reglab/statecodes huggingface dataset:
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-117 Stay of proceedings.

§431:16-117 Stay of proceedings.
(a) All proceedings in which the insolvent insurer is a party, or is obligated to defend a party in any court in this State, subject to waiver by the association in specific cases involving covered claims, shall be stayed for up to six months, and any additional time thereafter as may be determined by the court, from the date the insolvency is determined or an ancillary proceeding is instituted in the State, whichever is later, to permit proper defense by the association of all pending causes of action. As to any covered claims arising from a judgment or under any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, the association, either on its own behalf or on behalf of the insured, may apply to have such judgment, order, decision, verdict, or finding set aside by the same court, administrator, or other entity that made the judgment, order, decision, verdict, or finding and shall be permitted to defend the claim on the merits.
(b) The liquidator, receiver, or statutory successor of an insolvent insurer covered by this part shall permit access by the board of directors or its authorized representative to the insolvent insurer's claim records that are necessary for the board in carrying out its functions under this part with regard to covered claims. In addition, the liquidator, receiver, or statutory successor shall provide the board of directors or its representative with copies of those records upon the request by the board and at the expense of the board. [L 1987, c 347, pt of §2; am L 2000, c 93, §14; am L 2004, c 122, §73]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-202 Purpose.

§431:16-202 Purpose.
(a) The purpose of this part is to protect, subject to certain limitations, the persons specified in section 431:16-203 against failure in the performance of contractual obligations, under life and accident and health or sickness insurance policies and annuity contracts specified in section 431:16-203(b), because of the impairment or insolvency of the member insurer that issued the policies or contracts.
(b) To provide this protection, an association of insurers is created to pay benefits and to continue coverages as limited herein, and members of the association are subject to assessment to provide funds to carry out the purpose of this part. [L 1987, c 347, pt of §2; am L 2002, c 155, §91]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-206 Creation of the association.

§431:16-206 Creation of the association.
(a) There is created a nonprofit legal entity to be known as the Hawaii life and disability insurance guaranty association. All member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this State. The association shall perform its functions under the plan of operation established and approved under section 431:16-210 and shall exercise its powers through a board of directors established under section 431:16-207. For purposes of administration and assessment the association shall maintain three accounts:
(1) The life insurance account;
(2) The accident and health or sickness insurance account; and
(3) The annuity account.
(b) The association shall come under the immediate supervision of the commissioner and shall be subject to the applicable provisions of the insurance laws of this State. Meetings or records of the association may be opened to the public upon majority vote of the board of directors of the association. [L 1987, c 347, pt of §2; am L 2002, c 155, §93; am L 2012, c 250, §6]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-207 Board of directors.

§431:16-207 Board of directors.
(a) The board of directors of the association shall consist of not less than five nor more than nine member insurers serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the commissioner. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the commissioner. To select the initial board of directors, and initially organize the association, the commissioner shall give notice to all member insurers of the time and place of the organizational meeting. In determining voting rights at the organizational meeting each member insurer shall be entitled to one vote in person or by proxy. If the board of directors is not selected within sixty days after notice of the organizational meeting, the commissioner may appoint the initial members.
(b) In approving selections or in appointing members to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.
(c) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors but members of the board shall not otherwise be compensated by the association for their services. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-211 Duties and powers of the commissioner.

§431:16-211 Duties and powers of the commissioner.
[(a)] In addition to the duties and powers enumerated elsewhere in this part, the commissioner shall:
(1) Upon request of the board of directors, provide the association with a statement of the premiums in this and any other appropriate states for each member insurer;
(2) When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time; notice to the impaired insurer shall constitute notice to its shareholders, if any; the failure of the insurer to promptly comply with such demand shall not excuse the association from the performance of its powers and duties under this part;
(3) In any liquidation or rehabilitation proceeding involving a domestic insurer, be appointed as the liquidator or rehabilitator.
(b) The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative the commissioner may levy a forfeiture on any member insurer which fails to pay an assessment when due. Such forfeiture shall not exceed five per cent of the unpaid assessment per month, but no forfeiture shall be less than $100 per month.
(c) Any action of the board of directors or the association may be appealed to the commissioner by any member insurer if such appeal is taken within sixty days of the final action being appealed. If a member insurer is appealing an assessment, the amount assessed shall be paid to the association and available to meet association obligations during the pendency of an appeal. If the appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Any final action or order of the commissioner shall be subject to judicial review in the circuit court of the first judicial circuit.
(d) The liquidator, rehabilitator or conservator of any impaired insurer may notify all interested persons of the effect of this part. [L 1987, c 347, pt of §2; am L 2004, c 122, §75]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-213 Credits for assessments paid.

§431:16-213 Credits for assessments paid.
(a) A member insurer may offset against its premium tax liability (or liabilities) to this State an assessment described in section 431:16-209(h) to the extent of twenty per cent of the amount of such assessment for each of the five calendar years following the year in which such assessment was paid. In the event a member insurer should cease doing business, all uncredited assessments may be credited against its premium tax liability (or liabilities) for the year it ceases doing business.
(b) Any sums which are acquired by refund, pursuant to section 431:16-209(f), from the association by member insurers, and which have theretofore been offset against premium taxes as provided in subsection (a) shall be paid by the association to the commissioner and by the commissioner deposited with the state director of finance for credit to the general fund of this State. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-216 Immunity.

§431:16-216 Immunity.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer or its agents or employees, the association or its agents or employees, members of the board of directors, or the commissioner or the commissioner's representatives, for any action or omission by them in the performance of their powers and duties under this part. Such immunity shall extend to the participation in any organization of one or more other state associations of similar purposes and to any such organization and its agents or employees. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:16-217 Stay of proceedings; reopening default judgments.

§431:16-217 Stay of proceedings; reopening default judgments.
All proceedings in which the insolvent insurer is a party in any court in this State shall be stayed one-hundred eighty days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the association on any matters germane to its powers or duties. As to judgment under any decision,
order, verdict, or finding based on default the association may apply to have such judgment set aside by the same court that made such judgment and shall be permitted to defend against such suit on the merits. [L 1987, c 347, pt of §2; am L 2012, c 250, §12]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-101.2 Confidential treatment.

§431:19-101.2 Confidential treatment.
(a) Except as otherwise provided in this section, all nonpublic information in a captive insurance company's application for licensure, its business plan, or of its parent or the parent's member organizations, and all other nonpublic information disclosed to the commissioner pursuant to this article, shall be given confidential treatment and shall not be made public by the commissioner.
(b) If the commissioner determines that the interest of the policyholders, shareholders, or the public will be served by making the information public, then after giving the captive insurance company and its parent or the parent's member organizations that would be affected thereby, three days written notice of intent, and unless otherwise contrary to law, the commissioner may make public all or any part of the nonpublic information in a manner that the commissioner deems appropriate; provided that the commissioner may disclose nonpublic information to courts of competent jurisdiction, and insurance departments or regulatory agencies of other competent jurisdictions without prior notification to the person to whom the information pertains.
(c) This section shall not apply to risk retention captive insurance companies. The confidentiality provisions of section 431:2-209 shall apply to risk retention captive insurance companies.
(d) For purposes of this section:
"Equity securities" means:
(1) A share in a corporation, whether or not transferable or denominated a "stock", or similar security evidencing an ownership interest in the person;
(2) The interest of a limited partner in a limited partnership;
(3) The interest of a partner in a partnership, including a joint venture; or
(4) A warrant or right, other than a right to convert, to purchase, sell, or subscribe to a share, security, or interest of a kind specified in paragraph (1), (2), or (3).
"Nonpublic information" means information that, prior to disclosure to the commissioner pursuant to this article is, or was:
(1) Not a public record as defined in rule 1001(5) of section 626-1; or
(2) Not a government record that must be disclosed under section 92F-12;
provided that in the case of a person whose equity securities are collectively owned and held by thirty-six or more persons, "nonpublic information" does not include financial information disclosed to owners and holders of equity securities. [L 2000, c 67, §1; am L 2002, c 157, §1; am L 2012, c 253, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-101.4 Service providers. The commissioner shall have the authority to approve service providers to captive insurance companies licensed under this article, including but not limited to captive insurance managers, independent certified public accountants, actuaries, and loss reserve specialists. [L 1998, c 150, §1]

§431:19-101.4
Service providers.
The commissioner shall have the authority to approve service providers to captive insurance companies licensed under this article, including but not limited to captive insurance managers, independent certified public accountants, actuaries, and loss reserve specialists. [L 1998, c 150, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-101.5 Captive insurance administrator. There shall be established within the insurance division a captive insurance administrator, who shall be solely responsible for assisting the commissioner in monitoring, regulating, and developing captive insurance companies under this article. The commissioner, with the approval of the director of commerce and consumer affairs, shall appoint the administrator who shall be designated as a deputy commissioner and shall be exempt from chapter 76, notwithstanding section 431:2-105(b) to the contrary. The administrator shall serve at the pleasure of the director of commerce and consumer affairs and shall report directly to the commissioner. [L 1997, c 261, pt of §2; am L 2000, c 253, §150; am L 2003, c 205, §1; am L 2007, c 232, §2; am L 2012, c 253, §4]

§431:19-101.5
Captive insurance administrator.
There shall be established within the insurance division a captive insurance administrator, who shall be solely responsible for assisting the commissioner in monitoring, regulating, and developing captive insurance companies under this article. The commissioner, with the approval of the director of commerce and consumer affairs, shall appoint the administrator who shall be designated as a deputy commissioner and shall be exempt from chapter 76, notwithstanding section 431:2-105(b) to the contrary. The administrator shall serve at the pleasure of the director of commerce and consumer affairs and shall report directly to the commissioner. [L 1997, c 261, pt of §2; am L 2000, c 253, §150; am L 2003, c 205, §1; am L 2007, c 232, §2; am L 2012, c 253, §4]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-101.6 Salary.

§431:19-101.6 Salary.
The salary of the administrator shall be set by the director of commerce and consumer affairs, but shall not be more than ninety-five per cent of the maximum salary of the commissioner.
[L 1997, c 261, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-101.7 General powers and duties.

§431:19-101.7 General powers and duties.
The administrator shall:
(1) Have the authority expressly conferred upon the administrator by, or reasonably implied from, the provisions of this article; and
(2) Assist the commissioner in the enforcement of this article and rules adopted pursuant to this article and related to captive insurance. [L 1997, c 261, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-101.8 Captive insurance administrative fund.

§431:19-101.8 Captive insurance administrative fund.
(a) The commissioner may establish a separate fund designated as the captive insurance administrative fund to be expended by the commissioner to carry out the commissioner's duties and obligations under this article.
(b) All moneys collected pursuant to this article, including premium taxes from captive insurance companies licensed in this State under this article, all captive insurance company application fees, annual license fees, and examination fees, shall be credited to the captive insurance administrative fund.
(c) Up to ten per cent of the total moneys credited to the fund in the prior fiscal year may be used for purposes of promoting Hawaii as a captive insurance domicile. Disbursements for promotional activities from the fund shall be subject to the approval of the director of commerce and consumer affairs.
(d) Sums from the fund expended by the commissioner shall be used to defray any administrative costs, including personnel costs associated with the captive programs of the insurance division, and costs incurred by supporting offices, branches, divisions, and departments. Notwithstanding any law to the contrary, the commissioner may use the moneys in the fund to employ or retain, by contract or otherwise and without regard to chapter 76, hearings officers, attorneys, investigators, accountants, examiners, and other necessary professional, technical, and support personnel to implement and carry out the purposes of this article; provided that any position, except any attorney position, that is subject to chapter 76 prior to July 1, 1999, shall remain subject to chapter 76.
(e) Moneys deposited by the commissioner in the fund shall not revert to the general fund. [L 1997, c 261, pt of §2; am L 1999, c 163, §12; am L 2000, c 131, §1; am L 2002, c 39, §17 and c 206, §1; am L Sp 2005, c 1, §2; am L 2012, c 253, §5]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-102.2 Personal lines insurance.

§431:19-102.2 Personal lines insurance.
(a) A captive insurance company may be licensed to provide personal lines coverage for unrelated risks if the commissioner deems that extraordinary circumstances exist whereby coverage would be appropriate and in the best interest of the public. In determining whether extraordinary circumstances exist, the commissioner shall consider the following factors:
(1) The extent to which the particular coverage is available in the voluntary market;
(2) The existence of a relationship between the parent of the captive insurance company and the proposed policyholders other than that of insurer to insured;
(3) Whether the captive insurance company has sufficient capitalization to insure the proposed risks; and
(4) Any other factors that the commissioner deems appropriate.
(b) Any captive insurance company formed pursuant to this section shall be subject to articles 5, 10, 10A, 10B, 10C, 10D, 10E, 10F, 10G, 12, and 15 of this chapter in addition to all other applicable law. [L 1993, c 339, §4; am L 2005, c 22, §28; am L 2012, c 253, §7]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-103 Names of companies.

§431:19-103 Names of companies.
(a) No captive insurance company shall adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in the State.
(b) A captive insurance company shall apply to the department of commerce and consumer affairs and the commissioner for approval of the use or change of a trade name pursuant to section 431:2-217. [L 1987, c 347, pt of §2; am L 2000, c 133, §3; am L 2019, c 70, §23]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-104 Minimum capital and surplus.

§431:19-104 Minimum capital and surplus.
(a) Each captive insurance company licensed pursuant to this article shall possess and thereafter maintain unimpaired capital and surplus in the amount established by the commissioner; provided that:
(1) The commissioner shall take into account the nature and volume of business transacted by each captive insurance company, and any other factors deemed appropriate by the commissioner;
(2) Class 3 companies shall be subject to other applicable provisions of this chapter that may require capital and surplus in excess of those established by the commissioner; and
(3) Minimum capital and surplus established by the commissioner shall be no less than the following amounts:
(A) Class 1 company: $100,000;
(B) Class 2 company: $250,000;
(C) Class 3 company: $500,000;
(D) Class 4 company: $500,000; and
(E) Class 5 company: An amount as determined by the commissioner on a case by case basis.
(b) Minimum required capital and surplus established by the commissioner pursuant to subsection (a) shall be in any one or combination of the following forms: cash, irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System, public obligations as defined in section 431:6-301, or other form approved by the commissioner; provided that minimum required capital and surplus in excess of the amounts listed in subsection (a)(3) shall be allowed to be invested in accordance with a strategic investment policy adopted and monitored by the captive insurance company €™s governing body, and approved by the commissioner.
(c) In the case of a branch captive insurance company, and in lieu of minimum capital and surplus under this section, the commissioner shall determine the amount and form of security to be maintained by the branch captive insurance company in this State after taking into consideration:
(1) The amount and nature of risk written through and retained by the branch captive insurance company in this State;
(2) The financial condition of the outside captive insurance company whose branch office is located in this State;
(3) Trusts or other security posted for ceding insurers; and
(4) Any other factors the commissioner deems appropriate.
The security required by the commissioner may be in the form of cash, an irrevocable letter of credit issued by a bank chartered in this State or a member bank of the Federal Reserve System, a trust, public obligations as defined in section 431:6-301, or any other forms of security deemed appropriate by the commissioner. [L 1987, c 347, pt of §2; am L 1998, c 150, §4; am L 1999, c 302, §3; am L 2000, c 36, §4 and c 133, §4; am L 2003, c 209, §3; am L 2007, c 232, §6; am L 2008, c 190, §5; am L 2012, c 253, §10]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-106 Formation of captive insurance companies in this State.

§431:19-106 Formation of captive insurance companies in this State.
(a) A captive insurance company shall be:
(1) Incorporated pursuant to chapter 414 as a stock insurer with its capital divided into shares and held by the stockholders;
(2) Incorporated pursuant to chapter 414D as a nonprofit insurer;
(3) Incorporated pursuant to chapter 414 as a mutual insurer without capital stock, the governing body of which is elected by the member organization of its association;
(4) Organized in the State as a reciprocal insurer in accordance with sections 431:3-107, 431:3-108, 431:4-404, 431:4-405 (provided that the principal office of the attorney-in-fact for the domestic reciprocal insurer shall not be required to be maintained in this State), 431:4-406 (excluding 431:4-406(b)(3)), 431:4-407, and 431:4-415(a); or
(5) Organized pursuant to chapter 428 as a member-managed or manager-managed limited liability company.
(b) Before the required organizational documents are transmitted to the department of commerce and consumer affairs, the incorporators or organizers shall petition the commissioner to issue a certificate setting forth the commissioner's finding that the establishment and maintenance of the proposed company will promote the general good of the State. In arriving at such a finding, the commissioner shall consider:
(1) The character, reputation, financial standing, and objectives of the organizers;
(2) The character, reputation, financial responsibility, insurance experience, and business qualifications of the captive insurance company's officers and directors, or members of its governing body, and its service providers; and
(3) Other aspects as the commissioner deems advisable.
(c) The required organizational documents and fees shall be transmitted to the department of commerce and consumer affairs for filing and recordation, as may be necessary.
(d) The capital stock of a captive insurance company incorporated as a stock insurer shall be issued at not less than par value.
(e) Captive insurance companies formed under this article shall have the privileges and be subject to the general corporation law, nonprofit corporation law, or limited liability company law of this State as may be applicable, as well as this article. In the event of conflict between any of the foregoing applicable laws of this State and this article, this article shall control. [L 1987, c 347, pt of §2; am L 1992, c 108, §3; am L 1993, c 205, §36; am L 1997, c 15, §1; am L 1999, c 302, §5; am L 2003, c 209, §5; am L 2005, c 31, §4; am L 2007, c 232, §7; am L 2012, c 253, §11]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-109 Grounds and procedures for suspension and revocation of certificate of authority; fines.

§431:19-109 Grounds and procedures for suspension and revocation of certificate of authority; fines.
(a) The commissioner may suspend or revoke the certificate of authority of a captive insurance company to do business in this State or impose a fine of not less than $100 nor more than $10,000 per violation, or any combination of these actions, for any of the following reasons:
(1) Insolvency or impairment of capital or surplus;
(2) Failure to meet the requirements of section 431:19-104;
(3) Refusal or failure to submit an annual report, as required by section 431:19-107 or any other report or statement required by law or by lawful order of the commissioner;
(4) Failure to comply with the provisions of its own organizational documents;
(5) Failure to submit to examination or any legal obligation relative thereto, as required by section 431:19-108;
(6) Refusal or failure to pay the cost of examination pursuant to section 431:19-108;
(7) Use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders;
(8) Failure to maintain actuarially appropriate loss reserves as determined by the commissioner; provided that the commissioner shall issue at least one warning to the captive insurance company to correct the problem prior to suspending or revoking the certificate of authority; and
(9) Failure otherwise to comply with the laws of this State.
(b) If the commissioner takes action pursuant to subsection (a), the commissioner shall notify the captive insurance company in writing of the reason for that action. The captive insurance company may make written demand upon the commissioner within ten days of the date of receipt of the notice for a hearing before the commissioner to determine the reasonableness of the commissioner's action. The hearing shall be held within thirty days of receipt of the written demand and shall be held pursuant to chapter 91. [L 1987, c 347, pt of §2; am L 2003, c 209, §7; am L 2010, c 7, §2; am L 2012, c 253, §15]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-110 Investments.

§431:19-110 Investments.
(a) Except for risk retention captive insurance companies, captive insurance companies licensed under this article shall be allowed to maintain investments in accordance with a strategic investment policy adopted and monitored by the captive insurance company's governing body, and approved by the commissioner; provided that in addition to the minimum capital and surplus requirements prescribed in section 431:19-104(b), each captive insurance company with an approved strategic investment policy shall maintain investments in one or more of the following forms, which aggregate not less than one hundred per cent of reserves as required by this chapter or the commissioner:
(1) Cash;
(2) Irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System;
(3) Investments in accordance with a strategic investment policy adopted and monitored by the captive insurance company's governing body, and approved by the commissioner;
(4) Premiums in the course of collection; or
(5) Other forms approved by the commissioner.
(b) Each captive insurance company that does not maintain a strategic investment policy as described in subsection (a) and risk retention captive insurance companies shall be subject to the restrictions on allowable investments provided under sections 431:6-101 to 431:6-501; provided that the commissioner may approve other assets, investments, and investment provisions as the commissioner deems appropriate.
(c) The commissioner may require a captive insurance company to file a complete disclosure of the identity, background, and experience of the key individuals or staff that are involved with its investment activities and administration, if deemed necessary.
(d) Each captive insurance company shall maintain in its principal office in this State a written record documenting its investment transactions, as well as documents evidencing the authorization or approval of the investments by the captive insurance company's governing body or its designated representative.
(e) The commissioner may prohibit or limit any investments or investible assets if the captive insurance company is not in compliance with this article or applicable rules. [L 1987, c 347, pt of §2; am L 1988, c 187, §11; am L 2003, c 208, §1; am L 2007, c 232, §9; am L 2012, c 253, §16]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-111 Reinsurance.

§431:19-111 Reinsurance.
(a) Any captive insurance company may provide reinsurance on risks ceded by any other insurer only upon approval of the reinsurance agreement by the commissioner.
(b) Any captive insurance company may take credit for reserves on risks ceded to a reinsurer; provided that no captive insurance company shall cede risks without the approval of the commissioner.
(c) In the case of a risk retention captive insurance company, a risk retention captive insurance company:
(1) Shall qualify for credit for reinsurance on risks ceded to a reinsurer if the reinsurer is in compliance with article 4A; or
(2) May qualify for credit for reinsurance on risks ceded to a reinsurer, if the reinsurer meets the reinsurance guidelines for risk retention captive insurance companies as adopted by the commissioner pursuant to chapter 91. [L 1987, c 347, pt of §2; am L 1988, c 187, §12; am L 2013, c 193, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-111.5 Class 5 companies.

§431:19-111.5 Class 5 companies.
(a) A class 5 company under this article is one that is not a class 1 company, class 2 company, class 3 company, or class 4 company, and acts only as a reinsurer or excess insurer, or both. Notwithstanding any other provision of this article, a class 5 company authorized under this article may reinsure or provide excess insurance, or both, for the risks and lines of insurance approved by the commissioner.
(b) Notwithstanding section 431:19-107(a), reserves for risks located outside of the United States reinsured or insured by a class 5 company, upon approval of the commissioner, may be determined in accordance with the required or approved reserve standards of the country in which the ceding insurer is domiciled or the excess insurance risks are located.
(c) Notwithstanding article 6 of this chapter and section 431:19-110, where the risks reinsured or insured by a class 5 company are located outside of the United States, the class 5 company, upon approval of the commissioner, may invest its funds in accordance with the laws and regulations applicable to insurers or reinsurers domiciled in the jurisdictions in which the risks are located, in proportion to the reserves held for the risks. [L 2000, c 36, §1; am L 2003, c 209, §8; am L 2012, c 253, §17]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-113 Exemption from compulsory associations.

§431:19-113 Exemption from compulsory associations.
No captive insurance company shall be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this State, except as provided under chapter 386, nor shall any captive insurance company, its insured, or its parent or any affiliated entity, or any member organization of its association, receive any benefit from any plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of the captive insurance company. [L 1987, c 347, pt of §2; am L 1991, c 79, §2; am L 2012, c 253, §18]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-115 Laws applicable.

§431:19-115 Laws applicable.
(a) No insurance laws of this State other than those contained in this article, article 15, or specifically referenced in this article shall apply to captive insurance companies; provided that:
(1) Sections 431:3-302 to 431:3-304.5, 431:3-307, 431:3-401 to 431:3-409, 431:3-411, 431:3-412, and 431:3-414; articles 1, 2, 4A, 5, 6, 9A, 9B, 9C, 11, 11A, and 3B; and chapter 431K shall apply to risk retention captive insurance companies; and
(2) Articles 1, 2, and 6 shall apply to class 5 companies.
(b) If any of the laws specified in this section are inconsistent with this article, this article shall apply unless the commissioner by rule or order determines otherwise on a case-by-case basis.
(c) The application of the foregoing provisions shall not diminish the commissioner's authority for exemption as may be contained therein or as may be deemed appropriate under the circumstances. [L 1987, c 347, pt of §2; am L 1994, c 190, § §5, 10; am L 1997, c 358, § §1, 2; am L 1998, c 150, §6; am L 1999, c 302, §7; am L 2000, c 36, §6 and c 133, §7; am L 2003, c 209, §9; am L 2012, c 253, §19; am L 2013, c 190, §5; am L 2016, c 140, §2; am L 2019, c 70, §24; am L 2021, c 112, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-115.5 Applicability of other laws to captive insurance companies writing motor vehicle insurance policies in this State.

§431:19-115.5 Applicability of other laws to captive insurance companies writing motor vehicle insurance policies in this State.
Captive insurance companies writing motor vehicle insurance policies in this State shall be subject to sections 431:10C-102, 431:10C-103, 431:10C-107, 431:10C-108, 431:10C-109, 431:10C-112, 431:10C-115, 431:10C-119, 431:10C-120, 431:10C-207, 431:10C-211, 431:10C-212, 431:10C-213, 431:10C-215, 431:10C-301, and 431:10C-303 through 431:10C-315. Captive insurance companies shall also be subject to the rules adopted by the commissioner to implement these sections. [L 1993, c 205, pt of §1; am L 1997, c 251, §56; am L 1999, c 163, §14]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-115.6 Applicability of other laws to captive insurance companies writing credit life or other credit disability insurance policies.

§431:19-115.6 Applicability of other laws to captive insurance companies writing credit life or other credit disability insurance policies.
Captive insurance companies writing credit life or credit disability policies in this State shall be subject to sections 431:10B-101 through 431:10B-114. Captive insurance companies shall also be subject to the rules adopted, pursuant to chapter 91, by the commissioner to implement these sections. [L 1997, c 16, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-115.7 Applicability of other laws to captive insurance companies writing direct workers' compensation insurance policies.

§431:19-115.7 Applicability of other laws to captive insurance companies writing direct workers' compensation insurance policies.
Captive insurance companies writing direct workers' compensation insurance policies pursuant to chapter 386 may be subject to article 15 if the captive insurance company is deemed insolvent. [L 2012, c 253, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-116 Taxation.

§431:19-116 Taxation.
(a) Each captive insurance company licensed to do business in this State shall pay to the director of finance through the commissioner a tax on gross premiums on or before March 1 of each year, as follows:
(1) .25 per cent on $0 to $25,000,000 of gross premiums for insurance written on all risks or property resident, situated, or located within this State, and on risks and property situated elsewhere upon which no premium tax is otherwise paid during the year ending on the preceding December 31, less return premiums and less any reinsurance accepted;
(2) .15 per cent on more than $25,000,000, to $50,000,000 of gross premiums for insurance written on all risks or property resident, situated, or located within this State, and on risks and property situated elsewhere upon which no premium tax is otherwise paid during the year ending on the preceding December 31, less return premiums and less any reinsurance accepted;
(3) .05 per cent on more than $50,000,000, to $250,000,000 of gross premiums for insurance written on all risks or property resident, situated, or located within this State, and on risks and property situated elsewhere upon which no premium tax is otherwise paid during the year ending on the preceding December 31, less return premiums and less any reinsurance accepted; and
(4) 0.00 per cent on more than $250,000,000 of gross premiums for insurance written on all risks or property resident, situated, or located within this State, and on risks and property situated elsewhere upon which no premium tax is otherwise paid during the year ending on the preceding December 31, less return premiums and less any reinsurance accepted;
provided that the annual maximum aggregate tax on gross premiums to be paid by a captive insurance company shall not exceed $200,000.
(b) The tax imposed by this section shall be in settlement of and in lieu of all demands for taxes of every character imposed by the laws of this State, the ordinances or other laws, or rules of any county of this State, except taxes on real property and taxes on the purchase, use, or ownership of tangible personal property. [L 1988, c 187, §2; am L 1993, c 205, §37; am L 1995, c 232, §3; am L 1999, c 302, §8; am L 2002, c 206, §2; am L 2007, c 224, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-201 Purpose.

§431:19-201 Purpose.
This part provides for the creation of special purpose financial captive insurance companies for the exclusive purpose of facilitating the securitization of one or more risks as a means of accessing alternative sources of capital and achieving the benefits of securitization. This part intends to allow the organizers of special purpose financial captive insurance companies to achieve greater efficiencies in structuring and executing insurance securitization, to diversify and broaden access to sources of capital, to facilitate access to insurance securitization and capital markets financing technology, and to further the economic development opportunities of the State. [L 2008, c 190, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-202 Applicable law.

§431:19-202 Applicable law.
(a) A special purpose financial captive insurance company shall be subject to the provisions of this part and to part I. If there is any conflict between this part and part I, this part shall control.
(b) A special purpose financial captive insurance company shall be subject to all applicable rules adopted pursuant to section 431:19-114 that are in effect as of July 1, 2008 and that are adopted after July 1, 2008.
(c) The commissioner, by order, may exempt a special purpose financial captive insurance company from any provision of this article or from any rule adopted pursuant to section 431:19-114 if the commissioner determines the provision to be inappropriate, given the nature of risks to be insured by the special purpose financial captive insurance company or its approved plan of operation, and that the public interest is being served or protected, and that reasonable expectations of the policyholders and consumers will be maintained.
(d) Nothing in this part shall be construed to affect chapter 485A in any manner. [L 2008, c 190, pt of §1]
Revision Note
"July 1, 2008" substituted for "the effective date of this part" pursuant to §23G-15.
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-205 Changes in plan of operation; voluntary dissolution or cessation of business.

§431:19-205 Changes in plan of operation; voluntary dissolution or cessation of business.
(a) Any change in the special purpose financial captive insurance company's plan of operation shall require the prior approval of the commissioner.
(b) Any transaction or series of transactions shall be subject to the prior approval of the commissioner if the transaction or series of transactions:
(1) Is undertaken to dissolve a special purpose financial captive insurance company; or
(2) Results in the termination of all or any part of a special purpose financial captive insurance company's business; provided that no prior approval of the commissioner shall be required for any transaction or series of transactions performed in accordance with a document, contract, or agreement described in the special purpose financial captive insurance company's plan of operation and if the commissioner is notified in advance of the transaction or series of transactions.
(c) A special purpose financial captive insurance company shall notify the commissioner in advance of any change in the legal ownership of any security issued by the special purpose financial captive insurance company. [L 2008, c 190, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-206 Formation.

§431:19-206 Formation.
(a) A special purpose financial captive insurance company may be incorporated as a stock corporation, limited liability company, mutual association, partnership, or other form of organization approved by the commissioner.
(b) A special purpose financial captive insurance company's organizational documents shall limit the special purpose financial captive insurance company's authority to transact the business of insurance or reinsurance to those activities that the special purpose financial captive insurance company conducts to accomplish its purposes as expressed in this part. [L 2008, c 190, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-207 Minimum capital and surplus.

§431:19-207 Minimum capital and surplus.
A special purpose financial captive insurance company shall not be issued a license unless it possesses and thereafter maintains unimpaired capital and surplus of not less than $250,000 in the form of cash or other assets approved by the commissioner. [L 2008, c 190, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-208 Issuance of securities.

§431:19-208 Issuance of securities.
(a) A special purpose financial captive insurance company may issue securities, as defined in section 485A-102, subject to and in accordance with its approved plan of operation and its organizational documents.
(b) A special purpose financial captive insurance company, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of these securities.
(c) A special purpose financial captive insurance company may:
(1) Subject to the approval of the commissioner, account for the proceeds of surplus notes as surplus; and
(2) Submit for prior approval of the commissioner, periodic written requests for payments of interest on and repayment of principal surplus notes, and any other debt obligations issued by the special purpose financial captive insurance company; provided that the commissioner may, in lieu of the approval of periodic written requests, approve a formula or plan that provides for the payment of interest, principal, or both.
(d) Securities issued by a special purpose financial captive insurance company pursuant to an insurance securitization shall not be considered to be insurance or reinsurance contracts. An investor in these securities or a holder of these securities, by sole means of this investment or holding, shall not be considered to be transacting the business of insurance in this State. The underwriter's placement or selling agents and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors involved in an insurance securitization pursuant to this part shall not be considered to be insurance producers or brokers or conducting business as an insurance or reinsurance company or agency, brokerage, intermediary, advisory, or consulting business only by virtue of their activities in conjunction with the insurance securitization. [L 2008, c 190, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:19-210 Disposition of assets; investments.

§431:19-210 Disposition of assets; investments.
(a) The assets of a special purpose financial captive insurance company shall be preserved and administered by or on behalf of the special purpose financial captive insurance company to satisfy the liabilities and obligations of the special purpose financial captive insurance company, the insurance securitization, and other related contracts and agreements.
(b) Unless waived by the commissioner, any security offering memorandum or other document issued to prospective investors regarding the offer and sale of a surplus note or other special purpose financial captive insurance company securities shall include a disclosure that all or part of the proceeds of the insurance securitization will be used to fund the special purpose financial captive insurance company's obligations to the counterparty.
(c) A special purpose financial captive insurance company shall not be subject to any restriction on investments; provided that the special purpose financial captive insurance company:
(1) Maintains compliance with the strategic investment policy adopted by the special purpose financial captive insurance company; and
(2) Shall not make a loan to any person other than as permitted under its plan of operation or as otherwise approved in advance by the commissioner;
provided further that the commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the special purpose financial captive insurance company unless the investment is otherwise approved in its plan of operation or in an order issued to the special purpose financial captive insurance company pursuant to section 431:19-202(c). [L 2008, c 190, pt of §1]