STAND. COM. REP. NO. 2942

Honolulu, Hawaii

RE: S.B. No. 2876

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2876 entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

The purpose and intent of this measure is to amend various portions of Hawaii Revised Statutes to update and improve existing insurance code provisions.

Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs, Hawaii Insurers Council, and the Hawaii Medical Service Association. Your Committee received testimony in opposition to this measure from the American Association of Public Insurance Adjusters.

Your Committee finds that there are certain areas of the insurance code that have not been updated in decades. This measure will, among other things, help reduce the potential for exorbitant commissions for public adjusters, establish a uniform standard of conduct agreement for various limited lines to reduce the potential for consumer misinformation and harm, reinsert inadvertently deleted provisions concerning the right to an administrative hearing in certain situations, and make other necessary administrative amendments to the insurance code to enhance consumer protection.

Your Committee has amended this measure by:

(1) Clarifying that a public adjuster contract shall not contain any contract term that precludes an insured from pursuing civil remedies;

(2) Inserting a severability clause; and

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

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2876, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2876, S.D. 1, and be placed on the calendar for Third Reading.

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

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ROSALYN H. BAKER, Chair