SB2952

THE SENATE	S.B. NO.	2952
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII

A BILL FOR AN ACT

relating to insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that insurers operating in the State are required to submit rate change proposals to the Hawaii insurance division for approval before implementation, ensuring compliance with insurance laws and protecting policyholders from rates that are excessive, inadequate, or unfairly discriminatory. However, there is a lack of explicit requirements for insurers to provide direct notice to individual policyholders regarding rate changes, which can leave consumers uninformed about adjustments that may affect their coverage and financial planning.

To enhance consumer protection and transparency, the legislature finds that it is essential to require that insurers provide direct written notice to policyholders about rate increases or significant policy changes, in addition to notifying the insurance commissioner. This direct communication ensures that policyholders are adequately informed and can make timely decisions regarding their insurance needs. The legislature also finds that several states have implemented regulations requiring insurers to notify policyholders directly of rate changes, like New Jersey, which requires insurers proposing an average rate increase to send notices directly to policyholders, and Washington, where insurers must provide notice of premium changes at least twenty days before renewing a policy with a ten per cent or greater increase. Implementing a similar requirement in Hawaii would align with these best practices, fostering transparency and accountability in the insurance industry. By ensuring that policyholders receive direct and timely notifications of rate changes, consumers are empowered to make informed decisions, seek alternative coverage if necessary, and better manage their financial planning. Therefore, the legislature emphasizes the importance of direct communication between insurers and policyholders, advocating for mandatory direct written notices of rate changes to enhance consumer protection and promote fairness in the insurance market.

Accordingly, the purpose of this Act is to require certain insurers to notify policyholders of rate changes at least sixty days before the effective date of the rate change.

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 14, part I, to be appropriately designated and to read as follows:

"§431:14- Rate changes; notification to policyholders. (a) Beginning January 1, 2027, insurers shall notify affected policyholders in writing of any rate changes approved by the commissioner under section 431:14-104.

(b) The notification shall include:

(1) A clear statement of the new rate and its effective date;

(2) The percentage increase or decrease in the rate compared to the prior period;

(3) A brief explanation of the reasons for the rate change, including relevant factors such as claims experience, inflation, or other actuarial considerations; and

(4) Information on how policyholders can contact the insurer or the Hawaii insurance division regarding questions or concerns about the rate change.

(d) Notification may be sent via mail to the last known address of the policyholder or electronically if the policyholder has consented to electronic communications.

(e) Failure to comply with this subsection shall result in administrative penalties as prescribed under section 431:2-203, including fines or corrective actions as determined by the commissioner."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2026.

INTRODUCED BY:	_____________________________

Report Title:

Insurance; Rate Changes; Notice

Description:

Beginning 1/1/2027, requires certain insurers to notify policyholders of rate changes at least 60 days before the effective date of the rate change.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

SB 2952: INSURANCE; RATE CHANGES; NOTICE

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