(a) In addition to section 431:8-205, insurance may be procured from an unauthorized insurer; provided that:

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Terms Used In Hawaii Revised Statutes 431:8-301

  • Exempt commercial purchaser: means any person purchasing commercial insurance which, at the time of placement, employs or retains a qualified risk manager to negotiate insurance coverage; and has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding twelve months. See Hawaii Revised Statutes 431:8-102
  • Home state: means , with respect to an insured, the state in which an insured maintains the insured's principal place of business or, in the case of an individual, the state in which the individual maintains the individual's principal residence; provided that if one hundred per cent of the insured risk is located out of the state where the insured maintains the insured's principal place of business or the state where the individual maintains the principal residence, the home state shall be the state where the greatest percentage of the insured's taxable premium for that insurance contract is allocated. See Hawaii Revised Statutes 431:8-102
  • Oversight: Committee review of the activities of a Federal agency or program.
  • Surplus lines broker: means any person licensed under section 431:8-310 to place insurance on risks resident, located, or to be performed in this State with unauthorized insurers. See Hawaii Revised Statutes 431:8-102
  • Surplus lines insurance: means any property and casualty insurance on risks procured from or placed with an unauthorized insurer under the laws of the insured's home state. See Hawaii Revised Statutes 431:8-102
  • Unauthorized insurer: means an insurer not holding a valid certificate of authority to transact an insurance business in the state in which the subject resident is located or in which the insurance contract will be performed. See Hawaii Revised Statutes 431:8-102
(1) The insurance is procured through a surplus lines broker licensed in the insured’s home state;
(2) The full amount or kind of insurance cannot be obtained from insurers who are authorized to do business in this State; provided that a diligent search is made among the insurers who are authorized to transact and are actually writing the particular kind and class of insurance in this State each time the insurance is placed or renewed;
(3) The surplus lines insurance procured is in addition to or in excess of the amount and coverage which can be procured from the authorized insurers; and
(4) The insurance is not procured at a rate lower than the lowest rate that is generally acceptable to authorized insurers transacting that kind of business and providing insurance affording substantially the same protection.
(b) A surplus lines broker is not required to make a due diligence search to determine whether the full amount or type of insurance can be obtained from authorized insurers when the broker is seeking to procure or place unauthorized insurance for an exempt commercial purchaser; provided that:

(1) The broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that the insurance may or may not be available from the admitted market which may provide greater protection with more regulatory oversight; and
(2) The exempt commercial purchaser has subsequently requested in writing for the broker to procure or place the insurance from an unauthorized insurer.
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