reglab/statecodes huggingface dataset:
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-409 Application for authority; declaration required.

§431:4-409 Application for authority; declaration required.
(a) When applying for a certificate of authority, the original subscribers and the proposed attorney shall fulfill the requirements of section 431:3-212, and execute and file with the commissioner a declaration setting forth:
(1) The name of the insurer, in compliance with section 431:3-202(b) and section 431:4-104(d)(1);
(2) The location of the insurer's principal office, which shall be the same as that of the attorney;
(3) The classes of insurance proposed to be transacted;
(4) The names and addresses of the original subscribers;
(5) The designation and appointment of the proposed attorney and a copy of the power of attorney;
(6) The names and addresses of the officers and directors of the attorney if a corporation, or of its members if a partnership;
(7) The powers of the subscribers' advisory committee and the names and terms of office of the members thereof;
(8) That all moneys paid to the reciprocal, after deducting therefrom any sum payable to the attorney, shall be held by the attorney-in-fact in the name of the reciprocal insurer for the purposes specified in the subscribers' agreement;
(9) A copy of the subscribers' agreement;
(10) A statement that each of the original subscribers has in good faith applied for insurance of the class proposed to be transacted, and that the insurer has received from each such subscriber the full premium or premium deposit required for the policy applied for, for a term of not less than twelve months at the rate theretofore filed with and approved by the commissioner;
(11) A statement of the financial condition of the insurer, and a schedule of its assets; and
(12) A copy of each policy, endorsement, and application form it then proposes to issue or use.
(b) Such declaration shall be acknowledged by each subscriber and by the attorney before any officer authorized to take acknowledgements of deeds. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-411 Attorney's bond.

§431:4-411 Attorney's bond.
(a) Concurrently with the filing of the declaration provided for in section 431:4-409, the attorney of a domestic reciprocal shall file with the commissioner a bond in favor of this State. The bond shall be executed by the attorney and by an authorized corporate surety, and shall be subject to the commissioner's approval.
(b) The bond shall be in the sum of $25,000 conditioned that the attorney will faithfully account, before a notary public, in a sworn affidavit, for all moneys and other property of the insurer coming into the attorney's hands, and that the attorney will not withdraw or appropriate for the attorney's own use from the funds of the insurer any moneys or property to which the attorney is not entitled under the power of attorney.
(c) The bond shall provide that it is not subject to cancellation unless sixty days' advance notice in writing of intent to cancel is given to both the attorney and the commissioner. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-412 Deposit in lieu.

§431:4-412 Deposit in lieu.
In lieu of the bond, the attorney may maintain on deposit with the commissioner a like amount in cash or in value of securities qualified under this code as insurers' investments, and subject to the same conditions as the bond. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-413 Actions on bond.

§431:4-413 Actions on bond.
Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of the conditions thereof or by a receiver or liquidator of the insurer. Amounts so recovered shall be deposited in and become part of the insurer's funds. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-415 Subscribers' advisory committee.

§431:4-415 Subscribers' advisory committee.
(a) The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.
(b) Not less than three-fourths of the committee shall be composed of subscribers other than the attorney, or any person employed by, representing, or having a financial interest in the attorney.
(c) The committee shall:
(1) Supervise the finances of the insurer;
(2) Supervise the insurer's operations to such extent as to assure their conformity with the subscribers' agreement and power of attorney;
(3) Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer; and
(4) Have such additional powers and functions as may be conferred by the subscribers' agreement. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-416 Subscriber's liability.

§431:4-416 Subscriber's liability.
(a) The liability of each subscriber subject to assessment for the obligations of the reciprocal insurer shall not be joint, but shall be individual and several.
(b) Each subscriber who is subject to assessment shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while the subscriber's policy was in force. The contingent liability may be at the rate of not less than one nor more than ten times the premium or premium deposit stated in the policy, and the maximum aggregate thereof shall be computed in the manner set forth in section 431:4-418.
(c) Each assessable policy issued by the insurer shall plainly set forth a statement of contingent liability. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-417 Subscriber's liability on judgments.

§431:4-417 Subscriber's liability on judgments.
(a) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty days.
(b) Any such judgment, or any judgment against the insurer based upon legal process served in compliance with section 431:2-206, shall be binding upon each of the insurer's subscribers only in such proportion as the subscriber's interests may appear and in an amount not exceeding the subscriber's contingent liabilities. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-418 Aggregate liability.

§431:4-418 Aggregate liability.
No one policy or subscriber as to such policy shall be assessed or be charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year, in excess of the number of times the premium as stated in the policy, computed solely upon premium earned on such policy during that year. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-419 Assessment.

§431:4-419 Assessment.
(a) Assessment may be levied from time to time upon the subscribers of a domestic reciprocal insurer, other than as to nonassessable policies, by the attorney upon approval in advance by the subscribers' advisory committee and the commissioner, or by the commissioner in liquidation of the insurer.
(b) Each subscriber's share of a deficiency for which an assessment is made, not exceeding in any event the subscriber's aggregate contingent liability as computed in accordance with section 431:4-418, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during the period upon all policies subject to assessment.
(c) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.
(d) No subscriber shall have an offset against any assessment for which the subscriber is liable on account of any claim for unearned premium or losses payable. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-420 Time limit for assessment.

§431:4-420 Time limit for assessment.
Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for, and shall pay the subscriber's share of any assessment, as computed and limited in accordance with this part if:
(1) While the subscriber's policy is in force or within one year after its termination, the subscriber is notified by either the attorney or the commissioner of the attorney's or the commissioner's intentions to levy such assessment, or
(2) If an action to have a receiver, conservator, rehabilitator, or liquidator of the insurer appointed is commenced pursuant to article 15 while the subscriber's policy is in force or within one year after its termination. [L 1987, c 347, pt of §2]
Revision Note
Subsection designation deleted pursuant to §23G-15.
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-421 Nonassessable policies.

§431:4-421 Nonassessable policies.
(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum paid-up capital stock and surplus required of a domestic stock insurer authorized to transact like classes of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the commissioner shall issue the commissioner's certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this State, and to omit provisions imposing contingent liability of subscribers under its policies then in force in this State, and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this State for so long as the surplus remains unimpaired.
(b) Upon impairment of the surplus, the commissioner shall forthwith revoke the certificate. No policy shall thereafter be issued or renewed without providing for the contingent assessment liability of subscribers.
(c) The commissioner shall not authorize a domestic reciprocal insurer to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish the liability of all its subscribers and in all such policies for all classes of insurance transacted by it. Except, if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in the state, and need not extinguish the contingent liability applicable to policies theretofore in force in the state. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-422 Contributions of surplus.

§431:4-422 Contributions of surplus.
The attorney or other parties may advance to the reciprocal insurer funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer, and shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. No such withdrawal or repayment shall be made without the advance approval of the commissioner. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-423 Share in savings.

§431:4-423 Share in savings.
A reciprocal insurer may from time to time return to its subscribers any savings or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but the distribution may vary as to classes of subscribers, based upon the experience of the subscribers. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-424 Subscriber's share of assets.

§431:4-424 Subscriber's share of assets.
Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions to its surplus made as provided in section 431:4-422, and the return of any unused deposits, savings, or credits, shall be distributed to its subscribers who were such within the twelve months prior to such formula as may have been approved by the commissioner. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-501 Reorganization, merger or consolidation.

§431:4-501 Reorganization, merger or consolidation.
(a) A domestic insurer may reorganize, merge or consolidate with another insurer subject to the provisions of this part, and subject to the following conditions:
(1) The plan of reorganization, merger, or consolidation shall be submitted to and be approved by the commissioner in advance of the reorganization, merger, or consolidation.
(2) The commissioner shall not approve any such plan unless the commissioner finds that it is fair, equitable, and consistent with law. If the commissioner fails to approve the plan, the commissioner shall state the commissioner's reasons for such failure in the commissioner's decision.
(3) No director, officer, member, or subscriber of any such insurer, except as is expressly provided by the plan of reorganization, merger, or consolidation, shall receive any fee, commission, other compensation or valuable consideration whatsoever, for in any manner aiding, promoting, or assisting in the reorganization, merger, or consolidation.
(4) Any reorganization, merger, or consolidation as to an incorporated domestic insurer shall in other respects be governed by the general laws of this State relating to business corporations. Except, that as to domestic mutual insurers, approval by two-thirds of its members who vote thereon pursuant to the notice and procedure as was approved by the commissioner shall constitute approval of the reorganization, merger, or consolidation as respects the insurer's members.
(b) Reinsurance of all or substantially all of the insurance in force of a domestic insurer by another insurer shall be deemed a consolidation for the purposes of this part. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-502 Mutualization of stock insurers.

§431:4-502 Mutualization of stock insurers.
(a) Any domestic stock insurer may become a domestic mutual insurer pursuant to such plan and procedure as are approved by the commissioner in advance of such mutualization.
(b) The commissioner shall not approve any such plan, procedure, or mutualization unless:
(1) It is equitable to both shareholders and policyholders.
(2) It is approved by vote of the holders of not less than three-fourths of the insurer's capital stock having voting rights, and by vote of not less than two-thirds of the insurer's policyholders who vote on such plan, pursuant to such notice and procedure as may be approved by the commissioner; provided that in the case of a life insurer, the right to vote thereon is limited to those policyholders whose policies have face amounts of not less than $1,000 and have been in force one year or more. Such vote may be registered in person, by proxy, or by mail.
(3) Mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair value thereof as determined by competent disinterested appraisers.
(4) The plan provides for appraisal and purchase of the shares of any nonconsenting stockholder in accordance with the laws of this State relating to the sale or exchange of all the assets of a private corporation.
(5) The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective.
(6) Mutualization leaves the insurer with surplus funds reasonably adequate to preserve the security of its policyholders and its ability to continue successfully in business in the states in which it is then authorized, and in the classes of insurance it is then authorized to transact. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-503 Conversion or reinsurance of mutual insurer.

§431:4-503 Conversion or reinsurance of mutual insurer.
(a) No domestic mutual insurer shall be converted, changed, or reorganized as a stock corporation.
(b) Such an insurer may be wholly reinsured in, its assets transferred to, and its liabilities assumed by another mutual or stock insurer under such terms and conditions as are approved by the commissioner in advance of such reinsurance.
(c) The commissioner shall not approve any such reinsurance agreement which does not determine the amount of and make adequate provision for paying to policyholders of the mutual insurer, reasonable compensation for their equities as owners of the insurer, such compensation to be apportioned to policyholders as identified and in the manner prescribed in section 431:4-326. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-504 Merger or conversion of reciprocal insurer.

§431:4-504 Merger or conversion of reciprocal insurer.
(a) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of the subscribers who vote upon such merger pursuant to such notice as may be approved by the commissioner and with approval of the commissioner of the terms therefor, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.
(b) Every new reciprocal insurer formed by merger shall assume and succeed to all of the obligations and liabilities of the respective merging reciprocal insurers and shall be held liable to pay and discharge all such debts and liabilities and perform such obligations in the same manner as if they had been incurred or contracted by it, but the subscribers of the predecessor reciprocal insurers shall continue subject to all the liabilities, claims, and demands which shall then exist, or which may thereafter accrue against them, or any of them, by reason of any liabilities and obligations incurred by them, or on their behalf as the subscribers before the date of merger.
(c) Such a stock or mutual insurer shall be subject to the same capital requirements and shall have the same rights as a like domestic insurer transacting like classes of insurance.
(d) The commissioner shall not approve:
(1) Any plan for a merger or conversion which is inequitable to subscribers, or
(2) Any plan for a conversion to a stock insurer which does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to the subscriber's interest in the reciprocal insurer, as determined in accordance with section 431:4-424, and a reasonable length of time within which to exercise the right. [L 1987, c 347, pt of §2; am L 1989, c 195, §15]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4A-102 Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer.

§431:4A-102 Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer.
(a) An asset or reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 431:4A-101 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. The commissioner may adopt by rules pursuant to section 431:4A-104(b) specific additional requirements relating to:
(1) The valuation of assets or reserve credits;
(2) The amount and forms of security supporting reinsurance arrangements described in section 431:4A-104(b); and
(3) The circumstances pursuant to which credit will be reduced or eliminated.
(b) The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if that security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified United States financial institution as defined in section 431:4A-103(b). This security may be in the form of:
(1) Cash;
(2) Securities listed by the securities valuation office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the securities valuation office, and qualifying as admitted assets;
(3) Clean, irrevocable, and unconditional letters of credit, issued or confirmed by a qualified United States financial institution, as defined in section 431:4A-103, effective no later than December 31 of the year for which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement;
(4) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance (or confirmation) shall, notwithstanding the issuing (or confirming) institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or
(5) Any other form of security acceptable to the commissioner. [L 1992, c 176, pt of §5; am L 2014, c 234, §2; am L 2022, c 28, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4A-103 Qualified United States financial institutions.

§431:4A-103 Qualified United States financial institutions.
(a) For purposes of section 431:4A-102(3), a "qualified United States financial institution" means an institution that:
(1) Is organized or (in the case of a United States office of a foreign banking organization) licensed, under the laws of the United States or any state thereof;
(2) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies; and
(3) Has been determined by either the commissioner, or the securities valuation office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner.
(b) For purposes of those provisions of this article specifying those institutions that are eligible to act as a fiduciary of a trust, "qualified United States financial institution" means an institution that:
(1) Is organized, or (in the case of a United States branch or agency office of a foreign banking organization) licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and
(2) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies. [L 1992, c 176, pt of §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4A-104 Rules.

§431:4A-104 Rules.
(a) The commissioner may adopt rules pursuant to chapter 91 implementing this article.
(b) The commissioner may adopt rules applicable to reinsurance arrangements as follows:
(1) A rule adopted pursuant to this section shall apply only to reinsurance relating to:
(A) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;
(B) Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;
(C) Variable annuities with guaranteed death or living benefits;
(D) Long-term care insurance policies; or
(E) Other life and health insurance and annuity products as to which the National Association of Insurance Commissioners adopts model regulatory requirements with respect to credit for reinsurance;
(2) A rule adopted pursuant to paragraph (1)(A) or (B) shall apply to any treaty containing:
(A) Policies issued on or after January 1, 2015; and
(B) Policies issued before January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015;
(3) A rule adopted pursuant to this section shall require the ceding insurer, in calculating the amounts or forms of security required to be held under rules, to use the valuation manual adopted by the National Association of Insurance Commissioners under section 11B(1) of the National Association of Insurance Commissioners Standard Valuation Law, including all amendments adopted by the National Association of Insurance Commissioners and in effect on the date as of which the calculation is made, to the extent applicable;
(4) A rule adopted pursuant to this section shall not apply to a cession to an assuming insurer that:
(A) Meets the conditions set forth in section 431:4A-101(f);
(B) Is certified in this State; or
(C) Maintains at least $250,000,000 in capital and surplus when determined in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, including all amendments thereto adopted by the National Association of Insurance Commissioners, excluding the impact of any permitted or prescribed practices; and is:
(i) Licensed in at least twenty-six states; or
(ii) Licensed in at least ten states, and licensed or accredited in a total of at least thirty-five states.
(5) The authority to adopt rules pursuant to this section shall not limit the commissioner's general authority to adopt rules pursuant to section 431:4A-104(a). [L 1992, c 176, pt of §5; am L 2022, c 28, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4F-101 Definitions.

§431:4F-101 Definitions.
As used in this article, unless the context requires otherwise:
"Alien insurer" has the same meaning as set forth in section 431:3-101.
"Trusteed assets" mean the assets in a trust account required by section 431:4F-104.
"Trusteed surplus" means the aggregate value of the insurer's general state deposits and trusteed assets deposited with a trustee in compliance with section 431:4F-105, plus accrued investment income thereon where such interest is collected by the states for trustees, less the aggregate net amount of all of the insurer's reserves and other liabilities in the United States as determined in accordance with section 431:4F-106.
"United States branch" means the business unit through which business is transacted within the United States by an alien insurer and the assets and liabilities of the insurer within the United States pertaining to such business. [L 2004, c 120, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4F-102 Scope.

§431:4F-102 Scope.
This article applies to a United States branch using this State as a state of entry to transact insurance in the United States. The United States branch shall be subject to all state laws applicable to an insurer domiciled in this State, unless otherwise provided. [L 2004, c 120, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4F-103 Authorization of entry.

§431:4F-103 Authorization of entry.
(a) An alien insurer may use this State as a state of entry to transact insurance in the United States through a United States branch by:
(1) Qualifying as an insurer licensed to do business in this State; and
(2) Establishing trust accounts, pursuant to trust agreements approved by the commissioner with a United States financial institution approved by the commissioner, in an amount at least equal to the minimum capital and surplus or authorized control level risk-based capital, whichever is greater, required to be maintained by a domestic insurer licensed for the same kind of insurance.
(b) Before authorizing the entry of a United States branch of any alien insurer through this State, the commissioner shall in addition to the requirements of section 431:4F-105 and any other requirement of this chapter, require the alien insurer to:
(1) Comply with the requirements of section 431:3-212;
(2) Submit an English language translation, as necessary, of any of the documents required in paragraph (1); and
(3) Submit to an examination of the insurer's affairs at its principal office within the United States. [L 2004, c 120, pt of §2; am L 2010, c 116, §1(4)]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4F-104 Maintenance of trust account.

§431:4F-104 Maintenance of trust account.
The trusteed assets, or the assets of the trust account of an alien insurer, as required by section 431:4F-103, shall at all times be in an amount equal to the United States branch's reserves and other liabilities plus the minimum capital and surplus or authorized control level risk-based capital, whichever is greater, required to be maintained by a domestic insurer licensed to do the same kind of insurance. [L 2004, c 120, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4F-107 Additional requirements for United States branch license.

§431:4F-107 Additional requirements for United States branch license.
(a) Before issuing any new or renewal license to any United States branch, the commissioner may require satisfactory proof, either in the alien insurer's charter or by an agreement evidenced by a duly certified resolution of its board of directors, or otherwise as the commissioner may require, that the insurer will not engage in any insurance business in contravention of this section or not authorized by its charter.
(b) The commissioner shall issue a renewal license to any United States branch if satisfied, by such proof as required, that the insurer is not delinquent with respect to any requirement imposed by this chapter and that its continuance in business in this State will not be hazardous or prejudicial to the best interests of the people of this State.
(c) No United States branch shall be licensed to do any kind of insurance business in this State, or any combination of kinds of insurance business, that are not permitted to be done by domestic insurers licensed under this chapter. No United States branch shall be authorized to do an insurance business in this State if it does anywhere within the United States any kind of business other than an insurance business and the business necessarily or properly incidental to the kind or kinds of insurance business that it is authorized to do in this State.
(d) Except as otherwise specifically provided, no United States branch, entering through this State or another state, shall be or continue to be authorized to do an insurance business in this State if it fails to comply substantially with any requirement or limitation of this chapter, applicable to similar domestic insurers hereafter organized, which in the judgment of the commissioner is reasonably necessary to protect the interest of the policyholders.
(e) No United States branch that, outside of this State, does any kind or combination of kinds of insurance business not permitted to be done in this State by similar domestic insurers hereafter organized, shall be or continue to be authorized to do an insurance business in this State, unless in the judgment of the commissioner the doing of that kind or combination of kinds of insurance business will not be prejudicial to the best interests of the people of this State.
(f) No United States branch shall be or continue to be authorized to do an insurance business in this State if it fails to keep full and correct entries of its transactions, which shall at all times be open to the inspection of persons invested by law with the rights of inspection and be maintained in its principal office within this State. [L 2004, c 120, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4F-108 Authority of commissioner.

§431:4F-108 Authority of commissioner.
Whenever it appears to the commissioner from any annual statement, quarterly statement, trusteed surplus statement, or any other report that a United States branch's trusteed surplus is reduced below minimum capital and surplus or the authorized control level risk-based capital, whichever is greater, required to be maintained by a domestic insurer licensed to transact the same kinds of insurance, the commissioner may proceed against the insurer pursuant to articles 5 and 15 as an insurer whose condition is such that its further transaction of business in the United States will be hazardous to its policyholders, its creditors, or the public in the United States. [L 2004, c 120, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-101 Impairment of capital.

§431:5-101 Impairment of capital.
(a)(1) A domestic stock insurer's capital stock shall be deemed to be impaired if its qualified assets at any time are less than its liabilities, including its capital stock as a liability.
(2) If a domestic insurer's capital stock is deemed to be impaired, the commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to cure the deficiency within ninety days after service of such notice.
(b) The insurer may cure the deficiency by assessment of stockholders, by action of its board of directors, or by other lawful means. The deficiency shall be cured:
(1) By the provision of cash or other assets eligible under this code for the investment of the insurer's funds; or
(2) By reduction of the insurer's capital stock to an amount not below the minimum required by either section 431:3-205, section 431:3-207 or section 431:3-208 for the classes of insurance to be thereafter transacted.
(c) Shares as to which such an assessment, made pursuant to this section, is not paid within sixty days after demand, shall be forfeitable and may be cancelled by vote of the directors and new shares issued to make up the deficiency.
(d) If the deficiency is not cured and proof thereof filed with the commissioner within the ninety-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by article 15.
(e) If the deficiency is not cured, the insurer shall not issue or deliver any policy after the expiration of the ninety-day period. Any officer or director who violates or knowingly permits the violation of this provision shall be fined not less than $500 nor more than $10,000 for each violation. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-102 Impairment of surplus.

§431:5-102 Impairment of surplus.
(a)(1) A domestic mutual insurer's surplus shall be deemed to be impaired if its qualified assets are less than its liabilities, plus the amount of any surplus required by this code for the classes of insurance authorized to be transacted.
(2) If a domestic mutual insurer's surplus is deemed to be impaired, the commissioner shall at once ascertain the amount of the deficiency and serve notice upon the insurer to cure the deficiency within ninety days after service of such notice.
(b) The insurer shall cure the deficiency in cash or in assets eligible under this code for the investment of the insurer's funds.
(c) If the deficiency is not cured and proof thereof filed with the commissioner within such ninety-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by article 15.
(d) If the deficiency is not cured the insurer shall not issue or deliver any policy after the expiration of such ninety-day period. Any officer or director who violates or knowingly permits the violation of this provision shall be fined not less than $500 nor more than $10,000 for each violation. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-103 Impairment of reciprocal's surplus.

§431:5-103 Impairment of reciprocal's surplus.
(a)(1) A domestic reciprocal insurer's surplus shall be deemed to be impaired if its qualified assets are at any time insufficient to discharge its liabilities other than any liability on account of funds contributed by the attorney or other parties, and insufficient to maintain the surplus required for the classes of insurance it is authorized to transact.
(2) Upon such impairment of a reciprocal insurer's surplus, its attorney shall forthwith levy an assessment upon subscribers made subject to assessment by the terms of their policies for the amount needed to make up the deficiency.
(3) For the purposes of a determination of impairment of a reciprocal under this section, surplus means the required surplus which corresponds to the paid-up capital stock required of a stock insurer for authority to transact a like class or classes of insurance.
(b) The insurer shall be deemed insolvent and shall be proceeded against as authorized by this code if:
(1) The attorney fails to make the assessment within thirty days after the commissioner orders the attorney to do so; or
(2) The deficiency is not fully made up within sixty days after the date the assessment was made.
(c) If liquidation of such an insurer is ordered, an assessment shall be levied upon the subscribers for such an amount, subject to limits as provided by this code, as the commissioner determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney, but including the reasonable cost of the liquidation. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-202 Assets not allowed.

§431:5-202 Assets not allowed.
In addition to assets excluded under section 431:5-201, the following shall not be allowed as assets in any determination of the financial condition of an insurer:
(1) Trade names, agency plants, other like intangible assets, and any receivable without adequate documentation;
(2) Positive goodwill from all sources in excess of ten per cent of capital and surplus adjusted to exclude electronic data processing equipment and operating system software and net deferred tax assets;
(3) Prepaid or deferred charges for expenses and commissions paid by the insurer except the unaccrued portion of taxes paid prior to due date, on real property acquired or used pursuant to section 431:6-311;
(4) Advances to officers, employees, agents, and other persons on personal security only;
(5) Stock of the insurer, owned by it, or any equity therein or loans secured thereby, or any proportionate interest in such stock through the ownership by the insurer of an interest in another firm, corporation or business unit;
(6) Furniture, furnishings, fixtures, electronic data software, safes, vehicles, library, stationery, literature, and supplies; except such personal property:
(A) The insurer is permitted to hold pursuant to section 431:6-311(e)(5);
(B) Acquired through enforcement of rights arising from security agreements acquired pursuant to section 431:6-310; or
(C) Reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by it for home office, branch office, and similar purposes; and
(7) The amount, if any, by which the aggregate book value of investments, as carried in the ledger assets of the insurer, exceeds the aggregate value thereof as determined under this code. [L 1987, c 347, pt of §2; am L 2004, c 122, §17]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-203 Liabilities

§431:5-203 Liabilities
. In any determination of the financial condition of an insurer, liabilities to be charged against its assets shall include:
(1) The amount of its capital stock outstanding, if any;
(2) The amount, estimated consistent with this article, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expense of adjustment or settlement thereof;
(3) With reference to life and accident and health or sickness insurance, and annuity contracts:
(A) The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this article which are applicable thereto;
(B) Reserves for accident and health or sickness benefits, for both active and disabled lives;
(C) Reserves for accidental death benefits; and
(D) Any additional reserves which may be required by the commissioner, consistent with practices adopted or approved by the National Association of Insurance Commissioners, on account of such insurances;
(4) With reference to insurance other than those specified in paragraph (3), the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this article;
(5) Taxes, expenses, and other obligations accrued at the date of the statement; and
(6) Any additional reserve set up by the insurer for a specific liability purpose or required by the commissioner consistent with practices adopted or approved by the National Association of Insurance Commissioners. [L 1987, c 347, pt of §2; am L 2003, c 212, §38]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-204 Determining financial condition of reciprocal insurers.

§431:5-204 Determining financial condition of reciprocal insurers.
In determining the financial condition of a reciprocal insurer, the commissioner shall apply the following rules:
(1) The commissioner shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis.
(2) The surplus deposits of subscribers shall be allowed as assets, except that any premium deposit delinquent for ninety days shall first be charged against the surplus deposits.
(3) The surplus deposits of subscribers shall not be charged as a liability.
(4) All premium deposits delinquent less than ninety days shall be allowed as assets.
(5) An assessment levied upon subscribers and not collected, shall not be allowed as an asset.
(6) The contingent liability of subscribers shall not be allowed as an asset.
(7) The computation of reserves shall be based upon premium deposits other than membership fees, and without any deduction for the compensation of the attorney. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-301 Unearned premium reserve.

§431:5-301 Unearned premium reserve.
(a) Every insurer shall maintain an unearned premium reserve on all policies in force for:
(1) Insurance against loss or damage to property, except as provided in section 431:5-302;
(2) General casualty insurance;
(3) Accident and health or sickness insurance, except as provided in section 431:5-303 and section 431:5-307; and
(4) Surety insurance.
(b) For purposes of this article, "unearned premium reserve" means the portions of the gross premiums in force, less authorized reinsurance.
(c) All reserves may be computed, at the insurer's option, on a monthly or more frequent, pro rata basis.
(d) After adopting any one of the methods for computing such reserve, an insurer shall not change methods without the commissioner's approval. [L 1987, c 347, pt of §2; am L 1997, c 368, §4; am L 2003, c 212, §39]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-302 Unearned premium reserve for marine and transportation.

§431:5-302 Unearned premium reserve for marine and transportation.
Marine and transportation insurance policy premiums on trip risks not terminated shall be deemed unearned. The commissioner may require the insurer to carry a reserve equal to one hundred per cent on trip risks written during the month ended as of the date of statement, and:
(1) Computed upon a pro rata basis; or
(2) With the commissioner's consent, in accordance with the alternative methods provided in section 431:5-301(c) and section 431:5-301(d). [L 1987, c 347, pt of §2; am L 1997, c 368, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-303 Active life reserves and unearned premium reserves for noncancellable disability insurance.

§431:5-303 Active life reserves and unearned premium reserves for noncancellable disability insurance.
(a) The legal minimum standard for computing the active life reserve, including the unearned premium reserve, of noncancellable disability policies shall be based on conference modification of class III disability experience with interest not to exceed three and one-half per cent a year on the full preliminary term basis.
(b) The tables shall be extended to cover the provisions of such policies on such bases as the commissioner may approve for policies:
(1) With a waiting period of less than three months; or
(2) Providing benefits at ages beyond the limits of conference modification of class III disability experience.
(c) The reserve for losses under noncancellable disability policies shall be based on conference modification of class III disability experience, except that for claims of less than twenty-seven months' duration, the reserve may be taken as equivalent to the prospective claim payments for three and one-half times the elapsed period of disability. In no case shall the reserve be less than the equivalent of seven weeks' claim payments.
(d) The commissioner shall modify the application of the tables and requirements prescribed in this section to policies or to claims arising under policies in accordance with the waiting period contained in such policies and in accordance with any limitation as to the time for which indemnity is payable. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-304 Loss reserves for liability and workers' compensation insurance.

§431:5-304 Loss reserves for liability and workers' compensation insurance.
The reserves for outstanding losses and loss expenses under policies of liability insurance and workers' compensation insurance shall be determined in accordance with the applicable basis set forth in the convention annual statement blank of the National Association of Insurance Commissioners. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:5-305 Increased reserves.

§431:5-305 Increased reserves.
(a) If the commissioner determines that an insurer's unearned premium reserves, however computed, are inadequate, the commissioner may require the insurer to compute such reserves or any part thereof according to such other method or methods as are prescribed in this code.
(b) If the loss reserves, however estimated, are inadequate, the commissioner shall require the insurer to maintain loss reserves in such increased amount as is needed to make them adequate. [L 1987, c 347, pt of §2]