SB2132

SECTION 1. Chapter 432G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§432G- Dental insurer rates; annual dental loss ratio required. (a) Each dental insurer shall file with the commissioner all proposed plan rates and rate changes for a dental insurance plan. The commissioner may deem a proposed plan rate of a dental insurer to be excessive and disapprove the proposed plan rate if the dental loss ratio for the plan is less than seventy-five per cent.

(b) If the annual dental loss ratio for a dental insurance plan is less than seventy-five per cent, the dental insurer offering the plan shall refund the excess premium to enrollees or groups. The total of all refunds issued under this subsection shall equal the amount of the dental insurer's earned premium that exceeds the amount necessary to achieve a dental loss ratio of seventy-five per cent, calculated using data reported by the dental insurer.

(c) A dental insurer shall provide notice to all enrollees or groups that were covered under the plan during the applicable twelve-month period that enrollees or groups are entitled to a refund on the premium pursuant to subsection (b), or if the enrollee or group remains covered by the dental insurer, that the enrollee or group is eligible for a credit on the premium for the subsequent twelve-month period.

(d) The dental loss ratio shall be calculated by dividing the numerator by the denominator as follows:

(1) The numerator is the amount spent on care, which shall include:

(A) The amount expended for clinical dental services that are services within the code on dental procedures and nomenclature provided to enrollees that includes payments under capitation contracts with dental providers, whose services are covered by the contract for dental clinical services or supplies covered by the contract;

(B) Unpaid claim reserves; and

(C) Any claim payment recovered by dental insurers from providers or enrollees using utilization management efforts, which are deducted from incurred claims amounts; provided that any overpayment received from a provider shall not be reported as a paid claim; provided further that overpayment recoveries received from a provider shall be deducted from incurred claims amounts;

(2) The calculation of the numerator shall not include:

(A) Administrative costs, including infrastructure, personnel costs, or broker payments;

(B) Amounts paid to third-party vendors for secondary network savings;

(C) Amounts paid to third-party vendors for network development, administrative fees, claims processing, or utilization management; or

(D) Amounts paid to providers for professional or administrative services that do not represent compensation or reimbursement for covered services provided to an enrollee, including dental record copying costs, attorneys' fees, subrogation vendor fees, and compensation to paraprofessionals, janitors, quality assurance analysts, administrative supervisors, secretaries to dental personnel, and dental record clerks; and

(3) The denominator shall be calculated using insurer revenue, which shall be the total amount of the earned premium revenues, excluding federal and state taxes and licensing and regulatory fees paid after accounting for any payments pursuant to federal law. The earned premium shall include all moneys paid by an enrollee as a condition of receiving coverage from the dental insurer, including any fees or other contributions associated with the dental insurance plan.

(e) For the purposes of enforcing the minimum dental loss ratio established under this section, the commissioner may:

(1) Authorize a waiver or adjustment of the refund requirements in this section if it is determined by the commissioner that issuing refunds would result in financial impairment for the dental insurer;

(2) Review, approve, or disapprove any dental insurance plan structure that affects the calculation of the dental loss ratio;

(3) Require a dental insurer to file benefit structure information, actuarial justifications, or other documentation necessary to determine compliance with this section; and

(4) Adopt rules as necessary to carry out the purposes of this section.

(f) As used in this section, "dental loss ratio" means the ratio used to determine the minimum percentage of all premium funds collected by a dental insurer each year that is spent on actual patient care rather than administrative or overhead costs."

SECTION 2. Section 432G-4, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"[[]§432G-4[]] Annual reports. (a) Each dental insurer shall file with the commissioner[:], in a manner prescribed by the commissioner:

(1) An audit, by an independent certified public accountant or an accounting firm designated by the dental insurer of the financial statements, reporting the financial condition and results of operations of the dental insurer, annually on or before June 1, or a later date as the commissioner upon request or for cause may specify. The dental insurer, on an annual basis and [~~prior to~~] before the commencement of the audit, shall notify the commissioner in writing of the name and address of the person or firm retained to conduct the annual audit. The commissioner may disapprove the dental insurer's designation within fifteen days of receipt of the dental insurer's notice, and the dental insurer shall be required to designate another independent certified public accountant or accounting firm;

(2) A list of the providers who have executed a contract that complies with section 432G‑6(d), annually on or before March 1; [~~and~~]

(3) A description of the available grievance procedures, the total number of grievances handled through those procedures, a compilation of the causes underlying those grievances, and a summary of the final disposition of those grievances, annually on or before March 1[.]; and

(4) Dental loss ratio information for the last calendar year for each dental insurance plan provided by a dental insurer, organized by market and product type; provided that the commissioner may request the dental insurer to provide data verification of any information provided by the dental insurer as required by this paragraph, which shall be provided to the commissioner within thirty days of the request.

The commissioner shall publish annually, by electronic or online publication on the official website of the insurance division, the information provided pursuant to paragraph (4), including the aggregate dental loss ratio, in a manner that allows the public to compare dental loss ratios among dental insurers by market type.

As used in this section, "dental loss ratio" has the same meaning as defined in section 432G- ."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2132
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII