STAND. COM. REP. NO. 450

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1676

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Madam:

 

     Your Committees on Health and Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 1676 entitled:

 

"A BILL FOR AN ACT RELATING TO THE HAWAII HEALTH SYSTEMS CORPORATION,"

 

beg leave to report as follows:

 

     The purpose of this measure is to ensure quality health care services by providing access to affordable medical malpractice and hospital professional and general liability coverage to our state hospital system.

 

     Specifically, this measure authorizes and provides initial funding for the establishment of a domestic captive insurance company five-year pilot project, by the Hawaii Health Systems Corporation, to provide medical malpractice and hospital and general liability coverage to the corporation and the physicians serving the entity.

 

     Your Committees received testimony in support of this measure from Hawaii Health Systems Corporation.  The Department of Commerce and Consumer Affairs submitted comments on this measure.

 

     Your Committees find that actuarial studies need to be conducted in order to accurately recommend an appropriation amount.

 

     Your Committees find that the cost of hospital professional and general liability coverage continues to rise.  Further, your Committees find that there is a lack of insurers willing to provide coverage in Hawaii, and the policies offered have decreased limits of available coverage and restrictions on what liability exposures are covered.  Your Committees find that a captive insurance company to provide hospital malpractice coverage is a good alternative, and according to the Insurance Commissioner's testimony, is almost the only alternative available at this time.

 

     Your Committees have adopted the recommendations of the Department of Commerce and Consumer Affairs and amended this measure by removing the "carve out" language in section 3 due to sufficient authority in existing captive statutes that would allow the Insurance Commissioner to license a captive for Hawaii Health Systems Corporation's pilot project.

 

     Your Committees further amended this measure by changing the effective date to encourage further discussion.

 

     As affirmed by the records of votes of the members of your Committees on Health and Commerce, Consumer Protection, and Affordable Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1676, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1676, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committees on Health and Commerce, Consumer Protection, and Affordable Housing,

 

____________________________

BRIAN T. TANIGUCHI, Chair

 

____________________________

DAVID Y. IGE, Chair