REPORT TITLE:
Insurance


DESCRIPTION:
Increases fines for violations of the insurance statutes and
rules, clarifies the licensing provisions for fraternal benefit
society agents; and requires policies provided by mutual benefit
societies and health maintenance organization to meet certain
Flesch Reading Ease tests. (HB1066 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1066
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D.1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO INSURANCE.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 431:2-203, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (b) to read as follows:
 
 3      "(b) (1)  A person who intentionally or knowingly violates,
 
 4           intentionally or knowingly permits any person over whom
 
 5           the person has authority to violate, or intentionally
 
 6           or knowingly aids any person in violating any insurance
 
 7           rule or statute of this State or any effective order
 
 8           issued by the commissioner, shall be subject to any
 
 9           penalty or fine as stated in this code or the penal
 
10           code of the Hawaii Revised Statutes.
 
11      (2)  If the commissioner has cause to believe that any
 
12           person has violated any penal provision of this code or
 
13           of other [laws] law relating to insurance, the
 
14           commissioner shall certify the facts of the violation
 
15           to the public prosecutor of the jurisdiction [of] in
 
16           which the offense was committed.
 
17      (3)  Violation of any provision of this code is punishable
 
18           by a fine of not less than [$10] $100 nor more than
 
19           [$1,000,] $10,000 per violation, or by imprisonment for
 

 
Page 2                                                     1066
                                     H.B. NO.           H.D.1
                                                        
                                                        

 
 1           not more than one year, or both, in addition to any
 
 2           other penalty or forfeiture provided herein or
 
 3           otherwise by law.
 
 4      (4)  The terms [intentionally] "intentionally" and
 
 5           [knowingly] "knowingly" have the meanings given in
 
 6           [sections] section 702-206(1) and [702-206(2).] (2)."
 
 7      SECTION 2.  Section 432:1-101.5, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]432:1-101.5[]]  Disclosure of health care coverage and
 
10 benefits.  In order to ensure that all individuals understand
 
11 their health care options and are able to make informed
 
12 decisions, all mutual benefit societies shall provide current and
 
13 prospective members with written disclosure of coverages and
 
14 benefits, including information on coverage principles and any
 
15 exclusions or restrictions on coverage.
 
16      The information provided shall be current, understandable,
 
17 and available prior to membership, and upon request after
 
18 membership.  A policy provided to a member which describes
 
19 coverages and benefits shall be in conformance with part I of
 
20 article 10 of chapter 431."
 
21      SECTION 3.  Section 432:2-609, Hawaii Revised Statutes, is
 
22 amended by amending subsection (a) to read as follows:
 

 
 
 
Page 3                                                     1066
                                     H.B. NO.           H.D.1
                                                        
                                                        

 
 1      "(a) [Agents of societies shall be licensed in accordance
 
 2 with article 9 of the insurance code; provided that no
 
 3 examination shall be required of any individual licensed to
 
 4 represent a fraternal benefit society prior to July 1, 1988.]
 
 5 Fraternal benefit society agents shall be licensed in accordance
 
 6 with the provisions governing solicitors in article 9 of chapter
 
 7 431, except that the appointment shall be made by the fraternal
 
 8 benefit society.  Fraternal benefit society agents are not
 
 9 prohibited from obtaining additional licenses provided for in
 
10 article 9.  No examination shall be required of an individual
 
11 licensed to represent a fraternal benefit society prior to July
 
12 1, 1988."
 
13      SECTION 4.  Section 432D-25, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]432D-25[]]  Disclosure of health care coverage and
 
16 benefits.  In order to ensure that all individuals understand
 
17 their health care options and are able to make informed
 
18 decisions, all health maintenance organizations shall provide
 
19 current and prospective enrollees with written disclosure of
 
20 coverages and benefits, including information on coverage
 
21 principles and any exclusions or restrictions on coverage.
 
22      The information provided shall be current, understandable,
 
23 and available prior to enrollment, and upon request after
 

 
Page 4                                                     1066
                                     H.B. NO.           H.D.1
                                                        
                                                        

 
 1 enrollment.  A policy or contract provided to an enrollee which
 
 2 describes coverages and benefits shall be in conformance with
 
 3 part I of article 10 of chapter 431."
 
 4      SECTION 5.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6      SECTION 6.  This Act shall take effect upon its approval,
 
 7 except that sections 2 and 4 of this Act shall take effect on
 
 8 January 1, 2000.