Bill Text: HI HB1087 | 2018 | Regular Session | Amended
Bill Title: Relating To Insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-11-30 - Carried over to 2018 Regular Session. [HB1087 Detail]
Download: Hawaii-2018-HB1087-Amended.html
|
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1087 |
|
TWENTY-NINTH LEGISLATURE, 2017 |
H.D. 1 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to part I of article 10C to be appropriately designated and to read as follows:
"§431:10C- Payment of general excise tax and certificate of ownership fee on third party claims. (a) When a motor vehicle insurer settles a total loss motor vehicle damage liability claim with a third-party claimant, the insurer shall pay the applicable general excise tax and certificate of ownership fee; provided that if the third-party claimant cannot substantiate the purchase and the payment of the general excise tax and certificate of ownership fee by submitting to the insurer appropriate documentation within thirty-three days after the receipt of settlement, the insurer shall not be required to reimburse the third-party claimant for the tax or fee.
(b) In lieu of the procedure in subsection (a), the insurer may directly pay the required general excise tax and certificate of ownership fee to the third-party claimant at the time of settlement.
(c) Written notice of the payment procedure outlined in this section shall be communicated to the third-party claimant at the time of settlement, together with any form required by the insurer for applying for the reimbursement.
(d) An insurer's obligation to reimburse a third-party claimant for the applicable general excise tax and certificate of ownership fee as set forth in this section shall be subject to the property damage liability limit of the policy."
SECTION 2. Section 431:2-403, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Violation of subsection (a) is a criminal offense and shall constitute:
(1) A class B felony if the value of the benefits,
recovery, or compensation obtained or attempted to be obtained [is more than]
exceeds $20,000;
(2) A class C felony if the value of the benefits,
recovery, or compensation obtained or attempted to be obtained [is more than
$300;] exceeds $750; or
(3) A misdemeanor if the value of the benefits,
recovery, or compensation obtained or attempted to be obtained is [$300 or
less.] not in excess of $750."
SECTION 3. Section 431:3-212, Hawaii Revised Statutes, is amended to read as follows:
"§431:3-212 Application for
authority. To apply for an original certificate of authority, an insurer
shall[:] file with the commissioner a Uniform Certificate of
Authority Application from the National Association of Insurance Commissioners
that shall set forth or be accompanied by all of the following:
(1) [File with the commissioner its] The
insurer's request showing:
(A) Its name, in compliance with sections 431:3-202(b)
and 431:4-104(d)(1), home office location, type of insurer, organization
date, [and] state or country of its domicile, and name and location of the
principal office of its attorney-in-fact, if a reciprocal insurer;
(B) The classes of insurance it proposes to transact; and
(C) Additional information as the commissioner
may reasonably require[;].
(2) [File with the commissioner:] Documents
including the following:
(A) A copy of its charter as
amended or [such copy] certified by the proper public officer of the
state or country of domicile, if a foreign or alien insurer;
(B) A copy of its bylaws as amended, certified by its proper officer;
(C) A copy of its annual statement as of December 31 last preceding;
(D) An appointment of the commissioner as its
attorney to receive service of legal
process, if a foreign or alien insurer[,] or a domestic reciprocal
insurer;
(E) The name and business address of its authorized resident agent upon whom process may be served in all cases, if a foreign or alien insurer;
(F) A copy of the appointment and authority of its United States manager, certified by its proper officer, if an alien insurer;
(G) A certificate from the proper public
official of its state or country of domicile showing that it is duly organized
and [is] authorized to transact the classes of insurance proposed to be
transacted, if a foreign or alien insurer;
(H) The declaration required by section 431:4-409, if a domestic reciprocal insurer;
(I) [Certificate] A certificate
of the proper public official as to any deposit made or held in compliance with
this code;
(J) [Copy] A copy of the
report of the last examination made of the insurer certified by the insurance
supervisory official of its state of domicile or entry into the United States,
if a foreign or alien insurer; and
(K) Other documents or stipulations as the
commissioner may reasonably require to evidence compliance with this code[;
and].
(3) [Deposit] A deposit with the
commissioner of the appropriate fees required by this code."
SECTION 4. Section 431:3-212.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
Each transferring insurer shall file new policy forms on or before the
effective date of the transfer, if such forms are required to be
approved by the commissioner. The insurer may use existing policy forms with appropriate endorsements if
permitted by[, and under such conditions as approved by,] the commissioner.
Every [such] transferring insurer shall
notify the commissioner of the details of the proposed transfer and shall file
promptly a Uniform Certificate of Authority Application for any
resulting amendments to corporate documents filed or required to be filed with
the commissioner."
SECTION 5. Section 431:7-101, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The commissioner shall collect, in advance, the following fees:
(1) Certificate of authority:
(A). Application
for [a] certificate of authority $900
(B). Issuance of certificate of authority....... $600
(C). Application for motor vehicle self-insurance $300
(2) Organization of domestic insurers and affiliated corporations:
(A). Application
for [a] solicitation permit.. $1,500
(B). Issuance of solicitation permit............ $150
(3) Producer's license:
(A). Issuance[,]
of regular license.............. $50
(B). Issuance[,]
of temporary license............ $50
(4) Nonresident producer's license: Issuance........ $75
(5) Independent adjuster's license: Issuance........ $75
(6) Public adjuster's license: Issuance............. $75
(7) Claims adjuster's limited license: Issuance..... $75
(8) Independent bill reviewer's license:
Issuance......................................... $80
(9) Limited producer's license: Issuance............ $60
(10) Managing general agent's license: Issuance...... $75
(11) Reinsurance intermediary's license:
Issuance......................................... $75
(12) Surplus lines broker's license: Issuance....... $150
(13) Service contract provider's registration:
Issuance......................................... $75
(14) Approved course provider certificate:
Issuance........................................ $100
(15) Approved continuing education course certificate: Issuance $30
(16) Vehicle protection product warrantor's registration: Issuance $75
(17) Criminal history record check; fingerprinting: For each criminal history record check and fingerprinting check, a fee to be established by the commissioner.
(18) Limited line motor vehicle rental company producer's license: Issuance...................................... $1,000
(19) Legal service plan certificate of authority:
Issuance before July 1, 2014.................. $1,000
Issuance on or after July 1, 2014............... $500
(20) Life settlement provider's license:
Issuance before July 1, 2014.................... $150
Issuance on or after July 1, 2014................ $75
(21) Life settlement broker's license:
Issuance before July 1, 2014.................... $150
Issuance on or after July 1, 2014................ $75
(22) Examination for license: For each examination, a fee to be established by the commissioner."
SECTION 6. Section 431:9-201, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
Notwithstanding subsection (a), following a [catastrophe in this State,]
declaration by the commissioner authorizing assistance of nonresident
adjusters, a Hawaii license shall not be required of a nonresident adjuster
for the adjustment of losses; provided that:
(1) The common losses
suffered that are to be adjusted are a direct result of [the catastrophe]
an event and [shall be] are so severe that licensed
adjusters and licensed independent adjusters who are residents of this State
will be unable to adjust the losses within a reasonable time as determined by
the commissioner;
(2) The nonresident
adjuster provides [to] the commissioner a certified copy of the
adjuster's current license in another state. The other state shall have
substantially similar licensing requirements to section 431:9-222; and
(3) Within three working days of the commencement of work by the nonresident adjuster, the insurance company, independent adjusting company, or producer that is using the adjuster shall provide on its letterhead to the commissioner:
(A) The name of the nonresident adjuster;
(B) The nonresident adjuster's Hawaii mailing and business addresses and phone numbers; and
(C) The nonresident adjuster's permanent home and business addresses and phone numbers.
Upon satisfaction of all of these requirements,
the nonresident adjuster may be registered with the commissioner and adjust [catastrophic]
the event's losses in this State for up to one hundred twenty days from
the date of registration or for a period of time determined by the
commissioner, whichever is less.
As used in this subsection, ["catastrophe"]
"event" means insured property losses in Hawaii that result
from a sudden, specific, and natural or manmade disaster or phenomenon, as
determined by the commissioner."
SECTION 7. Section 431:9A-102, Hawaii Revised Statutes, is amended by amending the definition of "terminate" to read as follows:
""Terminate" means:
(1) To cancel the relationship between an insurance producer and an insurer; or
[(2) To cancel the relationship between an
appointing producer and another producer; or
(3)] (2) To terminate a producer's
authority to transact insurance."
SECTION 8. Section 431:9A-114, Hawaii Revised Statutes, is amended to read as follows:
"§431:9A-114 Appointments. (a) An
insurance producer shall not act as an agent of an insurer unless the [insurance]
producer becomes an appointed agent of that insurer [or is contracted with
and appointed by an insurance producer so appointed].
(b) To appoint a producer as its agent, the [appointing]
insurer [or producer] shall file, in a format approved by the
commissioner, a notice of appointment within fifteen days from the date the
agency or business entity contract is executed or the first insurance
application is submitted to the insurer [or producer]. If the appointment
form is not received by the commissioner within the fifteen-day period, the
appointment shall become effective on the date on which the commissioner
receives the appointment form. A producer shall disclose to a client if the
conditions of subsection (a) have not been met. An insurer [or producer]
may also elect to appoint a producer to all or some insurers within the
insurer's [or producer's] holding company system or group by filing with
the commissioner a single appointment notice.
(c) Upon receipt of the notice of appointment
and within a reasonable time not to exceed thirty days, the commissioner shall
verify that the [insurance] producer is eligible for appointment. If
the [insurance] producer is determined to be ineligible for appointment,
the commissioner shall notify the appointing insurer [or producer]
within five days of its determination.
(d) An appointing insurer [or producer]
shall pay an appointment fee, in the amount and method of payment set forth in
article 7, for each [insurance] producer appointed by the appointing
insurer [or producer].
(e) An appointing insurer [or producer]
shall remit, in a manner prescribed by the commissioner, a renewal appointment
fee in the amount set forth in article 7."
SECTION 9. Section 431:9A-115, Hawaii Revised Statutes, is amended to read as follows:
"§431:9A-115 Notification to
commissioner of termination. (a) A producer who terminates the
appointment, employment, contract, or other insurance business relationship
with an insurer shall notify the commissioner within thirty days following the
effective date of the termination, using the applicable format prescribed by
the commissioner. An insurer[,] or its authorized
representative [of the insurer, or a producer] that terminates the
appointment, employment, contract, or other insurance business relationship
with a producer shall notify the commissioner within thirty days following the
effective date of the termination, using the applicable format prescribed by
the commissioner. An insurer[, an] or its authorized
representative [of the insurer, or a producer who] that
terminates a producer for one of the reasons set forth in section 431:9A-112,
or [who] that has knowledge the producer was found by a court,
governmental body, or self-regulatory organization to have engaged in any of
the activities in section 431:9A-112, shall use the particular format for that
situation as prescribed by the commissioner. Upon the written request of the
commissioner, the insurer shall provide additional information, documents,
records, or other data pertaining to the termination or activity of the
producer.
(b) The insurer[, an] or its
authorized representative [of the insurer, or a producer] shall promptly
notify the commissioner in a format acceptable to the commissioner if, upon
further review or investigation, the insurer[, an] or its authorized
representative [of the insurer, or a producer] discovers additional
information that would have been reportable to the commissioner in accordance
with subsection (a), had the insurer[,] or its authorized
representative [of the insurer, or producer then] known of its
existence.
(c) The insurer[,] and its
authorized representative [of the insurer, and the producer] are subject
to the following:
(1) Within fifteen days after making the notification
required by subsections (a) and (b), the insurer[,] or its
authorized representative [of the insurer, or the producer] shall mail a
copy of the notification to the producer at the producer's last known address.
If the producer is terminated for any of the causes listed in section
431:9A-112, the insurer[,] or its authorized representative [of
the insurer, or the producer] shall provide a copy of the notification to
the producer at the producer's last known address by certified mail, return
receipt requested, postage prepaid or by overnight delivery using a nationally
recognized carrier.
(2) Within thirty days after the producer has
received the original or additional notification, the producer may file written
comments concerning the substance of the notification with the commissioner.
The producer, by the same means, shall simultaneously send a copy of the
comments to the reporting insurer[,] or its authorized representative
[of the insurer, or the producer], and the comments shall become [a]
part of the commissioner's file and shall accompany every copy of a report
distributed or disclosed for any reason about the producer as permitted under
subsection [(e).] (f).
(d) The producer initiating the termination shall be subject to the following:
(1) Within fifteen days after making the notification required by subsection (a), the producer shall mail a copy of the notification to the insurer at the insurer's last known address; and
(2) Within thirty days after the insurer has received the original or additional notification, the insurer may file written comments concerning the substance of the notification with the commissioner. The insurer, by the same means, shall simultaneously send a copy of the comments to the producer, and the comments shall become part of the commissioner's file and shall accompany every copy of a report distributed or disclosed for any reason about the insurer as permitted under subsection (f).
[(d)] (e) Immunity from civil
liability for notification applies as follows:
(1) In the absence of actual malice, an insurer, the
insurer's authorized representative, a producer, the commissioner, or an
organization of which the commissioner is a member and that compiles the
information and makes it available to other commissioners or regulatory or law
enforcement agencies shall not be subject to civil liability[, and a].
A civil cause of action of any nature shall not arise against these
entities or their respective agents or employees[,] as a result of [any]:
(A) Any statement or information
required by or provided pursuant to this section [or any];
(B) Any information relating to
any statement that may be requested in writing by the commissioner[,]
from an insurer or producer; or [a]
(C) A statement by a terminating
insurer or producer to an insurer or producer limited solely [and
exclusively] to whether a termination under subsection (a) was reported to
the commissioner, provided that the propriety of any termination under
subsection (a) is certified in writing by an officer or authorized representative
of the insurer or producer terminating the relationship.
(2) In any action brought against a person that may have immunity under paragraph (1) for making any statement required by this section or for providing any information relating to any statement that may be requested by the commissioner, the party bringing the action shall plead specifically in any allegation that paragraph (1) does not apply because the person making the statement or providing the information did so with actual malice.
(3) [Paragraphs] Paragraph (1) or (2)
shall not abrogate or modify any existing statutory or common law privileges or
immunities.
[(e)] (f) Confidentiality and
privilege from disclosure [is] are established as follows:
(1) Any documents, materials, or other information in
the control or possession of the commissioner or [any] the
commissioner's agent [of the commissioner] that is furnished by an
insurer, a producer, or an employee or agent [thereof who is]
acting on behalf of the insurer or producer, or is obtained by the
commissioner, [any] the commissioner's agent [of the
commissioner], the insurance division, or any employee of the insurance
division, in an investigation pursuant to this section shall be confidential
and privileged, shall not be subject to chapter 92F, [shall not be subject
to] subpoena, [shall not be subject to] or discovery, and
shall not be admissible in evidence in any civil action; provided that the
commissioner or the commissioner's designee is authorized to use the documents,
materials, or other information in the furtherance of any regulatory or legal
action brought as a part of the commissioner's duties.
(2) Neither the commissioner nor any person who received documents, materials, or other information while acting under the authority of the commissioner shall be required to testify in any civil action concerning any confidential documents, materials, or information subject to paragraph (1).
(3) Any provision to the contrary notwithstanding, the commissioner may:
(A) Share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to paragraph (1), with other state, federal, and international regulatory and law enforcement agencies and authorities, the National Association of Insurance Commissioners, and their affiliates or subsidiaries; provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information;
(B) Receive documents, materials, or
information, including otherwise confidential and privileged documents,
materials, or information, from the National Association of Insurance
Commissioners, its affiliates or subsidiaries, and [from] state,
federal, and international regulatory and law enforcement agencies and
authorities and shall maintain as confidential or privileged any document,
material, or information received with the notice or [the] understanding
that it is confidential or privileged under the laws of the jurisdiction that
is the source of the document, material, or information; and
(C) Enter into agreements governing sharing and use of information consistent with this subsection.
(4) No waiver of any applicable privilege or claim of
confidentiality in the documents, materials, or information shall occur as a
result of disclosure to the commissioner under this section or [as a result
of] sharing, receiving, or using the information as authorized in
paragraph (3).
(5) Nothing in this article shall prohibit the
commissioner from releasing final[,] adjudicated actions, including
terminations that are open to public inspection pursuant to section 431:2-209
to a database or other clearinghouse service maintained by the National
Association of Insurance Commissioners or its affiliates or subsidiaries.
[(f)] (g) An insurer, [the]
its authorized representative [of the insurer], or a producer who
fails to report as required [under the provisions of] by this
section or who is found to have reported with actual malice by a court of
competent jurisdiction may, after notice and hearing, have its license or
certificate of authority suspended or revoked and may be fined in accordance
with article 2."
SECTION 10. Section 431:15-201, Hawaii Revised Statutes, is amended to read as follows:
"§431:15-201
Commissioner's summary orders and supervision proceedings. (a) If, upon
examination or at any other time, the commissioner finds that any domestic
insurer requires supervision because it is in [such] a condition [as
to] that would render the continuance of its business hazardous to
the public or to holders of its policies or certificates of insurance, or if
the domestic insurer gives its consent, then the commissioner shall issue a
supervision order and shall:
(1) Notify the insurer of the commissioner's order; and
(2) Furnish to the insurer a written list of the commissioner's requirements to abate the commissioner's order. The commissioner shall also proceed, if necessary, against the insurer pursuant to section 431:2-203.
(b) During the period of supervision, the
commissioner may appoint a supervisor to supervise the insurer[.],
and the commissioner may employ counsel, clerks, and assistants as necessary.
The supervisor shall have all the powers and responsibilities granted under
this section. Any persons appointed under this section shall serve at
the pleasure of the commissioner.
(c) The compensation of the supervisor, counsel, clerks, and assistants and all expenses of the supervision shall be approved by the commissioner and paid out of the funds or assets of the insurer upon presentation of a detailed account of the expenses filed by the supervisor or other persons employed or appointed by the commissioner. The commissioner may in whole or in part defer payment of expenses due from the insurer pursuant to this section upon a showing that payment would adversely impact the financial condition of the insurer and jeopardize its recovery during supervision. Deferred payments shall be made by the insurer when payment no longer adversely impacts its financial condition.
(d) The order appointing a supervisor
shall direct the supervisor to enforce orders issued under subsection (a) and [also]
may [require that] prohibit the insurer [shall not do] from
doing any of the following [things] during the period of supervision
without [the] prior written approval of the commissioner or [the]
supervisor:
(1) Dispose of, convey, or encumber any of its
assets or [its] business in force;
(2) Withdraw from any of its bank accounts;
(3) Lend any of its funds;
(4) Invest any of its funds;
(5) Transfer any of its property;
(6) Incur any debt, obligation, or liability;
(7) Merge or consolidate with another company;
(8) Enter into any new reinsurance contract or treaty; or
(9) Write any new or renewal business.
[(c)] (e) Any insurer subject to
an order under this section shall comply with the requirements of the
commissioner within sixty days from the date the supervision order is served. If
the insurer fails to comply within the time specified, the commissioner may
institute proceedings under section 431:15-301 or section 431:15-306 to have a
rehabilitator or liquidator appointed[,] or seek to enforce the order
pursuant to section 431:2-203.
[(d)] (f) Any insurer subject to
an order under this section may request a hearing to review the order. The
hearing shall be held as provided in chapter 91, but the request for a hearing
shall not stay the effect of the order. The insurer, at any time, may waive said
hearing and apply for immediate judicial relief by means of any remedy afforded
by law without first exhausting administrative remedies.
[(e)] (g) During the period of
supervision, the insurer may request that the commissioner [to]
review an action taken or proposed to be taken by the supervisor[,
specifying where the action complained of is believed not to be] that
the insurer believes is not in the best interest of the insurer.
[(f)] (h) If any person has
violated any supervision order issued under this section [which as to the
person was then still in effect], the person shall pay a penalty imposed by
the circuit court of the first judicial circuit of this State, which shall
not [to] exceed $10,000 for each violation.
[(g)] (i) The commissioner may
apply for, and the court may grant, [such] restraining orders,
preliminary [and] or permanent injunctions, [and] or
other orders [as may be deemed necessary and proper] to enforce a
supervision order.
[(h)] (j) If any person:
(1) With authority over or in charge of any segment of the insurer's affairs; or
(2) Who exercises control directly or indirectly over activities of the insurer through any holding company or other affiliate of the insurer;
knowingly violates any valid order of the commissioner issued under this section and, as a result of the violation, the net worth of the insurer is reduced or the insurer suffers loss it would not otherwise have suffered, the person shall become personally liable to the insurer for the amount of the reduction or loss. The commissioner or supervisor may bring an action on behalf of the insurer in the circuit court of the first judicial circuit of this State to recover the amount of the reduction or loss together with any costs."
SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 12. This Act shall take on July 1, 2112; provided that sections 7,8, and 9 shall take effect on January 1, 2019.
Report Title:
Insurance Fraud Violations; Insurer; Certificate of Authority; Uniform Certificate of Authority Application; Fees; Motor Vehicle Self-Insurance; Declaration by the Commissioner; Nonresident Adjusters; Insurance Producer License; Producer Licensing Model Act; Appointments; Notification of Termination; Motor Vehicle Insurance; Third-Party Claimant; General Excise Tax; Certificate of Ownership Fee; Supervision of Insurers
Description:
Updates Hawaii Revised Statutes title 24 by: changing the dollar amount of the benefits, recovery, or compensation obtained or attempted to be obtained for a class C felony, and misdemeanor; requiring insurers seeking a certificate of authority to submit a Uniform Certificate of Authority Application to the Insurance Division and to clarify that the insurer's name must comply with sections 431:3-202(b) and 431:4-104(d)(1); including application and service fees charged to motor vehicle self-insurers; allowing the Insurance Commissioner to issue a declaration before an event that may require the use of nonresident adjusters; complying with the National Association of Insurance Commissioners' Producer Licensing Model Act; allowing third-party claimants to claim the general excise tax and certificate of ownership fee in total loss claims; requiring that certain costs and expenses incurred by the Insurance Commissioner during supervisory proceedings be paid or reimbursed by the assets of the insurer; and making technical, nonsubstantive amendments for clarity and consistency. (HB1087 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
