| 47 | | - | SECTION 1. The legislature finds that insurers doing business in the State are required to provide written notice to their customers on cancellation, but the current notice requirement of ten days is unrealistic given the state of the property casualty insurance market in Hawaii. Requiring insurers to give notice at least twenty days before policy cancellation ensures that policyholders have sufficient time to secure alternative coverage and mitigates potential disruptions. The legislature further finds that a mandate for certified mail delivery provides verifiable proof of notice, thus reducing disputes and enhancing accountability. The legislature also finds that extending the notice period promotes greater clarity and fairness in insurer-policyholder relationships by establishing clear expectations and legal assurances, thereby enabling consumers to make informed decisions regarding their insurance coverage. To modernize and streamline these processes, insurers may use electronic certified mailing, such as e-certified mail, to maintain delivery verification while reducing administrative burdens and costs. Recognizing the operational adjustments required to meet these new standards, this Act provides for phased implementation to allow insurers sufficient time to adapt. By enacting this measure, the legislature emphasizes the importance of consumer protection while fostering transparency, accountability, and fairness in the insurance industry. The purpose of this Act is to increase the notice period for a property insurer to notify a policyholder of a cancellation, including cancellation due to nonpayment, of a policy of insurance on property used for residential purposes, including multi-family residential purposes. SECTION 2. Section 431:10-226.5, Hawaii Revised Statutes, is amended to read as follows: "[[]§431:10-226.5[]] Notice of cancellation or nonrenewal[. In]; notice of cancellation or nonrenewal for policies of property insurance. (a) Except as provided in subsection (b), in the case of cancellation of a policy, the insurer shall give written notice to the insured [not] no fewer than ten days [prior to] before the effective date of cancellation. For nonrenewal of a policy, the insurer shall give written notice to the insured [not] no fewer than thirty days [prior to] before the effective date of nonrenewal. If under title 24 or a policy, a longer time period is required for a notice of cancellation or nonrenewal for the policy, the longer period shall be applicable. Cancellation or nonrenewal shall not be deemed valid unless evidence of mailing is provided. (b) This subsection shall only apply to policies of insurance on property used for residential purposes, including multi-family residential properties. In the case of cancellation of a policy, the property insurer shall give written notice to the insured no fewer than twenty days prior to the effective date of cancellation. In the case of cancellation of a policy due to nonpayment of premium or material representation, the property insurer shall give written notice to the insured no fewer than ten days before the effective date of the cancellation. For nonrenewal of a policy, the property insurer shall give written notice to the insured no fewer than thirty days before the effective date of nonrenewal. If under title 24 or a policy, a longer time period is required for a notice of cancellation or nonrenewal for the policy, the longer period shall be applicable; provided that the longer period shall be applicable only to the insurer. Cancellation or nonrenewal shall not be deemed valid unless evidence of certified, e-certified, or electronic mailing is provided." SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 4. This Act shall not be applied so as to impair any contract existing as of the effective date of this Act in a manner violative of article I, section 10, of the United States Constitution or the Hawaii State Constitution. SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 3000; provided that section 2 shall take effect on January 1, 2026. |
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| 47 | + | SECTION 1. The legislature finds that insurers doing business in the State are required to provide written notice to their customers on cancellation or nonrenewal, but the current notice requirements of ten and thirty days, respectively, are unrealistic given the state of the property casualty insurance market in Hawaii. Requiring insurers to give notice at least thirty days prior to policy cancellation and sixty days prior to nonrenewal ensures that policyholders have sufficient time to secure alternative coverage and mitigates potential disruptions. The legislature further finds that a mandate for certified mail delivery provides verifiable proof of notice, thus reducing disputes and enhancing accountability. The legislature also finds that extending notice periods promotes greater clarity and fairness in insurer-policyholder relationships by establishing clear expectations and legal assurances, thereby enabling consumers to make informed decisions regarding their insurance coverage. To modernize and streamline these processes, insurers may use electronic certified mailing, such as e-certified mail, to maintain delivery verification while reducing administrative burdens and costs. Recognizing the operational adjustments required to meet these new standards, this Act provides for phased implementation to allow insurers sufficient time to adapt. By enacting this measure, the legislature emphasizes the importance of consumer protection while fostering transparency, accountability, and fairness in the insurance industry. The purpose of this Act is to increase the notice period for an insurer to notify a policy holder of a cancellation or nonrenewal of a property casualty insurance policy. SECTION 2. Section 431:10-226.5, Hawaii Revised Statutes, is amended to read as follows: "[[]§431:10-226.5[]] Notice of cancellation or nonrenewal. In the case of cancellation of a policy, the insurer shall give written notice to the insured not fewer than [ten] thirty days prior to the effective date of cancellation. For nonrenewal of a policy, the insurer shall give written notice to the insured not fewer than [thirty] sixty days prior to the effective date of nonrenewal. If under title 24 or a policy, a longer time period is required for a notice of cancellation or nonrenewal for the policy, the longer period shall be applicable[.]; provided that the longer period shall be applicable only to the insurer. Cancellation or nonrenewal shall not be deemed valid unless evidence of certified, electronic, or e-certified mailing is provided." SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 4. This Act shall not be applied so as to impair any contract existing as of the effective date of this Act in a manner violative of article I, section 10, of the United States Constitution or the Hawaii State Constitution. SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 2050; provided that section 2 shall take effect on January 1, 2026. |
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