“Twisting” in insurance refers to the illegal practice of inducing a policyholder to drop an existing insurance policy and purchase a new one from another company, or even from the same company, to the detriment of the policyholder. This often involves misrepresentation or incomplete comparison of the policies. Hawaii Revised Statutes (HRS) § 431:13-103(a)(10) specifically prohibits misrepresentation in insurance applications or policies, and HRS § 431:13-103(a)(1) prohibits misrepresenting the terms of a policy. Engaging in twisting can lead to severe penalties, including license suspension or revocation under HRS § 431:9-232, monetary fines as outlined in HRS § 431:1-211, and potential criminal charges if the actions are deemed fraudulent. The key element is that the replacement must be demonstrably disadvantageous to the policyholder.

Hawaii Administrative Rules (HAR) § 18-2-20 outlines the continuing education (CE) requirements for licensed insurance producers. Producers must complete 24 credit hours of approved CE courses every two years to maintain their license. At least three of these hours must be in ethics. Acceptable courses include those related to insurance law, policy provisions, and industry practices. HAR § 18-2-21 specifies the process for course approval. Failure to comply with CE requirements can result in license suspension or revocation, as detailed in HAR § 18-2-22. Producers are responsible for tracking their CE credits and providing proof of completion to the Insurance Division upon request. The biennial renewal process also requires attestation of CE completion.

The Hawaii Life and Disability Guaranty Association, established under Hawaii Revised Statutes (HRS) Chapter 431:17, provides a safety net for policyholders in the event that a life or disability insurance company becomes insolvent. It covers direct life insurance policies, health insurance policies, annuity contracts, and supplemental contracts. However, it does not cover self-funded plans, certain unallocated annuity contracts, or policies issued by fraternal benefit societies. The Association’s coverage is subject to limitations, typically capped at $300,000 for life insurance death benefits and $100,000 for health insurance benefits, as outlined in HRS § 431:17-304. The Association is funded by assessments on solvent insurance companies operating in Hawaii, proportionate to their premiums received in the lines of business covered by the Association, as per HRS § 431:17-203.

To obtain an insurance producer license in Hawaii, applicants must meet several requirements outlined in Hawaii Revised Statutes (HRS) § 431:9-221 and Hawaii Administrative Rules (HAR) § 18-2-10. First, they must complete a pre-licensing education course approved by the Insurance Division, covering the specific lines of authority they seek. Second, they must pass the state licensing examination administered by a designated testing provider. The application process involves submitting a completed application form, providing proof of pre-licensing education, and paying the required fees. A background check, including fingerprinting, is also required. HRS § 431:9-221(b) specifies the information required on the application. Failure to meet any of these requirements will result in denial of the license.

Unfair discrimination in insurance refers to the practice of treating individuals or groups differently based on arbitrary or discriminatory factors, rather than on legitimate risk-based considerations. Hawaii Revised Statutes (HRS) § 431:13-103(a)(7) prohibits unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for life insurance or annuity contracts. Similarly, HRS § 431:10C-111 prohibits unfair discrimination in automobile insurance rates. Examples of unfairly discriminatory practices include charging different rates based solely on race, religion, or national origin, or refusing to insure someone based on their sexual orientation. Legitimate risk factors, such as driving record for auto insurance or health status for health insurance, are permissible bases for differential treatment, provided they are actuarially justified and applied consistently.

“Controlled business” refers to insurance written on the producer’s own life, health, or property, or on the lives, health, or property of the producer’s immediate family or business associates. Hawaii Revised Statutes (HRS) § 431:9-225 places limitations on the amount of premium a producer can derive from controlled business. Specifically, during any 12-month period, the aggregate commissions earned from controlled business cannot exceed 25% of the aggregate commissions earned on all business written by the producer during the same period. If a producer exceeds this limitation, their license may be suspended or revoked. The purpose of this regulation is to prevent producers from primarily using their license to obtain insurance for themselves and their close associates, rather than serving the general public. Accurate record-keeping is crucial for demonstrating compliance with this requirement.

Licensed insurance producers in Hawaii are required to notify the Insurance Division of any change in their residential address, business address, or legal name within 30 days of the change. This requirement is outlined in Hawaii Revised Statutes (HRS) § 431:9-223 and further detailed in Hawaii Administrative Rules (HAR). The notification must be submitted in a manner prescribed by the Insurance Commissioner, typically through an online portal or written notification. Failure to report these changes within the specified timeframe can result in administrative penalties, including fines or suspension of the producer’s license. Maintaining accurate and up-to-date contact information is essential for the Insurance Division to communicate important regulatory updates and licensing information to producers.

“Twisting” in insurance refers to the illegal practice of inducing a policyholder to drop an existing insurance policy and purchase a new one from the same or a different insurer, to the detriment of the policyholder. This often involves misrepresentation or incomplete comparison of the two policies. Hawaii Revised Statutes (HRS) addresses unfair methods of competition and unfair and deceptive acts or practices in the insurance industry. Engaging in twisting violates HRS § 431:13-103, which prohibits misrepresentation in insurance applications and policy comparisons. Penalties for twisting can include suspension or revocation of the producer’s license, fines levied by the Insurance Commissioner, and potential civil lawsuits from the affected policyholder. The severity of the penalty depends on the frequency and severity of the twisting incidents. Producers must ensure they provide accurate and complete information to clients, allowing them to make informed decisions without being misled into replacing policies unnecessarily.

Hawaii Administrative Rules (HAR) outlines the continuing education (CE) requirements for licensed insurance producers. Producers are generally required to complete a specific number of CE credit hours biennially to maintain their licenses. The exact number of hours varies depending on the license type. Courses must be approved by the Hawaii Insurance Division and cover relevant topics such as insurance law, ethics, product knowledge, and industry updates. HAR specifies the criteria for course approval and the process for reporting CE credits. Failure to meet the CE requirements by the license renewal date can result in the lapse of the insurance producer’s license. Producers may be given a grace period to complete the requirements, but penalties, such as late fees or license suspension, may apply. Reinstatement of a lapsed license often requires completing all outstanding CE credits and paying a reinstatement fee. Producers should proactively track their CE credits and ensure timely completion to avoid any disruption in their licensing status.

The Hawaii Life and Disability Guaranty Association, established under HRS Chapter 431D, provides a safety net for policyholders in the event that a life or disability insurance company becomes insolvent and is unable to meet its obligations. The Association covers life insurance policies, disability income policies, and annuity contracts issued by member insurers licensed in Hawaii. However, there are limitations on the coverage provided. The Guaranty Association typically covers a specified amount per insured person, per insurer, for each type of policy. These limits are defined in HRS Chapter 431D and are designed to protect a large number of policyholders while managing the financial risk to the Association. When an insurer becomes insolvent, the Guaranty Association steps in to either continue coverage by transferring the policies to a solvent insurer or by directly paying claims up to the statutory limits. This protection helps to maintain public confidence in the insurance industry and ensures that policyholders receive at least a portion of the benefits they were promised.

When a client files a complaint against an insurance producer in Hawaii, the producer has a responsibility to respond promptly and professionally. The producer should first attempt to resolve the complaint directly with the client, documenting all communication and actions taken. If the complaint cannot be resolved, the client may file a formal complaint with the Hawaii Insurance Division. The Insurance Division will investigate the complaint to determine if the producer violated any insurance laws or regulations, as outlined in HRS Chapter 431. The investigation may involve gathering information from the client, the producer, and any other relevant parties. If the Insurance Division finds that the complaint is substantiated, the producer may face disciplinary actions, including fines, suspension or revocation of their license, and required remedial education. The severity of the consequences depends on the nature and severity of the violation. Producers must maintain accurate records, act ethically, and comply with all applicable laws and regulations to minimize the risk of complaints and disciplinary actions.

“Controlled business” refers to insurance written on the producer’s own life, health, or property, or on the lives, health, or property of their immediate family or business associates. Hawaii Administrative Rules (HAR) places restrictions on the amount of controlled business an insurance producer can write to prevent them from primarily using their license to benefit themselves rather than serving the general public. The specific percentage of total premiums that can be derived from controlled business is defined in HAR. If a producer exceeds this limit, it may be considered a violation of insurance regulations and could result in disciplinary action, including suspension or revocation of their license. The purpose of these restrictions is to ensure that producers are primarily engaged in the business of serving the insurance needs of the public and are not using their license primarily for personal gain. Producers must carefully track their business to ensure compliance with these regulations.

Hawaii insurance regulations require producers to maintain accurate and complete records of all insurance transactions. These records must include, but are not limited to, applications, policies, premium payments, claims information, correspondence with clients, and any other documents related to insurance business. HRS Chapter 431 and related regulations specify the minimum length of time these records must be retained, typically several years. The purpose of these requirements is to ensure that there is a clear audit trail of all insurance transactions, which is essential for regulatory oversight, consumer protection, and dispute resolution. Failure to maintain adequate records can result in disciplinary action by the Hawaii Insurance Division, including fines, suspension or revocation of the producer’s license, and potential legal liability. Producers should establish and maintain a robust record-keeping system to ensure compliance with these requirements.

Hawaii insurance regulations place strict requirements on the advertising and marketing materials used by insurance producers. All advertising must be accurate, truthful, and not misleading. Producers must clearly and conspicuously disclose all relevant information, including policy limitations, exclusions, and any fees or charges. HRS § 431:13-103 specifically prohibits false or misleading advertising. In some cases, advertising materials may need to be approved by the insurer before they can be used. The Hawaii Insurance Division has the authority to review advertising materials and take action against producers who use misleading or deceptive advertising. Penalties for violating these regulations can include fines, cease and desist orders, suspension or revocation of the producer’s license, and potential civil lawsuits from consumers who have been harmed by the misleading advertising. Producers must ensure that all advertising materials comply with these regulations to avoid potential legal and regulatory consequences.