Estate of Cabral v. AIG Hawaii Insurance Co.

RAMIL, Justice. We issued a writ of certiorari to review the decision of the Intermediate Court of Appeals (ICA) in Estate of Cabral v. AIG Hawai'i Ins. Co., 88 Hawai'i 345, 966 P.2d 1071, (App.1998). Specifically, we address whether Hawaii Revised Statutes (HRS) §§ 43L10C-304 and 431:10C-103(10) (Spec.Pamph.1987) confer upon an insured a survivors’ loss benefit equivalent to the aggregate no-fault benefits less any no-fault benefits paid or payable under the policy. In the instant case, the circuit court affirmed the Insurance Commissioner’s decision that, when the claimant increased no-fault benefits from $15,000 to $50,000, this increase did not affect that part of the policy relating to survivors’ loss benefits. On appeal, the ICA vacated the circuit court’s order and remanded “with instructions that the Commissioner shall enter an order holding that Claimant is entitled to receive survivor’s loss benefits in the amount of $50,000,” less other benefits already paid. 88 Hawaii at 356, 966 P.2d at 1082. The ICA also held that (1) Hawaii Administrative Rules (HAR) § 16-23-11 does not govern the amounts of survivors’ benefits payable, as the respondent argued, and (2) that the rule governs only the amount of premiums charged, not the benefits due. 88 [345] Hawai'i at 354-355, 966 P.2d at 1088-1081. We disagree. By its plain language, HAR § 16-23-11 (including the exhibit incorporated by reference in it), clearly and unambiguously lays out not only the premiums an insurer may charge, but the benefits payable to an insured. Nevertheless, the ICA correctly held that, under HRS § 431:10C-103(10)(B), no-fault survivors’ benefits are subject either to an aggregate limit of $15,000 or “[a]n aggregate limit of the expanded limits where the insured has contracted for it under an optional additional coverage.” 88 Hawai'i at 353, 966 P.2d at 1079. Accordingly, we hold that, insofar as HAR § 16-23-11 conflicts with HRS § 431:10C~103(10)(B) by limiting survivors’ benefits to $15,000 despite the presence of expanded no-fault coverage, HAR § 16-23-11 is void as a matter of law. In all other respects, we affirm the judgment of the ICA vacating the circuit court’s order affirming the Insurance Commissioner and remanding for further action as set forth in the conclusion of the ICA’s opinion.