Bill Text: HI SCR82 | 2024 | Regular Session | Introduced

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Bill Title: Requesting The Director Of Commerce And Consumer Affairs To Convene A Working Group To Study And Devise Comprehensive Strategies To Restore Accessible Insurance Options To Residents And Commercial Businesses In Lava Zones 1 And 2.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2024-03-22 - The committee on CPN deferred the measure. [SCR82 Detail]

Download: Hawaii-2024-SCR82-Introduced.html

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THE SENATE	S.C.R. NO.	82
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII

SENATE CONCURRENT

RESOLUTION

 

 

Requesting the Director of Commerce and Consumer Affairs to convene a working group to study and devise comprehensive strategies to restore accessible insurance options to residents and COMMERCIAL businesses in Lava Zones 1 and 2.

 

 

     WHEREAS, volcanic eruptions can present a threat to residences and commercial property within certain high-risk areas, such as those on Hawai‘i island designated as Lava Zones 1 and 2 by the United States Geological Survey; and

 

     WHEREAS, despite the recent volcanic eruption in Lava Zones 1 and 2 on Hawai‘i island, and the associated risks, development in these areas has continued, in large part due to the high demand for affordable housing; volcanic tourism and its importance to the local economy; and cultural or religious ties to Kīlauea, Mauna Loa, and the surrounding areas; and

 

     WHEREAS, while a stable and affordable insurance market can provide financial security for those residing in or operating a commercial business in high-risk lava zone areas, private insurance carriers have, for the most part, largely remained reluctant to provide this much needed product; and

 

     WHEREAS, this problem has been exacerbated by the Universal Property and Casualty Insurance Company's (UPCIC) decision to withdraw from the homeowners, condominium, and renters insurance market in the State by August 31, 2024, impacting approximately one thousand policyholders on Hawai‘i island -- many of whom are located in a high-risk lava zone area; and

 

     WHEREAS, for those Hawai‘i island homeowners living in Lava Zones 1 and 2, their sole remaining insurance provider, the Hawaii Property Insurance Association (HPIA) -- a state-run insurer of last resort that does not offer policy options for commercial businesses -- has offered replacement insurance at premium rates nearly three to four times higher than that of UPCIC, citing the rising costs of building materials, supply chain issues, a loss of reserves following the 2018 Kīlauea lava flow, and the increased costs of reinsurance; and

 

     WHEREAS, the drastically higher premium rates for residents in Lava Zones 1 and 2 are causing significant financial insecurity and hardships, especially for individuals looking to finance the purchase of property or vulnerable individuals and low-income families; and

 

     WHEREAS, it is necessary for the State to take steps to resolve this pressing issue and ensure that residents and businesses in Lava Zones 1 and 2 have access to an affordable and equitable insurance market; now, therefore,

 

     BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2024, the House of Representatives concurring, that the Director of Commerce and Consumer Affairs is requested to convene a working group to study and devise comprehensive strategies to restore accessible insurance options to residents and commercial businesses in Lava Zones 1 and 2; and

 

     BE IT FURTHER RESOLVED that the working group is requested to explore various means of assisting affected residents and businesses, including:

 

     (1)  Evaluating the equitable application of policy premiums;

 

     (2)  Decreasing HPIA policy premiums and expanding coverage to include commercial businesses;

 

     (3)  Implementing subsidies or financial assistance programs to mitigate the financial burden for vulnerable residents in Lava Zones 1 and 2;

 

     (4)  Exploring the creation of a risk pooling mechanism; and

 

     (5)  Exploring any other feasible solutions, pursuant to the discretion of the working group; and

 

     BE IT FURTHER RESOLVED that the working group is requested to comprise the following members:

 

     (1)  The Director of Commerce and Consumer Affairs, or the Director's designee, who is requested to serve as Chairperson of the working group;

 

     (2)  The Insurance Commissioner, or the Commissioner's designee;

 

     (3)  One member of the Senate, to be appointed by the President of the Senate;

 

     (4)  One member of the House of Representatives, to be appointed by the Speaker of the House of Representatives;

 

     (5)  The Mayor of the County of Hawai‘i, or the Mayor's designee;

 

     (6)  The Chairperson of the Hawai‘i County Council, or the Chairperson's designee;

 

     (7)  The Chairperson of the Board of Directors of the Hawaii Property Insurance Association;

 

     (8)  One small business owner in Hawaiʻi County whose principal place of business is located within Lava Zones 1 or 2, to be selected by the Chairperson of the working group;

 

     (9)  One homeowner in Hawai‘i County whose residence is located within Lava Zones 1 or 2, to be selected by the Chairperson of the working group; and

 

    (10)  Any other member deemed necessary by the working group; and

 

     BE IT FURTHER RESOLVED that an initial meeting of the working group be convened no later than July 1, 2024; and

 

     BE IT FURTHER RESOLVED that the working group is requested, with the assistance of the Department of Commerce and Consumer Affairs, to 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; and

 

     BE IT FURTHER RESOLVED that the working group is requested to be dissolved on June 30, 2025; and

 

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the President of the Senate, Speaker of the House of Representatives, Director of Commerce and Consumer Affairs, Insurance Commissioner, Mayor of the County of Hawai‘i, Chairperson of the Hawaiʻi County Council, and Chairperson of the Board of Directors of the Hawaii Property Insurance Association.

 

 

 

	OFFERED BY:	_____________________________

Report Title: 

DCCA; Insurance Working Group; Lava Zones; Report to Legislature