REPORT TITLE:
Insurance


DESCRIPTION:
Increases fines for violations of the insurance statutes and
rules; clarifies the scope of authority of the chief deputy
insurance commissioner and the licensing provisions for fraternal
benefit society agents; and requires policies provided by mutual
benefit societies and health maintenance organizations to meet
certain Flesch Reading Ease tests. (CD1)

 
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THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            C.D. 1
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO INSURANCE.



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

 1      SECTION 1.  Section 431:2-105, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (a) to read as follows:
 
 3      "(a)  There shall be a chief deputy commissioner, who shall
 
 4 be subject to chapters 76 and 77.  The chief deputy commissioner
 
 5 shall have the power to perform any act or duty [conferred upon]
 
 6 assigned by the commissioner, and shall take and subscribe the
 
 7 same oath of office as the commissioner, which oath shall be
 
 8 endorsed upon the certificate of the chief deputy commissioner's
 
 9 appointment and filed in the office of the lieutenant governor."
 
10      SECTION 2.  Section 431:2-203, Hawaii Revised Statutes, is
 
11 amended by amending subsection (b) to read as follows:
 
12      "(b) (1)  A person who intentionally or knowingly violates,
 
13           intentionally or knowingly permits any person, over
 
14           whom the person has authority, to violate, or
 
15           intentionally or knowingly aids any person in violating
 
16           any insurance rule or statute of this State or any
 
17           effective order issued by the commissioner, shall be
 
18           subject to any penalty or fine as stated in this code
 
19           or the penal code of the Hawaii Revised Statutes.
 

 
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 1      (2)  If the commissioner has cause to believe that any of
 
 2           other [laws] law relating to insurance, the
 
 3           commissioner shall certify the facts of the violation
 
 4           to the public prosecutor of the jurisdiction [of] in
 
 5           which the offense was committed.
 
 6      (3)  Violation of any provision of this code is punishable
 
 7           by a fine of not less than [$10] $100 nor more than
 
 8           [$1,000,] $10,000 per violation, or by imprisonment for
 
 9           not more than one year, or both, in addition to any
 
10           other penalty or forfeiture provided herein or
 
11           otherwise by law.
 
12      (4)  The terms [intentionally] "intentionally" and
 
13           [knowingly] "knowingly" have the meanings given in
 
14           [sections] section 702-206(1) and [702-206(2).] (2)."
 
15      SECTION 3.  Section 432:1-101.5, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]�432:1-101.5[]]  Disclosure of health care coverage and
 
18 benefits.  In order to ensure that all individuals understand
 
19 their health care options and are able to make informed
 
20 decisions, all mutual benefit societies shall provide current and
 
21 prospective members with written disclosure of coverages and
 
22 benefits, including information on coverage principles and any
 
23 exclusions or restrictions on coverage.
 

 
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 1      The information provided shall be current, understandable,
 
 2 and available prior to membership, and upon request after
 
 3 membership.  A policy provided to a member which describes
 
 4 coverages and benefits shall be in conformance with part I of
 
 5 article 10 of chapter 431."
 
 6      SECTION 4.  Section 432:2-609, Hawaii Revised Statutes, is
 
 7 amended by amending subsection (a) to read as follows:
 
 8      "(a) [Agents of societies shall be licensed in accordance
 
 9 with article 9 of the insurance code; provided that no
 
10 examination shall be required of any individual licensed to
 
11 represent a fraternal benefit society prior to July 1, 1988.]
 
12 Fraternal benefit society agents shall be licensed in accordance
 
13 with the provisions governing solicitors in article 9 of chapter
 
14 431, except that the appointment shall be made by the fraternal
 
15 benefit society.  Fraternal benefit society agents are not
 
16 prohibited from obtaining additional licenses provided for in
 
17 article 9.  No examination shall be required of an individual
 
18 licensed to represent a fraternal benefit society prior to
 
19 July 1, 1988."
 
20      SECTION 5.  Section 432D-25, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "[[]�432D-25[]]  Disclosure of health care coverage and
 
23 benefits.  In order to ensure that all individuals understand
 

 
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 1 their health care options and are able to make informed
 
 2 decisions, all health maintenance organizations shall provide
 
 3 current and prospective enrollees with written disclosure of
 
 4 coverages and benefits, including information on coverage
 
 5 principles and any exclusions or restrictions on coverage.
 
 6      The information provided shall be current, understandable,
 
 7 and available prior to enrollment, and upon request after
 
 8 enrollment.  A policy or contract provided to an enrollee which
 
 9 describes coverages and benefits shall be in conformance with
 
10 part I of article 10 of chapter 431."
 
11      SECTION 6.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 7.  This Act shall take effect upon its approval,
 
14 except that sections 3 and 5 of this Act shall take effect on
 
15 January 1, 2000.
 

 
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