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SB2952
THE SENATE
S.B. NO.
2952
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to insurance
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that insurers operating
in the State are required to submit rate change proposals to the Hawaii insurance
division for approval before implementation, ensuring compliance with insurance
laws and protecting policyholders from rates that are excessive, inadequate, or
unfairly discriminatory.
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However, there
is a lack of explicit requirements for insurers to provide direct notice to
individual policyholders regarding rate changes, which can leave consumers
uninformed about adjustments that may affect their coverage and financial
planning.
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To enhance consumer protection and
transparency, the legislature finds that it is essential to require that
insurers provide direct written notice to policyholders about rate increases or
significant policy changes, in addition to notifying the insurance commissioner.
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This direct communication ensures that
policyholders are adequately informed and can make timely decisions regarding
their insurance needs.
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The legislature
also finds that several states have implemented regulations requiring insurers
to notify policyholders directly of rate changes, like New Jersey, which
requires insurers proposing an average rate increase to send notices directly
to policyholders, and Washington, where insurers must provide notice of premium
changes at least twenty days before renewing a policy with a ten per cent or
greater increase.
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Implementing a similar
requirement in Hawaii would align with these best practices, fostering
transparency and accountability in the insurance industry.
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By ensuring that policyholders receive direct
and timely notifications of rate changes, consumers are empowered to make
informed decisions, seek alternative coverage if necessary, and better manage
their financial planning.
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Therefore, the
legislature emphasizes the importance of direct communication between insurers
and policyholders, advocating for mandatory direct written notices of rate
changes to enhance consumer protection and promote fairness in the insurance
market.
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Accordingly, the purpose of this Act is to
require certain insurers to notify policyholders of rate changes at least sixty
days before the effective date of the rate change.
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SECTION 2.
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Chapter 431, Hawaii Revised Statutes, is
amended by adding a new section to article 14, part I, to be appropriately
designated and to read as follows:
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�431:14-
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Rate changes;
notification to policyholders.
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(a)
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Beginning January 1, 2027, insurers shall
notify affected policyholders in writing of any rate changes approved by the
commissioner under section 431:14-104.
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(b)
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The notification shall include:
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(1)
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A clear statement of the new rate
and its effective date;
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(2)
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The percentage increase or decrease
in the rate compared to the prior period;
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(3)
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A brief explanation of the reasons
for the rate change, including relevant factors such as claims experience,
inflation, or other actuarial considerations; and
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(4)
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Information on how policyholders can
contact the insurer or the Hawaii insurance division regarding questions or
concerns about the rate change.
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(c)
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The notification shall be sent at least sixty
days before the effective date of the rate change.
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(d)
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Notification may be sent via mail to the last
known address of the policyholder or electronically if the policyholder has
consented to electronic communications.
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(e)
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Failure to comply with this subsection
shall result in administrative penalties as prescribed under section 431:2-203,
including fines or corrective actions as determined by the commissioner.
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SECTION 3.
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New statutory material is underscored.
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SECTION 4.
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This Act shall take effect on July 1, 2026.
INTRODUCED BY:
_____________________________
Report Title:
Insurance;
Rate Changes; Notice
Description:
Beginning
1/1/2027, requires certain insurers to notify policyholders of rate changes at
least 60 days before the effective date of the rate change.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.