HRS §431:4-318
When a mutual insurer can assess policyholders
If a domestic mutual insurance company's assets fall below what it owes plus required surplus, and the shortfall isn't fixed, its directors may, with the commissioner's approval, charge its policyholders who had contingent liability policies in the past year. The charge is based on their share of premiums, and no one can deduct unpaid premiums or losses from it.
The statute, as written — Accrual of liability
(a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum surplus, if any, required of it by this code as prerequisite for continuance of its certificate of authority, and the deficiency is not cured from other sources, its directors may, if approved by the commissioner, make an assessment only on its members who at any time within the twelve months immediately preceding the date assessment was authorized by its directors held policies providing for contingent liability. (b) The assessment shall be for such an amount of money as is required in the opinion of the commissioner, to render the insurer fully solvent, and provide a reasonable amount of working capital above the minimum amount of surplus, but the working capital so provided shall not exceed five per cent of the insurer's liabilities as of the date on which the amount of deficiency was determined. (c) A member's proportionate part of any assessment shall be computed by applying to the premium earned within the twelve-month period on the member's contingently liable policy or policies the ratio of the total assessment to the total premium earned during the period on all contingently liable policies which are subject to the assessment. (d) No member shall have an offset against any assessment for which the member is liable, on account of any claim for unearned premium or losses payable.
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