HRS §431:14A-113
Annual accounting and policyholder dividends
This section requires the company to do a yearly review of its losses and costs. The board can give policyholders dividends based on an actuary's report, but only if the company stays solvent. Dividends must be fair, not tied to renewing, and not given in the first three years.
The statute, as written — Annual accounting; dividends
(a) The company shall conduct an annual accounting of its incurred loss experience and expenses. (b) The board may declare and apportion reasonable dividends to policyholders, determined by an actuarial opinion prepared by a qualified actuary after evaluating the impact of the dividends on the solvency of the company. The dividends may be paid or credited to policyholders according to classifications of policies established by the board. (c) No dividends shall be: (1) Paid or credited in a manner that unfairly discriminates between policies within the same classification; (2) Made contingent upon payment of any renewal premium on any policy; or (3) Paid or credited in the first three years of operation of the company.
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