HB 253: RELATING TO INSURANCE.

A BILL FOR AN ACT

RELATING TO INSURANCE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 14 to be appropriately designated and to read as follows:

     "§431:14-     Exception for condominium master insurance or condominium master hurricane insurance.  (a)  Notwithstanding any provision of this article to the contrary, in the event that an existing condominium master insurance policy or condominium master hurricane insurance policy procured by a condominium association or its board of directors, whether wholly or partially, is issued by a surplus lines insurer, an admitted insurer may offer such policies at an amount of no more than fifty per cent of the amount charged by the surplus lines insurer; provided that:

     (1)  The condominium association has been covered by a condominium master insurance policy or condominium master hurricane insurance policy, whether wholly or partially, issued by a surplus lines insurer for no less than the preceding three years;

     (2)  The admitted insurer shall not charge the condominium association the amount authorized under this section for longer than six years; and

     (3)  The admitted insurer may require the condominium association to deposit a specific amount in the association's replacement reserves fund or to make certain maintenance and repairs.

     (b)  As used in this section, "condominium association" has the same meaning as association as defined in section 514B-3."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 3000.

Report Title:

Insurance; Condominiums; Rates; Surplus Lines Insurance; Admitted Insurers

Description:

Allows authorized insurers in the State to offer building and hurricane damage insurance for condominium buildings at a lesser rate than the building's prior surplus lines insurance policy for the same coverage.  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.

A BILL FOR AN ACT

relating to insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 14 to be appropriately designated and to read as follows:

     "§431:14-     Exception for condominium master insurance or condominium master hurricane insurance.  (a)  Notwithstanding any provision of this article to the contrary, in the event that an existing condominium master insurance policy or condominium master hurricane insurance policy procured by a condominium association or its board of directors, whether wholly or partially, is issued by a surplus lines insurer, an admitted insurer may offer such policies at an amount of no more than fifty per cent of the amount charged by the surplus lines insurer; provided that:

     (1)  The condominium association has been covered by a condominium master insurance policy or condominium master hurricane insurance policy, whether wholly or partially, issued by a surplus lines insurer for no less than the preceding three years;

     (2)  The admitted insurer shall not charge the condominium association the amount authorized under this section for longer than six years; and

     (3)  The admitted insurer may require the condominium association to deposit a specific amount in the association's replacement reserves fund or to make certain maintenance and repairs.

     (b)  As used in this section, "condominium association" has the same meaning as association as defined in section 514B-3."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

Insurance; Condominiums; Rates; Surplus Lines Insurance; Admitted Insurers

Description:

Allows authorized insurers in the State to offer building and hurricane damage insurance for condominium buildings at a lesser rate than the building's prior surplus lines insurance policy for the same coverage.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  254

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 253

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 253 entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to allow authorized insurers in the State to offer building and hurricane insurance for condominium buildings at a lesser rate than the building's prior surplus lines insurance policy for the same coverage.

     Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs.

     Your Committee finds that the availability of condominium building master insurance policy and unit owner insurance policy options within the condominium insurance marketplace was shrinking, even before the August 2023 Maui wildfire event.  For condominium building master insurance policies, insurers have increased deductible amounts from what used to be between $10,000 to $25,000 per unit, per occurrence, to as much as $250,000.  Furthermore, insurance premiums for hurricane insurance policies have recently risen so high that three hundred seventy-five to three hundred ninety buildings have opted to renew their hurricane insurance policies with less than one hundred percent hurricane coverage.  This measure will incentivize admitted insurers to provide insurance at rates, while higher than the rates they provide, lower than the rates offered by surplus lines insurers.

     Your Committee notes that there are ongoing discussions between the Committee and larger insurance companies for those companies to be drawn into and enter the admitted insurance carrier market.

     Your Committee has amended this measure by changing the effective date to July 1, 3000, to encourage further discussion.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 253, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 253, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,