THE SENATE |
S.B. NO. |
1098 |
THIRTY-FIRST LEGISLATURE, 2021 |
S.D. 1 |
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STATE OF HAWAII |
H.D. 1 |
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C.D. 1 |
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A BILL FOR AN ACT
RELATING TO THE REGULATORY AUTHORITY OF THE INSURANCE COMMISSIONER.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 431:7-101, Hawaii Revised Statutes, is amended to read as follows:
"§431:7-101 Fees. (a) The commissioner shall collect, in advance, the following fees:
(1) Certificate of authority:
(A) Application for certificate of authority ....$900
(B) Issuance of certificate of authority ........$600
(C) Application for motor vehicle self-insurance .... .............................................$300
(2) Organization of domestic insurers and affiliated corporations:
(A) Application for solicitation permit .......$1,500
(B) Issuance of solicitation permit .............$150
(3) [Producer's] Resident producer's
license:
(A) Issuance of regular license ..................$50
(B) Issuance of temporary license ................$50
(4) Nonresident producer's license: Issuance .........$75
(5) Independent adjuster's license: Issuance .........$75
(6) Public adjuster's license: Issuance ..............$75
(7) Claims adjuster's limited license: Issuance ......$75
(8) Administrator's license: Issuance ...............$150
(9) Independent bill reviewer's license: Issuance ....$80
(10) Limited producer's license: Issuance .............$60
(11) Managing general agent's license: Issuance .......$75
(12) Reinsurance intermediary's license: Issuance .....$75
(13) Surplus lines broker's license: Issuance ........$150
(14) Pharmacy benefit manager's registration: Issuance ...
..................................................$140
[(14)] (15) Service contract provider's registration:
Issuance ..........................................$75
[(15)] (16) Approved course provider certificate:
Issuance .........................................$100
[(16)] (17) Approved continuing education course
certificate: Issuance ............................$30
[(17)] (18) Vehicle protection product warrantor's
registration: Issuance ...........................$75
[(18)] (19) Criminal history record check; fingerprinting:
For each criminal history record check and fingerprinting check, a fee to be
established by the commissioner.
[(19)] (20) Limited line motor vehicle rental company
producer's license: Issuance ..................$1,000
(21) Limited lines portable electronics
producer's
license:
Issuance .............................$5,000
(22) Limited lines self-service storage
producer's license:
Issuance .........................................$60
[(20)] (23) Legal service plan certificate of authority:
Issuance before July 1, 2014 ...................$1,000
Issuance on or after July 1, 2014 ................$500
[(21)] (24) Life settlement provider's license:
Issuance before July 1, 2014 .....................$150
Issuance on or after July 1, 2014 .................$75
[(22)] (25) Life settlement broker's license:
Issuance before July 1, 2014 .....................$150
Issuance on or after July 1, 2014 .................$75
[(23)] (26) Examination for license: For each examination, a fee to be established
by the commissioner.
(b) The fees for services of the department of commerce and consumer affairs subsequent to the issuance of a certificate of authority, license, registration, 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) $50 per year for all services (including extension of the license) for a regularly licensed resident producer;
(3) $75 per year for all services (including extension of the license) for a regularly licensed nonresident producer;
(4) $45 per year for all services (including extension of the license) for a regularly licensed independent adjuster;
(5) $45 per year for all services (including extension of the license) for a regularly licensed public adjuster;
(6) $45 per year for all services (including extension of the license) for a claims adjuster's limited license;
(7) $150 per year for all services (including extension of the license) for an administrator's license;
(8) $60 per year for all services (including extension of the license) for a regularly licensed independent bill reviewer;
(9) $45 per year for all services (including extension of the license) for a producer's limited license;
(10) $75 per year for all services (including extension of the license) for a regularly licensed managing general agent;
(11) $75 per year for all services (including extension of the license) for a regularly licensed reinsurance intermediary;
(12) $45 per year for all services (including extension of the license) for a licensed surplus lines broker;
(13) $140 per year for all services
(including renewal of registration) for a pharmacy benefit manager;
[(13)] (14) $75 per year for all services (including
renewal of registration) for a service contract provider;
[(14)] (15) $65 per year for all services (including
extension of the certificate) for an approved course provider;
[(15)] (16) $20 per year for all services (including
extension of the certificate) for an approved continuing education course;
[(16)] (17) $75 per year for all services (including
renewal of registration) for a vehicle protection product warrantor;
[(17)] (18) A fee to be established by the commissioner
for each criminal history record check and fingerprinting;
[(18)] (19) $600 per year for all services (including extension
of the license) for a regularly licensed limited line motor vehicle rental company
producer;
(20) $2,500 per
year for all services (including extension of the license) for a regularly
licensed limited lines portable electronics producer;
(21) $45 per year
for all services (including extension of the license) for a regularly licensed
limited lines self-service storage producer;
[(19)] (22) $1,000 per year for all services provided
before July 1, 2014, (including extension of the certificate) for an authorized
legal service plan;
[(20)] (23) $500 per year for all services provided on or
after July 1, 2014, (including extension of the certificate) for an authorized
legal service plan;
[(21)] (24) $1,200 per year for all services (including
extension of the license) for a regularly licensed life settlement provider; and
[(22)] (25) $150 per year for all services (including
extension of the license) for a regularly licensed life settlement broker.
The services
referred to in paragraphs (1) to [(22)] (25) 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.
(c)
The commissioner shall notify the holder
of a certificate of authority issued under article 3 by written notice at least
thirty days prior to the extension date of the certificate of authority[,
license,] or other certificate. The
annual fee for all services shall be due and payable by electronic payment via
the National Association of Insurance Commissioners' Online Premium Tax for
Insurance or an equivalent service approved by the commissioner. If the fee is not paid before or on the
extension date, the fee shall be increased by a penalty in the amount of fifty per
cent of the fee. The commissioner shall
provide notice in writing of the delinquency of extension and the imposition of
the authorized penalty. If the fee and
the penalty are not paid within thirty days immediately following the date of notice
of delinquency, the commissioner may revoke, suspend, or inactivate the
certificate of authority[, license,] or other certificate, and may not
reissue, remove the suspension of, or reactivate the certificate of authority[,
license,] or other certificate until the fee and penalty have been paid.
(d) The commissioner shall
notify licensees and registrants by written notice at least thirty days prior
to the extension date of the license or registration. If the fee is not paid before or on the renewal
date for a license or registration, the fee shall be increased by a penalty in
the amount of double the unpaid renewal fee.
[(d)]
(e) Failure to pay the fee before
or on the renewal or extension date for a license, registration,
or other certificate [issued under article 9 or 9A] shall cause the
automatic inactivation of the license, registration, or other
certificate [effective as of the extension date].
[(e)]
(f) All fees and penalties are
nonrefundable and shall be deposited to the credit of the compliance resolution
fund."
SECTION 2. Section 431:8-102, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "business entity" to read:
""Business
entity" means an association, corporation, [individual,] limited
liability company, limited liability partnership, partnership, [person,]
or other legal entity."
2. By amending the definition of "individual" to read:
""Individual"
means a natural person [or a business entity]."
SECTION 3. Section 431:8-310, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) A surplus lines broker license shall be inactivated if the licensee fails to pay any required fee or penalty. A surplus lines broker who allows the surplus lines broker's license to become inactive for nonpayment of the renewal fee may reinstate that license without the necessity of a written examination; provided that the surplus lines broker:
(1) Pays the fee and a penalty in the
amount of [fifty per cent of] double the [then unpaid] then-unpaid
fees within [twenty-four] twelve months from the inactivation date;
and
(2) Is in compliance with all the requirements of chapter 431.
[The
license shall automatically expire if the surplus lines broker does not
reinstate the surplus lines broker's license within the twenty-four month
period.]"
SECTION 4. Section 431:8-327, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) To qualify for a license renewal, a licensee shall:
(1) [During the twenty-four months preceding]
Preceding a license renewal, complete the required number of credit hours
specified in subsection (b) in approved continuing education courses; and
(2) Pay the fees as required under section 431:7-101."
2. By amending subsection (h) to read:
"(h)
A licensee need not retake the surplus
lines broker license examination; provided that all renewal requirements
in this section are met or reactivation occurs within [two years] twelve
months of the date of inactivation."
SECTION
5. Section 431:9-206, Hawaii Revised
Statutes, is amended to read as follows:
"§431:9-206 Examinations for license. [(a)
Each] Prior to the issuance of the license, each applicant
for license as an adjuster or independent bill reviewer shall [prior to the
issuance of any such license,] personally take and pass to the satisfaction
of the commissioner an examination given by the commissioner as a test of the
applicant's qualifications and competence.
[(b)
This requirement shall not apply to
applicants who at any time within the three-year period next preceding date of
application held a license in this State which conferred powers comparable to
those being applied for.
(c)
Applicants who held a license on
December 31, 1987, shall not, for the purpose of qualifying for the issuance or
extension of such license after January 1, 1988, be required to take an
examination.]"
SECTION 6. Section 431:9-232, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) Prior to the renewal
or extension of a license, each licensee shall [annually] pay the
fee required in section 431:7‑101.
(b) A license for an adjuster or independent bill reviewer shall be inactivated if a licensee fails to pay any required fees or penalties.
An adjuster or independent bill reviewer who allows the adjuster's or independent bill reviewer's license to become inactive for nonpayment of the renewal fee may reinstate that license without the necessity of a written examination; provided that the adjuster or independent bill reviewer:
(1) Pays the fee and a penalty in the
amount of [fifty per cent of] double the [then unpaid]
then-unpaid fees within [twenty-four] twelve months from
the inactivation date; and
(2) Is in compliance with all the requirements of chapter 431.
[The
license shall automatically expire if the adjuster or independent bill reviewer
does not reinstate the license within the twenty-four-month period.]"
SECTION 7. Section 431:9A-102, Hawaii Revised Statutes,
is amended as follows:
1. By
amending the definition of "business entity" to read:
""Business entity" means an association,
corporation, [individual,] limited liability company, limited liability
partnership, partnership, [person,] or other legal entity."
2. By
amending the definition of "individual" to read:
""Individual" means a natural person [or
a business entity]."
SECTION 8.
Section 431:9A-106, Hawaii Revised Statutes, is amended by amending
subsection (a) to read as follows:
"(a) A person applying for an insurance producer license shall make application to the commissioner on the uniform application and declare under penalty of denial, suspension, or revocation of the license that the statements made in the application are true, accurate, and complete to the best of the applicant's knowledge and belief. Before approving the application, the commissioner shall find that the applicant:
(1) Is at least eighteen years of age;
(2) Has not committed any act that is a ground for a licensure sanction set forth in section 431:9A-112;
(3) Has paid the applicable fees set forth in section 431:7-101;
(4) Has passed, within the two years
immediately preceding the [date of the examination or] issuance of the
license, [whichever is later,] the applicable examination for each line
of authority for which the applicant has applied; and
(5) Has submitted a full set of
fingerprints, including a scanned file from a hard copy fingerprint, for the
commissioner to obtain and receive national and state criminal history [[]record[]]
checks from the Federal Bureau of Investigation and the Hawaii criminal justice
data center, pursuant to section 846-2.7."
SECTION 9. Section 431:9A-107, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c)
An insurance producer who allows the
producer's license to become inactive for nonpayment of the renewal fee may
reinstate that license without the necessity of passing a written examination,
if the fee payable and a penalty in the amount of [fifty per cent of then unpaid]
double the then-unpaid renewal fees are paid within [twenty-four]
twelve months from the inactivation date and the producer is in
compliance with all the requirements of chapter 431. [If the license is not reinstated within
the twenty-four-month period, the license shall automatically expire.]"
SECTION 10. Section 431:9A-124, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) To qualify for a license renewal, a licensee shall:
(1) [During the twenty-four months
preceding] Preceding a license renewal, complete the required number
of credit hours as set forth in subsection (b) in approved continuing education
courses; and
(2) Pay the fees as required under section 431:7‑101."
2. By amending subsection (h) to read:
"(h)
A licensee need not retake the producer
license examination; provided that renewal requirements in this section
are met or reactivation occurs within [two years] twelve months
of the date of inactivation."
SECTION 11. Section 431:9A-176, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e)
Each owner licensed under this part
shall pay to the commissioner the limited lines producer's [application fee
and license] fee pursuant to section 431:7-101."
SECTION 12. Section 431:9B-102, Hawaii Revised Statutes, is amended by amending subsections (a) through (f) to read as follows:
"(a) [Persons,
firms, associations, and corporations acting as a reinsurance
intermediary-broker in this State shall maintain a license as a reinsurance
intermediary-broker in this State. The
reinsurance intermediary-broker shall maintain a license in every state where
it maintains an office, either directly, as a member or employee of a firm or
association, or as an officer, director, or employee of a corporation.] No person, firm, association, or corporation shall act
as a reinsurance intermediary-broker in this State if the reinsurance
intermediary-broker maintains an office either directly or as a member or
employee of a firm or association, or as an officer, director, or employee of a
corporation:
(1) In
this State, unless the reinsurance intermediary‑broker is a licensed
producer or reinsurance intermediary in this State; or
(2) In
another state, unless the reinsurance intermediary‑broker is a licensed
producer in this State or another state having a law substantially similar to
this article.
(b) [Persons, firms, associations, and
corporations acting as a reinsurance intermediary-manager for a reinsurer
domiciled in this State shall maintain a license as a reinsurance
intermediary-manager in this State. A
reinsurance intermediary-manager license shall be required to act as a
reinsurance intermediary-manager in this State for a nondomestic reinsurer.]
No person, firm, association, or corporation shall act as a reinsurance
intermediary-manager in this State unless:
(1) In the case of a reinsurer domiciled
in this State, the reinsurance intermediary-manager is a licensed producer in
this State; or
(2) The reinsurance intermediary-manager
maintains an office either directly or as a member or employee of a firm or
association, or as an officer, director, or employee of a corporation in this
State, and is a licensed producer or reinsurance intermediary in this State.
(c) The commissioner may require a reinsurance intermediary-manager subject to subsection (b) to:
(1) File a bond from an insurance company licensed to do business within the State or with an insurance company approved by the commissioner, in an amount equal to $500,000 or ten per cent of the annual reinsurance premiums managed by the reinsurance intermediary‑manager, whichever is greater, except that the bond amount under this paragraph shall not exceed $10,000,000, for the protection of the reinsurer;
(2) Maintain an errors and omissions policy[,]
with an insurance company licensed to do business within the State or with an
insurance company approved by the commissioner, in an amount equal to $250,000 or
twenty-five per cent of the annual reinsurance premiums managed by the
reinsurance intermediary‑manager, whichever is greater, except that the
policy limits under this paragraph shall not exceed $10,000,000; and
(3) Provide any other report required by the commissioner.
At the
commissioner's request, the reinsurance intermediary‑manager shall
provide the commissioner with proof of the bond and [the] policy[,]
and appropriate documentation to show that the bond and [the] policy
continue to be in effect, or that a new bond and [a] new policy
have been secured.
(d)(1) The commissioner may issue a
reinsurance intermediary license to any person, firm, association, or
corporation that has complied with the requirements of this article. Any [such] reinsurance intermediary
license issued to a firm or an association shall authorize all the
members of that firm or association and any designated employees to act as reinsurance
intermediaries under the license, and all those persons shall be named in the
application and any supplements thereto. Any [such] reinsurance intermediary
license issued to a corporation shall authorize all of the officers, and any
designated employees and directors thereof, to act as reinsurance
intermediaries on behalf of the corporation, and all those persons shall be
named in the application and any supplements thereto.
(2) If the applicant for a reinsurance
intermediary license is a nonresident, the applicant, as a condition precedent
to receiving or holding a license, shall designate the commissioner as agent
for service of process in the manner[,] and with the same legal effect[,]
provided for by this article for service of process upon unauthorized insurers[;
and]. The applicant also shall
furnish the commissioner with the name and address of a resident of this State
upon whom notices or orders of the commissioner or process affecting the
nonresident reinsurance intermediary may be served. The licensee shall promptly notify the
commissioner in writing of every change in its designated agent for service of
process, and [such] the change shall not become effective until
acknowledged by the commissioner.
(3) The commissioner shall issue a nonresident reinsurance intermediary license if:
(A) The applicant is currently licensed as a resident reinsurance intermediary or an insurance producer pursuant to article 9A and in good standing in the applicant's home state;
(B) The applicant has submitted the proper request for licensure and paid the fees required by section 431:7-101;
(C) The applicant has submitted or
transmitted to the commissioner the application for licensure that the
applicant submitted to the applicant's home state[,] or, in lieu
of the same, a completed uniform application; and
(D) The person's home state awards nonresident licenses to residents of this State on the same basis.
(e)
The commissioner may refuse to issue a
reinsurance intermediary license if, in the commissioner's judgment, the
applicant, anyone named on the application, or any member, principal, officer,
or director of the applicant, is not trustworthy, or that any controlling
person of the applicant is not trustworthy to act as a reinsurance
intermediary, or that any of the foregoing has given cause for revocation or
suspension of [such] the license, or has failed to comply with
any prerequisite for the issuance of the license. Upon written request therefor, the
commissioner shall furnish a summary of the basis for refusal to issue a license,
which document shall be privileged and not subject to disclosure pursuant to
chapter 92F.
(f) Licensed attorneys at law of this State, when acting in their professional capacity as such, shall be exempt from this section."
SECTION 13. Section 431:9J-102, Hawaii Revised Statutes,
is amended by amending subsection (f) to read as follows:
"(f) The license shall be renewable or extendable
biennially. [The renewal or extension
date for a license issued to a natural person shall be the sixteenth day of the
licensee's birth month. The renewal or
extension date for a license issued to an artificial person shall be the sixteenth
day of April for a nonresident licensee, and the sixteenth day of July for a
resident licensee.] The license
shall remain in effect so long as the fees set forth in section 431:7-101 are
paid."
SECTION 14. Section 431:31-107, Hawaii Revised Statutes,
is amended to read as follows:
"§431:31-107 Application for license and fees. (a) A sworn application for a license under this
article shall be filed with the commissioner on forms prescribed and furnished
by the commissioner.
(b) The application for a license shall provide the:
(1) Name, residence address, [electronic-mail]
electronic mail address, and other information required by the commissioner
for an employee or officer of the vendor that is designated by the applicant as
the person responsible for the vendor's compliance with the requirements of
this article; provided that[,] if the vendor derives more than fifty per
cent of its revenue from the sale of portable electronics insurance, the
information in this paragraph shall be provided for all officers, directors,
and shareholders of record having beneficial ownership of ten per cent or more
of any class of securities registered under the federal securities law; and
(2) Location of the applicant's home office.
(c)
Any vendor engaging in portable
electronics insurance transactions on or before [[]January 1, 2013,[]]
shall apply for licensure within ninety days of the application's being made
available by the commissioner. Any
applicant commencing operations after [[]January 1, 2013,[]] shall
obtain a license prior to offering portable electronics insurance.
(d)
[Initial licenses issued pursuant to
this article shall be valid for a period of not less than twenty-four months. Renewed licenses shall be valid for a period
of twenty-four months.] The license shall be renewable biennially. Licensing fees shall be governed by section
431:7-101.
[(e) Each vendor
licensed under this article shall pay to the commissioner a fee of $5,000 for
the issuance of the initial portable electronics limited lines license, plus a
license fee of $2,500 per year for the initial or renewal term. A pro rata portion of the license fee may be
applied for a partial year of the initial term.]"
SECTION 15. Statutory
material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 16. This Act shall take effect on January 1, 2022.
Report Title:
Producer; Adjuster; Independent Licensing; Reinsurance; Licensing; National Association of Insurance Commissioners; Fees; Applications; Certificates; Registrations; Renewals
Description:
Adopts certain provisions of the National Association of Insurance Commissioners' Producer Licensing Model Act, Public Adjuster Licensing Model Act, Reinsurance Intermediary Model Act, and Independent Adjuster Licensing Model Guidelines to provide consistency and promote efficiency in processing insurance licensing fees, applications, certificates, registrations, and renewals. Effective 1/1/2022. (CD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.