reglab/statecodes huggingface dataset:
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-102 Definitions.

§431:3D-102 Definitions.
As used in this article:
"Insurance group" means those insurers and affiliates included within an insurance holding company system as defined in article 11.
"Insurer" shall have the same meaning as set forth in article 1, except that it shall not include:
(1) Agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state;
(2) Fraternal benefit societies;
(3) Nonprofit medical and hospital service associations that are exempt from state and federal income taxes; or
(4) Unauthorized insurers.
"Own risk and solvency assessment" means a confidential internal assessment, appropriate to the nature, scale, and complexity of an insurer or insurance group and conducted by that insurer or insurance group, of the material and relevant risks associated with the insurer or insurance group's current business plan and the sufficiency of capital resources to support those risks.
"Own Risk and Solvency Assessment Guidance Manual" means the Own Risk and Solvency Assessment
Guidance
Manual as developed and adopted by the National Association of Insurance Commissioners and as amended from time to time. A change in the Own Risk and Solvency Assessment Guidance Manual shall take effect on the January 1 following the calendar year in which the changes have been adopted by the National Association of Insurance Commissioners.
"Own risk and solvency assessment summary report" means a confidential, high-level summary of an insurer or insurance group's own risk and solvency assessment. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-103 Risk management framework.

§431:3D-103 Risk management framework.
An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-104 Own risk and solvency assessment requirement.

§431:3D-104 Own risk and solvency assessment requirement.
Subject to section 431:3D-106, an insurer or the insurance group of which the insurer is a member shall regularly conduct an own risk and solvency assessment consistent with a process comparable to the Own Risk and Solvency Assessment Guidance Manual. The own risk and solvency assessment shall be conducted no less than annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-105 Own risk and solvency assessment summary report.

§431:3D-105 Own risk and solvency assessment summary report.
(a) Upon the commissioner's request, and no more than once each year beginning in 2018, an insurer shall submit to the commissioner an own risk and solvency assessment summary report or any combination of reports that together contain the information described in the Own Risk and Solvency Assessment Guidance Manual, which is applicable to the insurer, the insurance group of which it is a member, or both.
(b) Notwithstanding any request from the commissioner, if the insurer is a member of an insurance group, the insurer shall submit any reports required by this section if the commissioner is the lead state commissioner of the insurance group as determined by the procedures in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.
(c) Any reports filed pursuant to this section shall include a signature of the insurance group's chief risk officer or another executive responsible for the oversight of the insurer's enterprise risk management process attesting, to the best of the person's belief and knowledge, that:
(1) The insurer applies the enterprise risk management process described in the own risk and solvency assessment summary report; and
(2) A copy of the report has been provided to the insurer's board of directors or the appropriate committee thereof.
(d) An insurer may comply with subsection (a) by providing the most recent and substantially similar report, which is provided by the insurer or another member of an insurance group of which the insurer is a member, or any combination of reports that together contain the information described in the Own Risk and Solvency Assessment Guidance Manual, to the commissioner of another state or a supervisor or regulator of a foreign jurisdiction if that report provides information comparable to that described in the Own Risk and Solvency Assessment Guidance Manual. Any such report in a language other than English must be accompanied by a translation of that report into the English language. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-107 Contents of own risk and solvency assessment summary report.

§431:3D-107 Contents of own risk and solvency assessment summary report.
(a) The own risk and solvency assessment summary report shall be prepared consistent with the Own Risk and Solvency Assessment Guidance Manual and subject to the requirements of subsection (b). Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.
(b) The review of the own risk and solvency assessment summary report and any additional requests for information shall be made using similar procedures currently used in the analysis and examination of multi-state or global insurers and insurance groups. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-109 Sanctions.

§431:3D-109 Sanctions.
(a) Any insurer failing without just cause to timely file the own risk and solvency assessment summary report as required in this article shall be required after notice and hearing to pay a penalty of not less than $100 and not more than $500 for each day's delay, which shall be recovered by the commissioner. Any penalty recovered pursuant to this section shall be paid into the compliance resolution fund.
(b) The maximum penalty under this section is $50,000. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that imposing the penalty would constitute a financial hardship to the insurer. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3D-110 Severability.

§431:3D-110 Severability.
If any provision of this article or its application to any person or circumstance is held invalid, that determination shall not affect the provisions or applications of this article that can be given effect without the invalid provision or application, and to that end, the provisions of this article are severable. [L 2016, c 140, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3G-101 Purpose and scope.

§431:3G-101
Purpose and scope.
(a) The purpose of this article is to:
(1) Provide the insurance commissioner a summary of an insurer's or insurance group's corporate governance structure, policies, and practices to permit the commissioner to gain and maintain an understanding of the insurer's corporate governance framework;
(2) Outline the requirements for completing a corporate governance annual disclosure with the commissioner; and
(3) Provide for the confidential treatment of the corporate governance annual disclosure and related information that will contain confidential and sensitive information related to an insurer's or insurance group's internal operations and proprietary and trade secret information that, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.
(b) Nothing in this article shall be construed to prescribe or impose corporate governance standards and internal procedures beyond those required under applicable state corporate law. Notwithstanding the foregoing, nothing in this article shall be construed to limit the commissioner's authority, or the rights or obligations of third parties, under sections 431:2-303 and 431:11-107.
(c) The requirements of this article shall apply to all insurers domiciled in this State. [L 2019, c 71, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3G-102 Definitions.

§431:3G-102 Definitions.
For the purposes of this article:
"Corporate governance annual disclosure" means a confidential report filed by the insurer or insurance group made in accordance with the requirements of this article.
"Insurance group" means those insurers and affiliates included within an insurance holding company system as defined in article 11.
"Insurer" has the same meaning as in section 431:1-202, except that it shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
"Own risk and solvency assessment summary report" means the report filed in accordance with section 431:3D-105. [L 2019, c 71, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3G-105 Contents of corporate governance annual disclosure.

§431:3G-105 Contents of corporate governance annual disclosure.
(a) The insurer or insurance group shall have discretion over the responses to the corporate governance annual disclosure inquiries; provided that the corporate governance annual disclosure shall contain the material information necessary to permit the commissioner to gain an understanding of the insurer's or insurance group's corporate governance structure, policies, and practices. The commissioner may request additional information deemed material and necessary to provide the commissioner with a clear understanding of the corporate governance policies, the reporting or information system, or the controls implementing those policies.
(b) Notwithstanding subsection (a), the corporate governance annual disclosure shall be prepared consistent with rules adopted by the commissioner. Documentation and supporting information shall be maintained and made available upon examination or request of the commissioner. [L 2019, c 71, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3G-108 Sanctions.

§431:3G-108 Sanctions.
Any insurer failing, without just cause, to timely file the corporate governance annual disclosure as required in this article shall be required, after notice and an opportunity for hearing, to pay a penalty of not less than $100 and not more than $500 for each day's delay, to be recovered by the commissioner and paid into the compliance resolution fund. The maximum penalty under this section shall be $50,000. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer. [L 2019, c 71, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3G-109 Severability.

§431:3G-109 Severability.
If any provision of this article other than section 431:3G-106, or the application thereof to any person or circumstance, is held invalid, the determination of invalidity shall not affect those provisions or applications of this article that can be given effect without the invalid provision or application; to that end, the provisions of this article, except for section 431:3G-106, are severable. [L 2019, c 71, pt of §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-101 Definitions.

§431:4-101 Definitions.
As used in this article:
"Available surplus" means the excess over the minimum amount of surplus required for the classes of insurance the insurer is authorized to transact.
"Equity security" means any stock or similar security; any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; any such warrant or right; or any security that the commissioner, by rules and regulations as the commissioner may prescribe in the public interest or for the protection of investors, designates as an equity security.
"Surplus funds" means the excess of the insurer's assets over its liabilities, including its capital stock as a liability. [L 1987, c 347, pt of §2; am L 2019, c 111, §15]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-102 Types of insurers permitted.

§431:4-102 Types of insurers permitted.
An insurer formed in this State shall be either:
(1) An incorporated stock insurer,
(2) An incorporated mutual insurer which charges for and collects in advance cash premiums in an amount adequate to maintain full legal reserves and to fully meet and discharge all of its obligations and liabilities under its policies without assessments or calls upon its members for additional premium, except as provided in this article relative to the contingent liability of its members, or
(3) A reciprocal insurer, with respective powers, duties and restrictions as provided in this article. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-104 Articles of incorporation.

§431:4-104 Articles of incorporation.
(a) This section applies to insurers incorporated in this State.
(b) The incorporators shall be individuals who are United States citizens, and a majority of them shall be residents of this State. The number of incorporators shall be:
(1) Not less than five if a stock insurer, or
(2) Not less than ten if a mutual insurer.
(c) After the articles of incorporation have been approved by the department of commerce and consumer affairs and by the commissioner, the original shall be filed with the department, one copy with the commissioner, and one copy retained by the insurer.
(d) The articles of incorporation shall state in addition to the requirements set forth in section 414-32:
(1) The name of the insurer, which shall include the word "Insurance" and, as the last word thereof, one of the words "Corporation", "Incorporated", or "Limited", or one of the abbreviations "Corp.", "Inc.", or "Ltd.". In the case of the reciprocal insurer, the name shall include the word "Reciprocal", "Interinsurer", "Interinsurance", "Exchange", "Underwriters", or "Underwriting";
(2) (A) Whether it is a stock or mutual insurer; and
(B) The classes of insurance it will issue, according to the designations made in this article.
(3) The place of its principal office, which shall be established and maintained in this State.
(4) (A) If a stock insurer, the amount of its capital, the aggregate number of shares, and the par value of each share, which par value shall not be less than $2, and if the privilege of subsequent extension of the authorized capital stock is sought, then the limit of such extension shall be stated;
(B) If a mutual insurer, the maximum contingent liability of its policyholders for the payment of its expenses and losses occurring under its policies.
(5) The names and addresses, both business and residence, of the officers of the insurer for the initial term.
(6) Other provisions, not inconsistent with law, as may be deemed proper by the incorporators. [L 1987, c 347, pt of §2; am L 2002, c 40, §68]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-105 Affidavit.

§431:4-105 Affidavit.
(a) Before applying to the commissioner for an initial certificate of authority, a stock or mutual insurer is required to file with the commissioner an affidavit, sworn to by the president, secretary, and treasurer of the corporation as named in the articles of incorporation.
(b) The affidavit shall set forth:
(1) The number of shares which the corporation is authorized to issue;
(2) The par value of the shares;
(3) The names of the shareholders;
(4) The number of shares owned by each shareholder;
(5) The amount of money paid to the corporation by each shareholder; and
(6) That the required capital has been paid in full in cash. [L 1987, c 347, pt of §2; am L 2003, c 212, §33]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-106 Board of directors.

§431:4-106 Board of directors.
The board of directors of a domestic insurer shall consist of not less than five individuals, at least three-fourths of the individuals shall be United States citizens, and a majority of the individuals shall be residents of this State. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-106.5 Membership in mutual or subscriber in reciprocal insurers; no personal liability of representative.

§431:4-106.5 Membership in mutual or subscriber in reciprocal insurers; no personal liability of representative.
Any person may make application to enter into agreement for and hold policies or contracts in or with and be a member or subscriber of any domestic, foreign, or alien mutual or reciprocal insurer. Any officer, representative, or trustee, receiver, or legal representative of any such member or policyholder shall be recognized as acting for or on its behalf for the purpose of such contracts or membership, but shall not be personally liable upon the contract by reason of acting in such representative capacity. [L 1989, c 195, §1]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-107 Solicitation permit required.

§431:4-107 Solicitation permit required.
(a) No person forming or proposing to form in this State any of the following shall advertise, solicit or receive any funds, agreement, stock subscription or membership on account thereof, unless the person has applied for and has received from the commissioner a solicitation permit:
(1) An insurer,
(2) An insurance holding corporation,
(3) A stock corporation to finance an insurer or insurance production, or
(4) A corporation to manage an insurer.
(b) Any person violating this section shall be fined not more than $10,000 or imprisoned not more than ten years, or both. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-108 Application for a solicitation permit.

§431:4-108 Application for a solicitation permit.
To apply for a solicitation permit a person shall:
(1) File with the commissioner a request showing:
(A) Name, type and purpose of insurer or corporation proposed to be formed;
(B) Names, addresses and business records of each person associated or to be associated with in the formation of the proposed insurer or corporation;
(C) Full disclosure of the terms of all understandings and agreements existing or proposed among persons so associated relative to the proposed insurer or corporation or the formation thereof;
(D) The plan according to which solicitations are to be made;
(E) Such additional information as the commissioner may reasonably require.
(2) File with the commissioner:
(A) (i) The articles of incorporation, or
(ii) The proposed subscribers' agreement and power of attorney, if the proposed insurer is a reciprocal;
(B) Original and one copy of any proposed bylaws;
(C) Copy of any security proposed to be issued and copy of application or subscription agreement therefor;
(D) Copy of any insurance contract proposed to be offered and copy of application therefor;
(E) Copy of any prospectus, advertising or literature proposed to be used;
(F) Copy of proposed form of any escrow agreement required.
(3) Deposit with the commissioner the appropriate fees required by this code. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-109 Permit issued or denied.

§431:4-109 Permit issued or denied.
(a) The commissioner shall expeditiously examine the application for a solicitation permit and make any investigation relative thereto deemed necessary.
(b) The commissioner shall give notice to the applicant that the commissioner will issue a solicitation permit, stating the terms to be contained therein, if the commissioner finds:
(1) The application is complete;
(2) The documents therewith filed are equitable in terms and proper in form;
(3) The agreements made or proposed are equitable to present and future shareholders, subscribers, members, or policyholders; and
(4) None of the persons named in the application as being associated or to be associated with the formation of the insurer or corporation is untrustworthy.
(c) After such notice, the commissioner shall issue to the applicant a solicitation permit upon the applicant's filing of the following:
(1) The bond required by section 431:4-110; and
(2) The articles of incorporation of the incorporated insurer or other corporation with the department of commerce and consumer affairs and upon presentation of evidence of such filing to the commissioner.
(d) If the commissioner denies the application for a solicitation permit, the commissioner shall give notice to the applicant that the permit will not be granted, state the grounds therefor, and refund to the applicant all sums so deposited except the application fee. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-110 Bond or cash deposit.

§431:4-110 Bond or cash deposit.
(a) The commissioner shall not issue a solicitation permit until the person applying therefor files with the commissioner a corporate surety bond in the penalty sum of $150,000, in favor of this State and for the use and benefit of this State and of subscribers and creditors of the proposed organization. The bond shall be conditioned upon the payment of costs incurred by this State in the event of any legal proceedings for liquidation or dissolution of the proposed organization before completion of organization or in the event a certificate of authority is not granted; upon a full accounting for funds received until the proposed insurer has been granted its certificate of authority; or until the proposed corporation has completed its organization as defined in the solicitation permit.
(b) In lieu of filing the bond described in subsection (a), the person may deposit with the director of finance through the commissioner $150,000 in cash or in United States government bonds at par value, to be held in trust upon the same conditions as required for the bond.
(c) The commissioner may waive the requirement for a bond or deposit in lieu thereof if the permit provides that:
(1) The proposed securities are to be distributed solely and finally to those few persons who are the active promoters intimate to the formation of the insurer or other corporation, or to the formation of the insurer or other corporation; or
(2) The securities are to be issued in connection with subsequent financing as provided in section 431:4-120, and distribution thereof is not to be made to the general public.
(d) Any bond filed, or any deposit or remaining portion thereof held under this section shall be released and discharged upon settlement or termination of all liabilities against it. [L 1987, c 347, pt of §2; am L 1993, c 205, §8]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-111 Expiration and contents.

§431:4-111 Expiration and contents.
Every solicitation permit issued by the commissioner shall:
(1) Expire two years from its date, unless earlier terminated by the commissioner, and shall so state.
(2) State the securities for which subscriptions are to be solicited, the number, classes, par value, and selling price thereof, or identify the insurance contract for which applications and advance premiums or deposits are to be solicited.
(3) Limit the portion of funds received on account of stock subscriptions, if any are proposed to be taken, which may be used for promotion and organization expenses to such amount as the commissioner deems adequate, but in no event to exceed fifteen per cent of such funds as and when actually received.
(4) If to be for a mutual or reciprocal insurer, limit the portion of funds received on account of applications for insurance which may be used for promotion or organization expenses to a reasonable commission upon such funds, giving consideration to the class or classes of insurance and policy or policies involved and to the costs incurred by insurers generally in the production of similar business, and provide that no such commission shall be deemed to be earned nor be paid until the insurer has received its certificate of authority and the policies applied for, and upon which such commission is to be based, have been actually issued and delivered.
(5) Contain such other information required by this part or reasonable conditions relative to accounting and reports or otherwise as the commissioner deems necessary. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-112 Permit not an inducement.

§431:4-112 Permit not an inducement.
The granting of a solicitation permit is permissive only and shall not constitute an endorsement by the commissioner of any person or thing related to the proposed insurer or corporation. The existence of the permit shall not be advertised or used as an inducement in any solicitation. The substance of this section in boldfaced type not less than ten point shall be printed at the top of each solicitation permit. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-113 Organization solicitor's license.

§431:4-113 Organization solicitor's license.
Solicitation for sale of securities to members of the public under a solicitation permit shall be made only by individuals registered therefor pursuant to chapter 485A. [L 1987, c 347, pt of §2; am L 2006, c 229, §14]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-114 Revocation of solicitation permit.

§431:4-114 Revocation of solicitation permit.
(a) The commissioner shall revoke a solicitation permit if requested in writing by:
(1) A majority of the incorporators and at least two-thirds of the subscribers to stock or applicants for insurance in the proposed incorporated insurer or corporation; or
(2) A majority of the subscribers of a proposed reciprocal insurer.
(b) The commissioner may, for cause, modify a solicitation permit, or may, after a hearing, revoke any solicitation permit for:
(1) Violation of this code;
(2) Violation of the terms of the permit;
(3) Violation of any proper order of the commissioner; or
(4) Misrepresentation. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-115 Escrow of funds.

§431:4-115 Escrow of funds.
(a) All funds received pursuant to a solicitation permit shall be deposited and held in escrow in a bank or trust company under an agreement approved by the commissioner. No part of any such deposit shall be withdrawn except:
(1) For the payment of promotion and organization expenses as authorized by the solicitation permit;
(2) For the purpose of making any deposit with the commissioner required for the issuance of a certificate of authority to an insurer;
(3) Upon completion of payments on stock subscriptions made under the solicitation permit and deposit or appropriation of such funds for the purposes specified in the solicitation permit, if the proposed organization is not to be an insurer; or
(4) For making of refunds as provided in section 431:4-119.
(b) When the commissioner has issued a certificate of authority to an insurer, any such funds remaining in escrow for its account shall be released to the insurer. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-116 Expense pending completion.

§431:4-116 Expense pending completion.
(a)(1) The incorporators of any insurer shall be jointly and severally liable for its debts or liabilities until it has secured a certificate of authority.
(2) The incorporators of a corporation other than an insurer or the persons proposing to form a reciprocal insurer shall be jointly and severally liable for its debts or liabilities until it has completed its organization.
(b) Any portion of funds received on account of stock subscriptions which is allowed under the solicitation permit, may be applied concurrently toward the payment of promotion and organization expenses incurred. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-117 Issuance and forfeiture of securities.

§431:4-117 Issuance and forfeiture of securities.
(a) No proposed stock insurer or corporation shall issue any share of stock or participation agreement until:
(1) All subscriptions received under the solicitation permit have been fully paid in:
(A) Cash or securities eligible for investment of funds of insurers, or
(B) Other property after securing the written approval of the commissioner; and
(2) A certificate of authority has been issued to it, if an insurer.
(b) Every subscription contract to shares of a stock insurer or other corporation calling for payment in installments shall provide that such contracts, together with all amounts paid thereon, may be forfeited at the option of the corporation, upon failure to make good a delinquency in any installment upon not less than forty-five days notice in writing. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-118 Insurance application.

§431:4-118 Insurance application.
All applications for insurance obtained in forming a mutual or reciprocal insurer shall provide that:
(1) Issuance of the policy is contingent upon completion of organization of the insurer and issuance of a certificate of authority to it;
(2) The prepaid premium or deposit will be refunded in full to the applicant if the organization is not completed and the certificate of authority issued prior to the solicitation permit's date of expiration; and
(3) The agreement for insurance is not effective until a policy has been issued under it. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-119 Refund upon failure to complete or qualify or upon revocation of solicitation permit.

§431:4-119 Refund upon failure to complete or qualify or upon revocation of solicitation permit.
The commissioner shall withdraw all funds held in escrow and refund to subscribers or applicants all sums paid in on stock subscriptions, less that part of the sums paid in on subscriptions as has been allowed and used for promotion and organization expenses, and all sums paid in on insurance applications, and shall dissolve the proposed insurer or corporation if:
(1) The proposed insurer or corporation:
(A) Fails to complete its organization and obtain full payment for subscriptions and applications; and
(B) Fails to secure its certificate of authority before expiration of the solicitation permit, if an insurer; or
(2) The commissioner revokes the solicitation permit. [L 1987, c 347, pt of §2; am L 2019, c 111, §16]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-120 Subsequent financing.

§431:4-120 Subsequent financing.
(a) No domestic insurer, insurance holding corporation, stock corporation for financing operations of a mutual insurer, or attorney-in-fact corporation of a reciprocal insurer shall solicit or receive funds in exchange for any new issue of its corporate securities, other than through a stock dividend, until it has applied to the commissioner for, and has been granted, a solicitation permit, after:
(1) It has received a certificate of authority, if an insurer, or
(2) It has completed its initial organization and financing, if a corporation other than an insurer.
(b) The commissioner shall issue a solicitation permit unless the commissioner finds that:
(1) The funds proposed to be secured are excessive in amount for the purpose intended,
(2) The proposed securities or the manner of their distribution are inequitable, or
(3) The issuance of the securities would jeopardize the interests of policyholders or the holders of other securities of the insurer or corporation.
(c) A solicitation permit shall contain such terms and be issued upon such conditions as the commissioner may reasonably specify or require, and shall expire when the new issue of corporate securities has been completed.
(d) A solicitation permit shall limit the portion of funds received on account of such new issue of corporate securities which may be used for promotion and sales expenses for the new issue to such amount as the commissioner deems adequate, but in no event to exceed fifteen per cent of such funds as and when actually received.
(e) For purposes of this section, insurance holding corporation means any domestic corporation:
(1) Which, directly or indirectly through one or more intermediaries, controls a domestic insurer; and
(2) In which the total assets of the insurer, as reported in its most recent annual statement filed with the commissioner pursuant to section 431:3-301, is twenty per cent or more of the consolidated total assets of the corporation as reported in its most recent annual report to its owners. The annual report to owners shall be prepared in accordance with generally accepted accounting principles by a certified public accountant. [L 1987, c 347, pt of §2; am L 1989, c 207, §3]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-121 False exhibits.

§431:4-121 False exhibits.
Every person who, with intent to deceive knowingly exhibits any false account, document or advertisement, relative to the affairs of any insurer, or of any corporation of the kind enumerated in section 431:4-107, formed or proposed to be formed, is punishable in accordance with section 431:2-203. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-122 Depositaries.

§431:4-122 Depositaries.
The funds of a domestic insurer shall not be deposited in any bank or banking institution which has not first been approved as a depositary by the insurer's board of directors or by a committee designated for the purpose. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-123 Corrupt practices.

§431:4-123 Corrupt practices.
No person shall buy, sell or barter a vote or proxy, relative to any meeting of shareholders or members of an incorporated domestic insurer, or engage in any corrupt or dishonest practice in or relative to the conduct of any such meeting. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-124 Prohibited guaranty.

§431:4-124 Prohibited guaranty.
No domestic insurer or its affiliates or subsidiaries shall guarantee the financial obligation of any director or officer of such insurer or affiliate or subsidiary in the director's or officer's personal capacity, and any such guaranty attempted shall be void. This prohibition shall not apply to obligations of the insurer under surety bonds or insurance contracts issued in the regular course of business. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-125 Fees on use of funds.

§431:4-125 Fees on use of funds.
(a) No director, officer or employee having any authority in the investment or disposition of the funds of a domestic insurer shall accept, except on behalf of the insurer, or be the beneficiary of any fee, brokerage, gift, or other emolument because of any investment, loan, deposit, purchase, sale, payment, or exchange made by or for the insurer.
(b) The commissioner may adopt rules to define and permit additional exceptions to the prohibition in subsection (a), solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer, for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of such director. [L 1987, c 347, pt of §2; am L 2004, c 122, §14]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-126 Comply with foreign laws.

§431:4-126 Comply with foreign laws.
Any domestic insurer doing business in a state, territory or sovereignty may design and issue insurance contracts and transact insurance in such state, territory or sovereignty as required or permitted by the laws thereof. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-127 Solicitation in other states.

§431:4-127 Solicitation in other states.
(a) No domestic insurer shall knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer.
(b) A reciprocating state, as used herein, is one under the laws of which a similar prohibition is imposed upon and is enforced against insurers domiciled in that state.
(c) This section shall not prohibit:
(1) Advertising through publications and radio broadcasts originating outside the reciprocating state, if the insurer is licensed in a majority of the states in which such advertising is disseminated, and if the advertising is not specially directed to residents of the reciprocating state; and
(2) Insurance covering persons or risks located in a reciprocating state, under contracts solicited and issued in states in which the insurer is then licensed. Nor shall it prohibit insurance effectuated by the insurer as an unauthorized insurer in accordance with the laws of the reciprocating state. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-201 Other laws applicable.

§431:4-201 Other laws applicable.
Domestic stock insurers shall be subject to title 23 and any applicable general laws enacted pertaining to stock corporations except where inconsistent with the express provisions of this article. [L 1987, c 347, pt of §2; am L 1993, c 205, §9]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-202 Increase of capital.

§431:4-202 Increase of capital.
(a) A domestic stock insurer may increase its capital stock by complying with section 414-281 and section 431:4-120. The increase in capital shall be effective upon the payment of the increased capital in full in cash.
(b) If the increased capital stock is to be distributed as stock dividend, the increased capital stock may be fully paid in out of any available surplus funds as is provided in section 431:4-204, and the payment shall be effected by a transfer on the insurer's books from its surplus account to its capital account. [L 1987, c 347, pt of §2; am L 1989, c 207, §4; am L 2002, c 40, §69]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-203 Decrease of capital.

§431:4-203 Decrease of capital.
(a) A domestic stock insurer may decrease its capital stock by:
(1) Vote of not less than seventy-five per cent of the holders of the shares of stock outstanding and entitled to vote; and
(2) Filing a certificate executed in the same manner as provided in section 414-11, that such vote occurred, upon which filing the decrease in capital is effective.
(b) No such decrease shall be made which results in capital stock less in amount than the minimum required by this code for the classes of insurance thereafter to be transacted by the insurer.
(c) No surplus funds of the insurer resulting from a decrease of its capital stock shall be distributed to shareholders, except:
(1) As a stock dividend on a subsequent increase of capital stock;
(2) Upon dissolution of the insurer; or
(3) Upon approval of the commissioner, provided the commissioner has received satisfactory proof that the distribution will not impair the interests of policyholders or the solvency of the insurer.
(d) Upon a decrease of capital stock, the insurer's directors shall call in any outstanding stock certificates required to be changed pursuant thereto and shall issue proper certificates in their stead. [L 1987, c 347, pt of §2; am L 1989, c 195, §14; am L 2004, c 122, §15]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-204 Dividends to stockholders.

§431:4-204 Dividends to stockholders.
(a) No domestic stock insurer shall pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from any realized net profits.
(b) Such an insurer may pay a stock dividend out of any available surplus funds.
(c) No dividend shall be declared or paid which would reduce the insurer's surplus to an amount less than the minimum required for the classes of insurance thereafter to be transacted.
(d) The commissioner may revoke the certificate of authority of any insurer violating this section. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-205 Illegal dividends; reductions.

§431:4-205 Illegal dividends; reductions.
Any director of a domestic stock insurer who votes for or concurs in the declaration or payment of any dividend to stockholders or a reduction of capital stock not authorized by law shall, in addition to any other liability imposed by law, be guilty of violation of this code. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-206 Repayment of contributed surplus.

§431:4-206 Repayment of contributed surplus.
Contributions to the surplus of a domestic stock insurer, other than resulting from sale of its capital stock, shall not be subject to repayment except out of surplus in excess of the minimum surplus initially required of such an insurer transacting like classes of insurance. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-207 Participating policies.

§431:4-207 Participating policies.
(a) Any domestic stock insurer may, if its charter so provides, issue policies entitled to participate from time to time in the earnings of the insurer through dividends.
(b) The directors of a stock insurer may from time to time apportion and pay to the holders of participating policies dividends only out of that part of its surplus which is in excess of its required capital and minimum surplus. The dividends may be paid or credited according to a reasonable classification of its policies. No dividend shall be paid which unfairly discriminates among policies within the same classification.
(c) No such insurer shall issue in this State both participating and nonparticipating policies for the same class of risks, unless the right or absence of right to participate is reasonably related to the premium charge or the special character of the risk assumed.
(d) Dividends to participating life insurance policies issued by the insurer shall be paid only out of its surplus funds as defined in section 431:4-101. Dividends to participating policies for other classes of insurance shall be paid only out of that part of the surplus funds which is derived from any realized net profits.
(e) No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-208 Statement by beneficial owner, director, officer.

§431:4-208 Statement by beneficial owner, director, officer.
Every person who is directly or indirectly the beneficial owner of more than ten per cent of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such company, shall file in the office of the commissioner within ten days after the person becomes such beneficial owner, director, or officer a statement, in such form as the commissioner may prescribe, of the amount of all equity securities of such company of which the person is the beneficial owner, and within ten days after the close of each calendar month, if there has been a change in such ownership during such month, shall file in the office of the commissioner a statement, in such form as the commissioner may prescribe, indicating the person's ownership at the close of the calendar month and such changes in the person's ownership as have occurred during the calendar month. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-209 Recovery of profits realized.

§431:4-209 Recovery of profits realized.
For the purpose of preventing the unfair use of information which may have been obtained by the beneficial owner, director, or officer by reason of the owner's, director's, or officer's relationship to the company, any profit realized by the owner, director, or officer from any purchase and sale, or any sale and purchase, of an equity security of the company within any period of less than six months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of the beneficial owner, director or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover the profit may be instituted in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and in behalf of the company if the company fails or refuses to bring the suit within sixty days after request or fails diligently to prosecute the same thereafter; but no suit shall be brought more than two years after the date such profit was realized. This section shall not be construed to cover any transaction where the beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the commissioner by rules and regulations may exempt as not comprehended within the purpose of this section. [L 1987, c 347, pt of §2]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-210 Unlawful sales of equity security.

§431:4-210 Unlawful sales of equity security.
It shall be unlawful for any beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company if the person selling the security or the person's principal:
(1) Does not own the security sold; or
(2) If owning the security, does not deliver it against the sale within twenty days thereafter, or does not within five days after the sale deposit it in the mails or other usual channels of transportation.
No person shall be deemed to have violated this section if the person proves that notwithstanding the exercise of good faith the person was unable to make delivery or deposit within the required time, or that to do so would cause undue inconvenience or expense. [L 1987, c 347, pt of §2; am L 2018, c 18, §25]
2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:4-211 Exempt transactions.

§431:4-211 Exempt transactions.
Section 431:4-209 shall not apply to any purchase and sale, or sale and purchase, and section 431:4-210 shall not apply to any sale, of an equity security of a domestic stock insurance company not then or theretofore held by the person in an investment account, by a dealer in the ordinary course of the dealer's business and incident to the establishment or maintenance by the dealer of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. The commissioner may, by such rules and regulations as the commissioner deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market. [L 1987, c 347, pt of §2]