurance fraud prosecutions into the Compliance Resolution Fund to help the Branch cover the cost of preventing, investigating, and prosecuting insurance fraud.

     Current law provides DCCA with express jurisdiction over insurance fraud relating to motor vehicle insurance only.  Your Committee on Conference finds that because insurance fraud occurs in every line of insurance, Hawaii's insurance fraud law should be expanded accordingly.  By broadening DCCA's jurisdiction over insurance fraud, this bill provides a more comprehensive approach to combating this problem and will help reduce premiums and other costs for Hawaii's consumers and businesses.

     Your Committee on Conference has amended this bill by:

(1) Clarifying that licensed attorneys are exempt from the insurance fraud provisions of this bill only in cases where they represent insurance claimants other than themselves;

(2) Changing the effective date to July 1, 2009; and

(3) Making technical, nonsubstantive amendments for clarity and style.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 262, H.D. 2, S.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 262, H.D. 2, S.D. 2, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE SENATE

ON THE PART OF THE HOUSE

____________________________ ROSALYN H. BAKER, Chair	____________________________ ROBERT N. HERKES, Co-Chair
____________________________ BRIAN T. TANIGUCHI, Co-Chair	____________________________ BLAKE K. OSHIRO, Co-Chair
	____________________________ GILBERT KEITH-AGARAN, Co-Chair