STAND. COM. REP. NO. 340-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2472
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 2472 entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to incorporate the following
amendments into the Hawaii Revised Statutes (HRS) that are
"housekeeping" amendments proposed by the Insurance Division of
the Department of Commerce and Consumer Affairs:

     (1)  create a new section in Article 3 of HRS chapter 431
          defining the term "stock insurer" which is already used
          throughout the insurance code;

     (2)  create a new section in Article 10 of HRS chapter 431
          regarding general notice of cancellation and nonrenewal
          provision of insurance policies;

     (3)  amend HRS section 431:2-209 to allow the Insurance
          Division to share information with federal agencies and
          to clarify when certain records may be discarded;

     (4)  amend HRS section 431:2-215 to make technical
          amendments regarding the Insurance Regulation Fund and
          to clarify the Insurance Commissioner's authority to
          contract for the employment of professional services;


 
 
 
                                 STAND. COM. REP. NO. 340-00
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     (5)  amend HRS section 431:7-203 to clarify that a premium
          tax refund is to be paid out of the general fund which
          received the premium tax, and not the Insurance
          Regulation Fund;

     (6)  amend HRS section 431:8-302(b) to increase the
          financial responsibility requirement of unauthorized
          alien insurers;

     (7)  amend HRS sections 431:9-105 and 431:9-201 to properly
          cite the provision governing adjusters and to clarify
          the penalty provision for failure to be licensed;

     (8)  amend HRS section 431:10B-108(c) to clarify that prima
          facie rates can be usable without actuarial support
          provided that a loss ratio for the most recent three
          years is at least sixty per cent;

     (9)  amend HRS section 431:10C-307.7(b) to remove the
          ambiguity in the definitions of Class C felony and a
          misdemeanor;

     (10) amend HRS section 431:11-105 to remove the requirement
          that companies file holding company statements with the
          National Association of Insurance Commissioners;

     (11) amend HRS section 431:11-111 to make the penalty
          provisions for failure to file a holding company
          statement consistent with other penalty provisions in
          HRS title 24;

     (12) amend HRS section 431:15-335 to clarify that unclaimed
          funds are to be paid out of the state general fund that
          receives the unclaimed funds; and

     (13) amend HRS section 432:102(b) to clarify the intent of
          HRS section 431:2-125 that assesses insurers and
          entities governed under HRS title 24, including
          fraternal benefit societies. 

     Testimony in support of this measure was submitted by the
Insurance Division of the Department of Commerce and Consumer
Affairs.

     Testimony in support of this measure, with proposed
amendments, was submitted by the Hawaii Independent Insurance
Agents Association.


 
                                 STAND. COM. REP. NO. 340-00
                                 Page 3

 
     Testimony commenting on this measure was submitted by the
Hawaii State Association of Life Underwriters.

     Your Committee has amended this measure to provide a ten day
notice for cancellation and a thirty day notice for nonrenewal of
a policy.  Amounts of the civil penalties, contained in section 9
of this measure, have been left blank to ensure further
discussion on the appropriate fines for a violation of this
section.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 2472, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2472, H.D. 1, and be referred to the Committee on Finance.

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



                                   ______________________________
                                   RON MENOR, Chair