STAND. COM. REP. NO.614

Honolulu, Hawaii

, 2001

RE: S.B. No. 1074

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1074 entitled:

"A BILL FOR AN ACT RELATING TO CONSUMER PROTECTIONS FOR DEPOSITORY INSTITUTION SALES OF INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to require that sales of insurance products by banks be subject to federal laws and regulations.

The Commissioner of Financial Institutions testified in support of this measure.

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLBA) mandated the adoption of federal rules protecting consumers in retail sales of insurance products or annuities by depository institutions. This measure repeals specific requirements in the code of financial institutions relating to the sale of insurance by banks and establishes the applicability of federal law and rules to these transactions.

The GLBA further provides that federal rules adopted under the Act preempt comparable state laws where the federal rules provide greater consumer protection than state law. Your Committee finds that the State has an interest in maintaining regulatory oversight of insurance transactions involving banks within its jurisdiction. Therefore, in order to clarify the State's intent that insurance sales by banks be subject to state oversight, this measure has been amended by deleting language mandating the applicability of federal law to banks engaging in sales of insurance. Your Committee has also amended this measure to reflect preferred drafting style.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1074, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1074, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

RON MENOR, Chair