STAND. COM. REP. NO. 828

Honolulu, Hawaii

RE:    H.B. No. 1045

       H.D. 1

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which was referred H.B. No. 1045, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose and intent of this measure is to update the Insurance Code to adopt revisions to the National Association of Insurance Commissioners model laws and regulations related to risk-based capital trend tests for property and casualty insurers as required to maintain accreditation of the Insurance Division by the National Association of Insurance Commissioners.

     Your Committee received testimony in support of this measure from the Insurance Commissioner of the Department of Commerce and Consumer Affairs and Hawaii Medical Service Association.

     Your Committee finds that this measure applies consistent regulatory treatment to health maintenance organizations, mutual benefit societies, fraternal benefit societies, managed care plans, and other similar risk-bearing entities.  Your Committee further finds that adopting a risk-based capital regime for entities that are not currently subject to these requirements will allow the Insurance Division to be proactive in protecting consumers from the hardship of insurer insolvency.  Finally, your Committee finds that the amendments to the Insurance Code proposed by this measure are necessary for the State's Insurance Division to maintain accreditation by the National Association of Insurance Commissioners.

     Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1045, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1045, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________

ROSALYN H. BAKER, Chair