Report Title:

Motor Vehicle Insurance; Cancellations; Nonrenewals

Description:

Shortens from 30 days to 15 days both the length of time that a motor vehicle insurer must continue coverage after the insurer cancels a motor vehicle insurance policy and the notice period that the insurer must provide an insured before the insurer may cancel the policy. Specifies that cancellations are for nonpayments of premiums.

HOUSE OF REPRESENTATIVES

H.B. NO.

1820

TWENTY-SECOND LEGISLATURE, 2004

 

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-111, Hawaii Revised Statutes, is amended to read as follows:

"431:10C-111 Cancellation and nonrenewal of policies: when prohibited, when permitted. (a) An insurer may not cancel or refuse to renew a motor vehicle insurance policy, including required optional additional insurance meeting section 431:10C-302, once issued except when:

(1) The license of the principal operator to operate the type of motor vehicle is suspended or revoked;

(2) Premium payments for the policy are not made after reasonable demand therefor; or

(3) The nonrenewal or conditional renewal is limited in accordance with section 431:10C-111.5.

(b) An insurer may refuse to renew optional additional coverage in excess of that which the insurer is required to make available to the insured under section 431:10C-302 where the insured is a member of a class set forth in section 431:10C-407(b)(1)(A) or (B) at the time of the refusal to renew.

(c) No insurer shall refuse to continue a motor vehicle insurance policy based solely upon a person's race, creed, ethnic extraction, age, sex, length of driving experience, marital status, residence, physical handicap, or because an insured has elected to obtain any required or optional coverage or deductible required by law. If an insured alleges that the insurer's refusal to continue the motor vehicle insurance policy is based solely upon the insured's race, creed, ethnic extraction, age, sex, length of driving experience, marital status, residence, physical handicap, or because the insured has elected to obtain any required or optional coverage or deductible provided by law, the burden of proof shall rest with the insurer to prove that the refusal to continue the policy was not based on noncompliance with this subsection.

(d) In any case of cancellation [or refusal to renew,] for nonpayment of premium, the insurer shall continue all motor vehicle insurance and optional additional coverages in force, to the date of expiration or for [thirty] fifteen days following notice, whichever date occurs first.

(e) In any case of refusal to renew, the insurer shall continue all motor vehicle insurance, and optional additional coverages in force, to the date of expiration or for thirty days following notice, whichever date occurs first.

[(e)] (f) An insurer may also refuse to renew motor vehicle insurance policies:

(1) If the commissioner determines that the financial soundness of the insurer would be impaired by the writing of additional policies of insurance; or

(2) The insurer ceases to write any new policies of insurance of any kind in this State.

[(f)] (g) Within fifteen days of a cancellation and the return of the motor vehicle insurance identification card or a signed affidavit stating the card was lost or stolen, the insurer shall refund the pro rata unearned portion, if any, of any prepaid premiums. Premiums shall be considered "earned" as provided in section 431:10C-109."

SECTION 2. Section 431:10C-112, Hawaii Revised Statutes, is amended to read as follows:

"431:10C-112 Notice of cancellation or [non-renewal;] nonrenewal effect on term of coverage. (a) In any case of cancellation [or refusal to renew,] for nonpayment of premium, the insurer shall give written notice to the insured not less than [thirty] fifteen days prior to the effective date of the cancellation [or refusal to renew]. Cancellation [or refusal to renew] shall not be deemed valid unless supported by a certificate of mailing properly validated by the United States Postal Service.

(b) In any case of refusal to renew, the insurer shall give written notice to the insured not less than thirty days prior to the effective date of the refusal to renew. Refusal to renew shall not be deemed valid unless supported by a certificate of mailing properly validated by the United States Postal Service.

[(b)] (c) If the insurer has manifested in writing an offer to renew to the named insured at least thirty days prior to the end of the policy period and the offer is not accepted before the expiration of the policy term, the policy shall lapse upon that expiration date and section 431:10C-111 shall not apply. Notwithstanding other valid methods of acceptance, an offer shall be deemed accepted as of the date of mailing of the acceptance. The date of mailing may be evidenced by the postmark or a certificate of mailing properly validated by the United States Postal Service."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2004.

INTRODUCED BY:

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