reglab/statecodes huggingface dataset:
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-328 Provisions for third party claims.

§431:15-328 Provisions for third party claims.
(a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.
(b) Whether or not the third party files a claim, the insured may file a claim on its own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within sixty days after mailing of the notice required by section 431:15-311, whichever is later, it is an unexcused late filer.
(c) The liquidator shall make recommendations to the court under section 431:15-332, for the allowance of an insured's claim under subsection (b) after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and amend the liquidator's recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of:
(1) The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expenses of defense, or
(2) The amount allowed on the claims by the court.
After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator.
(d) If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection (c). If any insured's claim is subsequently reduced under subsection (c), the amount thus freed shall be apportioned ratably among the claims which have been reduced under this subsection.
(e) No claim may be presented under this section if it is covered by any guaranty fund or association, or foreign guaranty association. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-329 Disputed claims.

§431:15-329 Disputed claims.
(a) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or the claimant's attorney by first class mail at the address shown in the proof of claim. Within sixty days from the mailing of the notice, the claimant may file any objections with the liquidator. If no such filing is made, the claimant may not further object to the determination.
(b) Whenever objections are filed with the liquidator and the liquidator does not alter the denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or the claimant's attorney and to any other persons directly affected, not less than ten nor more than thirty days before the date of the hearing. The matter may be heard by the court or by a court appointed referee who shall submit findings of fact along with such referee's recommendations. [L 1987, c 347, pt of §2]
Case Notes
Liquidation court had personal jurisdiction over former parent company of liquidated life insurer after liquidator filed a motion for an order confirming liquidator's denial of a disputed claim that the company remained the sole shareholder of the insurer following liquidator's alleged failure to validly forfeit the company's surrendered shares. The motion did not initiate a new suit but was instead a continuation of the liquidation proceeding and was properly filed with the liquidation court, whose review of the claim was provided for under the Insurers Supervision, Rehabilitation and Liquidation Act. 135 H. 49, 346 P.3d 118 (2015).
Liquidation court had subject matter jurisdiction over claim by former parent company of liquidated life insurer that the company remained the sole shareholder of the insurer following liquidator's alleged failure to validly forfeit the company's surrendered shares, where: (1) liquidator reviewed and denied the claim asserted in a letter and lawsuit; (2) the company filed objections; and (3) liquidator, after determining not to alter the denial of the claim following the company's objections, properly filed a motion for an order confirming liquidator's determination of a disputed claim. 135 H. 49, 346 P.3d 118 (2015).
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-330 Claims of surety.

§431:15-330 Claims of surety.
Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution, however, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by the creditor in trust for such other person. The term other person as used in this section is not intended to apply to a guaranty fund or association, or foreign guaranty association. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-331 Secured creditor's claims.

§431:15-331 Secured creditor's claims.
(a) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
(1) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditors; or
(2) By agreement, arbitration, compromise or litigation between the creditor and the liquidator.
(b) The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant shall surrender this security to the liquidator, the entire claim shall be allowed as if unsecured. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-333 Liquidator's recommendations to the court.

§431:15-333 Liquidator's recommendations to the court.
(a) The liquidator shall review all claims duly filed in the liquidation and shall make such further investigation as the liquidator shall deem necessary. The liquidator may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court, except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty fund or association, or foreign guaranty fund or association. Unresolved disputes shall be determined under section 431:15-329. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with the liquidator's recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values of other investment value and the amounts owed.
(b) The court may approve, disapprove or modify the report on claims by the liquidator. Such reports as are not modified by the court within a period of sixty days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject thereafter to later modification or to rulings made by the court pursuant to section 431:15-329. No claim under a policy of insurance shall be allowed for an amount in excess of the applicable policy limits. [L 1987, c 347, pt of §2]
Case Notes
Liquidation court had personal jurisdiction over former parent company of liquidated life insurer after liquidator filed a motion for an order confirming liquidator's denial of a disputed claim that the company remained the sole shareholder of the insurer following liquidator's alleged failure to validly forfeit the company's surrendered shares. The motion did not initiate a new suit but was instead a continuation of the liquidation proceeding and was properly filed with the liquidation court, whose review of the claim was provided for under the Insurers Supervision, Rehabilitation and Liquidation Act. 135 H. 49, 346 P.3d 118 (2015).
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-334 Distribution of assets.

§431:15-334 Distribution of assets.
(a) Subject to any instructions the court may give, the liquidator shall make distributions pursuant to section 431:15-332 in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court in advance of the distribution.
(b) The liquidator shall make distributions to guaranty funds or associations, or foreign guaranty funds or associations pursuant to the priority schedule of section 431:15-332 to satisfy their claims under article 16 or similar laws of other states, if the claims have been filed pursuant to section 431:15-325. The liquidator may protect against inequitable allocations by making payments to funds and associations subject to binding agreements by them to repay any portions of the distributions that are later found to be in excess of an equitable allocation. If assets are available, the liquidator may also lend to guaranty funds and associations, subject to express advance court approval.
(c) The liquidator shall report to the court within four months after the issuance of the liquidation order under section 431:15-307, and every three months thereafter on the status of the assets and the payment of distributions and loans under subsection (b). The court may order the liquidator to make distributions to guaranty funds and associations under subsection (b) more expeditiously to minimize the need for assessments under article 16 or similar laws of other states.
(d)(1) Upon liquidation of a domestic nonlife mutual insurance company, any assets held in excess of its liabilities and the amounts which may be paid to its members as provided under subsection (d)(2) shall be paid into the state compliance resolution fund.
(2) The maximum amount payable upon liquidation to any member for and on account of such member's membership in a domestic nonlife mutual insurance company, in addition to the insurance benefits promised in the policy, is the total of all premium payments made by the member within the past five years with interest at the legal rate compounded annually. [L 1987, c 347, pt of §2; am L 1999, c 163, §15(1); am L 2002, c 39, §15; am L 2004, c 122, §71]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-335 Unclaimed and withheld funds.

§431:15-335 Unclaimed and withheld funds.
(a) All unclaimed funds subject to distribution remaining in the liquidator's hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found, shall be deposited with the director of finance, and shall be paid without interest except in accordance with section 431:15-332 to the person entitled thereto or the person's legal representative upon proof satisfactory to the director of finance of the person's right thereto. Any amount on deposit not claimed within six years from the discharge of the liquidator shall be deemed to have been abandoned and shall be escheated without formal escheat proceedings and be deposited with the general fund.
(b) All funds withheld under section 431:15-327 and not distributed, shall upon discharge of the liquidator be deposited with the compliance resolution fund and paid by the liquidator in accordance with section 431:15-332. Any sums remaining that under section 431:15-332 would revert to the undistributed assets of the insurer shall be transferred to the compliance resolution fund and become the property of the State under subsection (a), unless the commissioner in the commissioner's discretion petitions the court to reopen the liquidation under section 431:15-337. [L 1987, c 347, pt of §2; am L 1999, c 163, §15; am L 2000, c 182, §14; am L 2002, c 39, §16]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-336 Termination of proceedings.

§431:15-336 Termination of proceedings.
(a) When all assets justifying the expense of collection and distribution have been collected and distributed under this article, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute as may be deemed appropriate.
(b) Any other person may apply to the court at any time for an order under subsection (a). If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-337 Reopening liquidation.

§431:15-337 Reopening liquidation.
After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the circuit court of the first judicial circuit to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-338 Disposition of records during and after termination of liquidation.

§431:15-338 Disposition of records during and after termination of liquidation.
Whenever it shall appear to the commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, the commissioner may recommend to the court and the court shall direct what records should be retained for future reference and what should be destroyed. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-401 Conservation of property of foreign or alien insurers found in this State.

§431:15-401 Conservation of property of foreign or alien insurers found in this State.
(a) If a domiciliary liquidator has not been appointed, the commissioner may apply to the circuit court of the first judicial circuit by verified petition for an order directing the commissioner to act as conservator to conserve the property of an alien insurer not domiciled in this State or a foreign insurer on any one or more of the following grounds:
(1) Any of the grounds in section 431:15-301;
(2) That any of its property has been sequestered by official action in its domiciliary state, or in any other state;
(3) That enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent; or
(4) That its certificate of authority to do business in this State has been revoked or that none was ever issued, and that there are residents of this State with outstanding claims or outstanding policies.
(b) When an order is sought under subsection (a), the court may require an appropriate notice to the insurer and a hearing and may issue the order in whatever terms it considers appropriate. The filing or recording of the order with the bureau of conveyances imparts the same notice as an evidence of title.
(c) The conservator may at any time petition for and the court may grant an order under section 431:15-402 to liquidate assets of a foreign or alien insurer under conservation, or if appropriate, for an order under section 431:15-404, to be appointed ancillary receiver.
(d) The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make such finding and issue such order at any time upon motion of any interested party, but if such motion is denied all costs, including the reasonable attorney's fee of the conservator, shall be assessed against such party. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-402 Liquidation of property of foreign or alien insurers found in this State.

§431:15-402 Liquidation of property of foreign or alien insurers found in this State.
(a) If no domiciliary receiver has been appointed, the commissioner may apply to the circuit court of the first judicial circuit by verified petition for an order directing the commissioner to liquidate the assets found in this State of a foreign insurer, or an alien insurer not domiciled in this State, on any of the following grounds:
(1) Any of the grounds in section 431:15-301 or section 431:15-306; or
(2) Any of the grounds specified in section 431:15-401(a)(2) through (a)(4).
(b) When an order is sought under subsection (a), the court may require an appropriate notice to the insurer and hearing. If it appears to the court that the best interests of creditors, policyholders, and the public so require, the court may issue an order to liquidate the insurer in whatever terms it considers appropriate. The filing or recording of the order with the bureau of conveyances imparts the same notice as an evidence of title.
(c) If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under section 431:15-404. If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under section 431:15-404.
(d) On the same grounds as specified in subsection (a), the commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction, or any lesser part thereof that the commissioner deems desirable for the protection of the policyholders and creditors in this State.
(e) The court may order the commissioner, when the commissioner has liquidated assets of a foreign or alien insurer under this section, to pay claims of residents of this State against the insurer under such rules as to the liquidation of insurers under this article as are otherwise compatible with the provisions of this section. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-403 Domiciliary liquidators in other states.

§431:15-403 Domiciliary liquidators in other states.
(a) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under section 431:15-404(c), be vested by operation of law with the title to all of the assets, property, contracts, and rights of action, producers' balances, and all of the books, accounts, and other records of the insurer located in this State. The date of vesting shall be the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting shall be the date of entry of the order directing possession to be taken. The domiciliary liquidator shall have the immediate right to recover balances due from producers and to obtain
possession of the books, accounts, and other records of the insurer located in this State. The domiciliary liquidator shall also have the right to recover all other assets of the insurer located in this State, subject to section 431:15-404.
(b) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the commissioner of this State shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books, accounts and other records of the insurer located in this State, at the same time that the domiciliary liquidator is vested with title in the domicile. The commissioner of this State may petition for a conservation or liquidation order under section 431:15-401 or section 431:15-402, or for an ancillary receivership under section 431:15-404, or after approval by the circuit court of the first judicial circuit, may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require.
(c) Claimants residing in this State may file claims with the liquidator or ancillary receiver, if any, in this State or with the domiciliary liquidator, if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings. [L 1987, c 347, pt of §2; am L 2002, c 155, §88]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-404 Ancillary formal proceedings.

§431:15-404 Ancillary formal proceedings.
(a) If a domiciliary liquidator has been appointed for an insurer not domiciled in this State, the commissioner may file a petition with the circuit court of the first judicial circuit requesting appointment as ancillary receiver in this State:
(1) If the commissioner finds that there are sufficient assets of the insurer located in this State to justify the appointment of an ancillary receiver; or
(2) If the protection of creditors or policyholders in this State so requires.
(b) The court may issue an order appointing an ancillary receiver on whatever terms it considers appropriate. The filing or recording of the order with the bureau of conveyances imparts the same notice as evidence of title.
(c) When a domiciliary liquidator has been appointed in a reciprocal state, then the ancillary receiver appointed in this State may, whenever necessary, aid and assist the domiciliary liquidator in recovering assets of the insurer located in this State. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this State, and shall pay the necessary expenses of the proceedings. The ancillary receiver shall promptly transfer all remaining assets, books, accounts and records to the domiciliary liquidator. Subject to this section, the ancillary receiver and the receiver's deputies shall have the same powers and be subject to the same duties with respect to the administration of assets as a liquidator of an insurer domiciled in this State.
(d) When a domiciliary liquidator has been appointed in this State, ancillary receivers appointed in reciprocal states shall have, as to assets and books, accounts, and other records in their respective states, corresponding rights, duties and powers to those provided in subsection (c) for ancillary receivers appointed in this State. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-405 Ancillary summary proceedings.

§431:15-405 Ancillary summary proceedings.
The commissioner, in the commissioner's sole discretion, may institute proceedings under section 431:15-201 through section 431:15-203 at the request of the commissioner or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in this State. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-406 Claims of nonresidents against insurers domiciled in this State.

§431:15-406 Claims of nonresidents against insurers domiciled in this State.
(a) In a liquidation proceeding begun in this State against an insurer domiciled in this State, claimants residing in foreign countries or in states not reciprocal states must file claims in this State, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in this State as provided in this article, or in ancillary proceedings, if any, in the reciprocal states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of this State as provided in section 431:15-407(b) with respect to ancillary proceedings, the final allowance of claims by the courts in ancillary proceedings in reciprocal states shall be conclusive as to amount and as to priority against special deposits or other security located in such ancillary states, but shall not be conclusive with respect to priorities against general assets under section 431:15-332. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-407 Claims of residents against insurers domiciled in reciprocal states.

§431:15-407 Claims of residents against insurers domiciled in reciprocal states.
(a) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this State may file claims either with the ancillary receiver, if any, in this State, or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in this State may be proved either in the domiciliary state under the law of that state, or in ancillary proceedings, if any, in this State. If a claimant elects to prove a claim in this State, the claimant shall file a claim with the liquidator in the manner provided in section 431:15-325 and section 431:15-326. The ancillary receiver shall make a recommendation to the court as under section 431:15-333. The ancillary receiver shall also arrange a date for hearing if necessary under section 431:15-329 and shall give notice to the liquidator in the domiciliary state, either by certified mail or by personal service at least forty days prior to the date set for hearing. If the domiciliary liquidator, within thirty days after the giving of such notice, gives notice in writing to the ancillary receiver and to the claimant, either by certified mail or by personal service, of the domiciliary liquidator's intention to contest the claim, the domiciliary liquidator shall be entitled to appear or to be represented in any proceeding in this State involving the adjudication of the claim.
(c) The final allowance of the claim by the court of this State shall be accepted as conclusive as to amount and as to priority against special deposits or other security located in this State. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-408 Attachment, garnishment and levy of execution.

§431:15-408 Attachment, garnishment and levy of execution.
During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment or levy of execution shall be commenced or maintained in this State against the delinquent insurer or its assets. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-409 Interstate priorities.

§431:15-409 Interstate priorities.
(a) In a liquidation proceeding in this State involving one or more reciprocal states, the order of distribution of the domiciliary state shall control as to all claims of residents of this State and reciprocal states. All claims of residents of reciprocal states shall be given equal priority of payment from general assets regardless of where those assets are located.
(b) The owners of special deposit claims against an insurer, for which a liquidator is appointed in this State or any other state, shall be given priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit so that the claims secured by it are not fully discharged from it, the claimants may claim against a guaranty fund or association or may share in the general assets, but the claim shall be limited and the sharing shall be deferred until the general creditors having the same priority, and also the claimants against other special deposits sharing the same priority who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.
(c) The owner of a secured claim against an insurer for which a liquidator has been appointed in this State or any other state may surrender the security for the claim and file the claim as a general creditor, or the claim may be discharged by resort to the security in accordance with section 431:15-331, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-410 Subordination of claims for noncooperation.

§431:15-410 Subordination of claims for noncooperation.
If an ancillary receiver in another state or foreign country, whether called an ancillary receiver or not, fails to transfer to the domiciliary liquidator in this State any assets within the ancillary receiver's control other than special deposits, diminished only by the expenses of the ancillary receivership, if any, then the claims filed in the ancillary receivership, or with the guaranty fund or association in that jurisdiction, other than special deposit claims or secured claims, shall be placed in the class of claims under section 431:15-332(8). [L 1987, c 347, pt of §2; am L 2004, c 122, §72]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:15-411 Separability.

§431:15-411 Separability.
If any provision of this article or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the article and the application of such provision to other persons or circumstances shall not be affected thereby. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-102 Purpose.

§431:16-102 Purpose.
The purpose of this part is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and, to the extent provided in this part, to minimize financial loss to claimants or policyholders because of the insolvency of an insurer. [L 1987, c 347, pt of §2; am L 2000, c 93, §1]
Case Notes
Insurer which was never a member of insurance association, was not regulated by the insurance commissioner, nor subject to examination of its financial condition was not an authorized insurer. 70 H. 406, 772 P.2d 1193 (1989).
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-103 Scope.

§431:16-103 Scope.
This part shall apply to all types of direct insurance, but shall not apply to the following:
(1) Life, annuity, or accident and health or sickness insurance;
(2) Mortgage guaranty, financial guaranty, or any other forms of insurance offering protection against investment risks;
(3) Fidelity or surety bonds, or any other bonding obligations;
(4) Credit insurance, vendors' single interest insurance, collateral protection insurance, or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;
(5) Insurance of warranties or service contracts, including insurance that provides for the repair, replacement, or service of goods or property, for indemnification for the repair, replacement, or service for the operational or structural failure of the goods or property due to a defect in materials, artisanship, or normal wear and tear, or for reimbursement for the liability incurred by the issuer of agreements or service contracts that provide those benefits;
(6) Title insurance;
(7) Ocean marine insurance;
(8) Any transaction or combination of transactions between a person (including affiliates of the person) and an insurer (including affiliates of the insurer) that involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk; or
(9) Any insurance provided by or guaranteed by government. [L 1987, c 347, pt of §2; am L 2000, c 93, §2; am L 2002, c 155, §89; am L 2003, c 212, §111]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-106 Creation of association.

§431:16-106 Creation of association.
There is created a nonprofit unincorporated legal entity to be known as the Hawaii insurance guaranty association. All insurers defined as member insurers in section 431:16-105 shall be and remain members of the association as a condition of their authority to transact the business of insurance in this State. The association shall perform its function under a plan of operation established and approved under section 431:16-109 and shall exercise its powers through a board of directors established under section 431:16-107. [L 1987, c 347, pt of §2; am L 2000, c 93, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-107 Board of directors.

§431:16-107 Board of directors.
(a) The board of directors of the association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the commissioner. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members subject to the approval of the commissioner.
(b) In approving selections to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.
(c) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors. [L 1987, c 347, pt of §2; am L 2000, c 93, §6]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-110 Duties and powers of the commissioner.

§431:16-110 Duties and powers of the commissioner.
(a) The commissioner shall:
(1) Notify the association of the existence of an insolvent insurer not later than three days after the commissioner receives notice of the determination of the insolvency. The association shall be entitled to a copy of a complaint seeking an order of liquidation with a finding of insolvency against a member company at the same time that the complaint is filed with a court of competent jurisdiction.
(2) Upon request of the board of directors, provide the association with a statement of the net direct written premiums of each member insurer.
(b) The commissioner may:
(1) Require that the association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this part. The notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient.
(2) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a fine on any member insurer which fails to pay an assessment when due. The fine shall not exceed five per cent of the unpaid assessment per month, except that no fine shall be less than $100 per month.
(3) Revoke the designation of any servicing facility if the commissioner finds claims are being handled unsatisfactorily.
(c) Any final action or order of the commissioner under this part shall be subject to judicial review by the circuit court of the first judicial circuit. [L 1987, c 347, pt of §2; am L 2000, c 93, §9]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-111 Effect of paid claims.

§431:16-111 Effect of paid claims.
(a) Any person recovering under this part shall be deemed to have assigned the person's rights under the policy to the association to the extent of the person's recovery from the association. Every insured or claimant seeking the protection of this part shall cooperate with the association to the same extent as that person would have been required to cooperate with the insolvent insurer. The association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except any causes of action that the insolvent insurer would have had if those sums had been paid by the insolvent insurer and except as provided in subsection (b). In the case of an insolvent insurer operating as an assessable mutual company on a plan with assessment liability, payments of claims of the association shall not operate to reduce the liability of the insureds to the receiver, liquidator, or statutory successor for unpaid assessment.
(b) The association shall have the right to recover from the following persons the amount of any covered claim paid on behalf of such person pursuant to this part:
(1) Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds fifty million dollars and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part; and
(2) Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part.
(c) The association and a similar organization in another state shall be recognized as claimants in the liquidation of an insolvent insurer for any amounts paid by them on covered claims as determined under this part or similar laws in other states and shall receive dividends and any other distributions at the priority set forth in section 431:15-332. The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by determinations of covered claim eligibility under this part and by settlements of claims by the association or a similar organization in another state to the extent the determinations or settlements satisfy obligations of the association. The receiver shall not be bound in any way by the determinations or settlements to the extent there remains a claim against the insolvent insurer. The court having jurisdiction shall grant such claims priority equal to that to which the claimant would have been entitled in the absence of this part against the assets of the insolvent insurer.
(d) The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association, which shall preserve the rights of the association against the assets of the insolvent insurer. [L 1987, c 347, pt of §2; am L 2000, c 93, §10]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-112 Exhaustion of other coverage.

§431:16-112 Exhaustion of other coverage.
(a) Any person having a claim against an insurer whether or not the insurer is a member insurer under any provision in an insurance policy other than a policy of an insolvent insurer that is also a covered claim, shall be required to exhaust first the person's rights under the policy. Any amount payable on a covered claim under this part shall be reduced by the amount of any recovery under the insurance policy. If there are any other policies issued by an insolvent insurer applicable to the covered claim, then all such policies shall be exhausted before any claim can be deemed a covered claim subject to being covered by the association.
(1) A claim under a policy providing liability coverage to a person who may be jointly and severally liable as a joint tortfeasor with a person covered under the policy of the insolvent insurer that gives rise to the covered claim shall be considered to be a claim arising from the same facts, injury, or loss that gave rise to the covered claim against the association.
(2) A claim under an insurance policy other than a life insurance policy shall include, but is not limited to:
(A) A claim against a health maintenance organization, a hospital plan corporation, a professional health service corporation, or disability insurance policy; and
(B) Any amount payable by or on behalf of a self-insurer.
(3) The person insured by the insolvent insurer's policy may not be pursued by a third-party claimant for any amount paid to the third party by which the association's obligation is reduced by the application of this section.
(b) Any person having a claim that may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured, except that if the claim is a first-party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property. For a workers' compensation claim, the person shall seek recovery first from the association of the residence of the claimant. Any recovery under this part shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent. [L 1987, c 347, pt of §2; am L 2000, c 93, §11; am L 2012, c 250, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-113 Prevention of insolvencies.

§431:16-113 Prevention of insolvencies.
To aid in the detection and prevention of insurer insolvencies:
(1) The board of directors, upon majority vote, may make recommendations to the commissioner on matters generally related to improving or enhancing regulation for solvency; and
(2) At the conclusion of any domestic insurer insolvency in which the association was obligated to pay covered claims, the board of directors may prepare a report on the history and causes of the insolvency, based on the information available to the association, and submit the report to the commissioner. [L 1987, c 347, pt of §2; am L 2000, c 93, §12]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-115 Recoupment of assessment.

§431:16-115 Recoupment of assessment.
(a) Each member insurer shall annually recoup the assessments paid in the preceding years by the insurer under this part. The recoupment shall be recovered by means of a surcharge on premiums charged for policies for all kinds of insurance, except life, title, surety, accident and health or sickness, credit mortgage guaranty, and ocean marine. Prior to recoupment, each member insurer shall submit its plan for recoupment to the commissioner for approval. The surcharge shall be at a uniform percentage rate reasonably calculated to recoup the assessment paid by the member insurer. Any excess recovery by a member insurer shall be credited pro rata to that member insurer's policyholders' premiums in the succeeding year unless there has been a subsequent assessment, in which case the excess will be used to pay the amount of the subsequent assessment. If a member insurer fails to recoup the entire amount of its assessment in the first year under the procedure provided in this section, it may repeat the procedure in succeeding years
until the full assessment is recouped.
(b) Each insurer shall provide to the Hawaii insurance guaranty association an accounting of its recoupments. The Hawaii insurance guaranty association shall compile the insurers' accountings and submit it as part of its annual report to the commissioner.
(c) The amount of and reason for any surcharge shall be separately stated on any billing sent an insured. The surcharge shall not be considered premiums for any other purpose, including the computation of gross premium tax or the determination of producer commissions. [L 1987, c 347, pt of §2; am L 1995, c 232, §18; am L 2002, c 155, §90; am L 2003, c 212, §112]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-116 Immunity.

§431:16-116 Immunity.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association or its agents or employees, the board of directors, any person serving as an alternate or substitute representative of any director, or the commissioner or the commissioner's representatives for any action taken or any failure to act by them in the performance of their powers and duties under this part. [L 1987, c 347, pt of §2; am L 2000, c 93, §13]
Case Notes
Where plaintiff's alleged tortious breach of contract, emotional distress, and bad faith claims were based on actions of Hawaii insurance guaranty association, through its agents and employees, in addressing plaintiff's claim for underinsured motorist benefits, claims barred by this section. 87 H. 14, 950 P.2d 1214 (1998).