§431:10C-111 Cancellation and nonrenewal of policies: when prohibited, when permitted. (a) An insurer may not cancel or refuse to renew a motor vehicle insurance policy, including optional additional insurance under the requirements of section 431:10C-302, once issued except when:

(1) The license of the principal operator to operate the type of motor vehicle is suspended or revoked;

(2) Premium payments for the policy are not made after reasonable demand therefor;

(3) The nonrenewal or conditional renewal is limited in accordance with section 431:10C-111.5; or

(4) A motor vehicle insurance policy has been in effect for sixty days or less and cancellation of the policy is not based on any of the criteria prohibited by subsection (c).

(b) An insurer may refuse to renew optional additional coverage in excess of that which the insurer is required to make available to the insured under section 431:10C-302 where the insured is a member of a class set forth in section 431:10C-407(b)(1)(A) or (B) at the time of the refusal to renew.

(c) No insurer shall refuse to continue a motor vehicle insurance policy based solely upon a person's race, creed, ethnic extraction, age, sex, length of driving experience, marital status, residence, physical handicap, or because an insured has elected to obtain any required or optional coverage or deductible required by law. If an insured alleges that the insurer's refusal to continue the motor vehicle insurance policy is based solely upon the insured's race, creed, ethnic extraction, age, sex, length of driving experience, marital status, residence, physical handicap, or because the insured has elected to obtain any required or optional coverage or deductible provided by law, the burden of proof shall rest with the insurer to prove that the refusal to continue the policy was not based on noncompliance with this subsection.

(d) An insurer may also refuse to renew motor vehicle insurance policies:

(1) If the commissioner determines that the financial soundness of the insurer would be impaired by the writing of additional policies of insurance; or

(2) The insurer ceases to write any new policies of insurance of any kind in this State.

(e) Within fifteen days of a cancellation and the return of the motor vehicle insurance identification card or a signed affidavit stating the card was lost or stolen, the insurer shall refund the pro rata unearned portion, if any, of any prepaid premiums. Premiums shall be considered "earned" as provided in section 431:10C-109. [L 1987, c 347, pt of §2; am L 1989, c 195, §33; am L Sp 1993, c 4, §3; am L 1997, c 251, §22; am L 2004, c 122, §40 and c 124, §1]

Case Notes

As this section applied to insured's Hawaii joint underwriting plan insurance policy such that insurer could not have canceled insured's policy unless it complied with the provisions of this section, insurer's failure to do so rendered its cancellation invalid. 105 H. 445, 99 P.3d 96 (2004).