§431:2-215  Deposits to complianceresolution fund.  (a)  All assessments, fees, fines, penalties, andreimbursements collected by or on behalf of the insurance division under title24, except for the commissioner's education and training fund (section 431:2-214),the patients' compensation fund (Act 232, Session Laws of Hawaii 1984), thedrivers education fund underwriters fee (sections 431:10C-115 and 431:10G-107),and the captive insurance administrative fund (section 431:19-101.8) to theextent provided by section 431:19-101.8(b), shall be deposited into thecompliance resolution fund under section 26-9(o).  All sums transferred fromthe insurance division into the compliance resolution fund may be expended bythe commissioner to carry out the commissioner's duties and obligations undertitle 24.

(b)  Sums from the compliance resolution fundexpended by the commissioner shall be used to defray any administrative costs,including personnel costs, associated with the programs of the division, andcosts incurred by supporting offices and divisions.  Any law to the contrarynotwithstanding, the commissioner may use the moneys in the fund to employ orretain, by contract or otherwise, without regard to chapter 76, hearingsofficers, attorneys, investigators, accountants, examiners, and other necessaryprofessional, technical, administrative, and support personnel to implement andcarry out the purposes of title 24; provided that any position, except anyattorney position, that was subject to chapter 76 prior to July 1, 1999, shallremain subject to chapter 76.

(c)  Moneys deposited by the commissioner inthe fund shall not revert to the general fund.

(d)  The amount or amounts to be assessed foreach line or type of insurance or entity regulated under title 24 shall bedetermined and assessed as provided below:

(1)  The insurers or entities regulated under title 24shall be provided at least sixty days notice of when their respectiveassessments are due;

(2)  The total amount or amounts to be assessed ofinsurers or entities regulated under title 24 in all lines or types ofinsurance shall be calculated based on the commissioner's proposed fiscal yearbudget, less funds in the insurance regulation sub-account of the complianceresolution fund on June 30 of the fiscal year immediately preceding the fiscalyear of the proposed budget and less the commissioner's anticipated revenues;

(3)  The assessments by line or type shall bear areasonable relationship to the costs of regulating the line or type ofinsurance, including any administrative costs of the division; and

(4)  The sum total of all assessments made andcollected shall not exceed the special fund ceiling or ceilings related to thefund that are established by the legislature; provided that the total assessmentsfor all lines or types of insurance in any one fiscal year shall not exceed$5,000,000.

(e)  The commissioner may suspend an assessmentof any insurer if the commissioner determines that an insurer or entity mayreach insolvency or other financial difficulty if the assessment is madeagainst that insurer or entity. [L 1999, c 163, §7; am L 2000, c 182, §5 and c253, §150; am L 2002, c 39, §5; am L Sp 2005, c 1, §1; am L 2006, c 154, §1; amL 2009, c 77, §2]

 

Case Notes

 

  Amounts assessed against insurers for payment intothe insurance regulation fund under this section was a regulatory fee and notan unconstitutional tax where (1) the charges were assessed by thecommissioner; (2) the assessments were placed into a special fund intended toreimburse the division for insurance industry regulating costs; and (3) moneysfrom the fund to pay for services provided by the departments of commerce andconsumer affairs and budget and finance, and to buttress the division's reservefund were "used for the regulation or benefit of the parties upon whom theassessment was imposed".  120 H. 51, 201 P.3d 564.

  Where insurance commissioner imposed a substantialportion of the administrative cost of operating the insurance division and itssupporting offices and divisions upon insurers pursuant to this section, andthe insurance division's regulatory costs were necessitated by the business ofinsurers, this section did not violate the equal protection clauses of theHawaii or U.S. Constitutions.  120 H. 51, 201 P.3d 564.

  Where regulatory fees assessed against insurers by theinsurance commissioner, an officer of the executive branch, for payment intothe insurance regulation fund under this section were transferred by thelegislature via transfer bills from the insurance division into the generalfund, and the regulatory fees became available for general purposes as ifderived from general tax revenues, the transfers violated the separation ofpowers doctrine under the Hawaii constitution, article VIII, §3, and §26-10(b). 120 H. 51, 201 P.3d 564.

  Amounts assessed by the state insurance division againstinsurers for payment into the insurance regulation fund under this section didnot violate the equal protection clauses of the state and federal constitutionswhere the regulatory fees were rationally related to the statutory objective ofdefraying any administrative costs and costs incurred by supporting offices anddivisions.  117 H. 454 (App.), 184 P.3d 769.