Senate Commerce Committee advances health-savings, consumer-protection and insurance bills; several measures deferred

The Hawaii State Senate Committee on Commerce and Consumer Protection on Feb. 11 recommended passage with amendments for several bills and deferred others after a morning of testimony and decision-making.

The committee voted to advance SB 2431, a measure on health savings accounts, adopting Department of Taxation-requested changes including a five-year claim/carry-forward limit, removal of an aggregate cap, clarification that health plans must be written for the areas to be served, a definition for ‘‘rural,’’ and HMA-recommended transparent reporting. The committee set a defective effective date of July 1, 2050, to allow further work; the chair called the motion and recorded aye votes from the chair and vice chair.

SB 2797, a consumer-protection bill, was advanced with requested Department of Commerce and Consumer Affairs (DCCA) amendments and technical edits. Melissa Enright of the DCCA Office of Consumer Protection stood on written comments; Dave Erdman, interim president of Retail Merchants of Hawaii, testified in opposition, arguing the measure "shifts to new compliance costs and legal risk onto our businesses, our retailers, especially small retailers," and that "gift card fraud is driven by organized criminal activity, not retailer practices." The committee adopted a defective effective date of July 1, 2050 and moved the bill forward.

The committee deferred SB 2946, relating to foreclosures, citing lack of supporting testimony.

On insurance policy changes in SB 2961, the Insurance Division and the Hawaii Insurance Council pressed for clarifications to ensure provisions apply during declared states of emergency and to align language about additional living expense (ALE) benefits with policy limits. Matt Sujima of the Insurance Division explained ALE typically "helps to pay the reasonable increase in living expenses" and said limits are often set either as a percentage of dwelling coverage (commonly 15–30%) or by time frame. Senator McKelvey voiced concern that language tying benefits to ‘‘policy limits’’ could undermine statutory protections; after discussion the committee adopted several insurer-requested clarifications and removed the amendment that McKelvey warned could nullify the statute's intent. The recommendation to pass with amendments was adopted.

SB 2948, an insurance-fraud bill, was advanced with amendments deleting two definitions (claim harvesting and post-loss assignment abuse), aligning monetary thresholds with the penal code, requiring coordination with authorities that regulate licensed contractors, and clarifying that insurance professionals who reasonably relied on third-party information will not be found to have knowingly omitted material facts.

The committee reconsidered SB 3000 (heard earlier), clarified the attorney general's authority under the bill, added a special fund to collect and disburse civil-action proceeds, and recommended passage with amendments; the committee recorded a single recorded 'no' vote for Senator O'Hara and otherwise adopted the recommendation.

Next steps: deferred measures will be returned to committee calendars (SB 2946, SB 2452), and bills passed with amendments will proceed through the legislative process with the committee's recommended changes.

—Reporting by the Committee hearing record. The committee is scheduled to reconvene for related decision-making on Feb. 13 and Feb. 17 per the published calendar.