2012 Hawaii Revised Statutes
TITLE 24. INSURANCE
431. Insurance Code
431:14A-107 Duties and responsibilities.

§431:14A-107 Duties and responsibilities. (a) All corporate powers shall be exercised by or under the authority of the board, unless otherwise provided in this chapter or in the articles of incorporation.

(b) The board shall discharge its duties:

(1) In accordance with the company's purpose;

(2) With the care, skill, prudence, and diligence under the circumstances that a prudent director, acting in a like capacity and familiar with such matters would use in

conducting a similar enterprise and purpose;

(3) By diversifying the company's investments to minimize the risk of losses, unless it is prudent not to do so;

(4) In accordance with governing legal documents;

(5) By having an annual audit of the company by an independent certified public accountant;

(6) By securing a fidelity bond for the administrator and in its discretion for other agents dealing with the company's assets at the company's expense;

(7) By purchasing liability insurance for errors and omissions for the board, each director, and any other fiduciary employed or contracted by the company to cover liability or losses caused by the act or omission of a fiduciary;

(8) By maintaining proper books of accounts and records of the company's administration;

(9) By carrying out the reporting and disclosure requirements required by law;

(10) By appointing a qualified actuary to develop and recommend a responsible schedule of premium rates with consideration of the company's investment income or refunds, or both, and to provide actuarial certification of the company's loss reserves; and

(11) By cooperating with and assisting the council in its duties and responsibilities.

(c) Except as otherwise provided by law, the board may:

(1) Transact workers' compensation insurance policies required or authorized by state law to the same extent as any other insurer;

(2) Provide the terms and conditions of an insurance policy;

(3) Provide that any written instrument be executed for the company by the administrator or the administrator's agent;

(4) Enter into agreements to reinsure all or part of the company's exposure to loss and to limit the risk to the company; and

(5) Employ persons to administer the company, including legal counsel, accountants, insurance consultants, administrators, qualified actuaries, investment managers, adjustors, other experts, and clerical employees and pay compensation and expenses in connection therewith. [L 1996, c 261, pt of §2; am L 1998, c 252, §5]