Hawaii Surplus Lines key terms

Coverage placed with an insurer that is not licensed in Hawaii, used only when admitted carriers cannot provide the needed coverage. It is legally sold through specially licensed brokers rather than standard agents.

An insurance company authorized by the Hawaii Insurance Division to transact business in the state. Admitted insurers are backed by the state guaranty fund and are the required first market for coverage.

An insurer that has not received a certificate of authority to do business in Hawaii. It may lawfully accept surplus lines business only through a licensed surplus lines broker and is not protected by the state guaranty association.

A producer holding a special Hawaii license that allows placing coverage with non-admitted insurers. The broker must be separately licensed for surplus lines and must meet experience and examination requirements.

Documented effort to obtain coverage from admitted insurers before placing a risk with a non-admitted carrier. The broker must show the risk was declined or not adequately covered by authorized insurers.

A written refusal by an admitted insurer to accept a risk, or a statement that it cannot provide the coverage requested. Declinations support the diligent search record required for surplus lines placement.

A non-admitted insurer that meets the standards set by Hawaii or listed on the NAIC Quarterly Listing of Alien Insurers. Only insurers on the approved eligibility list may be used for surplus lines placements.

A national registry maintained by the National Association of Insurance Commissioners of alien insurers that meet trust fund and reporting standards. Hawaii accepts listed alien insurers as eligible surplus lines markets.

An insurer organized under the laws of a country other than the United States. In Hawaii, alien insurers may write surplus lines only if they appear on the approved eligibility listing.

An insurer incorporated in a state or jurisdiction other than Hawaii. A foreign insurer may be admitted in Hawaii or may operate as a non-admitted surplus lines carrier if it meets eligibility standards.

An insurer formed and organized under Hawaii law. Domestic insurers may be admitted carriers, and the term distinguishes them from foreign and alien companies for regulatory purposes.

The license issued by the Hawaii Insurance Division permitting an insurer to transact insurance in the state. Holding one is what makes a company an admitted insurer.

The state agency within the Department of Commerce and Consumer Affairs that regulates insurers, producers, and surplus lines activity. It licenses brokers, reviews eligibility, and enforces surplus lines statutes and rules.

The chief regulator of the Hawaii Insurance Division, appointed to administer the state insurance code. The Commissioner issues licenses, adopts rules, and may examine surplus lines brokers and insurers.

A tax imposed on surplus lines premiums written in Hawaii, collected by the surplus lines broker and remitted to the state. The rate and filing schedule are set by statute and regulation.

The periodic report a surplus lines broker submits showing premiums written, taxes due, and supporting policy detail. Timely and accurate filing is a core compliance duty of the licensed broker.

A fee charged by a surplus lines stamping office or the state on each surplus lines policy to fund regulation and oversight. In Hawaii, any such charge is handled through the broker's premium reporting.

A written notice to the insured stating that the policy is placed with a non-admitted insurer not protected by the state guaranty fund. The insured typically must acknowledge this disclosure in writing.

The state entity that pays covered claims of insolvent admitted insurers. Surplus lines policies written by non-admitted insurers are not covered, which is why disclosure to the insured is required.

The credential a producer must hold to place non-admitted coverage in Hawaii. It is separate from a property and casualty producer license and carries its own application, exam, and renewal requirements.

The general Hawaii license authorizing a person to solicit and sell insurance. A producer must hold this base license before qualifying for a surplus lines license.

Ongoing coursework required to keep an insurance license active in Hawaii. Surplus lines licensees must complete approved credits, including ethics, within each renewal cycle.

The periodic process of maintaining an active surplus lines or producer license, including fee payment and CE compliance. Failure to renew can result in lapsed authority to place business.

The authorization an insurer gives a producer to act on its behalf. Surplus lines placements require proper appointment or authorization from the eligible non-admitted insurer.

The division of earned commission between producers involved in a surplus lines transaction. Hawaii rules govern how and with whom a surplus lines broker may share compensation.

A state list of coverages that may be placed with non-admitted insurers without a full diligent search. It streamlines placement for hard-to-place lines where admitted markets are consistently unavailable.

A risk that admitted insurers decline or will not cover on acceptable terms because of unusual hazards, claims history, or capacity limits. Such risks are the proper subject of surplus lines placement.

Coverage placed with an insurer that is neither admitted nor an eligible surplus lines carrier, or placed without a licensed broker. Hawaii law restricts and penalizes such transactions.

The requirement that a surplus lines broker keep records of declinations, policy details, and tax filings for a set period. Records must be available for examination by the Insurance Division.

Written communication to the insured explaining the nature of surplus lines coverage and any limitations. It supports informed consent and documents compliance with disclosure rules.

A industry body that may assist with stamping, reporting, and market information for surplus lines writers. Hawaii's regulatory functions are handled by the Insurance Division and licensed brokers.

A liability insurer owned by its members and chartered under federal law. Such groups are generally regulated as non-admitted carriers and are placed through surplus lines channels.

An insurer formed by a parent organization to cover its own risks. Captives are not admitted carriers in Hawaii and may write business only through proper surplus lines or authorized channels.

The situation where an insured obtains non-admitted coverage directly without using a licensed surplus lines broker. Hawaii law generally prohibits this and requires broker involvement.

The broker's check that a non-admitted insurer meets Hawaii's financial and listing standards before placement. Using an ineligible insurer can void coverage and expose the broker to discipline.

The licensed surplus lines broker designated to handle a particular account and its filings. The broker of record is responsible for premium tax reporting and disclosure compliance.

Advertising or offering non-admitted coverage to a Hawaii insured. Solicitation must be conducted by a licensed surplus lines broker and cannot be done by unlicensed persons.

Written evidence that a non-admitted insurer has bound coverage, including policy terms and effective dates. It protects the insured and documents the placement for regulatory review.