STAND. COM. REP. NO. 579

Honolulu, Hawaii

RE:    S.B. No. 892

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 892 entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to update the Insurance Code by making housekeeping amendments and updating continuing education requirements for insurance licensees. 

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs and the Hawaii Captive Insurance Council.  Testimony in opposition to this measure was received from Hawaii Association for Justice and Hawaii Medical Service Association.  Testimony with comments on this measure was received from the National Association of Insurance and Financial Advisors.  Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee finds that this measure is necessary to bring Hawaii's insurance industry into uniformity with best practices in insurance regulation and to respond to changes in the industry.  Your Committee notes that the provisions relating to issuance of a surplus lines broker license and continuing education requirements for insurance licensees are based on recommendations by the National Association of Insurance Commissioners (NAIC) and reflect a policy of achieving greater uniformity in insurance regulation across states.  Greater uniformity will make insurance regulation less burdensome and simpler for insurers, producers, and regulators.  Further, the audit provisions in this measure are required by the NAIC as a condition of continuing accreditation. 

     Your Committee has amended this measure by:

     (1)  Repealing the current requirement that insurers submit printed copies of rate filings to the Insurance Commissioner and replacing it with an option to submit either electronic or paper filings consistent with Hawaii's March 1, 2009 adoption of the NAIC's System for Electronic Rate and Form Filing;

     (2)  Increasing the required number of continuing education credits relating to an insurance licensee's line of authority from eighteen to twenty-one;

     (3)  Removing the provision that amended section 431:10C-408, Hawaii Revised Statutes;

     (4)  Clarifying that the three hours of continuing education ethics training required of insurance licensees shall include instruction on Hawaii's laws and rules specific to the licensee's line of authority; and

     (5)  Making technical, nonsubstantive changes for the purpose of clarity and accuracy of the language of this measure.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 892, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 892, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

____________________________

ROSALYN H. BAKER, Chair