Insurance Bills Awaiting Action by Hawaii’s Governor

May 17, 2006

Several insurance-related bills in Hawaii — including measures involving workers compensation, auto insurance claims and privacy — have been approved by the Legislature and are awaiting action by the governor.

“The legislative session, which ended May 4, produced a number of insurance bills that were sent to Gov. Linda Lingle, who has until June 26 to give notice of her intent to veto bills and until July 11 to sign them into law,” said Sam Sorich, vice president and western regional manager of the Property Casualty Insurers Association of America (PCI).

One of the bills pending before the governor is SB 3072, which responds to a Hawaii Supreme Court decision that caused some confusion about the denial of auto insurance claims, he said.

“The bill makes it clear that an insurer may dispute the charges for the medical treatment to a claimant without having to issue a formal denial notice. This clarification will correct a misunderstanding among some consumers that their claims were being denied,” Sorich said.

“In essence the bill makes it clear that an insurer may adjust medical charges to conform to the state’s fee schedule without issuing denial notices to claimants. PCI is urging the governor to sign the bill into law.”

PCI is asking the governor to veto two other bills on her desk. Both are workers compensation measures. One, SB 3035, would require an insurer to pay disputed temporary disability benefits until there is a ruling from the director of Labor and Industrial Relations to terminate payment.

The other bill, HB 1867, would create a similar requirement for payments to providers of medical services when those payments are in dispute, according to PCI.

“In addition to requiring payments that are not justified, these bills do not provide adequate procedures that allow the recovery of payments that were not warranted,” Sorich said.

Legislators also passed a package of bills related to identify theft, document destruction and security breaches. PCI, according to Sorich, believed the bills do a generally good job of balancing privacy concerns with recognition of business realities.

“We do, however, believe that SB 2290 which relates to notices that a business must disseminate in the event of a security breach is flawed in two respects. The details in the notice which a business must send to an individual consumer could cause costly compliance problems. In addition, the provision in the bill that allows a business to send a substitute notice when the cost of sending individual notices exceeds a certain level uses a threshold that is too high.”

The Association of California Insurance Companies (ACIC) is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property/casualty insurance companies doing business in California.

Source: ACIC and PCI

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