Hawaii SB 1137: RELATING TO INSURANCE.

Bill Text

THE SENATE
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
S.B. NO. (137
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_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _JAN 1 7 2025_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
A BILL FORAN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that insurers operating 
in Hawaii are mandated 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. 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.
To enhance consumer protection and transparency, the 
legislature finds that it is essential to mandate that insurers 
provide direct written notice to policyholders about rate 
increases or significant policy changes, in addition to 
notifying the insurance commissioner. This direct communication 
ensures that policyholders are adequately informed and can make 
timely decisions regarding their insurance needs. The
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S.B. NO. (37
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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. Implementing a similar 
requirement in Hawaii would align with these best practices, 
fostering transparency and accountability in the insurance 
industry. 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. 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.
The purpose of this Act is to require insurers to notify 
policyholders of rate changes within thirty days after approval 
by the insurance commissioner of a rate change and not less than 
thirty days before the effective date of the rate change.
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SECTION 2. Chapter 431, Hawaii Revised Statutes, is 
amended by adding a new section to article 14, subpart I, to be 
appropriately designated and to read as follows:
"§431:14- Rate changes; notification to policyholders.
(a) Insurers shall notify affected policyholders in writing of 
any rate changes approved by the commissioner under 
section 431:14-104.
(b) The notification shall include:
(1) A clear statement of the new rate and its effective 
date;
(2) The percentage increase or decrease in the rate 
compared to the prior period;
(3) A brief explanation of the reasons for the rate 
change, including relevant factors such as claims 
experience, inflation, or other actuarial 
considerations; and
(4) Information on how policyholders can contact the 
insurer or the Hawaii insurance division regarding 
questions or concerns about the rate change.
(c) The notification shall be sent no later than thirty 
days after the rate filing is approved by the commissioner and 
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at least thirty days before the effective date of the rate 
change.
(d) Notification may be sent via mail to the last known 
address of the policyholder or electronically if the 
policyholder has consented to electronic communications.
(e) 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."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on January 1, 2026.
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S.B. NO. 1137
Report Title:
Insurance; Rate Changes
Description:
Requires insurers to notify policyholders of rate changes within 
30 days of approval by the Insurance Commissioner and not less 
than 30 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.
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