Report Title:

Motor Vehicle Insurance; Cancellation; Civil Sanctions

 

Description:

Prohibits the return of unearned premiums after cancellation of a motor vehicle insurance policy unless the insured provides proof of alternate coverage or proof of transfer of title, theft of the vehicle, or inoperability of the vehicle.

 

THE SENATE

S.B. NO.

1216

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to motor vehicle insurance.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Section 431:10C-109, Hawaii Revised Statutes, is amended to read as follows:

     "§431:10C-109  Motor vehicle insurance identification card after cancellation of policy; return to insurer, civil sanctions.  (a)  When a motor vehicle insurance policy is canceled before the end of the policy period, the insured shall, within thirty days after being notified of the cancellation:

     (1)  Return the motor vehicle insurance identification card to the insurer for the policy; or

     (2)  If the card is lost or stolen, submit to the insurer an affidavit signed by the insured stating that fact to the insurer.

     (b)  The insurer's notice of cancellation shall include:

     (1)  The reason for the cancellation; and

     (2)  A statement of actions which may be taken under this section if the card is not returned.

     (c)  If the card or affidavit is not returned within the period specified, the insurer may:

     (1)  If the premiums for the period shown on the motor vehicle insurance identification card have been prepaid, withhold the unearned portions of the premiums until the identification card or an affidavit signed by the insured has been returned.  In addition, all premiums shall be considered "earned" until the card is returned.

     (2)  If the premiums for the period shown on the identification card have not been paid in full, bring a civil action for three times the unpaid portion of the premiums.  Notwithstanding section 607-14, the insurer shall be awarded reasonable attorney's fees and court costs.  If the motor vehicle insurance identification card is returned after the civil action is filed but before the matter is taken to trial, the insurer shall be awarded damages of not less than $100, but not more than the amount of the unpaid premiums together with reasonable attorney's fees and costs as provided in this section.

 

     (d)  When a motor vehicle insurance policy is canceled by the insured before the end of the policy period, in addition to the requirements of subsection (a), the insured shall, within seven days of the cancellation:

     (1)  Submit proof to the insurer that the insured has obtained alternate motor vehicle insurance coverage for any vehicles covered under the policy;

     (2)  Submit proof to the insurer that title of the vehicle covered under the policy has been transferred from the insured;

     (3)  Submit a police report to the insurer reporting the theft of the vehicle; or

     (4)  Submit proof that the vehicle has been rendered inoperable.

     (e)  If the proof of alternate insurance, transfer of title, or vehicle inoperability required under subsection (b) is not submitted to the insurer, the insurer shall not return any portion of the unearned premium.

     [(d)] (f)  Notwithstanding the provisions of this section, the imposition of criminal sanctions under section 431:10C-117 shall not be precluded."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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