STAND. COM. REP. NO. 1251

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 1045

       H.D. 1

       S.D. 2

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred H.B. No. 1045, H.D. 1, S.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 adopt the National Association of Insurance Commissioners' Risk-Based Capital for Health Organizations Model Act to ensure consistent regulatory treatment of health maintenance organizations, mutual benefit societies, fraternal benefit societies, managed care plans, and similar risk-bearing entities.

 

     Your Committee received comments in support of this measure from Gordon Ito, State Insurance Commissioner, Department of Commerce and Consumer Affairs; and Jennifer Diesman, Vice President, Government Relations, Hawaii Medical Service Association.

 

     Your Committee finds that adoption of the National Association of Insurance Commissioners' model laws and regulations is essential for the state Insurance Division to retain the National Association of Insurance Commissioners accreditation. The National Association of Insurance Commissioners' financial regulation standards and accreditation program ensures that each state has adequate solvency laws and regulations to protect consumers and guarantee funds.

 

     Your Committee has amended this measure by:

 

     (1)  Changing the term "limited benefit society" to "limited society"; and

 

     (2)  Clarifying that if a domestic benefit society or health maintenance organization only writes direct business in Hawaii and assumes no reinsurance in excess of five per cent of direct premiums written; and either:

 

     (A)  Writes only $2,000,000 or less in direct annual premiums for comprehensive medical business; or

 

     (B)  Is a limited society or health maintenance organization that covers less than two thousand lives;

 

then the Insurance Commissioner has the authority to exempt the domestic benefit society, limited society, or health maintenance organization from the risk-based capital for insurers requirements of chapter 431, article 3, Hawaii Revised Statutes.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1045, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1045, H.D. 1, S.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

____________________________

DAVID Y. IGE, Chair