Deficits and insolvencies
HRS §386-207
in effect386-207. Deficits and insolvencies
(a) If the assets of a group are at any time insufficient to enable the group to discharge its legal liabilities and other obligations and to maintain the reserves required of it under this chapter, the group shall forthwith make up the deficiency or levy an assessment upon its members for the amount needed to make up the deficiency.
(b) In the event of a deficiency in any fund
year, the deficiency shall be made up immediately, either from:
(1) Surplus from a fund year other than the current
fund year;
(2) Administrative funds;
(3) Assessment of the membership, if ordered by the
group; or
(4) An alternate method as the insurance commissioner
may approve or direct.
The insurance commissioner shall be notified prior
to any transfer of surplus funds from one fund year to another.
(c) If the group fails to assess its members
or to otherwise make up the deficit within thirty days, the insurance
commissioner shall order it to do so.
(d) If the group fails to make the required
assessment of its members within thirty days after the insurance commissioner
orders it to do so or if the deficiency is not fully made up within sixty days
after the date on which the assessment is made or within a longer period of
time as may be specified by the insurance commissioner, the group shall be
deemed to be insolvent.
(e) The insurance commissioner shall proceed
against an insolvent group in the same manner as the insurance commissioner
would proceed against an insolvent domestic insurer in this State as prescribed
in chapter 431, article 15. The insurance commissioner shall have the same
powers and limitations in the proceedings as are provided under those laws,
except as otherwise provided in this chapter.
(f) In the event of the liquidation of a
group, the insurance commissioner shall levy an assessment upon its members for
an amount as the insurance commissioner determines to be necessary to discharge
all liabilities of the group, including the reasonable cost of liquidation.
[L
1986, c 304, pt of §1; am L 1990, c 34, §24]
Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol07_Ch0346-0398/HRS0386/HRS_0386-0207.htmFetched: 11/10/2026