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THE SENATE |
S.B. NO. |
3101 |
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THIRTY-THIRD LEGISLATURE, 2026 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
"§431:10- Explanation of premium increase. Insurers shall reasonably explain changes in premium upon written request by the policyholder, for any premium increase at renewal."
SECTION 2. Section 431:9-235, Hawaii Revised Statutes, is amended to read as follows:
"§431:9-235 Denial, suspension, revocation of
licenses. (a) The commissioner may deny, place on
probation, suspend, revoke, or refuse to [extend] issue or renew
any license issued under this article and may levy a civil penalty in
accordance with section 431:9-238,
for any cause specified in any other provision of this article, or for any of
the following causes:
[(1) For any cause for which issuance of the
license could have been refused had it then existed and been known to the
commissioner;
(2) If the licensee wilfully violates or
knowingly participates in the violation of any provision of this code;
(3) If the licensee has obtained or attempted
to obtain any license issued under this article through wilful
misrepresentation or fraud, or has failed to pass any examination required by
section 431:9-206;
(4) If
the licensee has misappropriated, converted to the licensee's own use, or
illegally withheld moneys required to be held in a fiduciary capacity;
(5) If
the licensee, with intent to deceive, has materially misrepresented the terms
or effect of any insurance contract; or has engaged or is about to engage in
any fraudulent transaction;
(6) If
the licensee has been found to have committed any unfair practice or fraud as
defined in article 13;]
(1) Providing
incorrect, misleading, incomplete, or materially untrue information in the
license application;
(2) Violating
any law, or violating any rule, subpoena, or order of the commissioner or of
another state's commissioner;
(3) Obtaining
or attempting to obtain a license through misrepresentation or fraud;
(4) Improperly
withholding, misappropriating, or converting any moneys or properties received
in the course of doing business;
(5) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;
(6) Having been convicted of a felony;
(7) Having admitted to or be found to have committed any insurance unfair trade practice or fraud;
(8) Using fraudulent, coercive, or dishonest practice or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere;
(9) Having an insurance producer license or its equivalent denied, placed on probation, suspended, or revoked in any other state, province district, or territory;
(10) Forging another's name on an application or on any document related to a transaction;
(11) Improperly using notes or any other reference material while taking an examination for an insurance license;
(12) Accepting insurance business from a person who is not licensed;
(13) Failing
to comply with an administrative or court order imposing child support
obligation;
(14) Failing to pay federal or state income taxes or failing to comply with any administrative or court order directing payment of federal or state income taxes;
(15) For any cause for which issuance of the license could have been refused had it then existed and been known to the commissioner;
[(7)] (16) If in the conduct of the licensee's affairs
under the license, the licensee has shown oneself to be a source of injury and
loss to the public; or
[(8)] (17) If the licensee has dealt with, or attempted
to deal with, insurance or to exercise powers relative to insurance outside the
scope of the licensee's licenses.
(b) [The
license of any partnership or corporation may be suspended, revoked, or refused
for any of the causes that relate to any individual designated in the license
to exercise its powers.] The
commissioner may act pursuant to subsection (a) by an order, provided that, prior to issuing the order, the commissioner
shall notify the applicant or licensee in writing of the commissioner's intent to act under subsection (a). The applicant or licensee may make written
application to the commissioner for a hearing before the commissioner to
determine the reasonableness of the commissioner's action within ten days of the date of receipt of the
notice. The hearing shall be held within
thirty days of receipt of the written application and shall be held pursuant to
chapter 91. If no written application
for a hearing is made to the commissioner within ten days of receipt of the
notice, the commissioner may proceed with issuing the order; and, unless
otherwise provided by law, the commissioner shall without further review or
hearing renew, reinstate, or grant the license only upon receipt of an
authorization from the administering agency.
(c)
The license of a business entity may be sanctioned pursuant to
subsection (a) if the commissioner finds, after hearing, that any licensee
working under the business entity has engaged in misconduct under subsection
(a) that was known or should have been known by one or more of the entity's
partners, officers, or managers acting on behalf of the entity and the
violation was neither reported to the commissioner by the entity nor corrective
action taken by the entity.
[(c)] (d) The holder of any license, which has been
revoked or suspended, shall surrender the license certificate to the
commissioner at the commissioner's request.
[(d)
The commissioner may suspend, revoke, or refuse to extend any license
for any cause specified in this article by an order:
(1) Given
to the licensee at least fifteen days prior to the order's effective date,
subject to the right of the licensee to have a hearing as provided in section
431:2-308. The license shall be
suspended pending the hearing; or
(2) Made
after a hearing as provided in section 431:2-308. The effective date of the order shall be ten
days after the date the order is given to the licensee. The order may be appealed to the circuit
court of the first judicial circuit of this State as provided in chapter 91.]
(e) The commissioner shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by chapter 431, 432, or 432D, against any person who is under investigation for or charged with a violation of chapter 431, 432, or 432D, even if that person's license or registration has been surrendered or has lapsed by operation of law."
SECTION 3. Section 431:9-238, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) In addition to or in lieu of [suspension,
revocation, or refusal to extend any license, after a hearing,] an
action by the commissioner under section 431:9-235, the commissioner may
levy a fine upon the applicant or licensee in an amount not less than
$100 and not more than $10,000."
SECTION 4. Section 431:9A-112, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
(b)
[If the commissioner takes action] The commissioner may act
pursuant to subsection (a) by an order, provided that prior to issuing the
order, the commissioner shall notify the applicant or licensee in writing
of the [reason for that action.] commissioner's intent to act under
subsection (a). The applicant or
licensee may make written [demand upon] application to the
commissioner for a hearing before the commissioner to determine the
reasonableness of the commissioner's action within ten days of the date of
receipt of the notice [for a hearing before the commissioner to determine
the reasonableness of the commissioner's action]. The hearing shall be held within thirty days
of receipt of the written [demand] application and shall be held
pursuant to chapter 91[, and following that action,]. If no written application for a hearing is
made to the commissioner within ten days of receipt of the notice, the
commissioner may proceed with issuing the order; and, unless otherwise
provided by law, the commissioner shall without further review or hearing
renew, reinstate, or grant the license only upon receipt of an authorization
from the administering entity."
SECTION 5. Section 431:10-226.5, Hawaii Revised Statutes, is amended to read as follows:
"§431:10-226.5 Notice of cancellation or nonrenewal; notice of cancellation or nonrenewal for policies of property insurance. (a) Except as provided in subsection (b), in the case of cancellation of a policy, the insurer shall give written notice to the insured not fewer than ten days before the effective date of cancellation. For nonrenewal of a policy, the insurer shall give written notice to the insured not fewer than thirty days before the effective date of nonrenewal. If under title 24 or a policy, a longer time period is required for a notice of cancellation or nonrenewal for the policy, the longer period shall be applicable. Cancellation or nonrenewal shall not be deemed valid unless evidence of mailing the written notice is provided.
(b) This subsection shall only apply to policies of insurance on property used for residential purposes, including multi-family residential properties. In the case of cancellation of a policy, the property insurer shall give written notice to the insured not fewer than twenty days before the effective date of cancellation. In the case of cancellation of a policy due to nonpayment of premium or material misrepresentation, the property insurer shall give written notice to the insured not fewer than ten days before the effective date of cancellation. For nonrenewal of a policy, the property insurer shall give written notice to the insured not fewer than thirty days before the effective date of nonrenewal. If under title 24 or a policy, a longer time period is required for a notice of cancellation or nonrenewal for the policy, the longer period shall be applicable; provided that the longer period shall be applicable only to the insurer. Cancellation or nonrenewal shall not be deemed valid unless evidence of mailing the written notice is provided.
(c) All notices of cancellation or nonrenewal shall clearly state the specific reason or reasons for cancellation or nonrenewal."
SECTION 6. Section 431K-7.1, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
If the service fee is not paid on or before [August 16 of the year in
which payment is due,] the extension date, a penalty shall be
imposed in the amount of fifty per cent of the service fee. The commissioner shall provide written notice
of the delinquency of payment and the imposition of the authorized penalty. If the service fee and the penalty are not
paid within thirty days immediately following the date of the notice of
delinquency, the commissioner may revoke the registration of the purchasing
group and may not reinstate the registration until the service fee and the
penalty have been paid."
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act, upon its approval, shall take effect on January 1, 2027; provided that section 7 shall take effect upon approval.
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INTRODUCED BY: |
_____________________________ |
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BY REQUEST |
Report Title:
Insurance Code; Insurance; Adjuster; Bill Reviewer; Licensing; National Association of Insurance Commissioners; Notice Requirements; Cancellation; Nonrenewal; Premium Change Notice; Unfair Methods of Competition; Unfair and Deceptive Acts and Practices; Purchasing Groups.
Description:
Amends various provisions of the Insurance Code to update and improve existing provisions. Clarifies grounds for denial, suspension, and revocation of an adjuster and bill reviewer license. Clarifies procedures for denying, suspending, and revoking an insurance producer license. Amends the notice requirements for cancellation or nonrenewal of an insurance policy. Requires insurers to provide explanation of premium increases upon request. Amends the definition of unfair methods of competition and unfair or deceptive acts or practices.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.