Hawaii Surplus Lines cheat sheet

Surplus Lines Insurance

• Surplus lines insurance is coverage placed with an eligible non-admitted insurer when admitted insurers are unable to provide the coverage; it is not a substitute for admitted market coverage.

• Hawaii requires surplus lines brokers to be licensed as property and casualty producers and to hold a surplus lines broker license issued by the Hawaii Insurance Division.

• A diligent search of the admitted market must be documented before placing a risk with a non-admitted insurer; the search must include at least three admitted insurers unless the risk is exempt.

• The surplus lines broker must file a report of each placement with the Hawaii Insurance Division within 30 days of the effective date, including the insured, insurer, coverage, and premium.

• Premium tax on surplus lines is 4.68% of gross premium (including policy fees) and is remitted by the surplus lines broker; Hawaii has no additional surplus lines stamping fee.

• Eligible surplus lines insurers must be authorized in their domicile, maintain minimum capital and surplus (typically $15 million), and appear on the Hawaii Insurance Division's list of eligible surplus lines insurers.

• Surplus lines policies are not protected by the Hawaii Insurance Guaranty Association; the insured must sign a disclosure acknowledging the lack of guaranty fund protection.

• Surplus lines brokers may not place coverage with an unauthorized insurer if the coverage is available from an admitted insurer; doing so may constitute an unfair trade practice.

• Hawaii surplus lines law is codified in Hawaii Revised Statutes Chapter 431, Article 8, and regulated by the Hawaii Insurance Division.