HI SB1277

Establishes new regulatory framework for legal service plans under Chapter 488, Hawaii Revised Statutes, requiring plans to obtain certificates of authority from the insurance commissioner before conducting business in the state.

Grants the insurance commissioner authority to investigate plans, access records, and require plan administrators to respond to written inquiries within seven days with substantive responses addressing stated concerns.

Requires plan administrators to maintain accumulated funds in separate federally insured accounts and obtain $100,000 surety bonds to protect plan members' funds.

Sets initial certificate of authority fee at $1,000 (reduced to $500 after July 1, 2014) and annual maintenance fees at corresponding amounts for legal service plans.

Authorizes the commissioner to deny, suspend, or revoke certificates and impose penalties up to $1,000 per day for noncompliance, with provision for cease-and-desist orders and restitution for aggrieved persons.