STAND. COM. REP. NO. 679

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 885

       S.D. 2

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 885, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO THE STATE RISK MANAGEMENT AND INSURANCE ADMINISTRATION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to permit the Comptroller to acquire risk management, investigative, claims adjustment, actuarial, and other services on a fee for services compensation method by exempting licensed individuals and entities from applicable regulations found within the insurance code.

 

     Your Committee received written comments in support of this measure from the Department of Accounting and General Services.

 

     Your Committee received written comments on this measure from the Insurance Division of the Department of Commerce and Consumer Affairs and the Department of the Attorney General.

 

     Your Committee finds that the only method by which the Comptroller is authorized to acquire insurance brokerage services is by a commission that is negotiated between the insurance company and the State's insurance broker.  In certain cases where commissions have increased due to increased premiums, a fixed fee rather than a commission-based fee would have been cost effective for the State.  On the other hand, in cases where premiums are rapidly declining, the commission model may be a better option for the State.  Accordingly, your Committee believes that granting the Comptroller the flexibility to determine the method by which it acquires insurance brokerage services will provide the State with cost savings.

 

     Your Committee has amended this measure by making a technical nonsubstantive amendment for the purposes of style and clarity and to comport with recommended drafting conventions.

 

     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 S.B. No. 885, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 885, S.D. 2.

 

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

 

 

 

________________________________

JILL N. TOKUDA, Chair