HB 2346 Summary

• Establishes licensing requirements for third party administrators in Hawaii, requiring them to obtain a license from the insurance commissioner before collecting premiums or adjusting claims for insurance coverage.

• Requires administrators to file a surety bond of at least $300,000 and submit annual audited financial statements demonstrating solvency and financial responsibility.

• Mandates written agreements between administrators and insurers containing specific requirements, fiduciary duties for handling premiums and claims, and prohibition against contingent compensation based on claim experience.

• Requires administrators to maintain complete recordkeeping of all transactions, provide written notice to insureds about the administrator's role, and file annual reports listing all insurers with whom they have agreements.

• Sets licensing fees at $150 for issuance and $150 annually for renewal, with grounds for license denial, suspension, or revocation including insolvency, unfair practices, or failure to pay judgments.