Bill Text: HI HB2056 | 2024 | Regular Session | Amended
Bill Title: Relating To Insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-03-22 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [HB2056 Detail]
Download: Hawaii-2024-HB2056-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2056 |
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THIRTY-SECOND LEGISLATURE, 2024 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that
reinsurance is a means of reducing an insurer's risk by establishing a contract
that transfers risk to a reinsurance company, which assumes either a portion of
or the entirety of one or more of the liabilities taken on by the initial
insurer.
The legislature
further finds that rising global temperatures associated with climate change
have increased severe weather events and, as a result, reinsurance companies
are having to drastically raise their prices in order to assure coverage of
future liabilities. In Florida, the
Florida Hurricane Catastrophe Fund is a state trust fund that provides
reimbursement to residential property insurance companies for a portion of
their catastrophic hurricane losses, with reinsurance coverage provided to
insurers at a lower cost than the private reinsurance market. Establishing a similar program in Hawaii may
help homeowners and insurance companies address the increased risk of
catastrophic events like the 2023 Maui wildfires.
Accordingly, the purpose of this Act is to establish a working group to identify the feasibility of a state-run reinsurance program to offset the liabilities of private reinsurance companies as a means of ensuring affordable coverage for property owners against catastrophic events, such as wildfires or flooding.
SECTION 2. (a) There is established within the department of commerce and consumer affairs a state reinsurance exploratory working group to explore the feasibility of establishing a state-run reinsurance program in Hawaii to ensure affordable coverage for property owners against catastrophic events such as wildfires or flooding.
(b) The working group shall consist of the following members or their designees:
(1) The insurance commissioner, who shall serve as the chair of the working group; and
(2) The director of taxation.
(c) The chair of the working shall invite the following persons to be members of the working group:
(1) A representative from an insurance company that sells property and casualty insurance in Hawaii;
(2) A representative of a reinsurance company that operates in Hawaii;
(3) A representative of the Hawaii Association of Realtors;
(4) A representative of the Hawaii Insurers Council;
(5) A representative of a bank that operates in Hawaii; and
(6) A representative of a mortgage lender that operates in Hawaii.
(d) The members of the working group shall serve without compensation but shall be reimbursed for reasonable expenses, including travel expenses, necessary for the performance of their duties.
(e) The working group shall submit a report of
its findings and recommendations, including any proposed legislation, to the
legislature no later than twenty days prior to the convening of the regular
session of 2025.
SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2024-2025 for administrative costs of the working group.
The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.
SECTION 4. In accordance with section 9 of article VII of the Hawaii State Constitution and sections 37‑91 and 37‑93, Hawaii Revised Statutes, the legislature has determined that the appropriations contained in H.B. No. , will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. In addition, the appropriation contained in this Act will cause the general fund expenditure ceiling for fiscal year 2024‑2025 to be further exceeded by $ or per cent. The combined total amount of general fund appropriations contained in only these two Acts will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. The reasons for exceeding the general fund expenditure ceiling are that:
(1) The appropriation made in this Act is necessary to serve the public interest; and
(2) The appropriation made in this Act meets the needs addressed by this Act.
SECTION 5. This Act shall take effect on July 1, 3000.
Report Title:
State Reinsurance Exploratory Working Group; DCCA; Appropriation; Expenditure Ceiling
Description:
Establishes the State Reinsurance Exploratory Working Group to study the feasibility of establishing a state-run reinsurance program to ensure affordable coverage for property owners against catastrophic events. Requires a report to the Legislature. Appropriates funds. Effective 7/1/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
