Allstate Insurance Co. v. Schmidt

Summary

The Supreme Court of Hawai'i held that Hawai'i Revised Statutes § 431:10C-207 prohibits automobile insurers from basing underwriting decisions, as well as rating plans, on a person's length of driving experience. The court affirmed the circuit court's judgment upholding the Insurance Commissioner's cease-and-desist order and a $3,000 civil penalty against Allstate.

Holdings

1. HRS § 431:10C-207 prohibits an insurer from basing an underwriting decision on an applicant's length of driving experience because the statute's reference to any 'standard or rating plan' encompasses both rating plans and underwriting standards.
2. The Insurance Commissioner did not engage in impermissible impromptu rulemaking by applying HRS § 431:10C-207 to Allstate's underwriting practice.
3. The $3,000 civil penalty was not an abuse of discretion because HRS § 431:10C-117 required a penalty for a violation and authorized any amount up to $5,000 per violation.

Questions Presented

1. Whether HRS § 431:10C-207 prohibits an insurer from using an applicant's length of driving experience as a basis for rejecting an automobile-insurance application.
2. Whether the Insurance Commissioner engaged in impermissible impromptu rulemaking by interpreting HRS § 431:10C-207 to apply to underwriting.
3. Whether the Chief Deputy Insurance Commissioner's imposition of a $3,000 civil penalty constituted an abuse of discretion.

Disposition

affirmed