Simon Glairy is a recognized expert in the fields of insurance and Insurtech, with a specialized focus on risk management and AI-driven risk assessment. His work often bridges the gap between complex regulatory changes and the practical technological workflows required to implement them. Today, we sit down with him to discuss the implications of Hawai’i’s Act 040, a legislative pivot that significantly heightens transparency for policyholders and tightens the accountability standards for industry professionals. The discussion covers the new requirement for written justifications of premium increases, the dramatic expansion of disciplinary grounds for adjusters from eight to seventeen items, and the refined notice procedures that property carriers must now follow. Glairy offers a deep dive into how these shifts will reshape compliance, producer behavior, and the consumer experience in the coming years.
With the arrival of Act 040, Hawai’i is requiring insurers to provide a reasonable, written explanation for renewal premium increases starting in 2027. How will this mandate change the day-to-day operations for insurance carriers, and what challenges do you anticipate in standardizing these explanations?
This shift transforms what was once a behind-the-scenes actuarial calculation into a front-facing customer service obligation that carriers must embrace. Companies cannot treat these requests as rare exceptions; they must build robust internal workflows to handle them as a standard request type starting January 1, 2027. Because the law applies across personal and commercial lines, companies will need to translate complex risk adjustments—ranging from inflation to local catastrophe data—into language that a policyholder can actually digest. It is a massive technical undertaking to ensure these explanations are “reasonable” enough to satisfy a regulator while being automated enough to keep the business running efficiently. I expect a significant sense of urgency as firms audit their legacy systems to see if they can even extract the specific data points needed to justify a sharp hike on an individual renewal.
The list of grounds for the commissioner to discipline adjusters and independent bill reviewers has expanded from eight to seventeen items. What does this broader net, which now includes things like failing to pay child support or income taxes, tell us about the evolving expectations for insurance professionals?
It signals that technical competence is no longer the only metric for maintaining a license; personal integrity and financial responsibility are now non-negotiable pillars of the profession. By including things like failing to pay state or federal income taxes or disregarding a child support order, the Hawai’i legislature is treating an insurance license as a privilege reserved for those who are in good standing with all aspects of the law. We are also seeing a much more global approach to oversight, where a license denial in another district, province, or territory can trigger a local revocation in Hawai’i. This means professionals must maintain a spotless record across every territory they touch, as the commissioner now has sharper tools to pull a license for a felony conviction or even the act of forging a single signature on an application. It is a clear message that the industry’s disciplinary playbook has been rewritten to prioritize character as much as commercial compliance.
The procedural rules for administrative action have been tightened, specifically regarding the ten-day window for a licensee to request a hearing. From a risk management perspective, how should firms prepare to handle these accelerated timelines?
The speed of this new process is designed to prevent bad actors from lingering in the system while an investigation drags on. Once the commissioner sends a notice of intent, that ten-day clock is incredibly short, especially when you consider that a hearing must then be held within thirty days of the application. Firms and individual producers need to have their documentation and legal counsel ready to move at a moment’s notice to avoid an order going through by default. It is also worth noting that the commissioner can now levy civil penalties, which range from $100 up to $10,000, as a standalone action or alongside other disciplinary steps. This level of discretionary power means that administrative sloppiness—like missing a deadline or failing to respond—could result in heavy fines before a defense is even mounted.
Regarding property insurance, the law now mandates specific reasons for cancellation and requires proof of mailing. How do these new notice requirements, particularly the twenty-day window for residential property, impact the protection of homeowners?
These changes add a layer of essential friction to the cancellation process, ensuring that homeowners aren’t left in the lurch without understanding why their coverage has vanished. For residential property, including multi-family units, the twenty-day notice period provides a small but vital buffer for a family to find alternative coverage, though that window shrinks to ten days if the issue is a material misrepresentation or nonpayment. The most critical operational change is the “burden of proof” regarding mailing; an insurer can no longer just claim they sent a notice—they must have verifiable evidence on file. By requiring that every notice clearly states the specific reason for the action, the law removes the ambiguity that often leaves consumers frustrated and confused. This creates a much more transparent to-do list for carriers who must now ensure their mailing logs and reason codes are beyond reproach.
What is your forecast for the insurance regulatory environment in Hawai’i as we move toward 2027?
I expect we will see a “copycat effect” where other states look at Hawai’i’s Act 040 as a blueprint for modernizing their own insurance codes in an age of rising premiums. The trend is moving rapidly toward total transparency, where the “black box” of premium increases is opened up to the public, and the personal conduct of adjusters is held to the same standard as their professional work. We will likely see more integration between different government databases—tax records, child support systems, and multi-state licensing boards—to automate the detection of the seventeen disciplinary grounds mentioned in this Act. For insurers, the years leading up to 2027 will be a race to upgrade data transparency and internal auditing to ensure they don’t fall foul of these new, sharper regulatory tools. Ultimately, this will lead to a more resilient and trusted industry, but the transition will be challenging for those who still rely on legacy systems and manual compliance checks.
