reglab/statecodes huggingface dataset:
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-207 Tax credit to facilitate regulatory oversight.

§431:7-207
Tax credit to facilitate regulatory oversight.
(a) Each authorized insurer that meets the requirements of subsection (b) may claim a tax credit under this section against the tax imposed by section 431:7-202(a) or (b) for the taxable year for which the credit is properly claimed. The tax credit shall be an amount equal to one per cent of the premiums taxed by section 431:7-202(a) and (b).
(b) An insurer may claim the credit only if, at all times during the taxable year, the insurer:
(1) Maintains in Hawaii books and records required by the commissioner sufficient to conduct the examination authorized by section 431:2-302;
(2) Employs in Hawaii personnel knowledgeable about the insurer's financial operations and who are authorized to represent the insurer in all matters pertaining to examination; and
(3) Maintains in Hawaii a customer service center with employees authorized to promptly adjust, settle, and pay claims and to promptly answer all questions from customers regarding their insurance policies.
(c) The commissioner shall prepare the forms necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91.
(d) All claims for the tax credit under this section, including any amended claims, must 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.
(e) The tax credit allowed by subsection (a) may be claimed on the interim returns required by section [431:7-202(f)]. [L 1992, c 236, §5; am L 1994, c 160, §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-208 Low-income housing, insurance premium tax credit.

§431:7-208 Low-income housing, insurance premium tax credit.
The low-income housing tax credit provided under section 235-110.8 shall be operative for this chapter and may be claimed against the tax imposed under section 431:7-202. [L 1999, c 24, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-209 High technology business investment tax credit.

§431:7-209 High technology business investment tax credit.
The high technology business investment tax credit provided under section 235-110.9 shall be operative for this chapter on July 1, 1999. [L 1999, c 178, §27; am L 2009, c 178, §7; am L 2017, c 3, §3]
Revision Note
"July 1, 1999" substituted for "the effective date of this Act" pursuant to §23G-15.
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-301 Deposits of insurers.

§431:7-301 Deposits of insurers.
(a) The director of finance shall accept, when made through the commissioner, deposits of securities or funds by insurers as follows:
(1) Deposits in amount as required to be made as prerequisite to a certificate of authority to transact insurance in this State.
(2) Deposits of insurers in amount as required to be made by the laws of other states as prerequisites for authority to transact insurance in such other states.
(3) Deposits in other additional amounts permitted to be made by this part.
(b) This part shall apply to the deposits listed in this section unless expressly inconsistent with the provisions of article 3 of this code, in which case the provisions of article 3 shall prevail. [L 1987, c 347, pt of §2; am L 1989, c 207, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-303 Securities eligible for deposit.

§431:7-303 Securities eligible for deposit.
All deposits shall consist of cash or other assets comprised of securities which are eligible for the investment of the funds of insurers under section 431:6-301 representing public obligations, and section 431:6-302 representing corporate obligations. [L 1987, c 347, pt of §2; am L 1989, c 195, §17]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-304 Record and receipt.

§431:7-304 Record and receipt.
(a) The director of finance shall keep a record in permanent form of all such funds and securities.
(b) The director of finance shall deliver to the insurer a receipt for all funds and securities so deposited by it. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-305 Transfer of securities.

§431:7-305 Transfer of securities.
(a) No transfer of any funds or security so held on deposit, whether voluntary or by operation of law, shall be valid unless approved in writing by the commissioner and countersigned by the director of finance or by the director's authorized deputy or agent, or unless expressly provided elsewhere in this code.
(b) A statement of each such transfer shall be entered on the records of the director, showing the name of the insurer from whose deposit the transfer is made, the name of the transferee, the par value of securities having par value, and the asset value of other securities as at last recent valuation. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-306 Director may designate depositary.

§431:7-306 Director may designate depositary.
At the request of an insurer, the director of finance may designate any solvent trust company or other solvent financial institution having trust powers, domiciled in the United States, as the director's depositary to receive and hold any such deposit. Any deposit so held shall be at the expense of the insurer. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-307 Responsibility for deposits.

§431:7-307 Responsibility for deposits.
This State shall be responsible for the safekeeping and return of all funds and securities deposited pursuant to section 431:7-301 to section [431:7-311] with the director of finance. The insurer shall be responsible for the safekeeping and return of all funds and securities deposited pursuant to section 431:7-306. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-308 Dividends and substitutions.

§431:7-308 Dividends and substitutions.
While solvent and complying with this part, an insurer shall be entitled:
(1) To collect and receive interest and dividends accruing on the securities so held on deposit for its account, and
(2) From time to time to exchange and substitute for any of such securities, other securities eligible for deposit and of at least equal value. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-309 Release of deposit.

§431:7-309 Release of deposit.
(a) Any required deposit or portion thereof shall be released in these instances only:
(1) Upon extinguishment of all liabilities or portion thereof, of the insurer for the security of which the deposit is held, by reinsurance contract or otherwise.
(2) If any such deposit or portion thereof is no longer required under this part.
(3) Upon proper order of a court of competent jurisdiction the deposit or portion thereof shall be released to the receiver, conservator, rehabilitator, or liquidator of the insurer for whose account the deposit is held.
(b) No such release shall be made except on application to and written order of the commissioner made upon proof satisfactory to the commissioner of the existence of one of such grounds therefor. The commissioner shall not have any personal liability for any such release of any deposit or part thereof so made by the commissioner in good faith.
(c) All releases of deposits or any part thereof shall be made to the person then entitled thereto upon proof of title satisfactory to the commissioner. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:7-310 Voluntary excess deposit.

§431:7-310 Voluntary excess deposit.
An insurer may deposit and maintain on deposit with the director of finance through the commissioner funds and eligible securities in amount exceeding its required deposit under this part by not more than $100,000 for the purpose of absorbing fluctuations in the value of securities held in its required deposit, and to facilitate the exchange and substitution of such required securities. During the solvency of the insurer, any such excess deposit, or any part thereof, shall be released to it upon its request. During the insolvency of the insurer, such excess deposit shall be released only as provided in section 431:7-309. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-101 Scope.

Cross References
Insurance policies issued to construction professionals, see §431:1-217.
PART I. GENERAL PROVISIONS
§431:8-101 Scope.
This article shall apply to the placement of insurance in insurers not authorized to transact insurance in the state in which the subject resident is located or in which the insurance contract will be performed. [L 1987, c 347, pt of §2; am L 2011, c 68, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-201 Transacting insurance business without certificate of authority prohibited.

§431:8-201 Transacting insurance business without certificate of authority prohibited.
It shall be unlawful for any insurer to transact an insurance business in this State, as defined in section 431:1-215, without a certificate of authority; provided that this section shall not apply to:
(1) The lawful transaction of surplus lines insurance;
(2) The lawful transaction of reinsurance by insurers;
(3) Transactions in this State involving a policy lawfully solicited, written, and delivered outside of this State covering only subjects of insurance not resident, located, or expressly to be performed in this State at the time of issuance, and subsequent to the issuance of the policy;
(4) Attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses;
(5) Transactions in this State involving group life and group accident and health or sickness or blanket accident and health or sickness insurance or group annuities where the master policy of the groups was lawfully issued in and delivered pursuant to the laws of a state in which the insurer was authorized to do an insurance business; provided that this paragraph shall not apply to transactions of association health plans;
(6) Transactions in this State involving any policy of insurance or annuity contract issued prior to July 1, 1988;
(7) Transactions in this State involving ocean marine insurance; and
(8) Transactions of contracts of insurance for property and casualty multi-state risks; provided that the producer is licensed to sell, solicit, or negotiate that insurance in the home state of the insured. [L 1987, c 347, pt of §2; am L 1989, c 195, §19; am L 2003, c 212, §43; am L 2011, c 68, §6; am L 2018, c 199, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-202 Acting for or aiding unauthorized insurer prohibited.

§431:8-202 Acting for or aiding unauthorized insurer prohibited.
(a) No person shall directly or indirectly act as producer for, or otherwise represent or aid on behalf of another, any unauthorized insurer in the solicitation, negotiation, procurement, or effectuation of insurance, or renewals thereof, or forwarding of applications, or delivery of policies or contracts or inspection of risks, or fixing of rates, or investigation or adjustment of claims or losses, or collection or forwarding of premiums, or in any other manner represent or assist an unauthorized insurer in the transaction of an insurance business.
(b) This section does not apply to:
(1) Transactions for which a certificate of authority to do business is not required of an insurer under the insurance laws of this State; and
(2) The property and operation of aircraft engaged in interstate or foreign commerce. [L 1987, c 347, pt of §2; am L 1989, c 195, §20; am L 2002, c 155, §14; am L 2006, c 154, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-203 Validity of contracts illegally effectuated.

§431:8-203 Validity of contracts illegally effectuated.
A contract of insurance effectuated by an unauthorized insurer in violation of this article shall be voidable except at the instance of the insurer. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-204 Liability of person assisting unauthorized insurer.

§431:8-204 Liability of person assisting unauthorized insurer.
In the event of failure of any such unauthorized insurer to pay any claim or loss within the provisions of such insurance contract, any person who assisted or in any manner aided directly or indirectly in the procurement of such insurance contract and who knew or should have known the transaction was illegal shall be liable to the insured for the full amount of the claim or loss in the manner provided by the provisions of the insurance contract. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-206 Commissioner may enjoin unauthorized insurers.

§431:8-206 Commissioner may enjoin unauthorized insurers.
Whenever the commissioner believes, from evidence satisfactory to the commissioner, that any insurer is violating or about to violate the provisions of section 431:8-201, the commissioner may bring an action in accordance with the commissioner's injunctive authority under article 2. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-207 Legal process against unauthorized insurer; how service of process made.

§431:8-207 Legal process against unauthorized insurer; how service of process made.
(a) Any act of transacting an insurance business in this State by any unauthorized insurer is equivalent to and shall constitute an irrevocable appointment by such insurer, binding upon the insurer, the insurer's personal representative, or successor in interest if a corporation, of the commissioner or the commissioner's successor in office, to be the true and lawful attorney of the insurer upon whom may be served all lawful process in any action, suit, or proceeding in any court by the commissioner or by the State or others, and upon whom may be served any notice, order, pleading, or process in any proceeding before the commissioner, and which arises out of transacting an insurance business in this State by such insurer. Any act of transacting an insurance business in this State by any unauthorized insurer shall be acknowledgement of its agreement that such service of process is of the same legal force and validity as personal service of process in this State upon the insurer.
(b) Service of process in an action or proceeding shall be made in accordance with section 431:2-206. Service is sufficient if:
(1) Notice of service and a copy of the court process or the notice, order, pleading, or process in the administrative proceeding are sent within ten days by registered mail by the plaintiff or the plaintiff's attorney in the court proceeding, or by the commissioner in the administrative proceeding, to the defendant or defendant's agent or representative at the defendant's last known principal place of business;
(2) The defendant's receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and an affidavit of the plaintiff or the plaintiff's attorney in a court proceeding, or of the commissioner in an administrative proceeding, are filed with the clerk of the court in which the proceeding is pending or with the commissioner in administrative proceedings, on or before the date the defendant is required to appear or respond, or within any further time as the court or commissioner may allow.
(c) No plaintiff shall be entitled to a judgment or a determination by default in any court or administrative proceeding in which process is served under this section until the expiration of forty days from the date of filing of the affidavit of compliance.
(d) Nothing in this section shall limit or affect the right to serve any process, notice, order, or demand upon any person or insurer in any other manner now or hereafter permitted by law. [L 1987, c 347, pt of §2; am L 2006, c 154, §6]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-208 Defense of action by unauthorized insurer; bond.

§431:8-208 Defense of action by unauthorized insurer; bond.
(a) Before any unauthorized insurer files or causes to be filed any pleading in any court action, suit, or proceeding, or any notice, order, pleading, or process in an administrative proceeding before the commissioner, instituted against such person or insurer by service made as provided in section 431:8-207, such insurer shall either:
(1) Deposit with the clerk of the court in which such action, suit, or proceeding is pending, or with the commissioner in administrative proceedings, cash or securities, or file a bond with good and sufficient sureties to be approved by the court or commissioner, in an amount fixed by the court or commissioner sufficient to secure the payment of any final judgment which may be rendered in such action or administrative proceeding, or
(2) Procure a certificate of authority to transact insurance in this State.
(b) The commissioner, in any administrative proceeding in which service is made as provided in section 431:8-207, may in the commissioner's discretion order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (a) and to defend such action.
(c) Nothing in subsection (a) shall be construed to prevent an unauthorized insurer from filing a motion to quash a writ or to set aside service made in the manner provided in section 431:8-207 on the ground that the unauthorized insurer has not transacted any insurance business in this State. [L 1987, c 347, pt of §2; am L 2003, c 212, §45; am L 2004, c 122, §25]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-209 Attorney's fees.

§431:8-209 Attorney's fees.
In an action against an unauthorized insurer upon a contract of insurance issued or delivered to a person in this State, if the insurer has failed for thirty days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that the refusal was vexatious and without reasonable cause, the court may allow to the plaintiff reasonable attorney's fees and include the fees in any judgment that may be rendered in the action. The fee shall not exceed twelve and one-half per cent of the amount that the court or jury finds the plaintiff is entitled to recover against the insurer, but in no event shall the fee be less than $25. Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause. [L 1987, c 347, pt of §2; am L 2006, c 154, §7]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-210 Advertising prohibited.

§431:8-210 Advertising prohibited.
(a) No publication published in this State, or radio or television broadcaster, or any other agency or means for the dissemination of information operated or located in this State shall publish, broadcast, or otherwise disseminate within this State, advertising for or on behalf of any insurer not then authorized to transact insurance in this State.
(b) This section does not apply to publications published in this State principally for circulation in the continental United States, wherein advertising by or on behalf of an unauthorized insurer is not directed expressly toward residents or subjects of insurance in this State. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-211 Penalties.

§431:8-211 Penalties.
(a) Any person, other than an insured, who represents or aids an unauthorized insurer in violation of this part may be subject to a fine not in excess of $1,000.
(b) Any unauthorized insurer who transacts any unauthorized act of an insurance business as set forth in this part may be fined not more than $10,000. [L 1987, c 347, pt of §2; am L 1989, c 207, §6; am L 2006, c 154, §8]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-300 Exemptions from surplus lines law.

§431:8-300 Exemptions from surplus lines law. This part shall not apply to reinsurance or to the following insurance when placed by a licensed producer of this State:
(1) Ocean marine insurance;
(2) Insurance on subjects located, resident, or to be performed wholly outside this State, or on vehicles or aircraft owned and principally garaged outside this State; or
(3) Insurance of aircraft or cargo of such aircraft, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of such aircraft. [L 1989, c 195, §2; am L 2002, c 155, §15]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-301 Insurance placed with unauthorized insurer permitted.

§431:8-301 Insurance placed with unauthorized insurer permitted.
(a) In addition to section 431:8-205, insurance may be procured from an unauthorized insurer; provided that:
(1) The insurance is procured through a surplus lines broker licensed in the insured's home state;
(2) The full amount or kind of insurance cannot be obtained from insurers who are authorized to do business in this State; provided that a diligent search is made among the insurers who are authorized to transact and are actually writing the particular kind and class of insurance in this State each time the insurance is placed or renewed;
(3) The surplus lines insurance procured is in addition to or in excess of the amount and coverage which can be procured from the authorized insurers; and
(4) The insurance is not procured at a rate lower than the lowest rate that is generally acceptable to authorized insurers transacting that kind of business and providing insurance affording substantially the same protection.
(b) A surplus lines broker is not required to make a due diligence search to determine whether the full amount or type of insurance can be obtained from authorized insurers when the broker is seeking to procure or place unauthorized insurance for an exempt commercial purchaser; provided that:
(1) The broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that the insurance may or may not be available from the admitted market which may provide greater protection with more regulatory oversight; and
(2) The exempt commercial purchaser has subsequently requested in writing for the broker to procure or place the insurance from an unauthorized insurer. [L 1987, c 347, pt of §2; am L 2011, c 68, §8]
Case Notes
Discussed: 406 F. Supp. 3d 884 (2019); 407 F. Supp. 3d 978 (2019); 407 F. Supp. 3d 1016 (2019); and 407 F. Supp. 3d 1051 (2019).
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-302 Surplus lines insurers.

§431:8-302 Surplus lines insurers.
(a) No surplus lines broker shall, either knowingly or without reasonable investigation of the financial condition and general reputation of the insurer, place insurance with a financially unsound insurer or with an insurer engaging in an unfair practice.
(b) A surplus lines broker may place surplus lines insurance only with insurers who are authorized to write that type of insurance in the insurer's domiciliary state.
(c) A surplus lines broker shall not place coverage with an unauthorized insurer unless, at the time of placement, the surplus lines broker has determined that:
(1) The unauthorized insurer has capital and surplus or its equivalent under the laws of its domiciliary state that equal the greater of the minimum capital requirement of this State or a minimum of $15,000,000; provided that:
(A) Minimum capital requirements may be satisfied by the insurer's possessing less than the minimum capital and surplus upon an affirmative finding of acceptability by the commissioner;
(B) A finding of acceptability pursuant to subparagraph (A) shall be based upon factors such as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry; and
(C) The commissioner shall not make an affirmative finding of acceptability pursuant to subparagraph (A) if the unauthorized insurer's capital and surplus is less than $4,500,000; or
(2) For an insurer not domiciled in the United States or its territories, the insurer shall be listed on the Quarterly Listing of Alien Insurers maintained by the National Association of Insurance Commissioners International Insurers Department; provided that:
(A) If an alien insurer is not in the Quarterly Listing of Alien Insurers, the surplus lines broker shall maintain in the broker's office evidence of the financial responsibility of the insurer; and
(B) Evidence satisfactory to the commissioner that the insurer maintains in the United States an irrevocable trust fund in either a national bank or a member of the Federal Reserve System in an amount of not less than $5,400,000 consisting of cash, securities, letters of credit, or of investments of substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of authorized insurers writing like kinds of insurance in this State, for the protection of all its policyholders in the United States, shall constitute prima facie evidence of the financial responsibility of the insurer. [L 1987, c 347, pt of §2; am L 1993, c 205, §12; am L 2000, c 182, §7; am L 2011, c 68, §9; am L 2019, c 216, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-305 Evidence of insurance; changes; penalties.

§431:8-305 Evidence of insurance; changes; penalties.
(a) Upon placing surplus lines insurance, the surplus lines broker shall as soon as reasonably possible deliver to the insured the policy or, if the policy is not available, the surplus lines broker's certificate, cover note, binder, or other evidence of insurance. Any confirmation of insurance shall be executed by the surplus lines broker and shall show:
(1) The policy number, effective date, home state, and a description and location of the subject of the insurance;
(2) A general description of the coverages, including any material limitations other than those in standard forms;
(3) The premium and rate charged;
(4) The taxes and fees to be collected from the insured;
(5) The name and address of the insured;
(6) The name and address of the insurer;
(7) If the direct risk is assumed by more than one insurer, the certificate shall state the name and address and proportion of the entire direct risk assumed by each insurer; and
(8) The name of the surplus lines broker and such broker's license number.
(b) No surplus lines broker shall issue or deliver any evidence of insurance or purport to insure, or represent that insurance has or will be written by any unauthorized insurer, unless the broker has authority from the insurer to cause the risk to be insured, or has received information from the insurer in the regular course of business that such insurance has been granted.
(c) If after delivery of the evidence of insurance there is any change in the identity of the insurers, or the proportion of the risk assumed by any insurer, or any other material change in coverage as stated in the original evidence of insurance, the surplus lines broker shall as soon as reasonably possible issue and deliver to the insured a substitute for, or endorsement of the original document, accurately showing the current status of the coverage and the insurer's responsibility thereunder.
(d) As soon as reasonably possible after the placement of any such insurance, the surplus lines broker shall procure from the insurer its policy or, if not available, a certificate of insurance and deliver it to the insured to replace any evidence of insurance initially issued to the insured.
(e) Any surplus lines broker who fails to comply with the requirements of this section shall be subject to the penalties provided in section 431:8-320. [L 1987, c 347, pt of §2; am L 2011, c 68, §10; am L 2019, c 216, §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-306 Signature of broker and special endorsement of surplus lines policy.

§431:8-306 Signature of broker and special endorsement of surplus lines policy.
Every insurance contract procured and delivered as a surplus lines coverage pursuant to this part, including any evidence of insurance other than a policy, shall:
(1) Bear the name and address of the surplus lines broker who procured it, and
(2) Have stamped or written conspicuously upon the first page of the contract the following:
"This insurance contract is issued by an insurer which is not licensed by the State of Hawaii and is not subject to its regulation or examination. If the insurer is found insolvent, claims under this contract are not covered by any guaranty fund of the State of Hawaii." [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-307 Broker's duty to notify insured

§431:8-307 Broker's duty to notify insured
. No contract of insurance placed by a surplus lines broker under this part and no premium charged therefor shall be due and payable until the surplus lines broker, when business is originated by a surplus lines broker, or the producer, when business is referred to a surplus lines broker from a licensed producer, has notified the insured in writing that:
(1) The insurer with which the surplus lines broker placed the insurance is not licensed by this State and is not subject to its supervision; and
(2) In the event of the insolvency of the surplus lines insurer, losses will not be paid by any of the State's insurance guaranty funds.
A copy of the notice shall be maintained by the broker with the records of the contract and available for examination.
Nothing in this section shall nullify any agreement by any insurer to provide insurance. [L 1987, c 347, pt of §2; am L 2002, c 155, §16; am L 2003, c 212, §46]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-308 Surplus lines insurance valid.

§431:8-308 Surplus lines insurance valid.
Insurance contracts procured as surplus lines coverage from unauthorized insurers shall be fully valid and enforceable as to all parties, and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-309 Effect of payment to surplus lines broker.

§431:8-309 Effect of payment to surplus lines broker.
Payment of a premium to a surplus lines broker acting for a person other than the surplus lines broker in negotiating, continuing, or reviewing any policy of insurance under this part shall be deemed to be payment to the insurer, notwithstanding whatever conditions or stipulations may be inserted in the policy or contract. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-311 Compensation.

§431:8-311 Compensation. A licensed surplus lines broker may accept and place surplus lines business from any producer licensed in this State for the class of insurance involved, and may compensate the producer therefor. [L 1987, c 347, pt of §2; am L 2002, c 155, §18]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-312 Records of surplus lines broker.

§431:8-312 Records of surplus lines broker.
(a) Each licensed surplus lines broker shall keep in the broker's office in this State a full and true record of each surplus lines contract placed by the broker including a copy of the policy, certificate, cover note, or other evidence of insurance including, as applicable:
(1) Amount of the insurance and perils insured;
(2) Brief description of the property insured and its location;
(3) Gross premium, taxes, and fees charged;
(4) Any return premium, taxes, and fees paid;
(5) Rate of premium charged upon the several items of property;
(6) Effective date of the contract and its terms;
(7) Name, address, and home state of the insured;
(8) Name and address of the insurer;
(9) Amount of tax and other sums to be collected from the insured; and
(10) Any additional information required by the commissioner.
(b) For each contract of insurance placed by a surplus lines broker, the broker shall maintain a written statement as to the diligent efforts by the surplus lines broker or the producer to place the insurance with authorized insurers.
(c) The record of each contract shall be kept open at all reasonable times to examination by the commissioner without notice for a period not less than five years following the termination of the contract. [L 1987, c 347, pt of §2; am L 1989, c 207, §7; am L 2002, c 155, §19; am L 2011, c 68, §11; am L 2019, c 216, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-313 Surplus lines broker's reports to commissioner.

§431:8-313 Surplus lines broker's reports to commissioner.
(a) Each surplus lines broker shall file electronically with the commissioner within forty-five days of the end of each calendar quarter a verified statement of all surplus lines insurance transacted during the calendar quarter as follows:
(1) The statement for the quarter ending March 31 shall be filed on or before May 15;
(2) The statement for the quarter ending June 30 shall be filed on or before August 15;
(3) The statement for the quarter ending September 30 shall be filed on or before November 15; and
(4) The statement for the quarter ending December 31 shall be filed on or before February 15.
(b) The statement shall be on forms as prescribed and furnished by the commissioner and shall show:
(1) Gross amount of premiums for each kind of insurance transacted;
(2) Gross premiums charged;
(3) Returned premiums paid to insureds;
(4) Net premiums and fees;
(5) Amount of remitted taxes and fees; and
(6) Additional information as required by the commissioner. [L 1987, c 347, pt of §2; am L 2003, c 212, §47; am L 2011, c 68, §12; am L 2019, c 216, §4; am L 2021, c 110, §7]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-314 Surplus lines advisory organizations.

§431:8-314 Surplus lines advisory organizations.
(a) An advisory surplus lines organization of surplus lines brokers may be formed to:
(1) Facilitate and encourage compliance by its members with the laws of this State and the rules and regulations of the commissioner relative to surplus lines insurance;
(2) Provide means for the examination, which shall remain confidential, of all surplus lines coverage written by its members to determine whether such coverages comply with such laws and regulations;
(3) Communicate with organizations of admitted insurers with respect to the proper use of the surplus lines market; and
(4) Receive and disseminate to its members information relative to surplus lines coverages.
(b) Every such advisory organization shall file with the commissioner:
(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation;
(2) A copy of its bylaws, rules and regulations governing its activities;
(3) A current list of its members;
(4) The name and address of its authorized resident agent upon whom notices or orders of the commissioner or processes issued at the commissioner's direction may be served, and
(5) An agreement that the commissioner may examine such advisory organization in accordance with the provisions of subsection (c).
(c) The commissioner shall, at least once in every five years, make or cause to be made an examination of each such advisory organization. The reasonable cost of any such examination shall be paid by the advisory organization upon presentation to it by the commissioner of a detailed account of each cost. The officers, managers, agents, and employees of such advisory organization may be examined at any time, under oath, and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation. The commissioner shall furnish two copies of the examination report to the advisory organization examined and shall notify such organization that it may, within twenty days thereof, request a hearing on the report or on any facts or recommendations therein. If the commissioner finds such advisory organization or any of its members to be in violation of this part, the commissioner may issue an order requiring the discontinuance of such violation. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-315 Tax on surplus lines.

§431:8-315 Tax on surplus lines.
(a) Within forty-five days after the end of each calendar quarter, each surplus lines broker shall pay to the director of finance, through the commissioner via the National Association of Insurance Commissioners' Online Premium Tax for Insurance or an equivalent service approved by the commissioner, a premium tax on surplus lines insurance transacted by the broker during the calendar quarter for insurance for which this State is the home state of the insured. The tax rate shall be in the amount of 4.68 per cent of gross premiums, less return premiums, on surplus lines insurance for which the home state is this State.
As used in this subsection, "gross premiums" means the amount of the policy or coverage premium charged by the insurer in consideration for the insurance contract. Any charges for policy, survey, inspection, service, or similar fees or other charges added by the broker shall not be considered part of gross premiums.
(b) The tax on any portion of the premium unearned at the termination of the insurance contract shall be returned to the policyholder. [L 1987, c 347, pt of §2; am L 2003, c 212, §48; am L 2006, c 154, §10; am L 2011, c 68, §13; am L 2019, c 216, §5; am L 2021, c 110, §8]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-316 Penalty for failure to file statement or remit tax.

§431:8-316 Penalty for failure to file statement or remit tax.
(a) If any surplus lines broker fails to:
(1) File statements required by section 431:8-313; or
(2) Pay the premium tax required by section 431:8-315 when the tax is due,
the surplus lines broker may be liable for a fine of up to $25 for each day of delinquency.
(b) The commissioner may:
(1) Collect the premium tax required by section 431:8-315 by distraint;
(2) Recover the premium tax required by section 431:8-315 and fine for failure to pay the premium tax by instituting an action in any court of competent jurisdiction; or
(3) Recover the fine for failure to file the statements required by section 431:8-313 by instituting an action in any court of competent jurisdiction. [L 1987, c 347, pt of §2; am L 2003, c 212, §49; am L 2006, c 154, §11; am L 2011, c 68, §14]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-317 License denial, nonrenewal, suspension, or revocation.

§431:8-317 License denial, nonrenewal, suspension, or revocation.
(a) The commissioner may deny, place on probation, suspend, revoke, or refuse to issue or renew any surplus lines broker's license and may levy a civil penalty in accordance with articles 2 and 3, or any combination of these actions, for any cause specified in any other provision of this chapter, or for any of the following causes:
(1) Failure to file statements required by section 431:8-313 or to pay the tax required by section 431:8-315;
(2) Failure to keep records or to allow the commissioner to examine the surplus lines broker's records as provided in this article;
(3) Removal of office accounts and records from this State during the period in which the accounts are required to be maintained under this article;
(4) Any of the causes for which a producer's license may be suspended or revoked under article 9A;
(5) Any cause for which issuance of the license could have been refused had it then existed and been known to the commissioner;
(6) Wilful violation or knowing participation in the violation of any provision of this code;
(7) Obtaining or attempting to obtain a license under this chapter through wilful misrepresentation or fraud, or failure to pass any examination required by section 431:8-324;
(8) Misappropriation, conversion to the licensee's own use, or illegally withholding moneys required to be held in a fiduciary capacity;
(9) Material misrepresentation with intent to deceive of the terms or effect of any insurance contract, or engagement or intent to engage in any fraudulent transaction;
(10) Commission of any unfair practice or fraud as defined in article 13;
(11) Conduct of affairs under a license issued pursuant to this chapter in a manner that causes injury and loss to the public;
(12) The issuance or purported issuance of any binder as to any insurer named in the binder if the licensee is not authorized to bind the insurer; or
(13) Dealing or attempting to deal with insurance or exercising powers relative to insurance outside the scope of the licensee's license.
(b) The license of any business entity may be denied, placed on probation, suspended, revoked, not issued, or not renewed for any of the causes applicable to any individual designated in the license to exercise the business entities' powers.
(c) The holder of any license which has been revoked or suspended shall surrender the license certificate to the commissioner at the commissioner's request.
(d) The procedures provided in article 9A for the suspension or revocation of producer licenses shall apply to suspension or revocation of a surplus lines broker's license.
(e) No broker whose license has been revoked shall again be licensed as a broker within one year thereafter, nor until any fines or delinquent taxes owing by the broker have been paid. [L 1987, c 347, pt of §2; am L 1989, c 195, §22; am L 2002, c 155, §20; am L 2003, c 212, §50; am L 2006, c 154, §12; am L 2011, c 68, §15; am L 2012, c 66, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-318 Examination of surplus lines broker's accounts and records

§431:8-318 Examination of surplus lines broker's accounts and records
. Whenever deemed necessary the commissioner may examine the records and accounts of any surplus lines broker to determine whether the broker is conducting business in accordance with the requirements of this article. [L 1987, c 347, pt of §2; am L 2003, c 212, §51]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-319 Actions against surplus lines insurer; service of process.

§431:8-319 Actions against surplus lines insurer; service of process.
(a) A surplus lines insurer may be sued upon any cause of action arising in this State under any surplus lines insurance contract made by it or evidence of insurance issued or delivered by the surplus lines broker pursuant to the procedure provided in part II of this article. Any such policy issued by the surplus lines broker shall contain a provision stating the substance of this section and designating the person to whom the commissioner shall mail process.
(b) Each insurer assuming a surplus lines insurance in this State shall be deemed thereby to have subjected itself to this article.
(c) The remedies provided in this section are in addition to any other methods provided by law for service of process upon insurers. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-320 Penalties.

§431:8-320 Penalties.
(a) Any surplus lines broker who in this State represents or aids an unauthorized insurer in violation of this article may be fined not more than $1,000.
(b) In addition to any other penalty provided for in this part or otherwise provided by law, including any suspension, revocation or refusal to renew a license, any person, firm, association or corporation violating any provisions of this article shall be liable to a penalty not exceeding $1,000 for the first offense, and not exceeding $2,000 for each succeeding offense.
(c) The above penalties are not exclusive remedies, penalties may also be assessed under article 13. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-321 Nonresident licensing.

§431:8-321 Nonresident licensing.
(a) Except as provided in section 431:8-317, a nonresident applicant shall receive a nonresident surplus lines broker license if:
(1) The applicant is currently licensed and is in good standing as a resident surplus lines broker in the applicant's home state;
(2) The applicant has submitted the proper request for
licensure and has paid the fees required by section
431:7-101;
(3) The applicant has submitted or transmitted to the commissioner the application for licensure that the applicant submitted to the applicant's home state, or in lieu of the same, a completed uniform application; and
(4) The applicant's home state awards nonresident surplus lines broker licenses to residents of this State on the same basis.
(b) The commissioner may verify the surplus lines broker's licensing status through the producer database maintained by the National Association of Insurance Commissioners, its affiliates, or its subsidiaries.
(c) A nonresident surplus lines broker who moves from one state to another state or a resident surplus lines broker who moves from this State to another state shall file a change of address with the commissioner and shall provide certification from the new resident state within thirty days of the change of legal residence. No fee or license application shall be required. Failure to timely inform the commissioner of a change in address shall result in a penalty pursuant to section 431:2-203. [L 2012, c 66, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:8-322 Reciprocity.

§431:8-322 Reciprocity.
(a) The commissioner shall waive any requirements for a nonresident surplus lines broker license applicant with a valid license from the applicant's home state, except for the requirements imposed by section 431:8-321, if the applicant's home state awards nonresident surplus lines broker licenses to residents of this State on the same basis.
(b) A nonresident surplus lines broker's satisfaction of the surplus lines broker's home state's continuing education requirements for licensed surplus lines brokers shall constitute satisfaction of this State's continuing education requirements if the nonresident surplus lines broker's home state recognizes the satisfaction of its continuing education requirements imposed upon surplus lines brokers from this State on the same basis. [L 2012, c 66, pt of §1]