PART IV.  SECURITY FOR COMPENSATION; EMPLOYMENT RIGHTS OF

INJURED EMPLOYEES; FUNDS

A.  Security for Compensation

Case Notes

  In the context of the Hawaii workers' compensation scheme, a physician is an incidental beneficiary rather than an intended third-party beneficiary of the employer's workers' compensation insurance policy; thus, as physician was not an intended third-party beneficiary of insurer's insurance policy, physician did not have a cause of action in tort for bad faith against insurer.  114 H. 122 (App.), 157 P.3d 561 (2007).

     §386-121  Security for payment of compensation; misdemeanor.  (a)  Employers, except the State, any county or political subdivision of the State, or other public entity within the State, shall secure compensation to their employees in one of the following ways:

     (1)  By insuring and keeping insured the payment of compensation with any stock, mutual, reciprocal, or other insurer authorized to transact the business of workers' compensation insurance in the State;

     (2)  By depositing and maintaining with the state director of finance security satisfactory to the director of labor and industrial relations securing the payment by the employer of compensation according to the terms of this chapter;

     (3)  Upon furnishing satisfactory proof to the director of the employer's solvency and financial ability to pay the compensation and benefits herein provided, no insurance or security shall be required, and the employer shall make payments directly to the employer's employees, as they may become entitled to receive the same under the terms and conditions of this chapter;

     (4)  An employer desiring to maintain security for payment of compensation under this section shall file an application with the director on a form provided for this purpose together with the employer's most current audited annual financial statement;

     (5)  Where an applicant for self-insurance is a subsidiary and the subsidiary cannot submit an independent current audited annual financial statement, an indemnity agreement approved as to form and content by the director shall be executed by the parent corporation of the subsidiary and submitted with its application;

     (6)  Each self-insurance authorization shall be effective from the date of issuance until June 30 of each calendar year;

     (7)  A notice of intention to cancel self-insurance shall be submitted in writing to the director within at least thirty days prior to the effective date of cancellation;

     (8)  A self-insurance authorization may be revoked by the director for good cause shown upon notification in writing to the self-insurer;

     (9)  By membership in a workers' compensation self-insurance group with a valid certificate of approval under section 386-194; or

    (10)  By membership in a workers' compensation group insured by a captive insurer under chapter 431, article 19.

     Any person who wilfully misrepresents any fact in order to obtain the benefits of paragraph (3) shall be guilty of a misdemeanor.

     (b)  Any decision of the director rendered under paragraphs (2) and (3) of subsection (a) of this section with respect to the amount of security required or refusing to permit no security to be given shall be subject to review on appeal in conformity with sections 386-87 and 386-88. [L 1963, c 116, pt of §1; Supp, §97-120; HRS §386-121; am L 1975, c 41, §1; gen ch 1985; am L 1986, c 304, §3; am L 1991, c 79, §1; am L Sp 2005, c 11, §12]

Case Notes

  Claimant may make insurance carrier party defendant by original claim or subsequent separate claim.  27 H. 476 (1923).

  Procedure informal.  32 H. 162 (1931).

  Cited:  31 H. 554 (1930).