§431:2-215 Deposits to compliance resolution fund. (a) All assessments, fees, fines, penalties, and reimbursements collected by or on behalf of the insurance division under title 24, except for the commissioner's education and training fund (section 431:2-214), the patients' compensation fund (Act 232, Session Laws of Hawaii 1984), the drivers education fund underwriters fee (sections 431:10C-115 and 431:10G-107), and the captive insurance administrative fund (section 431:19-101.8) to the extent provided by section 431:19-101.8(b), shall be deposited into the compliance resolution fund under section 26-9(o). All sums transferred from the insurance division into the compliance resolution fund may be expended by the commissioner to carry out the commissioner's duties and obligations under title 24.
(b) Sums from the compliance resolution fund expended by the commissioner shall be used to defray any administrative costs, including personnel costs, associated with the programs of the division, and costs incurred by supporting offices and divisions. Any law to the contrary notwithstanding, the commissioner may use the moneys in the fund to employ or retain, by contract or otherwise, without regard to chapter 76, hearings officers, attorneys, investigators, accountants, examiners, and other necessary professional, technical, administrative, and support personnel to implement and carry out the purposes of title 24; provided that any position, except any attorney position, that was subject to chapter 76 prior to July 1, 1999, shall remain subject to chapter 76.
(c) Moneys deposited by the commissioner in the fund shall not revert to the general fund.
(d) The amount or amounts to be assessed for each line or type of insurance or entity regulated under title 24 shall be determined and assessed as provided below:
(1) The insurers or entities regulated under title 24 shall be provided at least sixty days notice of when their respective assessments are due;
(2) The total amount or amounts to be assessed of insurers or entities regulated under title 24 in all lines or types of insurance shall be calculated based on the commissioner's proposed fiscal year budget, less funds in the insurance regulation sub-account of the compliance resolution fund on June 30 of the fiscal year immediately preceding the fiscal year of the proposed budget and less the commissioner's anticipated revenues;
(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 that the total assessments for all lines or types of insurance in any one fiscal year shall not exceed $5,000,000.
(e) The commissioner may suspend an assessment of any insurer if the commissioner determines that an insurer or entity may reach insolvency or other financial difficulty if the assessment is made against that insurer or entity. [L 1999, c 163, §7; am L 2000, c 182, §5 and c 253, §150; am L 2002, c 39, §5; am L Sp 2005, c 1, §1; am L 2006, c 154, §1; am L 2009, c 77, §2]
Amounts assessed against insurers for payment into the insurance regulation fund under this section was a regulatory fee and not an unconstitutional tax where (1) the charges were assessed by the commissioner; (2) the assessments were placed into a special fund intended to reimburse the division for insurance industry regulating costs; and (3) moneys from the fund to pay for services provided by the departments of commerce and consumer affairs and budget and finance, and to buttress the division's reserve fund were "used for the regulation or benefit of the parties upon whom the assessment was imposed". 120 H. 51, 201 P.3d 564 (2008).
Where insurance commissioner imposed a substantial portion of the administrative cost of operating the insurance division and its supporting offices and divisions upon insurers pursuant to this section, and the insurance division's regulatory costs were necessitated by the business of insurers, this section did not violate the equal protection clauses of the Hawaii or U.S. Constitutions. 120 H. 51, 201 P.3d 564 (2008).
Where regulatory fees assessed against insurers by the insurance commissioner, an officer of the executive branch, for payment into the insurance regulation fund under this section were transferred by the legislature via transfer bills from the insurance division into the general fund, and the regulatory fees became available for general purposes as if derived from general tax revenues, the transfers violated the separation of powers doctrine under the Hawaii constitution, article VIII, §3, and §26-10(b). 120 H. 51, 201 P.3d 564 (2008).
Amounts assessed by the state insurance division against insurers for payment into the insurance regulation fund under this section did not violate the equal protection clauses of the state and federal constitutions where the regulatory fees were rationally related to the statutory objective of defraying any administrative costs and costs incurred by supporting offices and divisions. 117 H. 454 (App.), 184 P.3d 769 (2008).