SB 2777: DCCA; Insurance Division; Property Insurance; Payment of Claims; Disclosure; Violations; Penalties

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 the cost of property insurance continues to increase in light of changing market conditions, including climate change and climate-related impacts.

     The legislature also finds that it is in the interest of consumers to have access to complete information when deciding between property insurance options, enabling them to make informed decisions in an increasingly expensive marketplace.

     Accordingly, the purpose of this Act is to:

     (1)  Establish a disclosure requirement for property insurers to provide certain information concerning the insurer's payment of claims in the previous calendar year; and

     (2)  Provide for enforcement, fines, attorneys' fees, and costs for violations of the disclosure requirement.

     SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new part to article 10E to be appropriately designated and to read as follows:

"Part     .  Payment of claims disclosureS

     §431:10E-A  Payment of claims disclosure.  (a)  Any authorized insurer operating in the State that sells, solicits, or offers coverage under a policy for insurance against loss of or damage to real property shall provide on request, subject to subsection (b), the following information relating to policies covering commercial and residential real property within the State for the period of January 1 through December 31 of the previous year:

     (1)  The total number of claims open at the beginning of the period;

     (2)  The total number of claims opened during the period;

     (3)  The total number of claims closed with payment during the period;

     (4)  The total number of claims closed without payment during the period; and

     (5)  The total number of claims open at the end of the period.

     (b)  The authorized insurer shall provide the information identified in subsection (a):

     (1)  To a person to whom any offer to sell or renew is made;

     (2)  Concurrently with an offer to sell or renew; and

     (3)  In a manner that is clearly and conspicuously displayed;

provided that the information to be provided shall be limited to each policy type included in the offer to sell or renew.

     (c)  For the purposes of this section, "clearly and conspicuously" means presented in a manner that is readily noticeable, readable, and understandable to a person to whom applicable information is provided.

     §431:10E-B  Violations.  (a)  Failure to provide the information required pursuant to section 431:10E-A shall constitute a violation of this part.  Upon determination by the insurance division that a violation has occurred, the authorized insurer may be fined not more than $1,000 per violation.

     (b)  An authorized insurer in violation of this part shall be responsible for any attorneys' fees and costs incurred by the department of commerce and consumer affairs or the attorney general to bring an administrative or civil action to enforce this part.

     (c)  An authorized insurer in violation of this part may be subject to any other administrative or civil action, as set forth under any relevant part of this chapter."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  This Act shall take effect on July 1, 2050.

Report Title:

DCCA; Insurance Division; Property Insurance; Payment of Claims; Disclosure; Violations; Penalties

Description:

Requires authorized property insurers to disclose certain information regarding payment of claims for the previous year.  Establishes penalties.  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 the cost of property insurance continues to increase in light of changing market conditions, including climate change and climate-related impacts.

     The legislature also finds that it is in the interest of consumers to have access to complete information when deciding between property insurance options, enabling them to make informed decisions in an increasingly expensive marketplace.

     Accordingly, the purpose of this Act is to:

     (1)  Establish a disclosure requirement for property insurers to provide the insurance commissioner with certain information concerning the insurer's payment of claims in the previous calendar year;

     (2)  Require the insurance division to make the disclosed information available to the public; and

     (3)  Provide for enforcement, fines, attorneys' fees, and costs for violations of the disclosure requirement.

     SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new part to article 10E to be appropriately designated and to read as follows:

"Part     .  Payment of claims disclosureS

     §431:10E-A  Payment of claims disclosure; retention of records.  (a)  Any insurer operating in the State that provides property insurance as defined in section 431:1-206 shall, within three months following the completion of the calendar year, submit to the commissioner a full and accurate written disclosure of the following information for that calendar year:

     (1)  The total number of claims filed with the insurer;

     (2)  The total number of filed claims that were approved to receive full payment;

     (3)  The total number of filed claims that were approved to receive partial payment;

     (4)  For claims approved for full or partial payment, the total number of those claims for which payments had been fully dispersed at the time of the disclosure; and

     (5)  Any other reasonable disclosure that the commissioner determines appropriate to effectuate this part.

     (b)  All disclosures submitted pursuant to this section shall be in a form prescribed by the commissioner.

     (c)  All disclosures submitted pursuant to this section shall be retained by the insurance division for       years and shall be made available for review by any individual upon request.

     §431:10E-B  Publication.  (a)  The insurance division shall make public the information received pursuant to section 431:10E-A as follows:

     (1)  On its website in a conspicuous location;

     (2)  In-person at its offices; and

     (3)  Through any other means or platforms deemed appropriate by the commissioner to effectuate this part.

     (b)  The information published pursuant to subsection (a) shall be made available in a format that aggregates the information disclosed by all insurers and shall enable a person viewing the information to identify each insurer and related data for the relevant reporting period.

     §431:10E-C  Violations.  (a)  For each day that an insurer is in violation of the disclosure requirement pursuant to this part, the insurance division shall fine the insurer $1,000 per day; provided that the maximum fine shall not exceed $50,000.

     (b)  An insurer in violation of this part shall be responsible for any attorneys' fees and costs incurred by the department of commerce and consumer affairs or the attorney general to bring an administrative or civil action to enforce this part.

     (c)  An insurer in violation of this part may be subject to any other administrative or civil action, as set forth under any relevant part of this chapter."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

DCCA; Insurance Division; Insurance Commissioner; Property Insurance; Payment of Claims; Disclosure; Records; Publication; Violations; Penalties

Description:

Requires property insurers to disclose to the Insurance Division of the Department of Commerce and Consumer Affairs certain information regarding payment of claims for the prior year.  Requires the Insurance Division to retain and make the information publicly available.  Establishes penalties.

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. 2649

Honolulu, Hawaii

RE:     S.B. No. 2777

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2777 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 insurers to disclose certain information regarding payment of claims for the previous year to the Insurance Division of the Department of Commerce and Consumer Affairs;

     (2)  Require the Insurance Division to retain and make the information publicly available; and

     (3)  Establish penalties.

     Your Committee received testimony in support of this measure from one individual.

     Your Committee received testimony in opposition to this measure from the Hawaii Insurers Council and National Association of Mutual Insurance Companies.

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

     Your Committee finds that the cost of property insurance continues to increase in the State, in part due to climate change and climate-related impacts.  This measure would provide consumers in the State with access to more information to inform property insurance policy purchasing decisions.

     Your Committee acknowledges the concerns raised in testimony by the Insurance Division of the Department of Commerce and Consumer Affairs that establishing a separate claims disclosure requirement in the State may result in duplicative reporting obligations and additional administrative burdens.

     Accordingly, your Committee has amended this measure by:

     (1)  Deleting language that would have required any insurer operating in the State that provides property insurance as defined in section 431:1-206, Hawaii Revised Statutes, to submit annual disclosures containing certain information to the Insurance Commissioner;

     (2)  Inserting language to require that any insurer authorized to do business in the State that sells, solicits, or offers coverage under a policy for insurance against loss of or damage to real property shall provide certain annual information relating to policies covering commercial or residential real property, or both, within the State to:

          (A)  The person or persons to whom any offer to sell or renew insurance is made;

          (B)  Concurrently with the offer to sell or renew; and

          (C)  In a manner that is clearly and conspicuously displayed;

     (3)  Deleting language that would have required the Insurance Commissioner to specify the form of, retain for a certain period of time, make available on request, and publish certain information required to be disclosed by an insurer;

     (4)  Clarifying that an authorized insurer in violation of the disclosure requirement shall be fined not more than $1,000 per violation;

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

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

     (7)  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. 2777, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2777, S.D. 1, and be referred to your Committee on Ways and Means.

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