HAR §16-7-9. Servicing carrier(s)

(a) In selecting a servicing carrier or carriers the board should satisfy itself that the servicing carrier possesses sufficiently experienced and qualified personnel to properly underwrite medical malpractice business in the State of Hawaii and to properly service claims that arise therefrom. (b) The servicing carrier must have the ability to collect the necessary data to disburse commission payments to agents on behalf of the plan and have the ability to store the data and report same to the Internal Revenue Service annually, if required. (c) The servicing carrier must generate the statistical and accounting information in report format required. The required content and format of these reports are to be set out in the operating principles. (d) The board of directors, in its sole discretion, may offer or allow a servicing carrier reimbursement in whole or in part for specific extraordinary expense incurred in qualifying for, continuing as or ceasing to be a servicing carrier. The expense must be explained and supported in detail as required by the board of directors, must be in its judgment significantly in excess of the normal additional expense expected to beincurred by the carrier, and must be actually incurred before reimbursement. (e) The board of directors may in its discretion authorize reimbursement of the servicing carrier for normal operating expenses incurred in connection with plan business. The normal operating expenses shall be defined and designated by the board but shall not include any loss or expense incurred as a result of fraud or dishonesty on the part of the servicing carrier’s personnel (including, but not limited to, independent adjusters and agents), and each servicing carrier shall hold the plan harmless from and reimburse it for any loss or expense arising out of fraud or dishonesty charged to the plan. (f) The designation of a servicing carrier may be withdrawn at the option of the servicing carrier or the board of directors on the giving of four months’ written notice to the other. Such arrangement may also be terminated at 6 any time by mutual agreement of the servicing carrier and the board of directors or terminated by the board of directors for just cause. [Eff 6/22/81] (Auth: HRS §435C-2) (Imp: HRS §435C-3)