§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]



 



Case Notes



 



  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.



  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.



  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.



  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.