STAND. COM. REP. NO.228

Honolulu, Hawaii

, 2003

RE: S.B. No. 1316

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1316 entitled:

"A BILL FOR AN ACT RELATING TO DENTAL INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to extend for another year the Insurance Commissioner's authority to examine, supervise, rehabilitate, and liquidate insolvent dental insurers.

The Department of Commerce and Consumer Affairs testified in support of this measure.

Act 132, Session Laws of Hawaii 2001, Regular Session (Act 132) made dental service corporations and dental service organizations subject to the Insurance Commissioner's enforcement, examination, supervision, rehabilitation, and liquidation powers. Prior to the Act, not all dental plans were subject to regulation by the Insurance Commissioner (Commissioner), and the granting of such authority was necessary to allow the Commissioner to protect consumers from the imminent failure of one particular dental insurer.

Under Act 132, the Commissioner's authority was established temporarily for a one-year period to allow the Commissioner to respond to the dental insurer's insolvency, and was scheduled to sunset on July 1, 2002. The Act was extended an additional year under Act 219, Session Laws of Hawaii 2002, to allow the Commissioner, who served as Liquidator in the insurer's liquidation proceedings, to see the proceedings through to their conclusion.

This measure proposes to extend Act 132 for another year until July 1, 2004, raising the issue of whether regulation of dental insurers should be established on a permanent basis. Your Committee notes that at the time of Act 132's enactment, concerns were expressed about establishing the Commissioner's oversight authority for a period beyond that necessary to deal with the one insolvent insurer. Your Committee finds that these concerns have yet to be resolved and encourages continuing discussions on this issue as the measure proceeds through the legislative process.

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. 1316 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.

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

____________________________

RON MENOR, Chair