Motor Vehicle Insurance

Requires insurer to provide immediate notification of
cancellation or nonrenewal of motor vehicle insurance policy to
insured, county motor vehicle licensing division, and county law

THE SENATE                              S.B. NO.           881
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  In an effort to make government more responsive
 2 to insured motorists, the legislature finds there must be a
 3 system of notification that will provide law enforcement with the
 4 ability to keep uninsured drivers off our streets and highways.
 5 Therefore, the legislature finds it necessary to mandate that an
 6 insurer, upon cancellation or nonrenewal of motor vehicle
 7 insurance, immediately notify the insured, the county motor
 8 vehicle licensing division, and county law enforcement.
 9      SECTION 2.  Section 431:10C-111, Hawaii Revised Statutes, is
10 amended to read as follows:
11      "431:10C-111  Cancellation and nonrenewal of policies:
12 when prohibited, when permitted[.]; notification.  (a)  An
13 insurer may not cancel or refuse to renew a motor vehicle
14 insurance policy, including required optional additional
15 insurance meeting section 431:10C-302, once issued except when:
16      (1)  The license of the principal operator to operate the
17           type of motor vehicle is suspended or revoked;
18      (2)  Premium payments for the policy are not made after
19           reasonable demand therefor; or

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                                     S.B. NO.           881

 1      (3)  The nonrenewal or conditional renewal is limited in
 2           accordance with section 431:10C-111.5.
 3      (b)  An insurer may refuse to renew optional additional
 4 coverage in excess of that which the insurer is required to make
 5 available to the insured under section 431:10C-302 where the
 6 insured is a member of a class set forth in section
 7 431:10C-407(b)(1)(A) or (B) at the time of the refusal to renew.
 8      (c)  No insurer shall refuse to continue a motor vehicle
 9 insurance policy based solely upon a person's race, creed, ethnic
10 extraction, age, sex, length of driving experience, marital
11 status, residence, physical handicap, or because an insured has
12 elected to obtain any required or optional coverage or deductible
13 required by law.  If an insured alleges that the insurer's
14 refusal to continue the motor vehicle insurance policy is based
15 solely upon the insured's race, creed, ethnic extraction, age,
16 sex, length of driving experience, marital status, residence,
17 physical handicap, or because the insured has elected to obtain
18 any required or optional coverage or deductible provided by law,
19 the burden of proof shall rest with the insurer to prove that the
20 refusal to continue the policy was not based on noncompliance
21 with this subsection.
22      (d)  In any case of cancellation or refusal to renew, the
23 insurer shall continue all motor vehicle insurance and optional
24 additional coverages in force, to the date of expiration or for

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                                     S.B. NO.           881

 1 thirty days following notice, whichever date occurs first.
 2      (e)  An insurer may also refuse to renew motor vehicle
 3 insurance policies:
 4      (1)  If the commissioner determines that the financial
 5           soundness of the insurer would be impaired by the
 6           writing of additional policies of insurance; or
 7      (2)  The insurer ceases to write any new policies of
 8           insurance of any kind in this State.
 9      (f)  Within fifteen days of a cancellation and the return of
10 the motor vehicle insurance identification card or a signed
11 affidavit stating the card was lost or stolen, the insurer shall
12 refund the pro rata unearned portion, if any, of any prepaid
13 premiums.  Premiums shall be considered "earned" as provided in
14 section 431:10C-109.
15      (g)  Immediately upon the cancellation or nonrenewal of a
16 motor vehicle insurance policy, the insurer shall provide
17 notification thereof to the insured, the motor vehicle licensing
18 division, and law enforcement agencies in the county in which the
19 insured resides.  Notification may be made via computer."
20      SECTION 3.  Statutory material to be repealed is bracketed.
21 New statutory material is underscored.
22      SECTION 4.  This Act shall take effect upon its approval.
24                           INTRODUCED BY:  _______________________