reglab/statecodes huggingface dataset:
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-306 Reserve credit for reinsurance.

§431:5-306 Reserve credit for reinsurance.
(a) An insurer may take credit for reserves on risks ceded to a reinsurer to the extent reinsured, except that:
(1) No credit shall be taken on account of reinsurance in any reinsurer not qualified under article 4A or in any reinsurer that has been disapproved by the commissioner; and
(2) No credit shall be allowed, as an asset or as a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding insurer under the contracts reinsured without diminution because of the insolvency of the ceding insurer.
(b) A reinsurance agreement may provide that:
(1) The liquidator, receiver or statutory successor of an insolvent ceding insurer shall be given written notice of the pendency of a claim against the insolvent ceding insurer on the policy or bond reinsured within a reasonable time after the claim is filed in the insolvency proceeding; and
(2) Any assuming insurer may investigate such claim and interpose any defense or defenses which it may deem available to the ceding insurer, its liquidator, receiver, or statutory successor, during the pendency of the claim, in the proceeding where the claim is to be adjudicated, at its own expense.
(c) Subject to court approval, the expense thus incurred by the assuming insurer shall be chargeable against the insolvent ceding insurer as a part of the expense of liquidation to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer.
(d) Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose defense to the claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though the expense had been incurred by the ceding insurer. [L 1987, c 347, pt of §2; am L 2004, c 122, §18]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-308 Valuation of bonds.

§431:5-308 Valuation of bonds.
(a) All bonds or other evidences of debt having a fixed term and rate held by any insurer may, if amply secured and not in default as to principal or interest, be valued as follows:
(1) If purchased at par, at the par value.
(2) If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at the earliest date callable at par or maturing at par and so as to yield in the meantime the effective rate of interest at which the purchase was made; or in lieu of such method, according to such accepted method of valuation as is approved by the commissioner.
(3) Purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase plus actual brokerage, transfer, postage, or express charges paid in the acquisition of such securities.
(4) Unless otherwise provided by a valuation established or approved by the National Association of Insurance Commissioners, no such security shall be carried at above call price for the entire issue during any period within which the security may be so called.
(b) The commissioner shall have full discretion in determining the method of calculating values according to the rules set forth in this section, not inconsistent with any such methods then currently formulated or approved by the National Association of Insurance Commissioners. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-309 Valuation of other securities.

§431:5-309 Valuation of other securities.
(a) Any security, other than a security covered by section 431:5-308, is required to be valued at its market value or, if there is no market, at its value as fixed by an impartial appraiser, all consistent with any current method for the valuation of any such security formulated or approved by the National Association of Insurance Commissioners.
(b) Preferred or guaranteed stock or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the commissioner and in accordance with such method of computation as the commissioner may approve.
(c) The stock of a subsidiary of an insurer acquired after January 1, 1956, shall be valued on the basis of the value of only such of the assets of the subsidiary as would constitute lawful investments for the insurer if acquired or held directly by the insurer. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-310 Valuation of property.

§431:5-310 Valuation of property.
(a) Real property acquired pursuant to a mortgage loan or a contract for a deed, in the absence of a recent appraisal deemed by the commissioner to be reliable, shall not be valued at an amount greater than the unpaid principal of the defaulted loan or contract at the date of the acquisition, with accrued interest thereon for not in excess of eighteen months, together with any taxes and expenses paid or incurred in connection with the acquisition, the cost of improvements thereafter made by the insurer, and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property.
(b) Other real property held by an insurer shall not be valued at any amount in excess of fair value.
(c) Personal property acquired pursuant to security agreements made under section 431:6-310 shall not be valued at an amount greater than the unpaid balance of principal on the defaulted loan at the date of acquisition together with taxes and expenses incurred in connection with the acquisition, or the fair value of the property, whichever amount is the lesser. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-311 Valuation of purchase money mortgages.

§431:5-311 Valuation of purchase money mortgages.
Purchase money mortgages on real property referred to in section 431:5-310 shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or ninety per cent of the fair value of the real property, whichever is less. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-101 Definitions pertaining to investments.

§431:6-101 Definitions pertaining to investments.
(a) For purposes of this article:
"Cash" includes cash equivalents.
"Cash equivalents" means highly-rated and highly-liquid investments or securities with a remaining term of ninety days or less and rated in the highest short-term category by a nationally recognized statistical rating organization recognized by the SVO. Cash equivalents include government money market mutual funds defined by the Purposes and Procedures Manual of the SVO, or its successor publication.
"Fixed charges" means interest on funded and unfunded debt, amortization of debt discount, and rentals for leased properties.
"Institution" means corporations, joint-stock associations, and business trusts.
"Net earnings available for fixed charges" means net income after deducting operating and maintenance expenses, taxes other than federal and state income taxes, depreciation, and depletion, but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of such institution.
"Obligation" means bonds, debentures, notes, or other evidence of indebtedness.
"Surplus as regards to policyholders" means the excess of the insurer's admitted assets over its liabilities.
"SVO" means the Securities Valuation Office of the National Association of Insurance Commissioners.
"Value" means fair value. Market value is the best evidence of fair value.
(b) If net earnings are determined in reliance upon consolidated earnings statements of parent and subsidiary institutions:
(1) The net earnings shall be determined after provision for income taxes of subsidiaries and after proper allowance for minority stock interest, if any, and
(2) The required coverage of fixed charges shall be computed on a basis including fixed charges and preferred dividends of subsidiaries other than those payable by the subsidiaries to the parent corporation or to any other of the subsidiaries.
Except that if the minority common stock interest in the subsidiary corporation is substantial, the fixed charges and preferred dividends may be apportioned in accordance with regulations prescribed by the commissioner. [L 1987, c 347, pt of §2; am L 2008, c 142, §1; am L 2019, c 70, §7]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-102 Merged, reorganized institutions.

§431:6-102 Merged, reorganized institutions.
In applying the earnings test set forth in section 431:6-101 to any such institution, whether or not in legal existence during the whole of such five years next preceding the date of investment by the insurer, which has at any time during the five-year period acquired substantially all of the assets of any other institution or institutions by purchase, merger, consolidation, or otherwise, or has been reorganized pursuant to the bankruptcy law, the earnings of the predecessor or constituent institutions, or of the institution so reorganized, available for the interest and dividends for such portion of the five-year period as may have preceded the acquisition, or the reorganization, may be included in the earnings of the issuing, assuming, or guaranteeing institution for such portion of such period as may be determined in accordance with adjusted or pro forma consolidated earnings statements covering such portion of such period and giving effect to all stock or shares outstanding, and all fixed charges existing, immediately after the acquisition, or the reorganization. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-103 Eligible investments; scope.

§431:6-103 Eligible investments; scope.
(a) This article shall apply to domestic insurers only. Insurers shall invest in or loan their funds on the security of, and shall hold as assets, only eligible investments as prescribed in this article.
(b) The eligibility of an investment shall be determined as of the date of its making or acquisition.
(c) Any limitation based upon the amount of the insurer's assets or surplus shall relate to assets or surplus as shown by the insurer's annual statement as of December 31 preceding date of investment. [L 1987, c 347, pt of §2; am L 2008, c 142, §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-104 General qualifications.

§431:6-104 General qualifications.
(a) Notwithstanding the provisions of section 431:6-321, no security or other investment shall be eligible for purchase or acquisition under this article unless it is interest bearing or interest accruing or income paying, is not then in default in any respect, and the insurer is entitled to receive for its exclusive account and benefit, the interest or income accruing thereon; except, that it may acquire real property and non-dividend paying securities as provided in this article. An insurer's aggregate investment in non-dividend paying securities shall not exceed the greater of twenty-five per cent of its admitted assets or fifty per cent of its surplus as regards to policyholders as defined in section 431:6-101.
(b) No security shall be eligible for purchase at a price above its fair value.
(c) No provision of this article shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets, or if acquired pursuant to a lawful and bona fide agreement of bulk reinsurance, merger, or consolidation. Any investments so acquired which are not otherwise eligible under this article shall be disposed of pursuant to section 431:6-403 if personal property or securities, or pursuant to section 431:6-312 if real property. [L 1987, c 347, pt of §2; am L 2008, c 142, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-105 General limitations.

§431:6-105 General limitations.
Except as otherwise expressly limited, an insurer shall not have at any time any combination of investments in or loans upon the security of the obligations, property, and securities of any one person aggregating an amount exceeding ten per cent of the insurer's assets. This section shall not apply to investments in, or loans upon the security of general obligations of the government of the United States or of any state of the United States, nor to investments in foreign securities pursuant to section 431:6-313(a), nor include policy loans made pursuant to section 431:6-314. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-106 Record of investments.

§431:6-106 Record of investments.
(a) As to each investment or loan of the funds of a domestic insurer, a written record in permanent form showing the authorization thereof shall be made and signed by an officer of the insurer or by the chairperson of the committee authorizing the investment or loan.
(b) Investment records which document the security transactions are to be maintained in the insurer's principal office in this State. [L 1987, c 347, pt of §2; gen ch 1993]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-201 Required investments for capital and reserves.

§431:6-201 Required investments for capital and reserves.
(a) An insurer shall invest and keep invested its funds aggregating in amounts, if a stock insurer, not less than sixty per cent of its minimum required capital, or if a mutual or reciprocal insurer, not less than sixty per cent of its required minimum surplus, in cash or investments eligible in accordance with section 431:6-301 (public obligations), and in mortgage loans on real property, pursuant to section 431:6-306.
(b) In addition to the investments required by subsection (a), an insurer shall maintain an amount aggregating not less than one hundred per cent of its reserves required by this code, in the following assets: cash, premiums in course of collection, reinsurance recoverable on paid losses, or investments eligible in accordance with this article, including interest and dividends receivable on the investments. [L 1987, c 347, pt of §2 as superseded by c 348, §10; am L 2008, c 142, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-301 Public obligations.

§431:6-301 Public obligations.
(a) An insurer may invest any of its funds in bonds or other evidences of debt, not in default as to principal or interest, which are valid and legally authorized obligations issued, assumed, or guaranteed by the United States or by any state thereof or by any possession of the United States or by any county, city, town, village, municipality, or district therein or by any political subdivision thereof or by any civil division or public instrumentality of one or more of the foregoing, if, by statutory or other legal requirements applicable thereto, such obligations are payable, as to both principal and interest:
(1) From taxes levied or required to be levied upon all taxable property or all taxable income within the jurisdiction of the governmental unit, or
(2) From adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment, but not including any obligation payable solely out of special assessments on properties benefited by local improvements unless adequate security is evidenced by the ratio of assessment to the value of the property or the obligation is additionally secured by an adequate guaranty fund required by law.
(b) In addition to the foregoing, an insurer may invest any of its funds in obligations issued or guaranteed by the Inter-American Development Bank, the International Bank for Reconstruction and Development, the Asian Development Bank or the African Development Bank. [L 1987, c 347, pt of §2; am L 1989, c 195, §16]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-302 Corporate obligations.

§431:6-302 Corporate obligations.
An insurer may invest any of its funds in obligations other than those eligible for investment under section 431:6-306 if they are:
(1) Issued, assumed, or guaranteed by any solvent institution created or existing under the laws of the United States or of any state, or district thereof; and
(2) Filed with the SVO or are considered "filing exempt" by the Purposes and Procedures Manual of the SVO, or its successor publication. [L 1987, c 347, pt of §2; am L 2008, c 142, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-303 Preferred or guaranteed stocks or shares.

§431:6-303 Preferred or guaranteed stocks or shares.
An insurer may invest any of its funds, in an aggregate amount not exceeding fifteen per cent of its assets, in preferred or guaranteed stocks or shares, other than common stocks, of solvent institutions existing under the laws of the United States or of any state, district, or territory thereof, if all of the prior obligations and prior preferred stocks, if any, of the institution at the date of acquisition by the insurer are:
(1) Eligible as investments under this article; and
(2) Filed with the SVO or are considered "filing exempt" by the Purposes and Procedures Manual of the SVO, or its successor publication. [L 1987, c 347, pt of §2; am L 2008, c 142, §6]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-304 Trustees or receivers obligations.

§431:6-304 Trustees or receivers obligations.
An insurer may invest any of its funds, in an aggregate amount not exceeding two per cent of its assets, in certificates, notes or other obligations issued by trustees or receivers of institutions existing under the laws of the United States or of any state, district or territory thereof, which, or the assets of which, are being administered under the direction of any court having jurisdiction, if the obligation is adequately secured as to principal and interest. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-305 Equipment trust obligations.

§431:6-305 Equipment trust obligations.
An insurer may invest any of its funds, in an aggregate amount not exceeding ten per cent of its assets, in equipment trust obligations or certificates which are adequately secured, or in other adequately secured instruments evidencing an interest in transportation equipment wholly or in part within the United States and the right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use or purchase of such transportation equipment. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-306 Mortgage loans and contracts.

§431:6-306 Mortgage loans and contracts.
An insurer may invest any of its funds in:
(1) (A) Bonds or evidences of debt which are secured by first mortgages or deeds of trust on real property located in the United States or Guam which meet either of the following requirements:
(i) Improved, unencumbered real property; or
(ii) Unimproved, unencumbered real property, only where the real property is to be improved, and the bond or evidence of debt is secured by a first mortgage or deed of trust on the real property and the improvement to be made thereon.
(B) Security interests in connection therewith pursuant to section 431:6-310;
(C) The seller's equity in an agreement of sale in any such property, covering the entire balance due on a bona fide sale of such property, in an amount not to exceed $15,000 or the amount permissible under section 431:6-105, whichever is greater, in any one such agreement of sale, nor in any amount in excess of the following percentages of the actual sale price or fair value of the property, whichever is the smaller:
(i) If a dwelling primarily designed for single family occupancy and occupied by the purchaser under such contract, seventy-five per cent,
(ii) In all other cases, sixty-six and two-thirds per cent.
(2) Purchase money mortgages or like securities received by it upon the sale or exchange of real property acquired pursuant to section 431:6-311.
(3) Evidences of debt secured by mortgage or trust deed guaranteed or insured by an agency of the United States.
(4) Evidences of debt secured by first mortgages or deeds of trust upon leasehold estates, running for a term of not less than five years beyond the maturity of the loan as made or extended, in improved real property, otherwise unencumbered, and if the mortgagee is entitled to be subrogated to all the rights under the leasehold. [L 1987, c 347, pt of §2 as superseded by c 348, §11; am L 1988, c 330, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-307 Mortgage loan limited by property value.

§431:6-307 Mortgage loan limited by property value.
(a) No mortgage loan or investment therein upon any one parcel of real property shall exceed in amount at the time of acquisition:
(1) Eighty per cent of the fair value of the property if the property is a dwelling house primarily intended for occupancy by one family, and the loan is required to be amortized within not more than thirty years by payment of installments thereon, at regular intervals not less frequent than every three months; or
(2) Seventy-five per cent of the fair value of the property in all other cases.
(b) The extent to which a mortgage loan made under section 431:6-306(3) is guaranteed or insured by an agency of the United States, may be deducted before application of the limitations in subsection (a). [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-308 Encumbrance defined.

§431:6-308 Encumbrance defined.
(a) Real property shall not be deemed to be encumbered within the meaning of section 431:6-306 by reason of the existence of instruments reserving mineral, oil, timber, or similar rights, rights of way, sewer rights, rights in walls, nor by reason of any liens for taxes or assessments not yet due, or on account of liens not delinquent for community recreational facilities or for the maintenance of community facilities, nor by reason of building restrictions or other restrictive covenants common to the community in which the property is located, nor by liens for service and maintenance of water rights where not delinquent, nor when such real property is subject to lease under which rents or profits are reserved to the owner if in any event the security for the loan or investment is a first lien upon the real property.
(b) If under any of the exceptions set forth in subsection (a) there is any sum owing but not due or delinquent, the total amount of such sum shall be deducted from the amount which otherwise might be loaned on the property.
The value of any mineral, oil, timber, or similar right reserved shall not be included in the fair value of the property. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-309 Appraisal; insurance; limit.

§431:6-309 Appraisal; insurance; limit.
(a) The fair value of property shall be determined by appraisal by a competent appraiser at the time of the making or acquiring of a mortgage loan or investing in a contract for the deed thereon.
(b) Buildings and other improvements located on the mortgaged premises shall be kept insured for the benefit of the mortgagee against loss or damage from fire in an amount not less than the unpaid balance of the obligation, or the insurable value of the property, whichever is the lesser.
(c) An insurer shall not make or acquire a loan or loans upon the security of any one parcel of real property in an aggregate amount in excess of $250,000 or more than the amount permissible under section 431:6-105, whichever is the greater. [L 1987, c 347, pt of §2 as superseded by c 348, §12]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-310 Security agreements.

§431:6-310 Security agreements.
(a) In connection with a mortgage loan on the security of real property designed and used primarily for residential purposes only acquired pursuant to section 431:6-306, an insurer may loan or invest an amount not exceeding twenty per cent of the amount loaned or invested in the real property mortgage, on the security of a security agreement for a term of not more than five years representing a first and prior lien, except for taxes not then delinquent, on personal property constituting durable equipment owned by the mortgagor and kept and used in the mortgaged premises.
(b) The term durable equipment shall include only mechanical refrigerators, mechanical laundering machines, heating and cooking stoves and ranges, mechanical kitchen aids, vacuum cleaners, and fire extinguishing devices; and in addition, in the case of apartment houses and hotels, room furniture and furnishings.
(c) Prior to acquisition of a security agreement, items of property to be included shall be separately appraised by a competent appraiser and the fair market value thereof determined. No such security agreement shall exceed in amount the same ratio of loan to the value of the property as is applicable to the companion mortgage loan on the real property. [L 1987, c 347, pt of §2; am L 2004, c 122, §19]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-312 Time limit for disposal.

§431:6-312 Time limit for disposal.
(a) Real property acquired by an insurer pursuant to section 431:6-311(e)(1) shall be disposed of within three years after it has ceased being necessary for the use of the insurer in the transaction of its business. Real property acquired by an insurer pursuant to such loans, mortgages, liens, judgments, or other debts, or pursuant to paragraphs (2), (3), (4), and (5) of section 431:6-311(e) shall be disposed of within three years after date of acquisition. The time for any such disposal shall be extended by the commissioner for a definite additional period or periods upon application and reasonable showing that forced sale of the property would be against the best interests of the insurer.
(b) Any such real property held by the insurer without the commissioner's consent beyond the time permitted for its disposal shall not be carried or allowed as an asset. [L 1987, c 347, pt of §2; am L 2004, c 122, §20]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-313 Foreign securities.

§431:6-313 Foreign securities.
(a) An insurer authorized to transact insurance in a foreign country may invest any of its funds, in an aggregate amount not exceeding its deposit and reserve obligations incurred in such country, in securities of or in such country possessing characteristics and of a quality similar to those required pursuant to this article for investments in the United States.
(b) An insurer may invest any of its funds, in an aggregate amount not exceeding fifteen per cent of its assets, in addition to any amount permitted pursuant to subsection (a), in obligations of the governments of the Dominion of Canada, or of Canadian provinces, or municipalities, and in obligations of Canadian corporations, which have not been in default during the five years next preceding date of acquisition, and which are otherwise of equal quality to like United States public or corporate securities as prescribed in this article.
(c) In addition to investments permitted under subsections (a) and (b), an insurer may acquire foreign investments, including American Depository Receipts, or engage in investment practices with persons of or in foreign jurisdictions of substantially the same types as those permitted under this article; provided that:
(1) The aggregate amount of foreign investments then held by the insurer under this subsection shall not exceed twenty per cent of its admitted assets; and
(2) The aggregate amount of foreign investments then held by the insurer under this subsection in a single foreign jurisdiction shall not exceed ten per cent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or three per cent of its admitted assets as to any other foreign jurisdiction.
(d) Investments acquired under this section shall be aggregated with investments of the same types made under all other sections of this article, and in a similar manner, for the purposes of determining compliance with limitations, if any, contained in the other sections. [L 1987, c 347, pt of §2; am L 2008, c 142, §7]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-315 Banks, savings and loan associations, credit unions, and financial services loan companies.

§431:6-315 Banks, savings and loan associations, credit unions, and financial services loan companies.
(a) An insurer may invest or deposit any of its funds in checking or savings accounts, under separate certificates of deposit, or in any other form in solvent banks or trust companies.
(b) An insurer may invest any of its funds in shares or savings accounts in solvent savings and loan associations that are insured by the Federal Deposit Insurance Corporation.
(c) An insurer may deposit any of its funds in shares or share draft accounts in solvent state chartered credit unions or federally chartered credit unions.
(d) An insurer may invest or deposit any of its funds in savings accounts, in certificates of deposit, or in any other form in solvent financial services loan companies that are insured by the Federal Deposit Insurance Corporation. [L 1987, c 347, pt of §2; am L 1993, c 107, §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-316 Insurance stocks.

§431:6-316 Insurance stocks.
(a) An insurer other than a life insurer may invest a portion of its surplus funds in an aggregate amount not exceeding fifty per cent of its surplus over its capital stock and other liabilities, or thirty-five per cent of its capital funds, whichever is greater, in the stocks of other insurers organized and existing under the laws of the states of the United States. Indirect or proportionate interests in insurance stocks held by an insurer through any intermediate subsidiary or subsidiaries shall be included in applying the limitations provided in subsections (a), (b) and (c).
(b) A life insurer may invest in such insurance stocks in an aggregate amount not exceeding the smaller of the following amounts: Five per cent of its assets or twenty-five per cent of its surplus over its capital stock and other liabilities, or of surplus over its required minimum surplus if a mutual life insurer.
(c) No such insurance stock shall be eligible as an investment unless it meets the qualifications for stocks of other corporations as set forth in section 431:6-317.
(d) The limitations on investment in insurance stocks set forth in this article shall not apply to stocks acquired under a plan for merger of the insurers which has been approved by the commissioner or to shares received as stock dividends upon shares already owned. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-317 Common stocks.

§431:6-317 Common stocks.
(a) To meet the requirements under section 431:6-201, an insurer may invest any of its funds in common shares of stock that are filed with the SVO or are considered "filing exempt" by the Purposes and Procedures Manual of the SVO, or its successor publication; provided that an insurer's amount of investment in common stocks and in non-dividend paying stocks made pursuant to this section and in common trust funds, mutual funds, and exchange traded funds made pursuant to section 431:6-322 shall not exceed the greater of twenty-five per cent of its admitted assets or one hundred per cent of its surplus as regards to policyholders as defined in section 431:6-101.
(b) An insurer may invest any of its funds in common shares of stock in solvent United States corporations after satisfying the requirements under section 431:6-201.
(c) An insurer's aggregate amount of investment in non-dividend paying stocks shall be subject to the limitations in section 431:6-104. [L 1987, c 347, pt of §2; am L 2008, c 142, §8; am L 2009, c 77, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-318 Collateral loans.

§431:6-318 Collateral loans.
An insurer is permitted to loan its funds upon the pledge of securities or evidences of debt eligible for investment under this article. As at date made, no such loan shall exceed in amount ninety per cent of the fair value of the collateral pledged, except that loans upon pledge of United States government bonds may be equal to the fair value of the bonds pledged and that loans on life insurance policies may equal the cash surrender value of the policy as provided in section 431:6-314. The amount so loaned shall be included in the maximum percentage of funds permitted to be invested in the kinds of securities for evidences of debt pledged or permitted by section 431:6-105. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-319 Miscellaneous investments.

§431:6-319 Miscellaneous investments.
(a) An insurer may loan or invest its funds in an aggregate amount not exceeding the lesser of the following sums: Five per cent of its assets or fifty per cent of its surplus over its capital and other liabilities, or, if a mutual or reciprocal insurer, fifty per cent of its surplus over the minimum required surplus, in kinds of loans or investments not otherwise specifically made eligible for investment and not specifically prohibited or made ineligible by this or other provisions of this article.
(b) No such loan or investment shall be represented by:
(1) Any item described in section 431:5-202;
(2) Any loan or investment of a kind specifically made eligible under any other provision of this code; or
(3) Any loan, investment, or assets theretofore acquired or held by the insurer under any other category of loans or investments.
(c) No one investment or loan shall exceed the amount specified in subsection (a) or one per cent of insurer's assets, whichever is the lesser.
(d) The insurer shall keep a separate record of all investments acquired under this section. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-320 Special consent investments.

§431:6-320 Special consent investments.
Upon approval of the commissioner and in compliance with section 431:6-104, an insurer may make any investment or kind of investment or exchange of assets otherwise prohibited or not eligible under this article. The commissioner's order of approval, if granted, shall specify whether any part of the investment may be credited to required minimum capital or surplus investment, or to investment of reserves. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-321 Hedging transactions.

§431:6-321 Hedging transactions.
(a) A domestic insurer may effect or maintain bona fide hedging transactions pertaining to securities otherwise eligible for investment under this part including, but not limited to:
(1) Financial futures contracts, warrants, options, calls, and other rights to purchase, and
(2) Puts and other rights to require another person to purchase the securities.
(b) The contracts, options, calls, puts, and rights shall be traded on a commodity exchange regulated under the Commodity Exchange Act, as amended, on a securities exchange, or on an over-the-counter market regulated under the Securities Exchange Act of 1934, as amended.
(c) For purposes of this section, a bona fide hedging transaction means a purchase or sale of a contract, warrant, option, call, put, or right entered into for the purpose of:
(1) Minimizing interest rate risks in respect to interest obligations on insurance policies or contracts supported by securities held by the insurer, or
(2) Offsetting changes in the market values or yield rates of securities held by the insurer. [L 1987, c 349, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-322 Common trust funds; mutual funds; and exchange traded funds.

§431:6-322 Common trust funds; mutual funds; and exchange traded funds.
(a) For purposes of this section:
"Common trust funds" means a fund maintained by a bank exclusively for the collective investment and reinvestment of moneys contributed by the bank in its capacity as a trustee, executor, administrator, guardian, or custodian of accounts as defined in section 584 of the Internal Revenue Code of 1986, as amended.
"Exchange traded fund" means a security that tracks an index, commodity, or basket of assets similar to an index fund, is registered with the federal Securities and Exchange Commission under the Investment Company Act of 1940, as amended, and is traded on a public exchange.
"Mutual funds" means an investment company that is registered with the federal Securities and Exchange Commission under the Investment Company Act of 1940 (15 United States Code section 80a-1, et seq.), as amended.
(b) To meet the requirements under section 431:6-201, an insurer may invest in common trust funds, mutual funds, and exchange traded funds; provided that an insurer's amount of investment made pursuant to this section and in common stocks made pursuant to section 431:6-317(a) shall not exceed the greater of twenty-five per cent of its admitted assets or one hundred per cent of its surplus as regards to policyholders as defined in section 431:6-101. This limitation shall not apply to investments approved on the "Mutual Funds List" from the Purposes and Procedures Manual of the SVO, or its successor publication.
(c) An insurer may invest any of its funds in common trust funds, mutual funds, and exchange traded funds after satisfying the requirements of section 431:6-201. [L 1987, c 349, §4; am L 2008, c 142, §9; am L 2009, c 11, §5 and c 77, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-401 Prohibited investments.

§431:6-401 Prohibited investments.
In addition to investments excluded under other provisions of this article, an insurer shall not, except with the commissioner's approval in advance, invest in or loan its funds upon the security of, or hold:
(1) Issued shares of its own capital stock, except for the purpose of mutualization in accordance with section 431:4-502.
(2) Any investment or loan ineligible under section 431:6-105.
(3) Securities issued by an insolvent corporation.
(4) Any investment or security which is found by the commissioner to be designed to evade any prohibition of this article. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-402 Securities underwriting; agreements to withhold or to repurchase.

§431:6-402 Securities underwriting; agreements to withhold or to repurchase.
No insurer shall:
(1) Participate in the underwriting of the marketing of securities in advance of their issuance or enter into any transaction for such underwriting for the account of such insurer jointly with any other person; or
(2) Enter into any agreement to withhold from sale any of its property, or to repurchase any property sold by it. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-403 Disposal of ineligible property and securities.

§431:6-403 Disposal of ineligible property and securities.
(a) Any personal property or securities lawfully acquired by an insurer, which it could not otherwise have invested in or loaned its funds upon at the time of the acquisition, shall be disposed of by the insurer within three years from date of acquisition, unless within such period the security has attained the standard for eligibility. The commissioner, upon application and reasonable showing that forced sale of any such property or security would be against the best interests of the insurer, may extend the disposal period for an additional reasonable time.
(b) While any such property or security remains so ineligible, it shall not be allowed as an asset of the insurer.
(c) Any ineligible property or security acquired contrary to this article by an insurer shall be disposed of forthwith; for failure so to do within sixty days after order of the commissioner requiring such disposal, the commissioner may revoke or suspend the insurer's certificate of authority.
(d) For the purposes of subsection (c), an investment otherwise eligible shall not be deemed ineligible for the reason that it is in excess of the amount permitted under this article to be invested in the category of investments to which it belongs; any such excess investment shall be disposed of within the time prescribed in subsection (a). [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-404 Authorization of investments.

§431:6-404 Authorization of investments.
No investment, loan, sale, or exchange, except a loan upon a life insurance policy, shall be made by any domestic insurer unless authorized or approved by its board of directors or by a committee charged by the board of directors, or the bylaws with the duty of making such investment, loan, sale, or exchange. The minutes of any such committee shall be recorded and reports shall be submitted to the board of directors for approval or disapproval. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:6-501 Investments of foreign, alien insurers.

§431:6-501 Investments of foreign, alien insurers.
The investments of a foreign or alien insurer shall be as permitted by the laws of its domicile, but shall be of a quality substantially as high as those required by this article for similar funds of like domestic insurers. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-201 Annual and monthly tax statements.

§431:7-201 Annual and monthly tax statements.
(a) Each authorized insurer shall electronically file with the commissioner annually, on or before March 1 in each year, a statement signed by a duly authorized person on its behalf, setting forth the total business transacted, and the amount of gross premiums reported by the insurer, pursuant to section 431:7-202, during the year ending on the preceding December 31, from all risks or property resident, situated, or located within this State, together with such other information as may be required by the commissioner to determine the taxability of premiums. The term "gross premiums" as used in this part shall not include consideration paid for annuities.
(b) Each authorized insurer shall electronically file with the commissioner monthly, on or before the twentieth day of the calendar month following the month in which the taxes accrue, a statement signed by a duly authorized person on its behalf, setting forth the total business transacted and the amount of gross premiums reported by the insurer, pursuant to section 431:7-202, during the month from all risks or property resident, situated, or located within this State, together with other information as may be required by the commissioner to determine the taxability of premiums.
(c) Any insurer failing or refusing to electronically file the annual tax statement on or before March 1, or the monthly statement on or before the twentieth day of the calendar month following the month in which the taxes accrue, shall be liable for a fine in an amount not less than $100 and not more than $500 for each day of delinquency. [L 1987, c 347, pt of §2; am L 1995, c 232, §13; am L 1998, c 202, §1; am L 2003, c 212, §41; am L 2010, c 22, §10; am L 2016, c 141, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-202.5 Additions to taxes for noncompliance or evasion; interest on underpayments and overpayments. The provisions of section 231-39 shall apply to taxes under this article. [L 1992, c 236, §2]

§431:7-202.5
Additions to taxes for noncompliance or evasion; interest on underpayments and overpayments.
The provisions of section 231-39 shall apply to taxes under this article. [L 1992, c 236, §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-204 In lieu provision.

§431:7-204 In lieu provision.
As to insurers, the taxes and fees imposed by section 431:7-201 to section 431:7-204, and the fees imposed by this code, when paid shall be in settlement of and in lieu of all demands for taxes, licenses, or fees of every character imposed by the laws of this State, the ordinances or other laws, rules, or regulations of any county of this State, except:
(1) As expressly otherwise provided;
(2) Taxes on real property;
(3) Taxes on the purchase, use, or ownership of tangible personal property; and
(4) Taxes on gross income, gross proceeds, gross rental, or gross rental proceeds under chapter 237 or 237D.
Nothing in this section shall be deemed to exempt insurers from liability for withholding taxes payable by their employees and paying the same to the proper collection officers, or from keeping such records, and making such returns and reports, as may be required in the case of other persons enjoying tax exemption. [L 1987, c 347, pt of §2; am L 1991, c 286, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-204.5 Appeals. Notwithstanding section 431:2-308, any person aggrieved by any assessment of the tax for any month or any year may appeal from the assessment in the manner and within the time and in all other respects as provided in section 235-114. [L 1992, c 236, §3; am L 2004, c 123, §12]

§431:7-204.5
Appeals.
Notwithstanding section 431:2-308, any person aggrieved by any assessment of the tax for any month or any year may appeal from the assessment in the manner and within the time and in all other respects as provided in section 235-114. [L 1992, c 236, §3; am L 2004, c 123, §12]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-205 Reports to department of taxation.

§431:7-205 Reports to department of taxation.
The commissioner shall promptly report to the department of taxation all amounts of taxes collected under section 431:7-201 to section 431:7-204 and section 431:8-315 and all amounts of refunds of such taxes made under section 431:7-203. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-206 Domestic company credit for retaliatory taxes paid other states.

§431:7-206 Domestic company credit for retaliatory taxes paid other states.
If by the laws of any state other than this State, or by the action of any public official of another state, any insurer or company, as defined in section 431:1-202, organized or domiciled in this State, shall be required to pay taxes for the privilege of doing business in the other state, and the amounts are imposed or assessed so that the taxes which are or would be imposed against Hawaii domestic insurance companies are greater than those taxes required of insurers organized or domiciled in the other state, to the extent the amounts are legally due to the other states, an insurer or company organized or domiciled in this State may claim a credit against the tax payable pursuant to this article of a sum not to exceed one hundred per cent of the amount. The credit shall not be greater than the tax payable pursuant to this article during the taxable year. All claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. [L 1987, c 348, §14; am L 2009, c 77, §6]