SB 1166: HPIA; HHRF; Property Insurance; Climate Change; Climate Disaster; Extreme Weather; Responsible Parties

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 climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system pose a threat to the health, safety, and security of all residents of, and visitors to, the State.  Climate disasters threaten the functionality of the regular insurance market and the residual market, or "insurers of last resort", like the Hawaii Property Insurance Association, as well as taxpayer resources in the state-funded Hawaii hurricane relief fund, which was reactivated by Act 296, Session Laws of Hawaii 2025, to provide insurance coverage in scenarios where the private market fails to do so.

     For residents, climate change risks include an increase in precipitation and intense tropical storms, hotter temperatures, rising sea level, and intensified drought.  Accordingly, the State has a compelling state interest in protecting its citizens from climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system.  This protection includes affordable access to a functioning insurance market in the State.

     The legislature further finds there is also a compelling state interest in preserving public resources for traditional public purposes, which does not include subsidizing the continued operation of the insurance market.  The insurance industry has been destabilized and harmed by the deception of people and entities who have engaged in misleading and deceptive practices about the connection between fossil fuel products and climate change.  The State's insurance industry, particularly the property and casualty insurance sector, has been destabilized by large and frequent payouts to policyholders for a variety of events caused by or attributable to the deception of these responsible parties.  This instability has led to increased nonrenewal rates and premiums on all islands and for multiple types of insurance policies.  Between 2018 and 2023, insurance nonrenewal rates increased by ninety-one per cent in the county of Kauai, two hundred ninety-six per cent in the city and county of Honolulu, one hundred eighty-four per cent in the county of Maui, and seventy per cent in the county of Hawaii.  The legislature believes that access to affordable insurance is necessary for the stability and financial health of residents of the State, but is threatened by increasing nonrenewal rates and rapidly rising premiums.  Therefore, the legislature further believes there is a compelling state interest in preserving insurance market stability, essential coverage for property owners and lenders, and affordable housing for the State's residents.

     The legislature further finds that the area burned by wildfires in the State has increased fourfold.  Most recently, the 2023 Maui wildfires, which were exacerbated by climate change, destroyed the town of Lahaina and killed at least one hundred two people.  In the aftermath of this tragic and horrific event, insurance companies operating in Hawaii have already paid out over $2,300,000,000 across more than ten thousand wildfire claims to fire victims, with another $1,000,000,000 of additional insured losses yet to be paid.  The scope and scale of damage has led to difficult settlement negotiations in which parties have tried to address how to meet the needs of fire victims, maintain a solvent market for insurance, and keep vital public utilities and educational institutions operating in the State's communities.  Hawaii has a compelling state interest in protecting the integrity of these institutions as they seek to provide relief to harmed and impacted parties.

     Climate change has also impacted the amount of water available in key watersheds across the islands.  Ongoing drought has created water security issues that are exacerbated by the growing water demand, which may increase up to thirty-six per cent by the end of the century.  For example, rainfall in the Nuuanu watershed is projected to decrease by as much as twenty‑seven per cent, and both the Heeia and Na Wai Eha watersheds are also experiencing decreases in rainfall, threatening groundwater supplies and drinking water availability.

     At Hawaii's shorelines, sea level has risen ten inches on average compared to 1950, and the mean number of days that cause high tide flooding in Honolulu has almost doubled from six to eleven days per year since the 1960s.  Almost all the shorelines in Hawaii, approximately ninety-two per cent, are predicted to retreat between one and twenty-four meters by 2050.  Researchers predict that shoreline retreat rates have doubled from the historical rate due to sea level rise.

     Climate change is also causing more extreme temperatures in Hawaii.  The average annual temperature in Hawaii in 2016 was about 1.7 degrees Fahrenheit warmer than the one hundred-year mean from 1917 to 2016.  Similarly, global mean sea surface temperature has increased by about 1.8 degrees Fahrenheit over the past century and waters around Hawaii have followed this trend.

     The legislature finds that for decades, certain people and entities have spread intentional lies, misinformation and disinformation, and misrepresentations about the connection between climate change and fossil fuel products, as well as how climate change has caused injuries in the State.  Continued lies, misinformation and disinformation, and misrepresentations by responsible parties pose a threat to the health, safety, and security of Hawaii's residents and visitors.  These parties have long known the dangers of fossil fuel products; however, they have continued to deny and lie for profit.  Hiding, obfuscating, and denying information to consumers, elected officials, and regulators alike has harmed and continues to harm the State.  Hawaii has a compelling interest in protecting consumers from lies and misleading information, while also encouraging factual and truthful information on how climate disasters and other harms can be attributed to the responsible parties who have spread falsehoods.

     The legislature further finds and declares that:

     (1)  Individuals and entities involved in the production of fossil fuel products have engaged in a decades-long project to protect their bottom lines with a coordinated effort to deceive the public about the reality of the climate crisis;

     (2)  Documents unveiled by investigative journalists and cited in current litigation brought by the city and county of Honolulu and the county of Maui demonstrate that those parties were aware of the potentially catastrophic impact of their products from as early as the 1950s.  Even though research conducted by their own scientists affirmed the impacts of their business, these parties outright denied that climate change was real, spread disinformation to cast doubt on the science, and fought regulatory action against fossil fuel and fossil fuel products;

     (3)  By the 1970s and 1980s, the scientific community understood that increasing carbon dioxide concentration in the atmosphere would contribute to global warming, and that the heightened carbon dioxide emissions were attributable to fossil fuels.  These facts were supported by several fossil fuel industry scientists from different companies, such as Exxon and Shell, who presented these findings to their management with warnings that the "present trend of fossil fuel consumption will cause dramatic environmental effects before the year 2050";

     (4)  Despite having internal knowledge that increased carbon dioxide concentrations due to fossil-fuel combustion posed a considerable threat, responsible parties launched a campaign to undermine climate science and stopped funding major climate research and launched campaigns to discredit climate science and delay actions perceived as contrary to their business interests by:

          (A)  Developing public relations strategies that were contradictory to their scientific knowledge and insights;

          (B)  Engaging in public communications campaigns to promote doubt and downplay the threats of climate change; and

          (C)  Funding individuals, organizations, and research aimed at discrediting the growing body of publicly available climate science;

     (5)  From 1970 to 2020, the oil and gas industry made nearly $2,800,000,000 per day and $1,000,000,000,000 per year in profit;

     (6)  Responsible parties currently advertise "green" efforts to the public that mask the lack of real investment in resiliency and energy-source transition and the continued prioritization of the extraction, refinement, and distribution of fossil fuel products;

     (7)  A December 2022 report by a congressional oversight committee revealed internal documents from fossil fuel industry senior leaders that explicitly reject taking accountability for the greenhouse gas emissions associated with their products; and

     (8)  By conduct and impact, these responsible parties have intentionally obfuscated the truth about climate change and outright deceived the public to continue dependence on fossil fuel products.

     The legislature finds that responsible parties must be held accountable for their deception to those harmed by climate disasters, extreme weather attributable to climate change, and long-term changes to the climate system.  The legislature further finds that the intentional lies, misinformation and disinformation, and misrepresentations by responsible parties about the connection between their fossil fuel products was primarily commercial activity.

     The legislature finds that insurance companies operating in the State are well positioned to redress the harm that responsible parties have caused through their deception.  By exercising their rights against responsible parties, the Hawaii Property Insurance Association, Hawaii hurricane relief fund, and private insurance companies have the ability to shift the costs of climate disasters, extreme weather attributable to climate change, and other harms resulting from long-term changes to the climate system onto the responsible parties rather than policyholders and taxpayers in the State.

     It is the intent of the State to provide a judicial forum for the efficient, just, and equitable resolution of claims under this Act.  State courts are the appropriate venue to hear these claims and provide appropriate relief.  The legislature further declares that the harms related or attributable to climate change should not be deemed acts of God, unforeseeable, or otherwise classified as a force majeure event eligible for litigation limitations or defenses, except as otherwise explicitly and unambiguously provided.

     Accordingly, the purpose of this Act is to:

     (1)  Provide a new, specific cause of action for insurers, including the Hawaii Property Insurance Association and the Hawaii hurricane relief fund, to seek damages against a responsible party for harms resulting from climate disasters and extreme weather attributable to climate change; and

     (2)  Require Hawaii Property Insurance Association insurance rates to account for any proceeds from the claims against a responsible party.

     SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 13 to be appropriately designated and to read as follows:

     "§431:13-     Civil liability of responsible parties.  (a)  The Hawaii Property Insurance Association, the Hawaii hurricane relief fund, or any private insurer may bring a civil action against a responsible party pursuant to this section if the following conditions are met:

     (1)  The Hawaii Property Insurance Association, the Hawaii hurricane relief fund, or any private insurer sustained qualifying damages of $10,000 or more as a result of a climate disaster or extreme weather or other event attributable to climate change; provided that multiple plaintiffs may aggregate their claims with a common injury and connection to a climate disaster or extreme weather or other event attributable to climate change to reach this amount in controversy threshold, regardless of association in a class action;

     (2)  At any time since 1950, the responsible party did business in this State, was registered to do business in this State, was appointed an agent of this State, or otherwise had sufficient contacts with this State to give this State jurisdiction over the responsible party; and

     (3)  Notwithstanding any other applicable statute of limitations, the action is filed within three years of the date that the injury was or should have been discovered.

     (b)  Any civil action against a responsible party that meets the conditions described in subsection (a) may be brought in any of the following applicable counties:

     (1)  The county in which all or a substantial part of the events giving rise to the action occurred;

     (2)  The county of residence for an individual defendant who is a natural person; or

     (3)  The county of the principal office in this State of any one of the defendants that is not a natural person.

     (c)  All responsible parties in any civil action that is filed pursuant to this section shall be jointly, severally, and strictly liable to a plaintiff for qualifying damages found to have been caused by a climate disaster or extreme weather or other event attributable to climate change.

     (d)  The payment by a plaintiff to a policyholder for qualifying damages resulting from a climate disaster or extreme weather or other event attributable to climate change, including an occurrence whose likelihood or severity was increased by long-term changes in the climate system, shall be deemed an injury in fact to the plaintiff for purposes of standing under this section.

     (e)  Notwithstanding any other law to the contrary, the following shall not be considered a defense under this section:

     (1)  A defendant's ignorance or mistake of law;

     (2)  A defendant's belief that the requirements under this section are unconstitutional;

     (3)  A defendant's reliance on a court decision that has been reversed or vacated on appeal or overruled by a subsequent court, even if the court decision had not been reversed, vacated, or overruled at the time the defendant engaged in the conduct giving rise to the action brought under this section;

     (4)  A defendant's reliance on a federal or state court decision that is not binding on the court in which the action has been brought;

     (5)  Nonmutual issue preclusion or nonmutual claim preclusion;

     (6)  A claim that the enforcement of this section or the imposition of civil liability against the defendant will violate a constitutional right of a third party;

     (7)  A defendant's assertion that this section proscribes conduct that is separately prohibited by any other law of this State;

     (8)  A claim that the defendant's fossil fuel products were not misused, or were not intended to be misused, in an unlawful manner;

     (9)  A defendant's assertion that federal or state laws relating to fossil fuel products and a responsible party's operations displace, abrogate, or supersede the actions authorized by this section, the authority of the courts of this State to provide a forum for the action, or the authority of the courts of this State to provide a remedy to plaintiffs;

    (10)  A defendant's assertion that a choice-of-law or choice-of-forum clause governs the action, regardless of whether the clause applies to a plaintiff on the basis of consumer transactions;

    (11)  A defendant's assertion that the plaintiff assumed a risk of harm through the use of the defendant's products; and

    (12)  A defendant's assertion that the forum is inconvenient, if the jurisdictional requirements of this section are satisfied.

     (f)  This section shall not prohibit this State, a state official, or a public prosecutor from filing an amicus curiae brief in a civil action brought pursuant to this section.

     (g)  If a plaintiff prevails in an action brought pursuant to this section, the court shall award the amount of the qualifying damages.  In any civil action against a responsible party under this section, the Hawaii Property Insurance Association, the Hawaii hurricane relief fund, or any private insurer may recover or obtain court costs, litigation expenses, reasonable attorneys' fees, and any other relief that the court or a jury deems proper.

     (h)  Notwithstanding any other law, a court shall not award attorneys' fees or costs to a defendant in an action brought pursuant to this section, unless the plaintiff was represented by counsel in the action and plaintiff's counsel is found by the court or the Hawaii State Bar Association to be in violation of applicable rules of professional conduct or rules of civil procedure.

     (i)  Qualifying damages awarded pursuant to this section may be offset by evidence that a plaintiff fully recovered from a public body or private entity for the plaintiff's qualifying damages.

     (j)  For the purposes of this section:

     "Climate disaster" means an event that meets any of the following qualifications and is determined by impact attribution science or extreme event attribution science to be substantially more probable or materially intensified by climate change from a responsible party's fossil fuel products:

     (1)  A natural catastrophe, including a hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought, or, regardless of cause, a fire, flood, or explosion, that, in the determination of the President of the United States, causes damage of sufficient severity and magnitude to warrant major disaster assistance under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law 93-288, as amended, to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused by the catastrophe;

     (2)  A catastrophic incident that is a natural or manmade incident that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the population, infrastructure, environment, economy, national morale, or government functions.  A catastrophic incident could result in sustained national impacts over a prolonged period of time, almost immediately exceed resources normally available to state, local, tribal, and private sector authorities in the impacted area, and significantly interrupt governmental operations and emergency services to such an extent that national security could be threatened.  A catastrophic incident does not include an event linked to terrorism;

     (3)  An event that qualifies or would have qualified as a climate disaster according to the National Centers for Environmental Information's billion-dollar weather and climate disasters program and data list, as it existed in December 2024;

     (4)  A state of emergency or local state of emergency as defined in section 127A-2; or

     (5)  An event or occurrence linked to extreme weather or other event attributable to climate change for which losses in the aggregate across insurance carriers in the State exceed $100,000,000.

     "Extreme event attribution science" means research aimed at understanding how human-induced changes in the global climate system affect the probability, severity, and other characteristics of extreme weather events, such as wildfires and flooding, by determining the likelihood of a particular event happening today compared to how it might have unfolded without the human-caused increase in concentration of greenhouse gases in the atmosphere.

     "Extreme weather or other event attributable to climate change" means weather, climate, or environmental conditions, including temperature, precipitation, drought, flooding, or wildfires, that are consistent with impacts or events that are attributable to climate change and in which the intensity, magnitude, location, timing, or extent of the event are shown by peer-reviewed studies or assessments using peer-reviewed methods, to be attributable in part to climate change.  These events include those that extreme event attribution science determines were made more likely or severe by climate change.

     "Fossil fuel product" includes crude petroleum oil and all other hydrocarbons, regardless of gravity, produced at the wellhead in liquid form by ordinary production methods; natural, manufactured, mixed, and byproduct hydrocarbon gas; refined crude oil; crude tops; topped crude; processed crude; processed crude petroleum; residue from crude petroleum; cracking stock; uncracked fuel oil; fuel oil; treated crude oil; residuum; gas oil; casinghead gasoline; natural-gas gasoline; kerosene; benzine; wash oil; waste oil; blended gasoline; lubricating oil; and blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas.

     "Impact attribution science" means research aimed at understanding how global climate change affects human and natural systems, including localized physical impacts, such as floods, droughts, and sea level rise, and the corresponding effects on infrastructure, public health, ecosystems, agriculture, and economies.

     "Qualifying damages" means the claims payments distributed by the Hawaii Property Insurance Association, the Hawaii hurricane relief fund, or an insurance company to a policyholder for damages resulting from a climate disaster or extreme weather or other event attributable to climate change.

     "Responsible party" means any firm, corporation, company, partnership, society, joint stock company, or other entity or association that engaged in misleading and deceptive practices, including lies, or the provision of misinformation or disinformation about the connection between its fossil fuel products and climate change and extreme weather or other events attributable to climate change.  "Responsible party" does not include the federal government, tribal governments, this State, a political subdivision of the federal, tribal, or state government, or an employee of the federal, tribal, or state government on the basis of acts or omissions in the course of official duties."

     SECTION 3.  Section 431:21-106, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The plan of operation:

     (1)  Shall establish procedures for performance of all the powers and duties of the association under section 431:21-105;

     (2)  Shall establish maximum limits of liability to be placed through the association;

     (3)  Shall establish reasonable underwriting standards for determining insurability of a risk that are comparable to the standards used to determine insurability of a risk located outside the area designated by the commissioner as eligible for association coverage;

     (4)  Shall establish a schedule of deductibles, if appropriate;

     (5)  Shall establish a maximum period of time during which a high-rise condominium may be eligible to be insured by the association, which shall not exceed sixty months;

     (6)  Shall establish the commission to be paid to licensed producers;

     (7)  Shall establish the rates to be charged for the insurance coverages, so that the total premium income from all association policies, when combined with the investment income, shall annually fund the administration of the association.  The administration of the association shall include the expenses incurred in processing applications, conducting inspections, issuing and servicing policies, paying commissions, and paying claims, but shall not include assessments approved by the commissioner[;].  Rates shall account for any proceeds obtained by the association from any civil action against a responsible party for claims paid for losses from climate disasters or extreme weather or other events attributable to climate change pursuant to section 431:13-   ; provided that if the association does not exercise its rights under that section, the association shall submit a report to the commissioner comparing the rates to be charged with the rates that would have been charged had the association fully recovered the losses from the responsible parties;

     (8)  Shall establish the manner and scope of the inspection and the form of the inspection report.  The inspection guidelines may include setting minimum conditions the property must meet before an inspection is required;

     (9)  Shall establish procedures whereby selections for the board of directors will be submitted to the commissioner for the commissioner's information;

    (10)  Shall establish procedures for records to be kept of all financial transactions of the association, its producers, and its board of directors;

    (11)  Shall establish procedures by which applications will be received and serviced by the association;

    (12)  Shall establish guidelines for the investigation and payment of claims;

    (13)  Shall establish procedures whereby the association may assume and cede reinsurance on risks written through the association;

    (14)  Shall include the following:

          (A)  Coverage forms, endorsements, limits, and deductibles for the covered condominium; provided that the association may categorize these forms, endorsements, limits, and deductibles by the type of peril being covered;

          (B)  Rate tiers, including potential high deductible options and surcharges for condominiums that remain in the plan of operation;

          (C)  Provisions authorizing the association to decline providing coverage;

          (D)  Potential annual premium rate increases; and

          (E)  Establishment of adequate rates to avoid assessment of the voluntary market;

    (15)  Shall require, [prior to] before issuance or renewal of coverage, the applicant for condominium property insurance coverage or renewal to:

          (A)  Provide the following to the association:

              (i)  The condominium association's declarations, bylaws, or other documents that describe the condominium association's process for paying claims, including the portion of the claim to be paid by the condominium association and the portion to be paid by each unit owner; and

             (ii)  The condominium association's declarations, bylaws, or other documents that describe the condominium association's process for handling losses both pursuant to the applicable master policy and by the applicable condominium association;

          (B)  Cause to be completed an inspection of the applicable condominium; provided that the inspection shall be consistent with any inspection and reporting standards established by the board of directors of the association and incorporated into the plan of operation pursuant to paragraph (8); and

          (C)  Satisfy any relevant requirements established by the board of directors of the association and incorporated into the plan of operation;

    (16)  May prohibit coverage under this article for any high-rise condominium for which the association or its servicing entities or any agents thereof have identified maintenance issues that materially affect the insurability of the high-rise condominium for the type of coverage being sought; and

    (17)  Shall adopt procedures, guidelines, installment amounts, and a timetable for the repayment of any general fund moneys that are loaned to sufficiently capitalize the reserve trust fund established pursuant to section 431:21-105(b)(9) and deposited into the separate account within the reserve trust fund; provided that the repayment shall not commence until the reserve trust fund is sufficiently capitalized as determined by the board of directors."

     SECTION 4.  Nothing in this Act shall be construed to:

     (1)  Limit in any way the enforceability of existing laws concerning insurance, consumer protection, climate, environment, energy, or natural resources, by either the government or other private plaintiffs;

     (2)  Replace legally mandated disaster recovery funds, designated disaster recovery funds established via legislation or administrative rule, or contractually obligated or court ordered insurance claim payouts;

     (3)  Relieve the liability of an entity for damages resulting from climate change, as provided by any other law; or

     (4)  Preempt, displace, or restrict any rights or remedies of a person, this State, local government entities, or a tribal government pursuant to law relating to a past, present, or future allegation of any of the following:

          (A)  Deception concerning the effect of fossil fuels on climate change;

          (B)  Damage or injury resulting from the role of fossil fuels in contributing to climate change; and

          (C)  Failure to avoid damage or injury related to climate change, including claims for nuisance, trespass, design defect, negligence, failure to warn, or deceptive or unfair practices, or claims for injunctive, declaratory, monetary, or other relief.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 3000.

Report Title:

HPIA; HHRF; Property Insurance; Climate Change; Climate Disaster; Extreme Weather; Responsible Parties

Description:

Allows the Hawaii Property Insurance Association, the Hawaii Hurricane Relief Fund, and private insurers to bring claims against responsible parties for amounts paid by the insurers for losses resulting from climate disasters and extreme weather attributable to climate change.  Requires insurance rates established by the Hawaii Property Insurance Association to account for any proceeds from the civil claims against a responsible party.  Effective 7/1/3000.  (HD2)

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.  The legislature finds that climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system pose a threat to the health, safety, and security of all residents of, and visitors to, the State.

     For residents, climate change risks include an increase in precipitation and intense tropical storms, hotter temperatures, rising sea level, and intensified drought.  Accordingly, the State has a compelling state interest in protecting its citizens from climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system.  This protection includes affordable access to a functioning insurance market in the State.

     The legislature further finds there is also a compelling state interest in preserving public resources for traditional public purposes, which does not include subsidizing the continued operation of the insurance market.  The insurance industry has been destabilized and harmed by the deception of people and entities who have engaged in misleading and deceptive practices about the connection between fossil fuel products and climate change.  The State's insurance industry, particularly the property and casualty insurance sector, has been destabilized by large and frequent payouts to policyholders for a variety of events caused by or attributable to the deception of these responsible parties.  This instability has led to increased nonrenewal rates and premiums on all islands and for multiple types of insurance policies.  Between 2018 and 2023, insurance nonrenewal rates increased by ninety-one per cent in the county of Kauai, two hundred ninety-six per cent in the city and county of Honolulu, one hundred eighty-four per cent in the county of Maui, and seventy per cent in the county of Hawaii.

     The legislature further finds that the area burned by wildfires in the State has increased fourfold.  Most recently, the 2023 Maui wildfires, which were exacerbated by climate change, destroyed the town of Lahaina and killed at least one hundred two people.  In the aftermath of this tragic and horrific event, insurance companies operating in Hawaii have already paid out over $2,300,000,000 across more than ten thousand wildfire claims to fire victims, with another $1,000,000,000 of additional insured losses yet to be paid.  The scope and scale of damage has led to difficult settlement negotiations in which parties have tried to address how to meet the needs of fire victims, maintain a solvent market for insurance, and keep vital public utilities and educational institutions operating in the State's communities.  Hawaii has a compelling state interest in protecting the integrity of these institutions as they seek to provide relief to harmed and impacted parties.

     Climate change has also impacted the amount of water available in key watersheds across the islands.  Ongoing drought has created water security issues that are exacerbated by the growing water demand, which may increase up to thirty-six per cent by the end of the century.  For example, rainfall in the Nuuanu watershed is projected to decrease by as much as twenty‑seven per cent, and both the Heeia and Na Wai Eha watershed are also experiencing decreases in rainfall, threatening groundwater supplies and drinking water availability.

     At Hawaii's shorelines, sea level has risen ten inches on average compared to 1950, and the mean number of days that cause high tide flooding in Honolulu has almost doubled from six to eleven days per year since the 1960s.  Almost all the shorelines in Hawaii, approximately ninety-two per cent, are predicted to retreat between one and twenty-four meters by 2050.  Researchers predict that shoreline retreat rates have doubled from the historical rate due to sea level rise.

     Climate change is also causing more extreme temperatures in Hawaii.  The average annual temperature in Hawaii in 2016 was about 1.7 degrees Fahrenheit warmer than the one hundred-year mean from 1917 to 2016.  Similarly, global mean sea surface temperature has increased by about 1.8 degrees Fahrenheit over the past century and waters around Hawaii have followed this trend.

     The legislature finds that for decades, certain people and entities have spread intentional lies, misinformation and disinformation, and misrepresentations about the connection between climate change and fossil fuel products, as well as how climate change has caused injuries in the State.  Continued lies, misinformation and disinformation, and misrepresentations by responsible parties pose a threat to the health, safety, and security of Hawaii's residents and visitors.  These parties have long known the dangers of fossil fuel products; however, they have continued to deny and lie for profit.  Hiding, obfuscating, and denying information to consumers, elected officials, and regulators alike has harmed and continues to harm the State.  Hawaii has a compelling interest in protecting consumers from lies and misleading information, while also encouraging factual and truthful information on how climate disasters and other harms can be attributed to the responsible parties who have spread falsehoods.

     The legislature further finds and declares that:

     (1)  Individuals and entities involved in the production of fossil fuel products have engaged in a decades-long project to protect their bottom lines with a coordinated effort to deceive the public about the reality of the climate crisis;

     (2)  Documents unveiled by investigative journalists and cited in current litigation brought by the city and county of Honolulu and the county of Maui demonstrate that those parties were aware of the potentially catastrophic impact of their products from as early as the 1950s.  Even though research conducted by their own scientists affirmed the impacts of their business, these parties outright denied that climate change was real, spread disinformation to cast doubt on the science, and fought regulatory action against fossil fuel and fossil fuel products;

     (3)  By the 1970s and 1980s, the scientific community understood that increasing carbon dioxide concentration in the atmosphere would contribute to global warming, and that the heightened carbon dioxide emissions were attributable to fossil fuels.  These facts were supported by several fossil fuel industry scientists from different companies, such as Exxon and Shell, who presented these findings to their management with warnings that the "present trend of fossil fuel consumption will cause dramatic environmental effects before the year 2050";

     (4)  Despite having internal knowledge that increased carbon dioxide concentrations due to fossil-fuel combustion posed a considerable threat, responsible parties launched a campaign to undermine climate science and stopped funding major climate research and launched campaigns to discredit climate science and delay actions perceived as contrary to their business interests by:

          (A)  Developing public relations strategies that were contradictory to their scientific knowledge and insights;

          (B)  Engaging in public communications campaigns to promote doubt and downplay the threats of climate change; and

          (C)  Funding individuals, organizations, and research aimed at discrediting the growing body of publicly available climate science;

     (5)  From 1970 to 2020, the oil and gas industry made nearly $2,800,000,000 per day and $1,000,000,000,000 per year in profit;

     (6)  Responsible parties currently advertise "green" efforts to the public that mask the lack of real investment in resiliency and energy-source transition and the continued prioritization of the extraction, refinement, and distribution of fossil fuel products;

     (7)  A December 2022 report by a congressional oversight committee revealed internal documents from fossil fuel industry senior leaders that explicitly reject taking accountability for the greenhouse gas emissions associated with their products; and

     (8)  By conduct and impact, these responsible parties have intentionally obfuscated the truth about climate change and outright deceived the public to continue dependence on fossil fuel products.

     The legislature finds that responsible parties must be held accountable for their deception to those harmed by climate disasters, extreme weather attributable to climate change, and long-term changes to the climate system.  The legislature further finds that the intentional lies, misinformation and disinformation, and misrepresentations by responsible parties about the connection between their fossil fuel products was primarily commercial activity.

     The legislature finds that insurance companies operating in the State are well positioned to redress the harm that responsible parties have caused through their deception.  By exercising their rights against responsible parties, the Hawaii property insurance association and private insurance companies have the ability to shift the costs of climate disasters, extreme weather attributable to climate change, and other harms resulting from long-term changes to the climate system onto the responsible parties rather than policyholders and taxpayers in the State.

     It is the intent of the State to provide a judicial forum for the efficient, just, and equitable resolution of claims under this Act.  State courts are the appropriate venue to hear these claims and provide appropriate relief.  The legislature further declares that the harms related or attributable to climate change should not be deemed acts of God, unforeseeable, or otherwise classified as a force majeure event eligible for litigation limitations or defenses, except as otherwise explicitly and unambiguously provided.

     Accordingly, the purpose of this Act is to:

     (1)  Provide a new, specific cause of action for insurers to seek damages against a responsible party for harms resulting from climate disasters, extreme weather attributable to climate change, and long-term changes in the climate system; and

     (2)  Require insurance rates to account for any proceeds from the claims against a responsible party.

     SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 13 to be appropriately designated and to read as follows:

     "§431:13-     Civil liability of responsible parties.  (a)  The Hawaii property insurance association or any private insurer may bring a civil action against a responsible party pursuant to this section if the following conditions are met:

     (1)  The Hawaii property insurance association or any private insurer sustained qualifying damages of no less than $10,000 as a result of a climate disaster or extreme weather or other event attributable to climate change; provided that multiple plaintiffs may aggregate their claims with a common injury and connection to a climate disaster or extreme weather or other event attributable to climate change to reach this amount in controversy threshold, regardless of association in a class action;

     (2)  During any time since the 1950, the responsible party did business in this State, was registered to do business in this State, was appointed an agent of this State or otherwise had sufficient contacts with this State to give this State jurisdiction over the responsible party; and

     (3)  Notwithstanding any other applicable statute of limitations, the action is filed within three years of the date that the injury was or should have been discovered.

     (b)  Any civil action against a responsible party that meets the conditions described in subsection (a) may be brought in any of the following applicable counties:

     (1)  The county in which all or a substantial part of the events giving rise to the action occurred;

     (2)  The county of residence for an individual defendant who is a natural person; or

     (3)  The county of the principal office in this State of any one of the defendants that is not a natural person.

     (c)  All responsible parties in any civil action that is filed pursuant to this section shall be jointly, severally, and strictly liable to a plaintiff for qualifying damages found to have been caused by a climate disaster or extreme weather or other event attributable to climate change.

     (d)  The connection between a policyholder's damages with a climate disaster, extreme weather or other event attributable to climate change, or harm resulting from long-term changes in the climate system and the payment to the policyholder for those damages shall be deemed an injury in fact for any person who is harmed by the event.  Any person who suffers an injury in fact under this subsection shall have standing to bring a civil action pursuant to this section.

     (e)  Notwithstanding any other law to the contrary, the following shall not be considered a defense under this section:

     (1)  A defendant's ignorance or mistake of law;

     (2)  A defendant's belief that the requirements under this section are unconstitutional;

     (3)  A defendant's reliance on a court decision that has been reversed or vacated on appeal or overruled by a subsequent court, even if the court decision had not been reversed, vacated, or overruled at the time the defendant engaged in the conduct giving rise to the action brought under this section;

     (4)  A defendant's reliance on a federal or state court decision that is not binding on the court in which the action has been brought;

     (5)  Nonmutual issue preclusion or nonmutual claim preclusion;

     (6)  A claim that the enforcement of this section or the imposition of civil liability against the defendant will violate a constitutional right of a third party;

     (7)  A defendant's assertion that this section proscribes conduct that is separately prohibited by any other law of this State;

     (8)  A claim that the defendant's fossil fuel products were not misused, or were not intended to be misused, in an unlawful manner;

     (9)  A defendant's assertion that federal or state laws relating to fossil fuel products and a responsible party's operations displace, abrogate, or supersede the actions authorized by this section, the authority of the courts of this State to provide a forum for the action, or the authority of the courts of this State to provide a remedy to plaintiffs;

    (10)  A defendant's assertion that a choice-of-law or choice-of-forum clause governs the action, regardless of whether the clause applies to a plaintiff on the basis of consumer transactions;

    (11)  A defendant's assertion that the plaintiff assumed a risk of harm through the use of the defendant's products; and

    (12)  A defendant's assertion that the forum is inconvenient, if the jurisdictional requirements of this section are satisfied.

     (f)  No civil or administrative enforcement action pursuant to this section shall be brought by this State or any of its political subdivisions or officers or employees thereof.

     (g)  Notwithstanding any other law, this State, a state official, or a public prosecutor shall not intervene in a civil action brought pursuant to this section.  However, this subsection shall not prohibit this State, a state official, or a public prosecutor from filing an amicus curiae brief in the action.

     (h)  If a plaintiff prevails in an action brought pursuant to this section, the court shall award the amount of the qualifying damages.

     (i)  Notwithstanding any other law, a court shall not award attorneys' fees or costs to a defendant in an action brought pursuant to this section, unless the plaintiff was represented by counsel in the action and plaintiff's counsel is found by the court or the Hawaii State Bar Association to be in violation of applicable rules of professional conduct or rules of civil procedure.

     (j)  Qualifying damages awarded pursuant to this section may be offset by evidence that a plaintiff fully recovered from a public body or private entity for the plaintiff's qualifying damages.

     (k)  For the purposes of this section:

     "Climate disaster" means an event that meets any of the following qualifications and is determined by impact attribution science or extreme event attribution science to be substantially more probable or materially intensified by climate change from a responsible party's fossil fuel products:

     (1)  A natural catastrophe, including a hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought, or, regardless of cause, a fire, flood, or explosion, that, in the determination of the President of the United States, causes damage of sufficient severity and magnitude to warrant major disaster assistance under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law 93-288, as amended, to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused by the catastrophe;

     (2)  A catastrophic incident that is a natural or manmade incident that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the population, infrastructure, environment, economy, national morale, or government functions.  A catastrophic incident could result in sustained national impacts over a prolonged period of time, almost immediately exceeds resources normally available to state, local, tribal, and private sector authorities in the impacted area, and significantly interrupts governmental operations and emergency services to such an extent that national security could be threatened.  A catastrophic incident does not include an event linked to terrorism;

     (3)  An event that qualifies or would have qualified as a climate disaster according to the National Centers for Environmental Information's billion-dollar weather and climate disasters program and data list, as it existed in December 2024;

     (4)  A state of emergency or local state of emergency as defined in section 127A-2; or

     (5)  An event or occurrence linked to extreme weather or other event attributable to climate change for which losses in the aggregate across insurance carriers in the State exceed $100,000,000.

     "Extreme event attribution science" means research aimed at understanding how human-induced changes in the global climate system affect the probability, severity, and other characteristics of extreme weather events, such as wildfires and flooding, by determining the likelihood of a particular event happening today compared to how it might have unfolded without the human-caused increase in concentration of greenhouse gases in the atmosphere.

     "Extreme weather or other event attributable to climate change" means weather, climate, or environmental conditions, including temperature, precipitation, drought, flooding, or wildfires, that are consistent with impacts or events that are attributable to climate change and in which the intensity, magnitude, location, timing, or extent of the event are shown by peer-reviewed studies or assessments using peer-reviewed methods, to be attributable in part to climate change.  These events include those that extreme event attribution science determines were made more likely or severe by climate change.

     "Fossil fuel product" includes crude petroleum oil and all other hydrocarbons, regardless of gravity, produced at the wellhead in liquid form by ordinary production methods; natural, manufactured, mixed, and byproduct hydrocarbon gas; refined crude oil; crude tops; topped crude; processed crude; processed crude petroleum; residue from crude petroleum; cracking stock; uncracked fuel oil; fuel oil; treated crude oil; residuum; gas oil; casinghead gasoline; natural-gas gasoline; kerosene; benzine; wash oil; waste oil; blended gasoline; lubricating oil; and blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas.

     "Impact attribution science" means research aimed at understanding how global climate change affects human and natural systems, including localized physical impacts, such as floods, droughts, and sea level rise, and the corresponding effects on infrastructure, public health, ecosystems, agriculture, and economies.

     "Qualifying damages" means the claims payments distributed by the Hawaii property insurance association or an insurance company to a policyholder for damages resulting from a climate disaster or extreme weather or other event attributable to climate change.

     "Responsible party" means a firm, corporation, company, partnership, society, joint stock company, or any other entity or association that engaged in misleading and deceptive practices, including lies, or the provision of misinformation or disinformation about the connection between its fossil fuel products and climate change and extreme weather or other events attributable to climate change.  "Responsible party" does not include the federal government, tribal governments, this State, a political subdivision of the federal, tribal, or state government, or an employee of the federal, tribal, or state government on the basis of acts or omissions in the course of official duties."

     SECTION 3.  Section 431:21-106, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The plan of operation:

     (1)  Shall establish procedures for performance of all the powers and duties of the association under section 431:21-105;

     (2)  Shall establish maximum limits of liability to be placed through the association;

     (3)  Shall establish reasonable underwriting standards for determining insurability of a risk that are comparable to the standards used to determine insurability of a risk located outside the area designated by the commissioner as eligible for association coverage;

     (4)  Shall establish a schedule of deductibles, if appropriate;

     (5)  Shall establish a maximum period of time during which a high-rise condominium may be eligible to be insured by the association, which shall not exceed sixty months;

     (6)  Shall establish the commission to be paid to licensed producers;

     (7)  Shall establish the rates to be charged for the insurance coverages, so that the total premium income from all association policies, when combined with the investment income, shall annually fund the administration of the association.  The administration of the association shall include the expenses incurred in processing applications, conducting inspections, issuing and servicing policies, paying commissions, and paying claims, but shall not include assessments approved by the commissioner[;].  Rates shall account for any proceeds obtained by the association from any civil action against a responsible party for claims paid for losses from climate disasters, extreme weather, or other event attributable to climate change pursuant to section 431:13-   ; provided that if the association does not exercise its rights, the association shall be required to submit a report to the commissioner comparing the rates to be charged with the rates that would have been charged had the association fully recovered the losses from the responsible parties;

     (8)  Shall establish the manner and scope of the inspection and the form of the inspection report.  The inspection guidelines may include setting minimum conditions the property must meet before an inspection is required;

     (9)  Shall establish procedures whereby selections for the board of directors will be submitted to the commissioner for the commissioner's information;

    (10)  Shall establish procedures for records to be kept of all financial transactions of the association, its producers, and its board of directors;

    (11)  Shall establish procedures by which applications will be received and serviced by the association;

    (12)  Shall establish guidelines for the investigation and payment of claims;

    (13)  Shall establish procedures whereby the association may assume and cede reinsurance on risks written through the association;

    (14)  Shall include the following:

          (A)  Coverage forms, endorsements, limits, and deductibles for the covered condominium; provided that the association may categorize these forms, endorsements, limits, and deductibles by the type of peril being covered;

          (B)  Rate tiers, including potential high deductible options and surcharges for condominiums that remain in the plan of operation;

          (C)  Provisions authorizing the association to decline providing coverage;

          (D)  Potential annual premium rate increases; and

          (E)  Establishment of adequate rates to avoid assessment of the voluntary market;

    (15)  Shall require, prior to issuance or renewal of coverage, the applicant for condominium property insurance coverage or renewal to:

          (A)  Provide the following to the association:

              (i)  The condominium association's declarations, bylaws, or other documents that describe the condominium association's process for paying claims, including the portion of the claim to be paid by the condominium association and the portion to be paid by each unit owner; and

             (ii)  The condominium association's declarations, bylaws, or other documents that describe the condominium association's process for handling losses both pursuant to the applicable master policy and by the applicable condominium association;

          (B)  Cause to be completed an inspection of the applicable condominium; provided that the inspection shall be consistent with any inspection and reporting standards established by the board of directors of the association and incorporated into the plan of operation pursuant to paragraph (8); and

          (C)  Satisfy any relevant requirements established by the board of directors of the association and incorporated into the plan of operation;

    (16)  May prohibit coverage under this article for any high-rise condominium for which the association or its servicing entities or any agents thereof have identified maintenance issues that materially affect the insurability of the high-rise condominium for the type of coverage being sought; and

    (17)  Shall adopt procedures, guidelines, installment amounts, and a timetable for the repayment of any general fund moneys that are loaned to sufficiently capitalize the reserve trust fund established pursuant to section 431:21-105(b)(9) and deposited into the separate account within the reserve trust fund; provided that the repayment shall not commence until the reserve trust fund is sufficiently capitalized as determined by the board of directors."

     SECTION 4.  Nothing in this Act shall be construed to:

     (1)  Limit in any way the enforceability of existing laws concerning insurance, consumer protection, climate, environment, energy, or natural resources, by either the government or other private plaintiffs;

     (2)  Replace legally mandated disaster recovery funds, designated disaster recovery funds established via legislation or administrative rule, or contractually obligated or court ordered insurance claim payouts;

     (3)  Relieve the liability of an entity for damages resulting from climate change, as provided by any other law; or

     (4)  Preempt, displace, or restrict any rights or remedies of a person, this State, local government entities, or a tribal government pursuant to law relating to a past, present, or future allegation of any of the following:

          (A)  Deception concerning the effect of fossil fuels on climate change;

          (B)  Damage or injury resulting from the role of fossil fuels in contributing to climate change; and

          (C)  Failure to avoid damage or injury related to climate change, including claims for nuisance, trespass, design defect, negligence, failure to warn, or deceptive or unfair practices, or claims for injunctive, declaratory, monetary, or other relief.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 3000.

Report Title:

HPIA; Property Insurance; Climate Change; Climate Disaster; Extreme Weather; Responsible Parties

Description:

Allows the Hawaii Property Insurance Association and private insurers to bring claims against responsible parties for amounts paid by the insurers for losses resulting from climate disasters and extreme weather attributable to climate change.  Requires insurance rates established by the Hawaii Property Insurance Association to account for any proceeds from the civil claims against a responsible party.  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.  The legislature finds that climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system pose a threat to the health, safety, and security of all residents of, and visitors to, the State.

     For residents, climate change risks include an increase in precipitation and intense tropical storms, hotter temperatures, rising sea level, and intensified drought.  Accordingly, the State has a compelling state interest in protecting its citizens from climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system.  This protection includes affordable access to a functioning insurance market in the State.

     The legislature further finds there is also a compelling state interest in preserving public resources for traditional public purposes, which does not include subsidizing the continued operation of the insurance market.  The insurance industry has been destabilized and harmed by the deception of people and entities who have engaged in misleading and deceptive practices about the connection between fossil fuel products and climate change.  The State's insurance industry, particularly the property and casualty insurance sector, has been destabilized by large and frequent payouts to policyholders for a variety of events caused by or attributable to the deception of these responsible parties.  This instability has led to increased nonrenewal rates and premiums on all islands and for multiple types of insurance policies.  Between 2018 and 2023, insurance nonrenewal rates increased by ninety-one per cent in the county of Kauai, two hundred ninety-six per cent in the city and county of Honolulu, one hundred eighty-four per cent in the county of Maui, and seventy per cent in the county of Hawaii.

     The legislature further finds that the area burned by wildfires in the State has increased fourfold.  Most recently, the 2023 Maui wildfires, which were exacerbated by climate change, destroyed the town of Lahaina and killed at least one hundred two people.  In the aftermath of this tragic and horrific event, insurance companies operating in Hawaii have already paid out over $2.3 billion across more than ten thousand wildfire claims to fire victims, with another one billion dollars of additional insured losses yet to be paid.  The scope and scale of damage has led to difficult settlement negotiations in which parties have tried to address how to meet the needs of fire victims, maintain a solvent market for insurance, and keep vital public utilities and educational institutions operating in the State's communities.  Hawaii has a compelling state interest in protecting the integrity of these institutions as they seek to provide relief to harmed and impacted parties.

     Climate change has also impacted the amount of water available in key watersheds across the islands.  Ongoing drought has created water security issues that are exacerbated by the growing water demand, which may increase up to thirty-six per cent by the end of the century.  For example, rainfall in the Nuuanu watershed is projected to decrease by as much as twenty‑seven per cent, and both the Heeia and Na Wai Eha watershed are also experiencing decreases in rainfall, threatening groundwater supplies and drinking water availability.

     At Hawaii's shorelines, sea level has risen ten inches on average compared to 1950, and the mean number of days that cause high tide flooding in Honolulu has almost doubled from six to eleven days per year since the 1960s.  Almost all the shorelines in Hawaii, approximately ninety-two per cent, are predicted to retreat between one and twenty-four meters by 2050.  Researchers predict that shoreline retreat rates have doubled from the historical rate due to sea level rise.

     Climate change is also causing more extreme temperatures in Hawaii.  The average annual temperature in Hawaii in 2016 was about 1.7 degrees Fahrenheit warmer than the one hundred-year mean from 1917 to 2016.  Similarly, global mean sea surface temperature has increased by about 1.8 degrees Fahrenheit over the past century and waters around Hawaii have followed this trend.

     The legislature finds that for decades, certain people and entities have spread intentional lies, misinformation and disinformation, and misrepresentations about the connection between climate change and fossil fuel products, as well as how climate change has caused injuries in the State.  Continued lies, misinformation and disinformation, and misrepresentations by responsible parties pose a threat to the health, safety, and security of Hawaii's residents and visitors.  These parties have long known the dangers of fossil fuel products; however, they have continued to deny and lie for profit.  Hiding, obfuscating, and denying information to consumers, elected officials, and regulators alike has harmed and continues to harm the State.  Hawaii has a compelling interest in protecting consumers from lies and misleading information, while also encouraging factual and truthful information on how climate disasters and other harms can be attributed to the responsible parties who have spread falsehoods.

     The legislature further finds and declares that:

     (1)  Individuals and entities involved in the production of fossil fuel products have engaged in a decades-long project to protect their bottom lines with a coordinated effort to deceive the public about the reality of the climate crisis;

     (2)  Documents unveiled by investigative journalists and cited in current litigation brought by the city and county of Honolulu and the county of Maui demonstrate that those parties were aware of the potentially catastrophic impact of their products from as early as the 1950s.  Even though research conducted by their own scientists affirmed the impacts of their business, these parties outright denied that climate change was real, spread disinformation to cast doubt on the science, and fought regulatory action against fossil fuel and fossil fuel products;

     (3)  By the 1970s and 1980s, the scientific community understood that increasing carbon dioxide concentration in the atmosphere would contribute to global warming, and that the heightened carbon dioxide emissions were attributable to fossil fuels.  These facts were supported by several fossil fuel industry scientists from different companies such as Exxon and Shell, who presented these findings to their management with warnings that the "present trend of fossil fuel consumption will cause dramatic environmental effects before the year 2050";

     (4)  Despite having internal knowledge that increased carbon dioxide concentrations due to fossil-fuel combustion posed a considerable threat, responsible parties launched a campaign to undermine climate science and stopped funding major climate research and launched campaigns to discredit climate science and delay actions perceived as contrary to their business interests by:

          (A)  Developing public relations strategies that were contradictory to their scientific knowledge and insights;

          (B)  Engaging in public communications campaigns to promote doubt and downplay the threats of climate change; and

          (C)  Funding individuals, organizations, and research aimed at discrediting the growing body of publicly available climate science;

     (5)  From 1970 to 2020, the oil and gas industry made nearly $2.8 billion a day and one trillion dollars a year in profit;

     (6)  Responsible parties currently advertise "green" efforts to the public that mask the lack of real investment in resiliency and energy-source transition and the continued prioritization of the extraction, refinement, and distribution of fossil fuel products;

     (7)  A December 2022 report by a congressional oversight committee revealed internal documents from fossil fuel industry senior leaders that explicitly reject taking accountability for the greenhouse gas emissions associated with their products; and

     (8)  By conduct and impact, these responsible parties have intentionally obfuscated the truth about climate change and outright deceived the public to continue dependence on fossil fuel products.

     The legislature finds that responsible parties must be held accountable for their deception to those harmed by climate disasters, extreme weather attributable to climate change, and long-term changes to the climate system.  The legislature further finds that the intentional lies, misinformation, disinformation, and misrepresentations by responsible parties about the connection between their fossil fuel products was primarily commercial activity.

     The legislature finds that insurance companies operating in the State are well positioned to redress the harm that responsible parties have caused through their deception.  By exercising their individual and subrogation rights against responsible parties, private parties and the Hawaii property insurance association have the ability to shift the costs of climate disasters, extreme weather attributable to climate change, and other harms resulting from long-term changes to the climate system onto the responsible parties rather than policyholders and taxpayers in the State.

     It is the intent of the State to provide a judicial forum for the efficient, just, and equitable resolution of claims under this Act.  State courts are the appropriate venue to hear these claims and provide appropriate relief.  The legislature further declares that the harms related or attributable to climate change should not be deemed acts of God, unforeseeable, or otherwise classified as a force majeure event eligible for litigation limitations or defenses, except as otherwise explicitly and unambiguously provided.

     Accordingly, the purpose of this Act is to:

     (1)  Provide a new, specific cause of action for insurers to seek damages against a responsible party for harms resulting from climate disasters, extreme weather attributable to climate change, and long-term changes in the climate system; and

     (2)  Provide a new, specific cause of action for any person other than an officer or employee of a state or local governmental entity to bring a civil action against a responsible party for harms resulting from climate disasters, weather attributable to climate change, and long-term changes in the climate system; and

     (3)  Require insurance rates to account for any proceeds from subrogation or civil claims against a responsible party.

     SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 13 to be appropriately designated and to read as follows:

     "§431:13-     Civil liability of responsible parties.  (a)  Any person, other than an officer or employee of a state or local governmental entity, may bring a civil action against a responsible party pursuant to this section if the following conditions are met:

     (1)  The injured party has sustained damages of not less than $10,000 as a result of a climate disaster or extreme weather or other event attributable to climate change; provided that multiple plaintiffs may aggregate their claims with a common injury and connection to a climate disaster or extreme weather or other events attributable to climate change to reach this amount in controversy threshold, regardless of association in a class action;

     (2)  During any time since the year     , the responsible party did business in the State, was registered to do business in the State, was appointed an agent of the State or otherwise had sufficient contacts with the State to give the State jurisdiction over the responsible party; and

     (3)  Notwithstanding any other applicable statute of limitations, the action is filed within three years of the date that the injury was or should have been discovered.

     (b)  The Hawaii property insurance association or any private insurer may bring a civil action against a responsible party on its own behalf or on behalf of one or more of its policyholders when the conditions described in subsection (a) are met.

     (c)  Any civil action against a responsible party that meets the conditions described in subsection (a) may be brought in any of the following applicable counties:

     (1)  The county in which all or a substantial part of the events giving rise to the action occurred;

     (2)  The county of residence for an individual defendant who is a natural person;

     (3)  The county of the principal office in the State of any one of the defendants that is not a natural person; or

     (4)  The county of residence for a plaintiff who is a natural person residing in the State.

     (d)  All responsible parties in any civil action that is filed pursuant to this section shall be jointly, severally, and strictly liable to a plaintiff for damages found to have been caused by a climate disaster or extreme weather or other event attributable to climate change.

     (e)  The connection of damages with a climate disaster, extreme weather or other event attributable to climate change, or harm resulting from long-term changes in the climate system shall be deemed an injury-in-fact for any person who is harmed by the event.  Any person who suffers an injury-in-fact under this subsection shall have standing to bring a civil action pursuant to this section.

     (f)  Notwithstanding any other law to the contrary, the following shall not be considered a defense under this section:

     (1)  A defendant's ignorance or mistake of law;

     (2)  A defendant's belief that the requirements under this section are unconstitutional;

     (3)  A defendant's reliance on a court decision that has been overruled on appeal or by a subsequent court, even if the court decision had not been overruled at the time the defendant engaged in the conduct giving rise to the action brought under this section;

     (4)  A defendant's reliance on a state or federal court decision that is not binding on the court in which the action has been brought;

     (5)  Nonmutual issue preclusion or nonmutual claim preclusion;

     (6)  A claim that the enforcement of this section or the imposition of civil liability against the defendant will violate a constitutional right of a third party;

     (7)  A defendant's assertion that this section proscribes conduct that is separately prohibited by any other law of the State;

     (8)  A claim that the defendant's fossil fuel products were not misused, or were not intended to be misused, in an unlawful manner;

     (9)  A defendant's assertion that state or federal laws relating to fossil fuel products and a responsible party's operations displace, abrogate, or supersede the actions authorized by this section, the authority of the courts of the State to provide a forum for the action, or the authority of the courts of the State to provide a remedy to plaintiffs;

    (10)  A defendant's assertion that a choice-of-law or choice-of-forum clause governs the action, regardless of whether the clause applies to a plaintiff on the basis of consumer transactions;

    (11)  A defendant's assertion that the plaintiff assumed a risk of harm through the use of their products; and

    (12)  A defendant's assertion that the forum is inconvenient, if the jurisdictional requirements of this section are satisfied.

     (g)  No civil or administrative enforcement action pursuant to this section shall be brought by the State or any of its political subdivisions or officers or employees thereof.

     (h)  Notwithstanding any other law, the State, a state official, or a public prosecutor shall not intervene in a civil action brought pursuant to this section.  However, this subsection shall not prohibit the State, a state official, or a public prosecutor from filing an amicus curiae brief in the action.

     (i)  If a plaintiff prevails in an action brought pursuant to this section, the court shall award all of the following:

     (1)  The full extent of noneconomic, compensatory, and punitive damages allowable;

     (2)  Compensatory damages in an amount of not less than the fair market value of recovering, recouping, rebuilding, or remediating the value of lost, damaged, and destroyed property; and

     (3)  Compensatory damages in an amount not less than the cost of the natural person's injuries, including medical care, mental and behavioral health care, past and present pain and suffering, or emotional distress.

     (j)  Notwithstanding any other law, a court shall not award attorneys' fees or costs to a defendant in an action brought pursuant to this section, unless the plaintiff was represented by counsel in the action and plaintiff's counsel is found by the court or the Hawaii State Bar Association to be in violation of applicable rules of professional conduct or rules of civil procedure.

     (k)  Damages awarded pursuant to this section may be offset by any of the following:

     (1)  Payments made to a harmed party pursuant to a contract of insurance.  In addition to an action brought pursuant to this section, an insurer may bring a subrogation action against a responsible party for recovery of payments made to insureds harmed by the responsible party pursuant to a contract of insurance, regardless of whether the insured has been made whole; or

     (2)  Evidence that a plaintiff fully recovered from a public body for their alleged injuries.

     (l)  For the purposes of this section:

     "Climate disaster" means an event that meets any of the following qualifications and is determined by impact attribution science or extreme event attribution science to be substantially more probable or materially intensified by climate change from a responsible party's fossil fuel products:

     (1)  A natural catastrophe, including a hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought, or, regardless of cause, a fire, flood, or explosion, that, in the determination of the President of the United States, causes damage of sufficient severity and magnitude to warrant major disaster assistance under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law 93-288, as amended, to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused by the catastrophe;

     (2)  A catastrophic incident that is a natural or manmade incident that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the population, infrastructure, environment, economy, national morale, or government functions.  A catastrophic incident could result in sustained national impacts over a prolonged period of time, almost immediately exceeds resources normally available to local, state, tribal, and private sector authorities in the impacted area, and significantly interrupts governmental operations and emergency services to such an extent that national security could be threatened.  A catastrophic incident does not include an event linked to terrorism;

     (3)  An event that qualifies or would have qualified as a climate disaster according to the National Centers for Environmental Information's billion-dollar weather and climate disasters program and data list, as it existed in December 2024;

     (4)  A state of emergency or local state of emergency as defined in section 127A-2; or

     (5)  An event or occurrence linked to extreme weather or other events attributable to climate change for which losses in the aggregate across insurance carriers in the State exceed one hundred million dollars.

     "Extreme event attribution science" means research aimed at understanding how human-induced changes in the global climate system affect the probability, severity, and other characteristics of extreme weather events, such as wildfires and flooding by determining the likelihood of a particular event happening today compared to how it might have unfolded without the human-caused increase in concentration of greenhouse gases in the atmosphere.

     "Extreme weather or other event attributable to climate change" means weather, climate, or environmental conditions, including temperature, precipitation, drought, flooding, or wildfires, that are consistent with impacts or events that are attributable to climate change and in which the intensity, magnitude, location, timing, or extent of the event are shown by peer-reviewed studies or assessments using peer-reviewed methods, to be attributable in part to climate change.  These events include those that extreme event attribution science determines were made more likely or severe by climate change.

     "Fossil fuel product" includes crude petroleum oil and all other hydrocarbons, regardless of gravity, produced at the wellhead in liquid form by ordinary production methods; natural, manufactured, mixed, and byproduct hydrocarbon gas; refined crude oil; crude tops; topped crude; processed crude; processed crude petroleum; residue from crude petroleum; cracking stock; uncracked fuel oil; fuel oil; treated crude oil; residuum; gas oil; casinghead gasoline; natural-gas gasoline; kerosene; benzine; wash oil; waste oil; blended gasoline; lubricating oil; and blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas.

     "Impact attribution science" means research aimed at understanding how global climate change affects human and natural systems, including localized physical impacts, such as floods, droughts, and sea level rise, and the corresponding effects on infrastructure, public health, ecosystems, agriculture, and economies.

     "Responsible party" means a firm, corporation, company, partnership, society, joint stock company, or any other entity or association that engaged in misleading and deceptive practices, including lies, or the provision of misinformation or disinformation about the connection between its fossil fuel products and climate change and extreme weather or other events attributable to climate change.  "Responsible party" does not include the federal government, tribal governments, the State, a political subdivision of the federal, tribal, or state government, or an employee of the federal, tribal, or state government on the basis of acts or omissions in the course of official duties."

     SECTION 3.  Section 431:14-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Rates shall be made in accordance with the following provisions:

     (1)  Rates shall not be excessive, inadequate, or unfairly discriminatory.

     (2)  Due consideration shall be given to:

          (A)  Past and prospective loss experience within and outside this State; provided that if the claim does not exceed the selected deductible amount pursuant to section 386-100, and the employer reimburses the insurer for the amount, the claims shall not be calculated in the employer's experience rating or risk category;

          (B)  The conflagration and catastrophe hazards, if any;

          (C)  Any proceeds recovered by the insurer through any legal actions, including subrogation claims and direct actions filed pursuant to section 431:13-   ;

        [(C)]  (D)  A reasonable margin for underwriting profit and contingencies;

        [(D)]  (E)  Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

        [(E)]  (F)  Past and prospective expenses both country‑wide and those specially applicable to this State;

        [(F)]  (G)  Investment income from unearned premium and loss reserve funds; and

        [(G)]  (H)  All other relevant factors within and outside this State.

     (3)  In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which that experience is available.

     (4)  The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any insurer or group with respect to any class of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

     (5)  Risks may be grouped by classifications for the establishment of rates and minimum premiums.  Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both.  These standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.  No risk classification may be based upon race, creed, national origin, or the religion of the insured.

     (6)  Manual, minimum, class rates, rating schedules, or rating plans shall be made and adopted, except in the case of:

          (A)  Special rates where manual, minimum, class rates, rating schedules, or rating plans are not applicable; and

          (B)  Specifically rated inland marine risks.

     (7)  No insurer authorized to do business in this State shall issue any policy that provides or makes available to any risks preferred rates based upon any grouping of persons, firms, or corporations by way of membership, license, franchise, contract, agreement, or any other means, other than common majority ownership of the risks, or except where:

          (A)  A common stock ownership in and management control of the risks are held by the same person, corporation, or firm;

          (B)  Permitted or authorized by filings in existence as of January 1, 1988, under the casualty rating law and the fire rating law, as these filings may be amended from time to time;

          (C)  Health care providers, as defined in section 671‑1 that could have joined the patients' compensation fund as it existed in chapter 671, part III, prior to May 31, 1984, joined together with one or more groups of related or unrelated health care providers;

          (D)  Permitted under article 12; or

          (E)  Otherwise expressly provided by law."

     SECTION 4.  Section 431:21-106, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The plan of operation shall:

     (1)  Establish procedures for performance of all the powers and duties of the association under section 431:21‑105;

     (2)  Establish maximum limits of liability to be placed through the association;

     (3)  Establish reasonable underwriting standards for determining insurability of a risk [which] that are comparable to the standards used to determine insurability of a risk located outside the area designated by the commissioner as eligible for association coverage;

     (4)  Establish a schedule of deductibles, if appropriate;

     (5)  Establish the commission to be paid to licensed producers;

     (6)  Establish the rates to be charged for the insurance coverages, so that the total premium income from all association policies, when combined with the investment income, shall annually fund the administration of the association.  The administration of the association shall include the expenses incurred in processing applications, conducting inspections, issuing and servicing policies, paying commissions, and paying claims, but shall not include assessments approved by the commissioner[;].  Rates shall account for any proceeds obtained by the association from any civil action or subrogation claim against a responsible party for claims paid for losses from climate disasters, extreme weather, or other event attributable to climate change pursuant to section 431:13-   ; provided that, if the association does not exercise its subrogation and direct action rights, the association shall be required to submit a report to the insurance commissioner comparing the rates to be charged with the rates that would have been charged had the association fully recovered the losses from the responsible parties;

     (7)  Establish the manner and scope of the inspection and the form of the inspection report.  The inspection guidelines may include setting minimum conditions the property must meet before an inspection is required;

     (8)  Establish procedures whereby selections for the board of directors will be submitted to the commissioner for the commissioner's information;

     (9)  Establish procedures for records to be kept of all financial transactions of the association, its producers, and its board of directors;

    (10)  Establish procedures by which applications will be received and serviced by the association;

    (11)  Establish guidelines for the investigation and payment of claims; and

    (12)  Establish procedures whereby the association may assume and cede reinsurance on risks written through the association."

     SECTION 5.  Nothing in this Act shall be construed to:

     (1)  Limit in any way the enforceability of existing laws concerning insurance, consumer protection, climate, environment, energy, or natural resources, by either the government or other private plaintiffs;

     (2)  Replace legally mandated disaster recovery funds, designated disaster recovery funds established via legislation or administrative rule, or contractually obligated or court ordered insurance claim payouts;

     (3)  Relieve the liability of an entity for damages resulting from climate change, as provided by any other law; or

     (4)  Preempt, displace, or restrict any rights or remedies of a person, the State, local government entities, or a tribal government pursuant to law relating to a past, present, or future allegation of any of the following:

          (A)  Deception concerning the effect of fossil fuels on climate change;

          (B)  Damage or injury resulting from the role of fossil fuels in contributing to climate change; and

          (C)  Failure to avoid damage or injury related to climate change, including claims for nuisance, trespass, design defect, negligence, failure to warn, or deceptive or unfair practices, or claims for injunctive, declaratory, monetary, or other relief.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect on July 1, 2050.

Report Title:

HPIA; Property Insurance; Subrogation Claims; Property and Casualty Insurance Rate Regulation; Climate Change

Description:

Allows the Hawaii Property Insurance Association to file and litigate subrogation claims against responsible parties for claims paid by the insurer for losses resulting from climate disasters and extreme weather attributable to climate change.  Establishes a new, specific cause of action that allows insurers and injured parties to file claims against a responsible party for damages resulting from climate disasters, extreme weather attributable to climate change, and other long-term changes in the climate system.  Requires insurance rates to account for any proceeds from subrogation or civil claims against a responsible party.  Effective 7/1/2050.  (SD2)

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.  The legislature finds that climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system pose a threat to the health, safety, and security of all residents of, and visitors to, the State.

     For residents, climate change risks include an increase in precipitation and intense tropical storms, hotter temperatures, rising sea level, and intensified drought.  Accordingly, the State has a compelling state interest in protecting its citizens from climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system.  This protection includes affordable access to a functioning insurance market in the State.

     The legislature further finds there is also a compelling state interest in preserving public resources for traditional public purposes, which does not include subsidizing the continued operation of the insurance market.  The insurance industry has been destabilized and harmed by the deception of people and entities who have engaged in misleading and deceptive practices about the connection between fossil fuel products and climate change.  The State's insurance industry, particularly the property and casualty insurance sector, has been destabilized by large and frequent payouts to policyholders for a variety of events caused by or attributable to the deception of these responsible parties.  This instability has led to increased nonrenewal rates and premiums on all islands and for multiple types of insurance policies.  Between 2018 and 2023, insurance nonrenewal rates increased by ninety-one per cent in the county of Kauai, two hundred ninety-six per cent in the city and county of Honolulu, one hundred eighty-four per cent in the county of Maui, and seventy per cent in the county of Hawaii.

     The legislature further finds that the area burned by wildfires in the State has increased fourfold.  Most recently, the 2023 Maui wildfires, which were exacerbated by climate change, destroyed the town of Lahaina and killed at least one hundred two people.  In the aftermath of this tragic and horrific event, insurance companies operating in Hawaii have already paid out over $2.3 billion across more than ten thousand wildfire claims to fire victims, with another one billion dollars of additional insured losses yet to be paid.  The scope and scale of damage has led to difficult settlement negotiations in which parties have tried to address how to meet the needs of fire victims, maintain a solvent market for insurance, and keep vital public utilities and educational institutions operating in the State's communities.  Hawaii has a compelling state interest in protecting the integrity of these institutions as they seek to provide relief to harmed and impacted parties.

     Climate change has also impacted the amount of water available in key watersheds across the islands.  Ongoing drought has created water security issues that are exacerbated by the growing water demand, which may increase up to thirty-six per cent by the end of the century.  For example, rainfall in the Nuuanu watershed is projected to decrease by as much as twenty‑seven per cent, and both the Heeia and Na Wai Eha watershed are also experiencing decreases in rainfall, threatening groundwater supplies and drinking water availability.

     At Hawaii's shorelines, sea level has risen ten inches on average compared to 1950, and the mean number of days that cause high tide flooding in Honolulu has almost doubled from six to eleven days per year since the 1960s.  Almost all the shorelines in Hawaii, approximately ninety-two per cent, are predicted to retreat between one and twenty-four meters by 2050.  Researchers predict that shoreline retreat rates have doubled from the historical rate due to sea level rise.

     Climate change is also causing more extreme temperatures in Hawaii.  The average annual temperature in Hawaii in 2016 was about 1.7 degrees Fahrenheit warmer than the one hundred-year mean from 1917 to 2016.  Similarly, global mean sea surface temperature has increased by about 1.8 degrees Fahrenheit over the past century and waters around Hawaii have followed this trend.

     The legislature finds that for decades, certain people and entities have spread intentional lies, misinformation and disinformation, and misrepresentations about the connection between climate change and fossil fuel products, as well as how climate change has caused injuries in the State.  Continued lies, misinformation and disinformation, and misrepresentations by responsible parties pose a threat to the health, safety, and security of Hawaii's residents and visitors.  These parties have long known the dangers of fossil fuel products; however, they have continued to deny and lie for profit.  Hiding, obfuscating, and denying information to consumers, elected officials, and regulators alike has harmed and continues to harm the State.  Hawaii has a compelling interest in protecting consumers from lies and misleading information, while also encouraging factual and truthful information on how climate disasters and other harms can be attributed to the responsible parties who have spread falsehoods.

     The legislature further finds and declares that:

     (1)  Individuals and entities involved in the production of fossil fuel products have engaged in a decades-long project to protect their bottom lines with a coordinated effort to deceive the public about the reality of the climate crisis;

     (2)  Documents unveiled by investigative journalists and cited in current litigation brought by the city and county of Honolulu and the county of Maui demonstrate that those parties were aware of the potentially catastrophic impact of their products from as early as the 1950s.  Even though research conducted by their own scientists affirmed the impacts of their business, these parties outright denied that climate change was real, spread disinformation to cast doubt on the science, and fought regulatory action against fossil fuel and fossil fuel products;

     (3)  By the 1970s and 1980s, the scientific community understood that increasing carbon dioxide concentration in the atmosphere would contribute to global warming, and that the heightened carbon dioxide emissions were attributable to fossil fuels.  These facts were supported by several fossil fuel industry scientists from different companies such as Exxon and Shell, who presented these findings to their management with warnings that the "present trend of fossil fuel consumption will cause dramatic environmental effects before the year 2050";

     (4)  Despite having internal knowledge that increased carbon dioxide concentrations due to fossil-fuel combustion posed a considerable threat, responsible parties launched a campaign to undermine climate science and stopped funding major climate research and launched campaigns to discredit climate science and delay actions perceived as contrary to their business interests by:

          (A)  Developing public relations strategies that were contradictory to their scientific knowledge and insights;

          (B)  Engaging in public communications campaigns to promote doubt and downplay the threats of climate change; and

          (C)  Funding individuals, organizations, and research aimed at discrediting the growing body of publicly available climate science;

     (5)  From 1970 to 2020, the oil and gas industry made nearly $2.8 billion a day and one trillion dollars a year in profit;

     (6)  Responsible parties currently advertise "green" efforts to the public that mask the lack of real investment in resiliency and energy-source transition and the continued prioritization of the extraction, refinement, and distribution of fossil fuel products;

     (7)  A December 2022 report by a congressional oversight committee revealed internal documents from fossil fuel industry senior leaders that explicitly reject taking accountability for the greenhouse gas emissions associated with their products; and

     (8)  By conduct and impact, these responsible parties have intentionally obfuscated the truth about climate change and outright deceived the public to continue dependence on fossil fuel products.

     The legislature finds that responsible parties must be held accountable for their deception to those harmed by climate disasters, extreme weather attributable to climate change, and long-term changes to the climate system.  The legislature further finds that the intentional lies, misinformation, and disinformation, and misrepresentations by responsible parties about the connection between their fossil fuel products was primarily commercial activity.

     The legislature finds that insurance companies operating in the State are well positioned to redress the harm that responsible parties have caused through their deception.  By exercising their individual and subrogation rights against responsible parties, private parties and the Hawaii property insurance association have the ability to shift the costs of climate disasters, extreme weather attributable to climate change, and other harms resulting from long-term changes to the climate system onto the responsible parties rather than policyholders and taxpayers in the State.

     It is the intent of the State to provide a judicial forum for the efficient, just, and equitable resolution of claims under this Act.  State courts are the appropriate venue to hear these claims and provide appropriate relief.  The legislature further declares that the harms related or attributable to climate change should not be deemed acts of God, unforeseeable, or otherwise classified as a force majeure event eligible for litigation limitations or defenses, except as otherwise explicitly and unambiguously provided.

     Accordingly, the purpose of this Act is to:

     (1)  Encourage private insurers and the Hawaii property insurance association to file and litigate subrogation claims against responsible parties for claims paid by the insurer for losses resulting from climate disasters, extreme weather attributable to climate change, and long-term changes to the climate system;

     (2)  Provide a new, specific cause of action for insurers to seek damages against a responsible party for harms resulting from climate disasters, extreme weather attributable to climate change, and long-term changes in the climate system; and

     (3)  Provide a new, specific cause of action for any harm other than an officer or employee of a state or local governmental entity to bring a civil action against a responsible party for harms resulting from climate disasters, weather attributable to climate change, and long-term changes in the climate system.

     SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 13 to be appropriately designated and to read as follows:

     "§431:13-    Civil liability of responsible parties.  (a)  Any person, other than an officer or employee of a state or local governmental entity, may bring a civil action against a responsible party pursuant to this section if the following conditions are met:

     (1)  The injured party has sustained damages of not less than $10,000 as a result of a climate disaster or extreme weather or other event attributable to climate change; provided that multiple plaintiffs may aggregate their claims with a common injury and connection to a climate disaster or extreme weather or other events attributable to climate change to reach this amount in controversy threshold, regardless of association in a class action;

     (2)  During any time since the year 1965, the responsible party did business in the State, was registered to do business in the State, was appointed an agent of the State or otherwise had sufficient contacts with the State to give the State jurisdiction over the responsible party; and

     (3)  Notwithstanding any other applicable statute of limitations, the action is filed within three years of the date that the injury was or should have been discovered.

     (b)  The Hawaii property insurance association or any private insurer may bring a civil action against a responsible party on its own behalf or on behalf of one or more of its policyholders when the conditions described in subsection (a) are met.

     (c)  Any civil action against a responsible party that meets the conditions described in subsection (a) may be brought in any of the following applicable counties:

     (1)  The county in which all or a substantial part of the events giving rise to the action occurred;

     (2)  The county of residence for an individual defendant who is a natural person;

     (3)  The county of the principal office in the state of any one of the defendants that is not a natural person; or

     (4)  The county of residence for a plaintiff who is a natural person residing in the State.

     (d)  All responsible parties in any civil action that is filed pursuant to this section shall be jointly, severally, and strictly liable to a plaintiff for damages found to have been caused by a climate disaster or extreme weather or other event attributable to climate change.

     (e)  The connection of a climate disaster, extreme weather or other event attributable to climate change, or harm resulting from long-term changes in the climate system shall be deemed an injury-in-fact for any person who is harmed by the event.  Any person who suffers an injury-in-fact under this subsection shall have standing to bring a civil action pursuant to this section.

     (f)  Notwithstanding any other law to the contrary, the following shall not be considered a defense under this section:

     (1)  A defendant's ignorance or mistake of law;

     (2)  A defendant's belief that the requirements under this section are unconstitutional;

     (3)  A defendant's reliance on a court decision that has been overruled on appeal or by a subsequent court, even if the court decision had not been overruled at the time the defendant engaged in the conduct giving rise to the action brought under this section;

     (4)  A defendant's reliance on a state or federal court decision that is not binding on the court in which the action has been brought;

     (5)  Nonmutual issue preclusion or nonmutual claim preclusion;

     (6)  A claim that the enforcement of this section or the imposition of civil liability against the defendant will violate a constitutional right of a third party;

     (7)  A defendant's assertion that this section proscribes conduct that is separately prohibited by any other law of the State;

     (8)  A claim that the defendant's fossil fuel products were not misused, or were not intended to be misused, in an unlawful manner;

     (9)  A defendant's assertion that state or federal laws relating to fossil fuel products and a responsible party's operations displace, abrogate, or supersede the actions authorized by this section, the authority of the courts of the State to provide a forum for the action, or the authority of the courts of the State to provide a remedy to plaintiffs;

    (10)  A defendant's assertion that a choice-of-law or choice-of-forum clause governs the action, regardless of whether the clause applies to a plaintiff on the basis of consumer transactions;

    (11)  A defendant's assertion that the plaintiff assumed a risk of harm through the use of their products; and

    (12)  A defendant's assertion that the forum is inconvenient, if the jurisdictional requirements of this section are satisfied.

     (g)  No civil or administrative enforcement action pursuant to this section shall be brought by the State or any of its political subdivisions or officers or employees thereof.

     (h)  Notwithstanding any other law, the State, a state official, or a public prosecutor shall not intervene in a civil action brought pursuant to this section.  However, this subsection shall not prohibit the State, a state official, or a public prosecutor from filing an amicus curiae brief in the action.

     (i)  If a plaintiff prevails in an action brought pursuant to this section, the court shall award all of the following:

     (1)  The full extent of noneconomic, compensatory, and punitive damages allowable;

     (2)  Compensatory damages in an amount of not less than the fair market value of recovering, recouping, rebuilding, or remediating the value of lost, damaged, and destroyed property; and

     (3)  Compensatory damages in an amount not less than the cost of the natural person's injuries, including medical care, mental and behavioral health care, past and present pain and suffering, or emotional distress.

     (j)  Notwithstanding any other law, a court shall not award attorneys' fees or costs to a defendant in an action brought pursuant to this section, unless the plaintiff was represented by counsel in the action and plaintiff's counsel is found by the court or the Hawaii State Bar Association to be in violation of applicable rules of professional conduct or rules of civil procedure.

     (k)  Damages awarded pursuant to this section may be offset by any of the following:

     (1)  Payments made to a harmed party pursuant to a contract of insurance.  In addition to an action brought pursuant to this section, an insurer may bring a subrogation action against a responsible party for recovery of payments made to insureds harmed by the responsible party pursuant to a contract of insurance, regardless of whether the insured has been made whole; or

     (2)  Evidence that a plaintiff fully recovered from a public body for their alleged injuries.

     (l)  For the purposes of this section:

     "Climate disaster" means an event that meets any of the following qualifications and is determined by impact attribution science or extreme event attribution science to be substantially more probable or materially intensified by climate change from a responsible party's fossil fuel products:

     (1)  A natural catastrophe, including a hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought, or, regardless of cause, a fire, flood, or explosion, that, in the determination of the President of the United States causes damage of sufficient severity and magnitude to warrant major disaster assistance under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law 93-288, as amended, to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused by the catastrophe;

     (2)  A catastrophic incident that is a natural or manmade incident that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the population, infrastructure, environment, economy, national morale, or government functions.  A catastrophic incident could result in sustained national impacts over a prolonged period of time, almost immediately exceeds resources normally available to local, state, tribal, and private sector authorities in the impacted area, and significantly interrupts governmental operations and emergency services to such an extent that national security could be threatened.  A catastrophic incident does not include an event linked to terrorism;

     (3)  An event that qualifies or would have qualified as a climate disaster according to the National Centers for Environmental Information's billion-dollar weather and climate disasters program and data list, as it existed in December 2024;

     (4)  A state of emergency or local state of emergency as defined in section 127A-2; or

     (5)  An event or occurrence linked to extreme weather or other events attributable to climate change for which losses in the aggregate across insurance carriers in the State exceed one hundred million dollars.

     "Extreme event attribution science" means research aimed at understanding how human-induced changes in the global climate system affect the probability, severity, and other characteristics of extreme weather events, such as wildfires and flooding by determining the likelihood of a particular event happening today compared to how it might have unfolded without human-caused increase in concentration of greenhouse gases in the atmosphere.

     "Extreme weather or other event attributable to climate change" means weather, climate, or environmental conditions, including temperature, precipitation, drought, flooding, or wildfires, that are consistent with impacts or events that are attributable to climate change and in which the intensity, magnitude, location, timing, or extent of the event are shown by peer-reviewed studies or assessments using peer-reviewed methods, to be attributable in part to climate change.  These events include those that extreme event attribution science determines were made more likely or severe by climate change.

     "Fossil fuel product" includes crude petroleum oil and all other hydrocarbons, regardless of gravity, produced at the wellhead in liquid form by ordinary production methods, natural, manufactured, mixed, and byproduct hydrocarbon gas, refined crude oil, crude tops, topped crude, processed crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, fuel oil, treated crude oil, residuum, gas oil, casinghead gasoline, natural-gas gasoline, kerosene, benzine, wash oil, waste oil, blended gasoline, lubricating oil, and blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas.

     "Impact attribution science" means research aimed at understanding how global climate change affects human and natural systems, including localized physical impacts, such as floods, droughts, and sea level rise, and the corresponding effects on infrastructure, public health, ecosystems, agriculture, and economies.

     "Responsible party" means a firm, corporation, company, partnership, society, joint stock company, or any other entity or association that engaged in misleading and deceptive practices, including lies, or the provision of misinformation or disinformation about the connection between its fossil fuel products and climate change and extreme weather or other events attributable to climate change.  "Responsible party" does not include the federal government, tribal governments, the state, a political subdivision of the federal, tribal, or state government, or an employee of the federal, tribal, or state government on the basis of acts or omissions in the course of official duties."

     SECTION 3.  Section 431:14-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Rates shall be made in accordance with the following provisions:

     (1)  Rates shall not be excessive, inadequate, or unfairly discriminatory.

     (2)  Due consideration shall be given to:

          (A)  Past and prospective loss experience within and outside this State; provided that if the claim does not exceed the selected deductible amount pursuant to section 386-100, and the employer reimburses the insurer for the amount, the claims shall not be calculated in the employer's experience rating or risk category;

          (B)  The conflagration and catastrophe hazards, if any;

          (C)  Any proceeds recovered by the insurer through any legal actions, including subrogation claims and direct actions filed pursuant to section 431:13-  ;

        [(C)]  (D)  A reasonable margin for underwriting profit and contingencies;

        [(D)]  (E)  Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

        [(E)]  (F)  Past and prospective expenses both country‑wide and those specially applicable to this State;

        [(F)]  (G)  Investment income from unearned premium and loss reserve funds; and

        [(G)]  (H)  All other relevant factors within and outside this State.

     (3)  In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which that experience is available.

     (4)  The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any insurer or group with respect to any class of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

     (5)  Risks may be grouped by classifications for the establishment of rates and minimum premiums.  Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both.  These standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.  No risk classification may be based upon race, creed, national origin, or the religion of the insured.

     (6)  Manual, minimum, class rates, rating schedules, or rating plans shall be made and adopted, except in the case of:

          (A)  Special rates where manual, minimum, class rates, rating schedules, or rating plans are not applicable; and

          (B)  Specifically rated inland marine risks.

     (7)  No insurer authorized to do business in this State shall issue any policy that provides or makes available to any risks preferred rates based upon any grouping of persons, firms, or corporations by way of membership, license, franchise, contract, agreement, or any other means, other than common majority ownership of the risks, or except where:

          (A)  A common stock ownership in and management control of the risks are held by the same person, corporation, or firm;

          (B)  Permitted or authorized by filings in existence as of January 1, 1988, under the casualty rating law and the fire rating law, as these filings may be amended from time to time;

          (C)  Health care providers, as defined in section 671‑1 that could have joined the patients' compensation fund as it existed in chapter 671, part III, prior to May 31, 1984, joined together with one or more groups of related or unrelated health care providers;

          (D)  Permitted under article 12; or

          (E)  Otherwise expressly provided by law."

     SECTION 4.  Section 431:21-106, Hawaii Revised Statutes, is amended to read as follows:

     "§431:21-106  Plan of operation.  (a)  The association shall submit to the commissioner a plan of operation and any amendments to the plan necessary or suitable to assure the fair, reasonable, and equitable administration of the association.  The plan of operation and any amendment shall become effective upon approval in writing by the commissioner.  If the association fails to submit a suitable plan of operation or if at any time the association fails to submit suitable amendments to the plan, the commissioner shall adopt the rules necessary to carry out this article.  The rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved in writing by the commissioner.

     (b)  All member insurers shall comply with the plan of operation.

     (c)  The plan of operation shall:

     (1)  Establish procedures for performance of all the powers and duties of the association under section 431:21-105;

     (2)  Establish maximum limits of liability to be placed through the association;

     (3)  Establish reasonable underwriting standards for determining insurability of a risk which are comparable to the standards used to determine insurability of a risk located outside the area designated by the commissioner as eligible for association coverage;

     (4)  Establish a schedule of deductibles, if appropriate;

     (5)  Establish the commission to be paid to licensed producers;

     (6)  Establish the rates to be charged for the insurance coverages, so that the total premium income from all association policies, when combined with the investment income, shall annually fund the administration of the association.  The administration of the association shall include the expenses incurred in processing applications, conducting inspections, issuing and servicing policies, paying commissions, and paying claims, but shall not include assessments approved by the commissioner[;].  Rates shall account for any proceeds obtained by the association from any civil action or subrogation claim against a responsible party for claims paid for losses from climate disasters and extreme weather attributable to climate change pursuant to section 431:13-  ; provided that, if the association does not exercise its subrogation and direct action rights, the association shall be required to submit a report to the insurance commissioner comparing the rates to be charged with the rates that would have been charged had the association fully recovered the losses from the responsible parties;

     (7)  Establish the manner and scope of the inspection and the form of the inspection report.  The inspection guidelines may include setting minimum conditions the property must meet before an inspection is required;

     (8)  Establish procedures whereby selections for the board of directors will be submitted to the commissioner for the commissioner's information;

     (9)  Establish procedures for records to be kept of all financial transactions of the association, its producers, and its board of directors;

    (10)  Establish procedures by which applications will be received and serviced by the association;

    (11)  Establish guidelines for the investigation and payment of claims; and

    (12)  Establish procedures whereby the association may assume and cede reinsurance on risks written through the association.

     (d)  For the purposes of this section:

     "Climate disaster" has the same meaning as defined in section 431:13-  .

     "Responsible party" has the same meaning as defined in section 431:13-  ."

     SECTION 5.  Nothing in this Act shall be construed to:

     (1)  Limit in any way the enforceability of existing laws concerning insurance, consumer protection, climate, environment, energy, or natural resources, by either the government or other private plaintiffs;

     (2)  Replace legally mandated disaster recovery funds, designated disaster recovery funds established via legislation or administrative rule, or contractually obligated or court ordered insurance claim payouts;

     (3)  Relieve the liability of an entity for damages resulting from climate change, as provided by any other law; or

     (4)  Preempt, displace, or restrict any rights or remedies of a person, the State, local government entities, or a tribal government pursuant to law relating to a past, present, or future allegation of any of the following:

          (A)  Deception concerning the effect of fossil fuels on climate change;

          (B)  Damage or injury resulting from the role of fossil fuels in contributing to climate change; and

          (C)  Failure to avoid damage or injury related to climate change, including claims for nuisance, trespass, design defect, negligence, failure to warn, or deceptive or unfair practices, or claims for injunctive, declaratory, monetary, or other relief.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect on July 1, 2050.

Report Title:

HPIA; Property Insurance; Subrogation Claims; Property and Casualty Insurance Rate Regulation; Climate Change

Description:

Encourages private insurers and the Hawaii Property Insurance Association to file and litigate subrogation claims against responsible parties for claims paid by the insurer for losses attributable to disasters attributable to climate change.  Allows the Hawaii Property Insurance Association to file and litigate subrogation claims against responsible parties for claims paid by the insurer for losses resulting from climate disasters and extreme weather attributable to climate change.  Establishes a new, specific cause of action that allows insurers and injured parties to file claims against a responsible party for damages resulting from climate disasters, extreme weather attributable to climate change, and other long-term changes in the climate system.  Requires insurance rates to account for any proceeds from subrogation or civil claims against a responsible party.  Effective 7/1/2050.  (SD1)

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.  The legislature finds that climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system pose a threat to the health, safety, and security of all residents of, and visitors to, Hawaii.

     For residents, climate change risks include an increase in precipitation and intense tropical storms, hotter temperatures, rising sea level, and intensified drought.  Accordingly, Hawaii has a compelling state interest in protecting its citizens from climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system.  This protection includes affordable access to a functioning insurance market in the State.

     The legislature further finds there is also a compelling state interest in preserving public resources for traditional public purposes, which does not include subsidizing the continued operation of the insurance industry.  The insurance industry has been destabilized and harmed by the deception of people and entities who have engaged in misleading and deceptive practices about the connection between fossil fuel products and climate change.  The State's insurance industry, particularly the property and casualty insurance sector, has been destabilized by large and frequent payouts to policyholders for a variety of events caused by or attributable to the deception of these responsible parties.  This instability has led to increased nonrenewal rates and premiums on all islands and for multiple types of insurance policies.  Between 2018 and 2023, insurance nonrenewal rates increased by ninety-one per cent in the county of Kauai, two hundred ninety-six per cent in the city and county of Honolulu, one hundred eighty-four per cent in the county of Maui, and seventy per cent in the county of Hawaii.

     The legislature further finds that the area burned by wildfires in Hawaii has increased fourfold.  Most recently, climate change exacerbated the Maui wildfires, which destroyed the town of Lahaina and killed at least one hundred two people. In the aftermath of this tragic and horrific event, insurance companies operating in Hawaii have already paid out over $2,300,000,000 across more than ten thousand wildfire claims to fire victims, with another $1,000,000,000 of additional insured losses yet to be paid.  The scope and scale of damage has led to difficult settlement negotiations in which parties have tried to address how to meet the needs of fire victims, maintain a solvent market for insurance, and keep vital public utilities and educational institutions operating in our communities.  Hawaii has a compelling state interest in protecting the integrity of these institutions as they seek to provide relief to harmed and impacted parties.

     Climate change has also impacted the amount of water available in key watersheds across the islands.  Ongoing drought has created water security issues that are exacerbated by the growing water demand, which may increase up to thirty-six per cent by the end of the century.  For example, rainfall in the Nuuanu watershed is projected to decrease by as much as twenty‑seven per cent, and both the Heeia and Na Wai Eha watershed are also experiencing decreases in rainfall, threatening groundwater supplies and drinking water availability.

     At Hawaii's shorelines, sea level has risen ten inches on average compared to 1950, and the mean number of days that cause high tide flooding in Honolulu has almost doubled from six to eleven days per year since the 1960s.  Almost all the shorelines in Hawaii, approximately ninety-two per cent, are predicted to retreat between one and twenty-four meters by 2050.  Researchers predict that shoreline retreat rates have doubled from the historical rate due to sea level rise.

     Climate change is also causing more extreme temperatures in Hawaii.  The average annual temperature in Hawaii in 2016 was about 1.7 degrees Fahrenheit warmer than the one hundred-year mean from 1917 to 2016.   Similarly, global mean sea surface temperature has increased by about 1.8 degrees Fahrenheit over the past century and waters around Hawaii have followed this trend.

     The legislature finds that insurance companies operating in the State need to redress the harm that responsible parties have caused through climate disasters, extreme weather attributable to climate change, and harms resulting from long‑term changes to the climate system.  Hawaii has a compelling state interest in ensuring that the Hawaii hurricane relief fund and the Hawaii property insurance association, which are both state entities, exercise their subrogation rights to recover from responsible parties that have caused damages due to climate disasters, extreme weather attributable to climate change, and harms resulting from long‑term changes to the climate system.  The courts of this State are the appropriate venue to provide this relief.  The legislature further declares that these harms related or attributable to climate change should not be deemed acts of God, unforeseeable, or otherwise classified as a force majeure event eligible for litigation limitations or defenses, except as otherwise explicitly and unambiguously provided.

     The legislature further finds that for decades, certain people and entities have spread intentional lies, misinformation and disinformation, and misrepresentations about the connection between climate change and fossil fuel-based products, as well as how climate change has directly contributed injuries in this State.  Continued lies, misinformation and disinformation, and misrepresentations by these responsible parties pose a threat to the health, safety, and security of Hawaii's residents and visitors.  These parties have long known the dangers of fossil fuel‑based products; however, they have continued to deny and lie for profit.  Hiding, obfuscating, and denying information to consumers, elected officials, and regulators alike has harmed and continues to harm Hawaii.  Hawaii has a compelling interest in protecting consumers from these lies and misleading information, while also encouraging factual and truthful information on how climate disasters and other harms can be attributed to the responsible parties who have spread those falsehoods.

     The legislature further finds and declares that:

     (1)  Individuals and entities involved in the production of fossil fuel products have engaged in a decades-long project to protect their bottom lines with a coordinated effort to deceive the public about the reality of the climate crisis;

     (2)  Documents unveiled by litigation and investigative journalists demonstrate that those parties were aware of the potentially catastrophic impact of their products from as early as the 1950s.  Even though research conducted by their own scientists affirmed the impacts of their business, these parties outright denied that climate change was real, spread disinformation to cast doubt on the science, and fought regulatory action against fossil fuel and fossil fuel products;

     (3)  The 1970s and 1980s saw the development of a clear scientific consensus that increasing carbon dioxide concentration in the atmosphere would contribute to global warming, and that the heightened carbon dioxide emissions were attributable to fossil fuels.  These facts were supported by several fossil fuel industry scientists from different companies such as Exxon and Shell, who presented these findings to their management with warnings that the "present trend of fossil fuel consumption will cause dramatic environmental effects before the year 2050;"

     (4)  Despite acknowledging that increased carbon dioxide concentrations due to fossil-fuel combustion posed a considerable threat, responsible parties decided not to take steps to prevent the risks of climate change.  Instead, they stopped funding major climate research and launched campaigns to discredit climate science and delay actions perceived as contrary to their business interests.  These corporations carried out these campaigns by:

          (A)  Developing public relations strategies that were contradictory to their knowledge and scientific insights;

          (B)  Engaging in public communications campaigns to promote doubt and downplay the threats of climate change; and

          (C)  Funding individuals, organizations, and research aimed at discrediting the growing body of publicly available climate science;

     (5)  From 1970 to 2020, the oil and gas industry responsible parties made nearly $2,800,000,000 a day and $1,000,000,000,000 dollars a year in profit;

     (6)  Responsible parties currently advertise "green" efforts to the public that mask the lack of real investment in resiliency and energy-source transition and the continued prioritization of the extraction, refinement, and distribution of fossil fuel products;

     (7)  A December 2022 report by a congressional oversight committee revealed internal documents from senior leaders from the fossil fuel industry that explicitly reject taking accountability for the greenhouse gas emissions associated with their products; and

     (8)  By conduct and impact, these responsible parties have intentionally obfuscated the truth about climate change and outright deceived the public to continue dependence on fossil fuel products.

     The legislature further finds that the intentional lies, misinformation, and disinformation, and misrepresentations by responsible parties about the connection between the products they sell is not political speech, but fundamentally commercial activity with incidental political impact.  The legislature finds that these parties must be accountable to those harmed by climate disasters, extreme weather attribute to climate change, and long-term changes to the climate system.

     The legislature finds that the Hawaii hurricane relief fund and the Hawaii property insurance association have not exercised their right of subrogation against responsible parties who should be held accountable for substantially contributing to losses associated with climate change due to their misleading and deceptive practices.

     It is the intent of this State to provide a judicial forum for the efficient, just, and equitable resolution of insurers' subrogation claims stemming from climate disasters, extreme weather attributable to climate change, and harms resulting from long-term changes to the climate system.

     The purpose of this Act is to:

     (1)  Require property and casualty insurance rates that incorporate historical or projected losses from fire or catastrophe hazards to be conditioned on agreement by the insurer to file and litigate subrogation claims against responsible parties; and

     (2)  Require the Hawaii property insurance association to file and litigate subrogation claims against certain responsible parties for claims paid by the insurer for losses that are attributable to climate change.

     SECTION 2.  Section 431:14-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Rates shall be made in accordance with the following provisions:

     (1)  Rates shall not be excessive, inadequate, or unfairly discriminatory.

     (2)  Due consideration shall be given to:

          (A)  Past and prospective loss experience within and outside this State; provided that if the claim does not exceed the selected deductible amount pursuant to section 386-100, and the employer reimburses the insurer for the amount, the claims shall not be calculated in the employer's experience rating or risk category;

          (B)  The conflagration and catastrophe hazards, if any[;], with the requirement that rates incorporating historical or projected losses from conflagration or catastrophe hazards shall be conditioned upon agreement by the insurer to file and litigate subrogation claims against responsible parties for claims paid for losses from climate disasters or extreme weather attributable to climate change;

          (C)  Any proceeds recovered by the insurer through subrogation claims;

        [(C)] (D)  A reasonable margin for underwriting profit and contingencies;

        [(D)] (E)  Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

        [(E)] (F)  Past and prospective expenses both country‑wide and those specially applicable to this State;

        [(F)] (G)  Investment income from unearned premium and loss reserve funds; and

        [(G)] (H)  All other relevant factors within and outside this State.

     (3)  In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which that experience is available.

     (4)  The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any insurer or group with respect to any class of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

     (5)  Risks may be grouped by classifications for the establishment of rates and minimum premiums.  Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both.  These standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.  No risk classification may be based upon race, creed, national origin, or the religion of the insured.

     (6)  Manual, minimum, class rates, rating schedules, or rating plans shall be made and adopted, except in the case of:

          (A)  Special rates where manual, minimum, class rates, rating schedules, or rating plans are not applicable; and

          (B)  Specifically rated inland marine risks.

     (7)  No insurer authorized to do business in this State shall issue any policy that provides or makes available to any risks preferred rates based upon any grouping of persons, firms, or corporations by way of membership, license, franchise, contract, agreement, or any other means, other than common majority ownership of the risks, or except where:

          (A)  A common stock ownership in and management control of the risks are held by the same person, corporation, or firm;

          (B)  Permitted or authorized by filings in existence as of January 1, 1988, under the casualty rating law and the fire rating law, as these filings may be amended from time to time;

          (C)  Health care providers, as defined in section 671‑1 that could have joined the patients' compensation fund as it existed in chapter 671, part III, prior to May 31, 1984, joined together with one or more groups of related or unrelated health care providers;

          (D)  Permitted under article 12; or

          (E)  Otherwise expressly provided by law."

     SECTION 3.  Section 431:21-106, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The plan of operation shall:

     (1)  Establish procedures for performance of all the powers and duties of the association under section 431:21‑105;

     (2)  Establish maximum limits of liability to be placed through the association;

     (3)  Establish reasonable underwriting standards for determining insurability of a risk which are comparable to the standards used to determine insurability of a risk located outside the area designated by the commissioner as eligible for association coverage;

     (4)  Establish a schedule of deductibles, if appropriate;

     (5)  Establish the commission to be paid to licensed producers;

     (6)  Establish the rates to be charged for the insurance coverages, so that the total premium income from all association policies, when combined with the investment income, shall annually fund the administration of the association.  The administration of the association shall include the expenses incurred in processing applications, conducting inspections, issuing and servicing policies, paying commissions, and paying claims, but shall not include assessments approved by the commissioner[;].  Rates charged shall also account for proceeds obtained by the association from subrogation claims made by the association;

     (7)  Establish the manner and scope of the inspection and the form of the inspection report.  The inspection guidelines may include setting minimum conditions the property must meet before an inspection is required;

     (8)  Establish procedures whereby selections for the board of directors will be submitted to the commissioner for the commissioner's information;

     (9)  Establish procedures for records to be kept of all financial transactions of the association, its producers, and its board of directors;

    (10)  Establish procedures by which applications will be received and serviced by the association;

    (11)  Establish guidelines for the investigation and payment of claims; [and]

    (12)  Establish procedures whereby the association may assume and cede reinsurance on risks written through the association[.]; and

    (13)  Require the association to file and litigate subrogation claims against responsible parties for claims paid by the insurer for losses from climate disasters and extreme weather attributable to climate change."

     SECTION 4.  Nothing in this Act shall be construed to limit in any way the enforceability of existing laws concerning insurance, consumer protection, climate, environment, energy, or natural resources, by either the government or other private plaintiffs.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

HPIA; Property Insurance; Subrogation Claims; Property and Casualty Rate Regulation

Description:

Requires that property and casualty insurance rates that incorporate historical or projected losses from fire or catastrophe hazards be conditioned on agreement by the insurer to file and litigate subrogation claims against responsible parties.  Requires the Hawaii Property Insurance Association to file and litigate subrogation claims against certain responsible parties for claims paid by the insurer for losses that are attributable to climate change.  Requires insurance rates to account for proceeds obtained by the Association through subrogation claims.

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. 888

Honolulu, Hawaii

RE:    S.B. No. 1166

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committees on Ways and Means and Judiciary, to which was referred S.B. No. 1166, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

beg leave to report as follows:

     The purpose and intent of this measure is to allow persons and insurers to recover damages for losses due to climate disasters and extreme weather attributable to climate change.

     Specifically, this measure:

     (1)  Establishes specific causes of action for insurers, the Hawaii Property Insurance Association, and certain other persons to seek damages against a responsible party for harms resulting from climate disasters and extreme weather attributable to climate change; and

     (2)  Requires insurance rates of the Hawaii Property Insurance Association and private insurers to account for any proceeds obtained from those civil actions or subrogation claims.

     Your Committees received written comments in support of this measure from the Sierra Club of Hawai`i, Center for Climate Integrity, and one individual.

     Your Committees received written comments in opposition to this measure from the Hawaii Association for Justice and one individual.

     Your Committees received written comments on this measure from the Attorney General; Department of Commerce and Consumer Affairs, Insurance Division; and Hawaii Property Insurance Association.

     Your Committees find that climate disasters and extreme weather attributable to climate change pose risks to the health, safety, and security of Hawaii's residents and visitors.  Your Committees further find that the State has a compelling interest in protecting its citizens from climate disasters and extreme weather attributable to climate change.

     Your Committees have amended this measure by:

     (1)  Changing, from 1965 to an unspecified year, the year beginning in which, if a responsible party took certain actions within the State, the responsible party would be under the jurisdiction of the State for purposes of the civil causes of action established under this measure;

     (2)  Amending the measure's purpose section to conform with the measure's body; and

     (3)  Making technical nonsubstantive amendments for purposes of clarity, consistency, and style.

     Your Committees respectfully request that future committees that deliberate on this measure consider the testimony of the Attorney General, which expressed concern that the provisions of this measure that authorize "any person" to seek damages against a responsible party may be found to be beyond the scope of this measure's title.

     As affirmed by the records of votes of the members of your Committees on Ways and Means and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1166, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 1166, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Ways and Means and Judiciary,

STAND. COM. REP. NO. 666

Honolulu, Hawaii

RE:    S.B. No. 1166

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 1166 entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require property and casualty insurance rates that incorporate historical or projected losses from fire or catastrophe hazards to be conditioned on agreement by the insurer to file and litigate subrogation claims against responsible parties; and

     (2)  Require the Hawaii Property Insurance Association to file and litigate subrogation claims against certain responsible parties for claims paid by the insurer for losses attributable to climate change.

     Your Committee received testimony in support of this measure from the Center for Climate Integrity.

     Your Committee received testimony in opposition to this measure from the Department of Commerce and Consumer Affairs and National Association of Mutual Insurance Companies.

     Your Committee received comments on this measure from the Department of the Attorney General, Hawaii Property Insurance Association (HPIA), and Hawaii Insurers Council.

     Your Committee finds that residents, businesses, and insurers in the State are suffering vast harms as a result of the fossil fuel industry increasing the risk of disasters attributable to climate change.  This measure would allow insurers in the State to recover losses attributable to climate change and extreme weather by holding fossil fuel companies accountable, rather than the policyholders via increased rates.

     Your Committee acknowledges the testimony of the HPIA expressing concerns that mandating private insurers and the HPIA to file subrogation claims against responsible parties could have the unintended consequence of increasing premiums for policyholders.  Because each decision regarding subrogation involves a careful consideration of various business factors, subrogation is evaluated on a case-by-case basis, and actions related to climate change or extreme weather events can be particularly challenging and extremely costly to pursue.  Amendments to this measure are therefore necessary to address these concerns.

     Prior to decision making on this measure, your Committee circulated a draft proposed S.D. 1 that incorporates language that makes the subrogation claims voluntary and addresses a number of other concerns raised in testimony.  Accordingly, your Committee finds this language preferrable and has amended this measure as follows:

     (1)  Inserting language establishing a private cause of action against responsible parties and authorizing insurers to bring actions under certain conditions;

     (2)  Inserting definitions for "climate disasters", "extreme event attribution science", "extreme weather or other event attributable to climate change", "fossil fuel products", "impact attribution science", and "responsible party";

     (3)  Deleting language that would have required insurers to bring claims against responsible parties and condition rates upon their agreement to bring claims;

     (4)  Inserting language that encourages, rather than requires, insurers to bring claims against responsible parties and use the proceeds from the lawsuits to establish rates;

     (5)  Inserting language that requires the HPIA to submit a report to the Insurance Commissioner that includes an explanation of why it may not have chosen to exercise its direct action rights against responsible parties and a comparison of rates;

     (6)  Clarifying the limitations on the applicability of this measure;

     (7)  Modifying its legislative findings;

     (8)  Amending section 1 to reflect its amended purpose;

     (9)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (10) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1166, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1166, S.D. 1, and be referred to your Committees on Ways and Means and Judiciary.

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