Bill Text: HI SB1276 | 2012 | Regular Session | Amended
Bill Title: Insurance; Basic Health Program
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-07-10 - (S) Act 254, 7/6/2012 (Gov. Msg. No. 1357). [SB1276 Detail]
Download: Hawaii-2012-SB1276-Amended.html
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THE SENATE |
S.B. NO. |
1276 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
S.D. 2 |
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STATE OF HAWAII |
H.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:
SECTION 1. Section 431:2-105, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There shall be a chief deputy commissioner, who shall be subject to chapter 76. The chief deputy commissioner shall have the power to perform any act or duty assigned by the commissioner. If a commissioner has not been appointed, the chief deputy commissioner shall have the power to perform any act conferred upon the commissioner until the appointment is made. The certificate of the chief deputy commissioner's appointment shall be filed in the office of the lieutenant governor."
SECTION 2. Section 431:2-202.5, Hawaii Revised Statutes, is amended to read as follows:
"§431:2-202.5
Approval; when deemed effective. Except as
provided otherwise, any approval required by law shall be deemed granted on the
[thirtieth] seventy-fifth calendar day following the filing of the request for approval if
the commissioner does not take any affirmative action to grant or deny the
approval within [thirty] seventy-five
calendar days of the request."
SECTION 3. Section 431:2-206, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) A person
competent to serve a summons shall serve upon the commissioner triplicate
copies of legal process against an insurer for whom the commissioner is
attorney. In the absence of the commissioner, the process may be served
upon the chief deputy or the deputy in charge of the insurance function.
At the time of service the plaintiff shall pay to the commissioner [$12,]
$25, taxable as costs in the action."
SECTION 4. Section 431:9-204, Hawaii Revised Statutes, is amended to read as follows:
"§431:9-204
Applications for license. (a) Application for [any such]
an adjuster or independent bill reviewer license shall be made to the commissioner
upon forms as prescribed and furnished by the commissioner. As a part of
or in connection with [any such] the
application, the applicant shall furnish information
including:
(1) The applicant's identity,
personal history, experience, business records, and a full set of fingerprints,
including a scanned file from a hard copy fingerprint, for the commissioner to
obtain and receive national and state criminal history [[]record[]]
checks from the Federal Bureau of Investigation and the Hawaii criminal justice
data center, pursuant to section 846-2.7; and
(2) Other pertinent facts as the commissioner may reasonably require.
[(b)(1) If the applicant is a
partnership or corporation, the application shall furnish in addition to the
requirements set forth in subsection (a):
(A) The names of
all partners or officers; and
(B) A designation
of each individual who is to exercise the powers to be conferred by the license
upon the partnership or corporation.
(2) Each individual shall
be required to furnish information to the commissioner as though for an
individual license.
(c)]
(b) Any person wilfully misrepresenting or omitting any fact
required to be disclosed in [any such] an
application filed pursuant
to this section shall be liable for penalties as provided
by this code."
SECTION 5. Section 431:9C-101, Hawaii Revised Statutes, is amended by amending the definition of "managing general agent" to read as follows:
""Managing general agent"
means any person, firm, association, or corporation that manages all or part of
the insurance business of an insurer (including the management of a separate
division, department, or underwriting office) and acts as an agent for [such] the insurer whether known
as a managing
general agent, manager, or other
similar term, who, with or without the authority, either separately or together
with affiliates, produces, directly or indirectly, and underwrites an amount of
gross direct written premium equal to or more than five per cent of the
policyholder surplus as reported in the last annual statement of the insurer in
any one quarter or year, together with one or more of the following activities
related to the business produced: adjusts or pays claims in excess of [an
amount determined by the commissioner,] $10,000, or negotiates
reinsurance on behalf of the insurer. Notwithstanding the preceding
sentence, the following persons shall not be considered as managing general agents for the purposes of this article:
(1) An employee of the insurer;
(2) A United States manager of the United States branch of an alien insurer;
(3) An underwriting manager who, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to article 11, and whose compensation is not based on the volume of premiums written;
(4) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under a power of attorney; and
(5) Any person, firm, association, or corporation domiciled in the State and authorized to do business only in the State and acting as a managing general agent for an insurer licensed and conducting business only in the State."
SECTION 6. Section 431:10H-228, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Every
insurer, health care service plan, or other entity providing long-term care
insurance or benefits in this State shall provide a copy of any long-term care
insurance advertisement intended for use in this State whether through written,
radio, or television medium to the commissioner for review or approval by the
commissioner to [the extent it may be reviewed under state law.] determine
compliance with this article. In addition, all advertisements shall be
retained by the insurer, health care service plan, or other entity for at least
three years from the date the advertisement was first used."
SECTION 7. Section 431:11-106, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) (1) Transactions within a holding company system to which an insurer subject to registration is a party shall be subject to the following standards:
(A) The terms shall be fair and reasonable;
(B) Charges or fees for services performed shall be reasonable;
(C) Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;
(D) The books, accounts, and records of each party to all transactions shall be maintained so as to clearly and accurately disclose the nature and details of the transactions including the accounting information necessary to support the reasonableness of the charges or fees to the respective parties; and
(E) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;
(2) The following transactions involving a domestic insurer and any person in its holding company system shall not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into the transaction at least thirty days prior thereto, or a shorter period as the commissioner may permit, and the commissioner has not disapproved it within that period:
(A) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments; provided that the transactions are equal to or exceed:
(i) With respect to nonlife insurers, the lesser of three per cent of the insurer's admitted assets or twenty-five per cent of surplus as regards policyholders each as of the thirty-first day of December next preceding; or
(ii) With respect to life insurers, three per cent of the insurer's admitted assets as of the thirty-first day of December next preceding;
(B) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer making the loans or extensions of credit; provided that the transactions are equal to or exceed:
(i) With respect to nonlife insurers, the lesser of three per cent of the insurer's admitted assets or twenty-five per cent of surplus as regards policyholders each as of the thirty-first day of December next preceding; or
(ii) With respect to life insurers, three per cent of the insurer's admitted assets as of the thirty-first day of December next preceding;
(C) Reinsurance agreements or modifications thereto in which the
reinsurance premium or a change in the insurer's liabilities equals or exceeds
five per cent of the insurer's surplus as regards policyholders, as of the
thirty-first day of December next preceding, including those agreements [which] that may require as
consideration the transfer of assets from an insurer to a nonaffiliate, if an
agreement or understanding exists between the insurer and nonaffiliate that any
portion of the assets will be transferred to one or more affiliates of the
insurer;
(D) All management agreements, service contracts, and [all]
cost-sharing arrangements; and
(E) Any material transactions, specified by rule, which the commissioner determines may adversely affect the interests of the insurer's policyholders.
Nothing in this section shall be deemed to authorize or permit any transactions which, in the case of an insurer not a member of the same holding company system, would be otherwise contrary to law;
(3) A
domestic insurer may not enter into transactions [which] that are part of a plan or series of like transactions
with persons within the holding company system if the purpose of those separate
transactions is to avoid the statutory threshold amount and thus avoid the
review that would otherwise occur. If the commissioner determines that
the separate transactions were entered into over any twelve-month period for
that purpose, the commissioner may exercise the commissioner's authority under
section 431:11-111;
(4) The commissioner, in reviewing transactions pursuant to subsection (a)(2), shall consider whether the transactions comply with the standards set forth in subsection (a)(1) and whether they may adversely affect the interests of policyholders; and
(5) The commissioner shall be notified
within thirty days of any investment of the domestic insurer in any one person
if the total investment in the person by the insurance holding company system
exceeds ten per cent of the [corporation's] person's voting
securities[.] or the domestic insurer
possesses control of the person as defined in section 431:11-102."
SECTION 8. Section 431:14G-105, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a)
Every managed care plan shall file [in triplicate] with the
commissioner, every rate, charge, classification, schedule, practice, or rule
and every modification of any of the foregoing that it proposes to use. Every filing shall [state]:
(1) State its
proposed effective date [and shall indicate];
(2) Indicate the character and extent of the coverage
contemplated[. The filing also shall include];
(3) Include a report on investment income[.];
and
(4) Be accompanied by a $50 fee payable to the commissioner which shall be deposited in the commissioner's education and training fund.
[(b) Each filing shall be
accompanied by a $50 fee payable to the commissioner and shall be deposited in
the commissioner's education and training fund.]
(b) For each filing, an insurer shall submit to the commissioner:
(1) An electronic copy of the filing; or
(2) Two printed copies of the filing.
The commissioner may also request a printed version of an electronic filing to be submitted pursuant to paragraph (1)."
SECTION 9. Section 431P-16, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e)
After each covered event, if the board shall determine that the moneys in the
hurricane reserve trust fund, excluding moneys determined by the board to be
needed to continue fund operations following that covered event, will be
insufficient to pay claims and other obligations of the fund arising out of
that covered event, the Hawaii hurricane relief fund [is authorized to] shall
levy a surcharge not to exceed seven and one-half per cent a year on premiums
charged for all property and casualty insurance policies issued for risks
insured in this State. These moneys may be deposited into the hurricane
reserve trust fund or into trust or custodial accounts, created for the benefit
of the fund's secured parties, that are held inside or outside the hurricane
reserve trust fund. The [formula to calculate the amount and period of
the surcharge for each covered event and the procedures and methodology for
payment of claims and other obligations of the fund shall be provided in the
plan of operation and the] surcharge [may] shall remain in
effect until all claims and other obligations of the fund, including but not
limited to claims under fund policies of hurricane property insurance, claims
financing transactions, bonds, notes, and other obligations arising out of that
covered event, shall have been fully discharged. The amount and reason
for any surcharge made pursuant to this subsection shall be separately stated
on any billing sent to an insured. The surcharge shall not be considered
premiums for any other purpose, including the computation of gross premium tax
or the determination of producers' commissions. The fund may establish
procedures for insurers to collect the surcharge from their customers who hold
property or casualty policies."
SECTION 10. Section 432:1-306, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) [After the
organization of the society is completed, and before a certificate of
compliance is granted by the commissioner, the] The society shall
deposit with the commissioner [one-half the maximum amount required to be
maintained in its death benefit and disability, or sick, or other benefit fund,
as provided in section 432:1-401,] fifty per cent of the minimum net
worth requirement as provided in section 432:1-407(a)(2), either in cash or
in securities approved by the commissioner[.]; provided that the
deposit shall be not less than $1,000,000 and shall not exceed $20,000,000."
SECTION 11. Act 59, Session Laws of Hawaii 2010, is amended as follows:
1. By amending section 4 to read:
"SECTION 4. Section 431:7-101, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The commissioner shall collect in advance the following fees:
(1) Certificate of authority: Issuance.........$900
(2) Organization of domestic insurers and affiliated corporations:
(A) Application and all other papers required for issuance of solicitation permit, filing.............................. $1,500
(B) Issuance of solicitation permit........$150
(3) Producer's license:
(A) Issuance, regular license...............$50
(B) Issuance, 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) [Workers' compensation claim] 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) Life
settlement contract provider's license:
Issuance....................................$75
(20) Life
settlement contract broker's license:
Issuance....................................$75]
(19) Legal service plan certificate of authority:
Issuance...................................$500
[(21)] (20)
Examination for license: For each examination, a fee to be established by
the commissioner.
(b) The fees for services of the department of commerce and consumer affairs subsequent to the issuance of a certificate of authority, license, or other certificate are as follows:
(1) $600 per year for all services (including extension of the certificate of authority) for an authorized insurer;
(2) $50 per year for all services (including extension of the license) for a regularly licensed producer;
(3) $75 per year for all services (including extension of the license) for a regularly licensed nonresident producer;
(4) $45 per year for all services (including extension of the license) for a regularly licensed independent adjuster;
(5) $45 per year for all services (including extension of the license) for a regularly licensed public adjuster;
(6) $45 per year for all services (including
extension of the license) for
a [workers' compensation] claims adjuster's limited license;
(7) $60 per year for all services (including extension of the license) for a regularly licensed independent bill reviewer;
(8) $45 per year for all services (including extension of the license) for a producer's limited license;
(9) $75 per year for all services (including extension of the license) for a regularly licensed managing general agent;
(10) $75 per year for all services (including extension of the license) for a regularly licensed reinsurance intermediary;
(11) $45 per year for all services (including extension of the license) for a licensed surplus lines broker;
(12) $75 per year for all services (including renewal of registration) for a service contract provider;
(13) $65 per year for all services (including extension of the certificate) for an approved course provider;
(14) $20 per year for all services (including extension of the certificate) for an approved continuing education course;
(15) $75 per year for all services (including renewal of registration) for a vehicle protection product warrantor;
(16) $20 for a criminal history record check; fingerprinting: For each criminal history record check and fingerprinting check, a fee to be established by the commissioner;
(17) $600 per year for all services
(including extension of the license) for a regularly licensed limited line
motor vehicle rental company producer[;
(18) $150
per year for all services (including extension of the license) for a regularly
licensed life settlement contract provider; and
(19) $150
per year for all services (including extension of the license) for a regularly
licensed life settlement contract broker.]; and
(18) $500 per year for all services (including extension of the certificate) for an authorized legal service plan.
The
services referred to in paragraphs (1) to [(19)] (18) shall not
include services in connection with examinations, investigations, hearings,
appeals, and deposits with a depository other than the department of commerce
and consumer affairs.""
2. By amending section 5 to read:
"SECTION 5. Section 431:7-101, Hawaii Revised Statutes, is amended to read as follows:
1. By amending subsections (a) and (b) to read:
"(a) The commissioner shall collect in advance the following fees:
(1) Certificate of authority: Issuance...........$1,800
(2) Organization of domestic insurers and affiliated corporations:
(A) Application and all other papers required for issuance of solicitation permit, filing....................................$3,000
(B) Issuance of solicitation permit.............$300
(3) Producer's license:
(A) Issuance, regular license...................$100
(B) Issuance, temporary license.................$100
(4) Nonresident producer's license: Issuance........................................$150
(5) Independent adjuster's license: Issuance.......$150
(6) Public adjuster's license: Issuance.............$150
(7) [Workers' compensation claim] Claim
adjuster's limited license: Issuance..............................$150
(8) Independent bill reviewer's license:
Issuance........................................$160
(9) Limited producer's license: Issuance...........$120
(10) Managing general agent's license: Issuance.....$150
(11) Reinsurance intermediary's license:
Issuance........................................$150
(12) Surplus lines broker's license: Issuance.......$300
(13) Service contract provider's registration:
Issuance........................................$150
(14) Approved course provider certificate:
Issuance........................................$200
(15) Approved continuing education course certificate: Issuance.........................................$60
(16) Vehicle protection product warrantor's registration: Issuance........................................$150
(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............................$2,000
[(19) Life settlement contract provider's
license:
Issuance........................................$150
(20) Life
settlement contract broker's license:
Issuance........................................$150]
(19) Legal service plan certificate of authority:
Issuance......................................$1,000
[(21)] (20)
Examination for license: For each examination, a fee to be established by
the commissioner.
(b) The fees for services of the department of commerce and consumer affairs subsequent to the issuance of a certificate of authority, license, or other certificate are as follows:
(1) $1,200 per year for all services (including extension of the certificate of authority) for an authorized insurer;
(2) $100 per year for all services (including extension of the license) for a regularly licensed producer;
(3) $150 per year for all services (including extension of the license) for a regularly licensed nonresident producer;
(4) $90 per year for all services (including extension of the license) for a regularly licensed independent adjuster;
(5) $90 per year for all services (including extension of the license) for a regularly licensed public adjuster;
(6) $90
per year for all services (including extension of the license) for a [workers'
compensation] claims adjuster's limited license;
(7) $120 per year for all services (including extension of the license) for a regularly licensed independent bill reviewer;
(8) $90 per year for all services (including extension of the license) for a producer's limited license;
(9) $150 per year for all services (including extension of the license) for a regularly licensed managing general agent;
(10) $150 per year for all services (including extension of the license) for a regularly licensed reinsurance intermediary;
(11) $90 per year for all services (including extension of the license) for a licensed surplus lines broker;
(12) $150 per year for all services (including renewal of registration) for a service contract provider;
(13) $130 per year for all services (including extension of the certificate) for an approved course provider;
(14) $40 per year for all services (including extension of the certificate) for an approved continuing education course;
(15) $150 per year for all services (including renewal of registration) for a vehicle protection product warrantor;
(16) $40 for a criminal history record check; fingerprinting: For each criminal history record check and fingerprinting check, a fee to be established by the commissioner;
(17) $1,200 per year for all services (including extension of the license) for a regularly licensed limited line motor vehicle rental company producer; and
[(18) $150
per year for all services (including extension of the license) for a regularly
licensed life settlement contract provider; and
(19) $150
per year for all services (including extension of the license) for a regularly
licensed life settlement contract broker.]
(18) $1,000 per year for all services (including extension of the certificate) for an authorized legal service plan.
The services referred to in paragraphs (1) to
[(19)] (18) shall not include services in connection with
examinations, investigations, hearings, appeals, and deposits with a depository
other than the department of commerce and consumer affairs."
2. By amending subsection (e) to read as follows:
"(e) All fees and penalties shall be deposited to the credit of the compliance resolution fund; provided that beginning July 1, 2010, the statutory fees collected pursuant to subsections (a) and (b), not including administratively set fees and assessments as may be authorized under this section, shall be deposited as follows:
(1) Fifty per cent shall be deposited into the compliance resolution fund; and
(2) Fifty per cent shall constitute an insurance license and service tax, which shall be deposited into the general fund.""
SECTION 12. Section 432:1-401, Hawaii Revised Statutes, is repealed.
["§432:1-401
Benefit funds. Each society shall at all times maintain:
(1) In its death benefit fund, at least
five times the maximum amount of death benefit offered or promised to be paid
to any one member, and
(2) In its sick, disability or other
benefit fund, at least twenty times the maximum amount of sick, disability or
other benefits, whichever maximum amount is greater, offered or promised to be
paid to any one member during or within a period of thirty days."]
SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 14. This Act shall take effect upon its approval.
Report Title:
Insurance
Description:
Updates the Insurance Code and related provisions. (SB1276 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
