Security for payment of compensation; misdemeanor
HRS §386-121
in effect386-121. Security for payment of compensation; misdemeanor
(a) Employers, except the State, any county or political subdivision of the State, or other public entity within the State, shall secure compensation to their employees in one of the following ways:
(1) By insuring and keeping insured the payment of
compensation with any stock, mutual, reciprocal, or other insurer authorized to
transact the business of workers' compensation insurance in the State;
(2) By depositing and maintaining with the state
director of finance security satisfactory to the director of labor and
industrial relations securing the payment by the employer of compensation
according to the terms of this chapter;
(3) Upon furnishing satisfactory proof to the
director of the employer's solvency and financial ability to pay the
compensation and benefits herein provided, no insurance or security shall be
required, and the employer shall make payments directly to the employer's
employees, as they may become entitled to receive the same under the terms and
conditions of this chapter;
(4) An employer desiring to maintain security for
payment of compensation under this section shall file an application with the
director on a form provided for this purpose together with the employer's most
current audited annual financial statement;
(5) Where an applicant for self-insurance is a
subsidiary and the subsidiary cannot submit an independent current audited
annual financial statement, an indemnity agreement approved as to form and
content by the director shall be executed by the parent corporation of the
subsidiary and submitted with its application;
(6) Each self-insurance authorization shall be
effective from the date of issuance until June 30 of each calendar year;
(7) A notice of intention to cancel self-insurance
shall be submitted in writing to the director within at least thirty days prior
to the effective date of cancellation;
(8) A self-insurance authorization may be revoked by
the director for good cause shown upon notification in writing to the
self-insurer;
(9) By membership in a workers' compensation
self-insurance group with a valid certificate of approval under section
386-194; or
(10) By membership in a workers' compensation group
insured by a captive insurer under chapter 431, article 19.
Any person who wilfully misrepresents any fact
in order to obtain the benefits of paragraph (3) shall be guilty of a
misdemeanor.
(b) Any decision of the director rendered
under paragraphs (2) and (3) of subsection (a) of this section with respect to
the amount of security required or refusing to permit no security to be given
shall be subject to review on appeal in conformity with sections 386-87 and
386-88.
[L 1963, c 116, pt of §1; Supp, §97-120; HRS §386-121; am L 1975, c 41,
§1; gen ch 1985; am L 1986, c 304, §3; am L 1991, c 79, §1; am L Sp 2005, c 11,
§12]
Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol07_Ch0346-0398/HRS0386/HRS_0386-0121.htmFetched: 11/10/2026