STAND. COM. REP. NO. 2903

Honolulu, Hawaii

RE: S.B. No. 2773

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2773, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THIRD PARTY ADMINISTRATORS,"

begs leave to report as follows:

The purpose and intent of this measure is to establish regulations for third party administrators.

Specifically, this measure:

(1) Encourages disclosure of contracts between insurers and third party administrators to potential insureds and the Insurance Commissioner;

(2) Promotes the financial responsibility of third party administrators;

(3) Regulates third party administrators' practices; and

(4) Governs the qualifications and procedures for the licensing of third party administrators.

Your Committee received written comments in support of this measure from the Insurance Division of the Department of Commerce and Consumer Affairs.

Your Committee received written comments on this measure from Hawaii-Western Management Group.

Your Committee finds that the regulations established by this measure are based on the National Association of Insurance Commissioners' Registration and Regulation of Third Party Administrators Guideline.

Your Committee has amended this measure by:

(1) Making corrections to the quoted text of sections 431:7-101 and 432:1-102, Hawaii Revised Statutes, in the measure to accurately reflect the printed version of the Hawaii Revised Statutes; and

(2) Making technical nonsubstantive changes for the purposes of clarity, consistency, 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. 2773, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2773, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair