Report Title:

Hawaii Employers' Mutual Insurance Company; Insurance Pool

Description:

Creates an insurance pool for small businesses by authorizing the Hawaii Employers' Mutual Insurance Company to cover general liability and property damage claims incurred by small businesses.

THE SENATE

S.B. NO.

901

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO INSURANCE.

 

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

SECTION 1. Section 431:14A-102, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Small business" means a business with twenty-five or fewer employees and gross annual income of less than $5,000,000."

SECTION 2. Section 431:14A-101, Hawaii Revised Statutes, is amended to read as follows:

"[[]§431:14A-101[]] Purpose. The Hawaii employers' mutual insurance company is established to provide workers' compensation coverage to employers of the State at the highest level of service with the lowest possible cost, consistent with reasonable and applicable actuarial standards and the sound financial integrity of the company. The purposes of the company are to provide the highest standard of workplace safety and loss prevention, to encourage employer involvement, and to be responsive to each policyholder's experience, practice, and operating effectiveness. A further purpose of the company is to provide general liability and property damage insurance for small businesses in the State."

SECTION 3. Section 431:14A-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The Hawaii employers' mutual insurance company is established as an independent corporation to provide workers' compensation insurance and related services to Hawaii employers[.], and to provide general liability and property damage insurance coverage to small businesses. The company may be reorganized as a nonprofit corporation under chapter 414D."

SECTION 4. Section 431:14A-103, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The company shall be organized and operated as a domestic mutual insurance company. The company shall comply with, unless specifically excluded, all requirements of the insurance code regarding a domestic mutual insurance company. The company shall not be an agency of the State. The company or its liabilities shall not be deemed to constitute debts or liabilities of the State of Hawaii or pledges of the full faith and credit of the State. The company shall write workers' compensation insurance policies covering Hawaii employers as required or authorized by law and employers' liability to the same extent as any other private insurer. The company shall write general liability and property damage insurance policies for small businesses operating in the State to the same extent as any other private insurer. The company shall not write other lines of insurance, reinsurance, or excess insurance[.], except as otherwise authorized by this chapter."

SECTION 5. Section 431:14A-107, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Except as otherwise provided by law, the board may:

(1) Transact workers' compensation insurance policies required or authorized by state law to the same extent as any other insurer;

(2) Transact general liability and property damage insurance policies for small businesses in the State to the same extent as any other insurer;

[(2)] (3) Provide the terms and conditions of an insurance policy;

[(3)] (4) Provide that any written instrument be executed for the company by the administrator or the administrator's agent;

[(4)] (5) Enter into agreements to reinsure all or part of the company's exposure to loss and to limit the risk to the company; and

[(5)] (6) Employ persons to administer the company, including legal counsel, accountants, insurance consultants, administrators, qualified actuaries, investment managers, adjustors, other experts, and clerical employees and pay compensation and expenses in connection therewith."

SECTION 6. Section 431:14A-112, Hawaii Revised Statutes, is amended to read as follows:

"[[]§431:14A-112[]] Financial statements and other reports. (a) The company shall submit to the commissioner an annual statement of financial condition audited by an independent certified accountant. The audit report shall contain an actuarial opinion prepared by a qualified actuary on the company's claims reserves and expenses. The financial statement shall be on a form prescribed by the commissioner and shall include actuarially appropriate reserves for:

(1) Known claims and associated expenses;

(2) Claims incurred but not reported and associated expenses;

(3) Unearned premiums; and

(4) Bad debts, reserves for which shall be shown as liabilities.

(b) The company shall compile and maintain statistical and actuarial data relating to the determination of premium rate levels, the incidence of work-related injuries, the cost of injuries, and other data relating to work injuries. The compiled information shall be submitted annually to the commissioner and to the director of labor and industrial relations.

(c) The company shall compile and maintain statistical and actuarial data relating to the determination of premium rate levels, the incidence and cost of claims, and other data relating to general liability and property damage insurance offered under this chapter. The compiled information shall be submitted annually to the commissioner."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:

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