STAND. COM. REP. NO. 1254-18

Honolulu, Hawaii

, 2018

RE: S.B. No. 2643

S.D. 1

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2643, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to clarify the requirements for additional privacy notices that an insurer must send to its customers by:

(1) Permitting an insurer to send a privacy notice every five years, if the relationship between the insurer and a customer is renewed annually or less than annually and the insurer has not changed its policies and practices relating to the disclosure of nonpublic personal financial information;

(2) Requiring an insurer to provide an additional privacy notice upon renewal of a relationship between an insurer and a customer that lasts longer than a year; and

(3) Requiring an insurer that changes its policies and practices to send an additional privacy notice to customers after the change is made.

The American Insurance Association, Hawaii Insurers Council, and American Council of Life Insurers testified in opposition to this measure. Hawaii Medical Service Association provided comments.

Your Committee has amended this measure by:

(1) Requiring insurers to provide privacy notices on a biennial basis to all customers, regardless of contract renewal period;

(2) Making conforming amendments to related statutory sections; and

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

Your Committee notes that the Insurance Code already requires an insurer to provide an updated notice of any change to privacy policies prior to disclosure of any information not previously authorized.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2643, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2643, S.D. 1, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

ROY M. TAKUMI, Chair