REPORT TITLE: 
Insurance Consumer Advocate


DESCRIPTION:
Establishes an office of insurance consumer advocate within the
department of commerce and consumer affairs.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           28
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO AN INSURANCE CONSUMER ADVOCATE.



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

 1      SECTION 1.  The legislature finds that there is a present
 
 2 and ongoing need to recognize the conflicting economic interests
 
 3 of insurers and consumers.  The establishment of an office of the
 
 4 insurance consumer advocate, and the appropriation of funds to
 
 5 employ actuaries and other professionals as may be necessary for
 
 6 the performance of the insurance consumer advocate's function,
 
 7 will best ensure that the interests of purchasers of insurance
 
 8 are heard and considered.
 
 9      It is the purpose of this Act to establish an office of the
 
10 insurance consumer advocate to represent the consumer's interest
 
11 in the review and consideration of rate increases and other
 
12 insurance matters involving regulation by the insurance
 
13 commissioner.
 
14      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
15 a new chapter to be appropriately designated and to read as
 
16 follows:
 
17                             "CHAPTER
 
18                    INSURANCE CONSUMER ADVOCATE
 
19         -1  Insurance consumer advocate.(a)  There is
 

 
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 1 established an office of the insurance consumer advocate within
 
 2 the department of commerce and consumer affairs for
 
 3 administrative purposes only.  The governor shall appoint,
 
 4 without regard to chapters 76 and 77, an insurance consumer
 
 5 advocate, who shall be the head of the office and who shall serve
 
 6 at the pleasure of the governor.  The insurance consumer
 
 7 advocate's salary shall be equivalent to a first deputy of the
 
 8 department of commerce and consumer affairs.  The insurance
 
 9 consumer advocate shall be a member of the state employees'
 
10 retirement system and shall be eligible to receive the benefits
 
11 of any state or federal employee benefit program generally
 
12 applicable to officers and employees of the State.
 
13      (b)  The insurance consumer advocate shall represent,
 
14 protect, and advance the interests of insurance consumers in this
 
15 State in all matters of insurance under the jurisdiction of the
 
16 insurance division of the department of commerce and consumer
 
17 affairs.
 
18      The responsibility for advocating the interests of insurance
 
19 consumers shall be separate and distinct from the responsibility
 
20 of the insurance commissioner and those assistants employed by
 
21 the commissioner under this chapter.  The insurance consumer
 
22 advocate shall have full rights to participate as a party in
 

 
 
 
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 1 interest in all proceedings before the insurance commissioner and
 
 2 the courts.
 
 3         -2  Insurance consumer advocate division; personnel.
 
 4 There shall be an insurance consumer advocate division within the
 
 5 department of commerce and consumer affairs to provide
 
 6 administrative support to the insurance consumer advocate.  The
 
 7 insurance consumer advocate may employ and, at pleasure, dismiss
 
 8 an executive administrator who shall be exempt from chapters 76
 
 9 and 77, and define the powers and duties of the executive
 
10 administrator and fix compensation.  The insurance consumer
 
11 advocate may employ accountants, investigators, actuaries,
 
12 clerks, stenographers, and other assistants as may be necessary
 
13 for the performance of the insurance consumer advocate's
 
14 function, subject to chapters 76 and 77.
 
15         -3  General power; duties.(a)  The insurance consumer
 
16 advocate may:
 
17      (1)  Adopt rules pursuant to chapter 91 necessary to
 
18           effectuate the purposes of this chapter;
 
19      (2)  Conduct investigations to secure information useful in
 
20           the lawful administration of any provision of this
 
21           chapter;
 
22      (3)  Assist, advise, and cooperate with federal, state, and
 

 
 
 
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 1           county agencies and officials to protect, promote, and
 
 2           advance the interests of insurance consumers;
 
 3      (4)  Organize and hold conferences on problems affecting
 
 4           insurance consumers;
 
 5      (5)  Represent the interests of insurance consumers before
 
 6           any state or federal agency or instrumentality having
 
 7           jurisdiction over matters which would affect those
 
 8           interests;
 
 9      (6)  Study the operation of laws affecting insurance
 
10           consumers and recommend to the governor and the
 
11           legislature new laws and amendments to laws in the
 
12           consumers' interest in the insurance field; and
 
13      (7)  Perform such other acts as may be incidental to the
 
14           exercise of the functions, powers, and duties set forth
 
15           in this section.
 
16      (b)  Whenever it appears to the insurance consumer advocate
 
17 that an insurer has:
 
18      (1)  Violated or failed to comply with any provision of this
 
19           chapter or of any state or federal law;
 
20      (2)  Failed to comply with any rule, regulation, or other
 
21           requirement of the insurance commissioner of any other
 
22           state or federal agency;
 

 
 
 
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 1      (3)  Failed to comply with any provision of its charter or
 
 2           franchise;
 
 3      (4)  Set or applied any rates, classifications, charges, or
 
 4           rules affecting motor vehicle compensation insurance
 
 5           rates that are unreasonable or are unreasonably
 
 6           discriminatory; or
 
 7      (5)  Failed to give appropriate consideration to investment
 
 8           income earned or realized by insurers, including
 
 9           investment income earned from unearned premium and loss
 
10           reserve funds in making rates;
 
11 the insurance consumer advocate may institute proceedings for
 
12 appropriate relief before the insurance commissioner.  The
 
13 insurance consumer advocate may appeal any decision or order in
 
14 any proceeding to which the insurance consumer advocate is a
 
15 party in the manner provided by law.
 
16      (c)  The insurance consumer advocate may file with the
 
17 insurance commissioner and serve upon any insurance carrier a
 
18 request in writing to furnish information reasonably relevant to
 
19 any matter or proceeding before the insurance commissioner or
 
20 reasonably required by the insurance consumer advocate to perform
 
21 any duties under this chapter.  Any such request shall set forth
 
22 with reasonable specificity the purpose for which the information
 

 
 
 
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 1 is requested and shall designate with reasonable specificity the
 
 2 information desired.  The party from whom information is
 
 3 requested shall comply with the request within the time limit set
 
 4 forth by the insurance consumer advocate unless within ten days
 
 5 following service, the party requests a hearing on the matter
 
 6 before the insurance commissioner and states the party's reasons
 
 7 for the request.  If a hearing is requested, the insurance
 
 8 commissioner shall proceed to hold a hearing and make a
 
 9 determination on the request within thirty days after the request
 
10 is filed.  The insurance consumer advocate or the party who
 
11 requested information may appeal from any final decision and
 
12 order of the insurance commissioner as provided by law, provided
 
13 that the appeal shall not stay any order of the insurance
 
14 commissioner to the insurance carrier to furnish information
 
15 unless specifically so ordered by the court.
 
16         -4  Legal counsel.  The attorney general shall act as
 
17 attorney for the insurance consumer advocate; except that, in
 
18 instances where the office of disciplinary counsel has determined
 
19 that a conflict exists or may exist, the insurance consumer
 
20 advocate may retain special counsel.
 
21         -5  Handling of complaints.  The insurance consumer
 
22 advocate shall provide a central clearinghouse of information by
 

 
 
 
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 1 collecting and compiling all complaints and inquiries concerning
 
 2 insurance matters and shall monitor the handling of employer and
 
 3 business complaints by the insurance commissioner."
 
 4      SECTION 3.  There is appropriated out of the general
 
 5 revenues of the State of Hawaii the sum of $        , or so much
 
 6 thereof as may be necessary for fiscal year 1999-2000, for the
 
 7 establishment of the office of the insurance consumer advocate in
 
 8 accordance with this Act.
 
 9      The sum appropriated shall be expended by the department of
 
10 commerce and consumer affairs.
 
11      SECTION 4.  This Act shall take effect on July 1, 1999.
 
12 
 
13                           INTRODUCED BY:_________________________