Report Title:
Compliance Resolution Fund; Insurers' exemption
Description:
Exempts insurers from assessments and fees paid into the Compliance Resolution Fund.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
160 |
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TWENTY-THIRD LEGISLATURE, 2005 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the compliance resolution fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 431:2-215, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) The commissioner shall determine the amount or amounts to be assessed and the time any moneys from assessments are due for each line or type of insurance or entity regulated under title 24; provided that:
(1) The criteria for making the assessment shall be established by rule; provided further that the commissioner shall have provisional authority to make assessments prior to adoption of the rule but this provisional authority shall not extend beyond two years from June 28, 1999;
(2) The insurers or entities under title 24 shall be provided reasonable notice of when their respective assessments are due;
(3) The assessments by line or type shall bear a reasonable relationship to the costs of regulating the line or type of insurance, including any administrative costs of the division; and
(4) The sum total of all assessments made and collected shall not exceed the special fund ceiling or ceilings related to the fund that are established by the legislature[.];
provided further that insurers other than those established under chapters 432, 432D, and 435C shall be exempt from fees and assessments under this subsection.
As used in this subsection, "reasonable notice" means a period of at least sixty days."
SECTION 2. Section 431:2-306, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) Examinations of:
[(1) Any insurer;
(2)] (1) Any person subject to examination under section 431:2-303(2); or
[(3)] (2) Any insurance guaranty fund established pursuant to article 16;
shall be at the expense of the [insurer, person,] person or guaranty fund examined. Examination expenses shall include fees, mileage, and expenses incurred as to witnesses or any other person, as defined in article 1, subject to an examination by the commissioner.
(b) The [insurer, person,] person or guaranty fund examined and liable therefor shall pay to the commissioner's examiners upon presentation of an itemized statement, their actual travel expenses, their reasonable living expense allowance, and their per diem compensation at a reasonable rate approved by the commissioner, incurred on account of the examination. All payments collected by the commissioner shall be remitted to:
(1) The compliance resolution fund; or
(2) The captive insurance administrative fund if independent contractor examiners or captive staff examiners were employed for a captive insurer's examination.
The commissioner or the commissioner's examiners shall not receive or accept any additional emolument on account of any examination."
SECTION 3. Section 431:3-306.5, Hawaii Revised Statutes, is amended to read as follows:
"§431:3-306.5 Residential hurricane coverage. (a) Upon written request of the commissioner by certified mail, an insurer writing the peril of residential hurricane coverage in this [State] state shall within thirty days after receipt of the request, make accessible to the commissioner or commissioner's designee information verifying that the insurer has the financial assets and ability to cover its hurricane insurance exposure. The information to be made accessible shall include:
(1) The aggregate amount of hurricane coverage premiums and aggregate limits of coverage by type of coverage, which shall be compiled on a quarterly basis;
(2) The probable maximum loss associated with the above aggregate limits, assuming the occurrence of a hurricane of a severity unlikely to occur more frequently than once every one hundred years, as that loss is estimated in a report prepared by a recognized hurricane modeling company;
(3) All financial information relating to the insurer's capital base and reinsurance program for hurricane losses, such as:
(A) Information describing the reinsurance program in place as of the date notice was received;
(B) The names and financial ratings of each reinsurer;
(C) Aggregate limits of reinsurance coverage available; and
(D) Reinstatement provisions; and
(4) Any other related information the commissioner may require to evaluate the adequacy of the program.
(b) If the commissioner determines that the loss estimated pursuant to subsection (a) exceeds the sum of an insurer's capitalization and available reinsurance, the commissioner may further examine that insurer's financial position as allowed by article 2 and commence supervisory and other appropriate proceedings under article 15.
[(c) The cost of an examination under this section shall be assessed against the insurer being examined and remitted to the commissioner for deposit into the compliance resolution fund.
(d)] (c) Any final order or decision of the commissioner under this section shall be made pursuant to chapter 91."
SECTION 4. Section 431:7-101, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The fees for services of the department of commerce and consumer affairs subsequent to the issuance of a certificate of authority, license, or other certificate are as follows:
[(1) $600 per year for all services (including extension of the certificate of authority) for an authorized insurer;
(2)] (1) $50 per year for all services (including extension of the license) for a regularly licensed producer;
[(3)] (2) $75 per year for all services (including extension of the license) for a regularly licensed nonresident producer;
[(4)] (3) $45 per year for all services (including extension of the license) for a regularly licensed independent adjuster;
[(5)] (4) $45 per year for all services (including extension of the license) for a regularly licensed public adjuster;
[(6)] (5) $45 per year for all services (including extension of the license) for a workers' compensation claims adjuster's limited license;
[(7)] (6) $60 per year for all services (including extension of the license) for a regularly licensed independent bill reviewer;
[(8)] (7) $45 per year for all services (including extension of the license) for a producer's limited license;
[(9)] (8) $75 per year for all services (including extension of the license) for a regularly licensed managing general agent;
[(10)] (9) $75 per year for all services (including extension of the license) for a regularly licensed reinsurance intermediary;
[(11)] (10) $45 per year for all services (including extension of the license) for a licensed surplus lines broker;
[(12)] (11) $75 per year for all services (including renewal of registration) for a service contract provider;
[(13)] (12) $65 per year for all services (including extension of the certificate) for an approved course provider;
[(14)] (13) $20 per year for all services (including extension of the certificate) for an approved continuing education course;
[(15)] (14) $75 per year for all services (including renewal of registration) for a vehicle protection product warrantor; and
[(16)] (15) $20 for a criminal history record check.
The services referred to in paragraphs (1) to [(16)] (15) shall not include services in connection with examinations, investigations, hearings, appeals, and deposits with a depository other than the department of commerce and consumer affairs."
SECTION 5. Section 431:10C-215, Hawaii Revised Statutes, is amended to read as follows:
"§431:10C-215 Inspection and audit. (a) In addition to the right and duty of examination under article 2, the commissioner shall have the right and the duty of visitation, inspection, and audit of all business records, including internal memoranda, audits, and correspondence related in any way to the insurer's motor vehicle insurance business in this [State.] state.
(b) The commissioner shall, in the commissioner's discretion, cause an audit to be made of all or any segment of the motor vehicle insurance books and business records of any insurer by the staff of the division or by an independent contract examiner. A copy of every audit, internal or external, performed by any insurer of any aspect of its motor vehicle books and business records shall be submitted immediately upon completion to the commissioner.
[(c) The commissioner shall assess and collect from each insurer, self-insurer, and from every applicant for a certificate of self-insurance or a license to transact a motor vehicle insurance and optional additional insurance business in this State, such portion of the full cost of every audit, inspection, examination, visitation, and other services related to motor vehicle insurance required by this or any other article, or performed by the commissioner in the commissioner's discretion under this article or this code, as the commissioner deems equitable in the rendering of the service. Assessments collected shall be paid into the compliance resolution fund.
(d)] (c) (1) Each insurer licensed to transact motor vehicle insurance or optional additional insurance business in this [State] state shall provide the commissioner with periodic reports on every aspect of the motor vehicle insurance and the optional additional insurance business the insurer transacts in the [State,] state, including[,] but not limited to[,] reports on the investment, reserve, reinsurance, loss and profit experience, ratemaking and schedules, and claims received and paid; and
(2) Each insurer shall, not less frequently than quarterly, report to the commissioner the details of each claim received, claim paid, application for and sale of a motor vehicle insurance policy, each termination and renewal refusal notice posted, and each cancellation and refusal to renew effected on both motor vehicle insurance and optional additional insurance policy transactions.
[(e)] (d) Any insurer failing to report information in the manner and within the time required by the commissioner, or failing fully to cooperate with the commissioner and the commissioner's staff in the fulfillment of their duties under this article and this code shall be subject to the penalty provided in section 431:14-117."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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