STAND. COM. REP. NO. 728

Honolulu, Hawaii

RE:    S.B. No. 1277

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 1277, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONSUMER PROTECTION,"

begs leave to report as follows:

     The purpose and intent of this measure is to strengthen the laws governing legal service plans.

     Specifically, this measure requires legal service plans to obtain a certificate of authority from the Insurance Commissioner prior to conducting business in the State.

     Your Committee received comments in support of this measure from Gordon Ito, State Insurance Commissioner, Department of Commerce and Consumer Affairs.

     Your Committee finds that legal service plans have a low rate of compliance with Hawaii law.  The Insurance Commissioner continues to receive complaints from consumers about prepaid legal service plans.  This measure will enhance the Commissioner's ability to regulate these plans and to enforce the laws governing these plans.

     Your Committee has amended this measure by:

(1)  Changing the new bond and fee amounts to unspecified sums;

(2)  Changing the effective date to July 1, 2050 in order to facilitate further discussion on the matter; and

(3)  Making technical nonsubstantive amendments for the purposes of clarity and style.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1277, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1277, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair