STAND. COM. REP. NO. 378-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2071

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 2071 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII EMPLOYERS' MUTUAL INSURANCE COMPANY,"

begs leave to report as follows:

The purpose of this bill is to amend the Hawaii Employers’ Mutual Insurance Company (HEMIC) law to require that the HEMIC oversight council perform its annual review of whether HEMIC is fulfilling its purpose, through a review conducted by the Auditor.

The Hawaii Insurance Council supported this measure. HEMIC opposed this measure. The Insurance Division of the Department of Commerce and Consumer Affairs (Insurance Division) commented.

Your Committee finds that there is some concern regarding HEMIC's exemption from surplus requirements and its large market share relative to its surplus, as well as whether HEMIC will reach its statutorily mandated surplus to premium ratio target within the next four years.

Your Committee also heard testimony that the Insurance Division is currently completing HEMIC’s regular triennial examination, including a full actuarial review of loss reserves, and that the report would be available in about a month.

 

Your Committee believes that it would place unnecessary burdens on HEMIC and its policy holders if any additional financial reviews are mandated. However, your Committee feels that it would be useful to have an Auditor's review that is focused on, and limited to whether HEMIC is accomplishing the purposes for which it was established. If nothing else, such a review would clarify the situation and clear the air of inference and innuendo.

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. 2071 and recommends that it be referred to the Committee on Finance.

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

 

____________________________

KENNETH T. HIRAKI, Chair