SB 2947: Department of Commerce and Consumer Affairs; Insurance; Insurance Commissioner; Wildfires; Risk Scores; Risk Models; Transparency; Mitigation; Rebates; Discounts; Consumer Notice; Appeals; Reports; Appropriation

THE SENATE	S.B. NO.	2947
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII

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 wildfires in the State have caused loss of life, displacement, and major damage to homes, businesses, and public infrastructure, and have disrupted the availability and affordability of residential property insurance.  The legislature further finds that insurers increasingly use wildfire risk scores, wildfire risk models, catastrophe models, and similar scoring methods to underwrite, price, surcharge, or discontinue residential property insurance, but policyholders and applicants often cannot obtain meaningful information about how these scores are determined or how risk-reducing actions may affect underwriting and pricing outcomes.

     The legislature further finds that science-based wildfire mitigation measures at the property level and community level can reduce wildfire risk and expected loss.  The legislature believes that insurers should account for verified mitigation actions in underwriting and pricing or, if an insurer’s model does not incorporate mitigation actions, provide meaningful premium discounts or other premium adjustments for demonstrated mitigation actions.  The legislature further finds that policyholders should receive timely notice of their wildfire risk score or classification, applicable mitigation discounts, and a clear and accessible process to appeal inaccurate scores or discount determinations.

     The legislature further finds that state policymakers across the western region have identified wildfire-driven insurance disruption as a shared and escalating challenge requiring coordinated, state-led solutions.  The legislature further finds that the consumer transparency, mitigation recognition, and accountability measures contained in this Act reflect model policy concepts advanced through the Council of State Governments West annual meeting process and are consistent with reforms enacted in other western states as part of a multi-state effort to stabilize insurance markets, better align pricing with verified risk reduction, and protect consumers.

     Accordingly, the purpose of this Act is to establish a comprehensive wildfire insurance consumer-protection framework that:

     (1)  Increases transparency for wildfire risk scoring and modeling used in residential property insurance;

     (2)  Ensures mitigation is recognized through underwriting, pricing, and premium discounts;

     (3)  Provides standardized notices and a right to appeal; and

     (4)  Authorizes insurers to offer premium reductions and other benefits for wildfire risk-preventative measures.

     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     .  WILDFIRE RISK MODEL TRANSPARENCY; MITIGATION INCENTIVES

     §431:10E-A  Definitions.  (a)  As used in this part:

     "Applicant" means a person who has submitted a completed application for residential property insurance coverage.

     "Catastrophe model" means a tool, instrumentality, means, product, or process, including a map-based tool, computer-based tool, or simulation, used by an insurer to estimate potential losses from catastrophic events, including wildfire-related events.

     "Community-level mitigation action" means a science-based mitigation action demonstrated by a community- or neighborhood-level designation, certification, or verification, or undertaken by a government entity, that reduces wildfire risk for a residential property or a community, including fuel reduction activities, forest treatment, wildfire-fighting and mitigation equipment investments, utility wildfire mitigation activities undertaken pursuant to a wildfire mitigation plan approved by the public utilities commission pursuant to chapter 269, and other risk-reduction activities identified by rule of the commissioner.

     "Property-specific mitigation action" means a science-based mitigation action that reduces wildfire risk for a residential property, including defensible space, ignition-resistant or fire-resistive building hardening measures, and mitigation verified or certified through a program recognized by the commissioner by rule.

     "Public plan-type association" means any public, quasi-public, or statutorily created plan-type association established under this chapter to facilitate access to residential property insurance when coverage is not otherwise available in the voluntary market, including any residual market mechanism or joint underwriting-type association established under this chapter.

     "Residential property insurance" means a policy of insurance that provides coverage for a residential structure or dwelling, residential condominium unit, multi-family residential housing, or appurtenant structures, and includes coverage provided through any residual market mechanism, joint underwriting association, or public plan-type association established under this chapter, as applicable.

     "Risk score" or "wildfire risk score" means a numerical value, rating, score, tier, or categorization derived from a statistical tool, modeling system, algorithm, scoring method, or other process used, in whole or in part, to measure or assess wildfire risk associated with a residential property or community for purposes of underwriting, pricing, rating, classification, establishing a rate differential, applying a surcharge, determining eligibility, renewing, or nonrenewing residential property insurance.

     "Scoring method" means an algorithmic or model-based method, including vendor products, that assigns a score, tier, class, or categorization used for underwriting or pricing decisions for residential property insurance, including wildfire risk scoring.

     (b)  The commissioner may adopt rules to further define definitions in this section consistent with this part.

     §431:10E-B  Wildfire risk score disclosures; requests; required content; timelines.  (a)  An insurer that uses a wildfire risk score in connection with underwriting, property evaluation, or rating of residential property insurance shall, upon the request of the insured, the insured's insurance producer, or an applicant, provide the requester with the following information for the residential property:

     (1)  The current wildfire risk score or other wildfire risk classification assigned to the residential property by the insurer;

     (2)  The range of possible wildfire risk scores or classifications under the model or scoring method used by the insurer;

     (3)  The name of the person or entity that created the wildfire risk score, model, or scoring method used to assign the score or classification, including the name of any vendor product used, if applicable;

     (4)  The date on which the wildfire risk score or classification was created or last updated for the residential property; and

     (5)  The key factors that adversely affected the wildfire risk score or classification assigned to the residential property, stated in plain language.

     (b)  The insurer shall provide the information required by subsection (a) in writing no later than thirty calendar days after receiving the request.

     (c)  Nothing in this section shall be construed to require an insurer to publicly disclose proprietary source code, trade secrets, or confidential vendor materials; provided that the insurer shall disclose sufficient information to comply with subsection (a).

     §431:10E-C  Model and scoring method filings; incorporation of mitigation; trade secret treatment.  (a)  An insurer that uses a wildfire risk model, catastrophe model, or scoring method to assign wildfire risk for underwriting, pricing, rating, establishing a rate differential, applying a surcharge, renewal, or nonrenewal decisions for residential property insurance shall provide to the commissioner, as part of the insurer's rate filings or other filings required by the commissioner by rule:

     (1)  A description of each wildfire risk model, catastrophe model, or scoring method used, including how the model or scoring method is used in underwriting and pricing decisions;

     (2)  The impact of the model or scoring method on rates, surcharges, rating tiers, eligibility, and nonrenewal decisions;

     (3)  An actuarial justification for rating factors, including mitigation discounts and other premium adjustments offered; and

     (4)  Any additional information required by rule, to the extent data is available.

     (b)  To the extent data is available and as established by rule, an insurer shall submit information as part of filings required by subsection (a) that describes how and whether the insurer's models or scoring methods account for statewide mitigation activities and risk-reduction investments, including forest treatment, wildfire-fighting and mitigation equipment investments, and utility wildfire mitigation activities undertaken pursuant to a wildfire mitigation plan approved by the public utilities commission pursuant to chapter 269, and other mitigation activities undertaken by government entities or utilities.

     (c)  An insurer that uses a wildfire risk model, catastrophe model, or combination of models shall ensure that the following are either incorporated in the insurer's model or scoring method or are otherwise demonstrably included in the insurer's underwriting and pricing:

     (1)  Property-specific mitigation actions; and

     (2)  Community-level mitigation actions.

     (d)  If an insurer does not incorporate property-specific mitigation actions and community-level mitigation actions into its wildfire risk model, catastrophe model, or scoring method, the insurer shall provide mitigation discounts, incentives, or other premium adjustments to policyholders and applicants who demonstrate that:

     (1)  Property-specific mitigation actions have been undertaken on the property;

     (2)  Community-level mitigation actions have been undertaken in sufficient proximity to the property to reduce the risk of loss; or

     (3)  As determined by rule of the commissioner.

     (e)  Information submitted to the commissioner under this section that constitutes a trade secret or confidential commercial information shall be treated as confidential to the extent permitted by law; provided that this subsection shall not limit the commissioner's authority to require disclosures to policyholders and applicants under this part.

     §431:10E-D  Public website disclosures; notices; timing; right to appeal; reconsideration.  (a)  An insurer subject to this part shall post on its public website readily accessible information describing:

     (1)  Premium discounts, incentives, or other premium adjustments available for property-specific mitigation actions and community-level mitigation actions;

     (2)  The process by which a policyholder or applicant may submit evidence of mitigation actions;

     (3)  The process to request a wildfire risk score or classification under section 431:10E-B;

     (4)  The process to appeal a wildfire risk score or classification and any mitigation discount determination under this section; and

     (5)  For each discount, incentive, or premium adjustment, the amount or range of the discount or adjustment, if applicable, and the mitigation actions associated with eligibility for the discount or adjustment.

     (b)  An insurer that provides a mitigation discount, or that uses a wildfire risk score, wildfire risk classification, wildfire risk model, catastrophe model, or scoring method to underwrite, price, create a rate differential, apply a surcharge, renew, or not renew residential property insurance based upon wildfire risk shall provide a written notice to each policyholder and applicant at the following times:

     (1)  For applicants, upon application for coverage and no later than thirty calendar days after receipt of a completed application;

     (2)  For policyholders being offered renewal, with the offer of renewal;

     (3)  For policyholders not being offered renewal, with the notice of nonrenewal; and

     (4)  For policyholders, at least annually, at a time and in a manner prescribed by rule of the commissioner.

     (c)  The notice required by subsection (b) shall include:

     (1)  A plain-language explanation of the wildfire risk score or classification, including that different insurers may use different models and score ranges;

     (2)  The range of possible scores or classifications that could be assigned to the property under the insurer's model or scoring method;

     (3)  The relative position of the property's assigned score or classification within the insurer's range;

     (4)  A written explanation of why the policyholder or applicant received the assigned score or classification, identifying the primary property features or other primary factors that influenced the assignment; and

     (5)  The impact, if any, that each property-specific mitigation action or community-level mitigation action could have on the wildfire risk score or classification assigned to the property.

     (d)  A policyholder or applicant whose wildfire risk score, wildfire risk classification, or applicable mitigation discount determination is inaccurate, or who believes the insurer failed to account for submitted mitigation evidence, may appeal directly to the insurer.

     (e)  The insurer shall notify the policyholder or applicant in writing of the right to appeal at the time the insurer provides a score, classification, or discount information under subsection (b).

     (f)  Upon receipt of an appeal under subsection (d), the insurer shall:

     (1)  Acknowledge receipt of the appeal in writing within ten calendar days; and

     (2)  Provide a written reconsideration and decision within thirty calendar days after receiving the appeal.

     (g)  If an appeal is denied, the insurer shall, upon request by the commissioner, forward a copy of the appeal and the insurer's response to the commissioner within the timeframe required by the commissioner.

     (h)  If a policyholder or applicant completes a property-specific mitigation action, or provides evidence of a community-level mitigation action in sufficient proximity to reduce risk of loss, after the last application or renewal, the insurer shall provide a revised wildfire risk score or classification no later than thirty calendar days after the policyholder or applicant submits a written request and supporting evidence, as determined by rule of the commissioner.

     §431:10E-E  Benefits and premium reductions for wildfire risk-preventative measures; disclosures; rate filings.  (a)  An insurer may provide a benefit or premium reduction to a residential property insurance policyholder for wildfire risk-preventative measures taken by the policyholder. Preventative measures include actions that reduce the risk of damage to property from wildfire, including but not limited to:

     (1)  Using ignition-resistant, fire-resistive, or noncombustible building materials in construction or retrofit, including noncombustible roofing or coatings and exterior glazing for fire protection;

     (2)  Establishing and maintaining defensible space landscaping around structures;

     (3)  Providing annual confirmation, if requested by the insurer, that the insured has employed defensible space landscaping around the insured’s structures;

     (4)  Installing fire alarms or emergency alarm systems;

     (5)  Providing adequate access to the property for firefighting equipment and authorized emergency vehicles;

     (6)  Maintaining an adequate outside water source or other on-site suppression resources, as determined by rule;

     (7)  Complying with local, state, or federal fire prevention or community preparedness programs recognized by the commissioner by rule; and

     (8)  Complying with the International Wildland-Urban Interface Code if a building is located in a wildland-urban interface area.

     (b)  An insurer that provides a benefit or premium reduction under subsection (a) shall disclose the benefit or premium reduction in writing to the policyholder in a manner prescribed by rule of the commissioner.

     (c)  An insurer that offers benefits or premium reductions under this section shall file the preventative measures agreement and any associated rate impacts with the commissioner in a manner prescribed by rule.

     (d)  For the purposes of this section:

     "Benefit" means a rebate, discount, abatement, credit, reduction of premium, or other advantage to the policyholder provided under the terms of a preventative measures agreement or program established by the insurer.

     "Preventative measures agreement" means an insurer program or agreement that specifies the preventative measures eligible for a benefit or premium reduction and any verification requirements.

     §431:10E-F  Rules; enforcement; remedies; coordination.  (a)  The commissioner shall adopt rules pursuant to chapter 91 to implement this part, including rules that:

     (1)  Establish minimum standards for notices, mitigation evidence, verification, and appeals;

     (2)  Identify acceptable mitigation certifications and verification programs;

     (3)  Specify filings required under section 431:10E-C;

     (4)  Provide standards for determining whether community-level mitigation actions are in sufficient proximity to reduce risk of loss; and

     (5)  Establish standardized formats to improve consumer understanding and comparability.

     (b)  The commissioner may examine and investigate insurer practices for compliance with this part and may take any action authorized under this chapter for violations, including orders, fines, or other administrative remedies authorized by law.

     (c)  The commissioner shall coordinate, as appropriate, with state and county agencies involved in wildfire preparedness, fuel reduction, building safety, and emergency management to align verification standards for mitigation actions.

     §431:10E-G  Reports to the legislature.  (a)  No later than twenty days prior to the convening of each regular session, the commissioner shall submit a report to the legislature on implementation of this part, including:

     (1)  Insurer compliance trends and common consumer issues;

     (2)  Aggregate information on appeals, reconsiderations, and outcomes;

     (3)  Aggregate information on mitigation discounts offered and utilized;

     (4)  Recommendations for statutory or administrative changes to improve insurance availability, transparency, and mitigation incentives; and

     (5)  Any other information the commissioner deems necessary.

     (b)  The report shall not disclose trade secrets or confidential proprietary information."

     SECTION 3.  Section 431:13-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  The following are defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:

     (1)  Misrepresentations and false advertising of insurance policies.  Making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison that:

          (A)  Misrepresents the benefits, advantages, conditions, or terms of any insurance policy;

          (B)  Misrepresents the dividends or share of the surplus to be received on any insurance policy;

          (C)  Makes any false or misleading statement as to the dividends or share of surplus previously paid on any insurance policy;

          (D)  Is misleading or is a misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates;

          (E)  Uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof;

          (F)  Is a misrepresentation for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy;

          (G)  Is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any insurance policy;

          (H)  Misrepresents any insurance policy as being shares of stock;

          (I)  Publishes or advertises the assets of any insurer without publishing or advertising with equal conspicuousness the liabilities of the insurer, both as shown by its last annual statement; or

          (J)  Publishes or advertises the capital of any insurer without stating specifically the amount of paid-in and subscribed capital;

     (2)  False information and advertising generally.  Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of the person's insurance business, which is untrue, deceptive, or misleading;

     (3)  Defamation.  Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature [which] that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and [which] that is calculated to injure any person engaged in the business of insurance;

     (4)  Boycott, coercion, and intimidation.

          (A)  Entering into any agreement to commit, or by any action committing, any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance; or

          (B)  Entering into any agreement on the condition, agreement, or understanding that a policy will not be issued or renewed unless the prospective insured contracts for another class or an additional policy of the same class of insurance with the same insurer;

     (5)  False financial statements.

          (A)  Knowingly filing with any supervisory or other public official, or knowingly making, publishing, disseminating, circulating, or delivering to any person, or placing before the public, or knowingly causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of a material fact as to the financial condition of an insurer; or

          (B)  Knowingly making any false entry of a material fact in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom the insurer is required by law to report, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, knowingly omitting to make a true entry of any material fact pertaining to the business of the insurer in any book, report, or statement of the insurer;

     (6)  Stock operations and advisory board contracts.  Issuing or delivering or permitting agents, officers, or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common-law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance;

     (7)  Unfair discrimination.

          (A)  Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any policy of life insurance or annuity contract or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contract;

          (B)  Making or permitting any unfair discrimination in favor of particular individuals or persons, or between insureds or subjects of insurance having substantially like insuring, risk, and exposure factors, or expense elements, in the terms or conditions of any insurance contract, or in the rate or amount of premium charge therefor, or in the benefits payable or in any other rights or privilege accruing thereunder;

          (C)  Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a property or casualty risk because of the geographic location of the risk, unless:

               (i)  The refusal, cancellation, or limitation is for a business purpose [which] that is not a mere pretext for unfair discrimination; or

              (ii)  The refusal, cancellation, or limitation is required by law or regulatory mandate;

          (D)  Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a residential property risk, or the personal property contained therein, because of the age of the residential property, unless:

               (i)  The refusal, cancellation, or limitation is for a business purpose [which] that is not a mere pretext for unfair discrimination; or

              (ii)  The refusal, cancellation, or limitation is required by law or regulatory mandate;

          (E)  Refusing to insure, refusing to continue to insure, or limiting the amount of coverage available to an individual because of the sex or marital status of the individual; however, nothing in this subsection shall prohibit an insurer from taking marital status into account for the purpose of defining persons eligible for dependent benefits;

          (F)  Terminating or modifying coverage, or refusing to issue or renew any property or casualty policy or contract of insurance solely because the applicant or insured or any employee of either is mentally or physically impaired; provided that this subparagraph shall not apply to accident and health or sickness insurance sold by a casualty insurer; provided further that this subparagraph shall not be interpreted to modify any other provision of law relating to the termination, modification, issuance, or renewal of any insurance policy or contract;

          (G)  Refusing to insure, refusing to continue to insure, or limiting the amount of coverage available to an individual based solely upon the individual's having taken a human immunodeficiency virus (HIV) test prior to applying for insurance; or

          (H)  Refusing to insure, refusing to continue to insure, or limiting the amount of coverage available to an individual because the individual refuses to consent to the release of information [which] that is confidential as provided in section 325‑101; provided that nothing in this subparagraph shall prohibit an insurer from obtaining and using the results of a test satisfying the requirements of the commissioner, which was taken with the consent of an applicant for insurance; provided further that any applicant for insurance who is tested for HIV infection shall be afforded the opportunity to obtain the test results, within a reasonable time after being tested, and that the confidentiality of the test results shall be maintained as provided by section 325‑101;

     (8)  Rebates.  Except as otherwise expressly provided by law:

          (A)  Knowingly permitting or offering to make or making any contract of insurance, or agreement as to the contract other than as plainly expressed in the contract, or paying or allowing, or giving or offering to pay, allow, or give, directly or indirectly, as inducement to the insurance, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits, or any valuable consideration or inducement not specified in the contract; or

          (B)  Giving, selling, or purchasing, or offering to give, sell, or purchase as inducement to the insurance or in connection therewith, any stocks, bonds, or other securities of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued thereon, or anything of value not specified in the contract;

     (9)  Nothing in paragraph (7) or (8) shall be construed as including within the definition of discrimination or rebates any of the following practices:

          (A)  In the case of any life insurance policy or annuity contract, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance; provided that any bonus or abatement of premiums shall be fair and equitable to policyholders and in the best interests of the insurer and its policyholders;

          (B)  In the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expense;

          (C)  Readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for the policy year;

          (D)  In the case of any contract of insurance, the distribution of savings, earnings, or surplus equitably among a class of policyholders, all in accordance with this article; [and]

          (E)  A reward under a wellness program established under a health care plan that favors an individual if the wellness program meets the following requirements:

               (i)  The wellness program is reasonably designed to promote health or prevent disease;

              (ii)  An individual has an opportunity to qualify for the reward at least once a year;

             (iii)  The reward is available for all similarly situated individuals;

              (iv)  The wellness program has alternative standards for individuals who are unable to obtain the reward because of a health factor;

               (v)  Alternative standards are available for an individual who is unable to participate in a reward program because of a health condition;

              (vi)  The insurer provides information explaining the standard for achieving the reward and discloses the alternative standards; and

             (vii)  The total rewards for all wellness programs under the health care plan do not exceed twenty per cent of the cost of coverage; and

          (F)  A benefit or premium reduction provided pursuant to section 431:10E-E for wildfire risk-preventative measures, including any benefit or premium reduction offered under an insurer program filed with the commissioner in accordance with section 431:10E-E;

    (10)  Refusing to provide or limiting coverage available to an individual because the individual may have a third-party claim for recovery of damages; provided that:

          (A)  Where damages are recovered by judgment or settlement of a third-party claim, reimbursement of past benefits paid shall be allowed pursuant to section 663-10;

          (B)  This paragraph shall not apply to entities licensed under chapter 386 or 431:10C; and

          (C)  For entities licensed under chapter 432 or 432D:

               (i)  It shall not be a violation of this section to refuse to provide or limit coverage available to an individual because the entity determines that the individual reasonably appears to have coverage available under chapter 386 or 431:10C; and

              (ii)  Payment of claims to an individual who may have a third-party claim for recovery of damages may be conditioned upon the individual first signing and submitting to the entity documents to secure the lien and reimbursement rights of the entity and providing information reasonably related to the entity's investigation of its liability for coverage.

               Any individual who knows or reasonably should know that the individual may have a third-party claim for recovery of damages and who fails to provide timely notice of the potential claim to the entity, shall be deemed to have waived the prohibition of this paragraph against refusal or limitation of coverage.  "Third-party claim" for purposes of this paragraph means any tort claim for monetary recovery or damages that the individual has against any person, entity, or insurer, other than the entity licensed under chapter 432 or 432D;

    (11)  Unfair claim settlement practices.  Committing or performing with [such] a frequency as to indicate a general business practice any of the following:

          (A)  Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;

          (B)  With respect to claims arising under its policies, failing to respond with reasonable promptness, in no case more than fifteen working days, to communications received from:

               (i)  The insurer's policyholder;

              (ii)  Any other persons, including the commissioner; or

             (iii)  The insurer of a person involved in an incident in which the insurer's policyholder is also involved.

               The response shall be more than an acknowledgment that [such] the person's communication has been received and shall adequately address the concerns stated in the communication;

          (C)  Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;

          (D)  Refusing to pay claims without conducting a reasonable investigation based upon all available information;

          (E)  Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;

          (F)  Failing to offer payment within thirty calendar days of affirmation of liability, if the amount of the claim has been determined and is not in dispute;

          (G)  Failing to provide the insured, or when applicable the insured's beneficiary, with a reasonable written explanation for any delay, on every claim remaining unresolved for thirty calendar days from the date it was reported;

          (H)  Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear;

          (I)  Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds;

          (J)  Attempting to settle a claim for less than the amount to which a reasonable person would have believed the person was entitled by reference to written or printed advertising material accompanying or made part of an application;

          (K)  Attempting to settle claims on the basis of an application that was altered without notice, knowledge, or consent of the insured;

          (L)  Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made;

          (M)  Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;

          (N)  Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician or advanced practice registered nurse of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;

          (O)  Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage to influence settlements under other portions of the insurance policy coverage;

          (P)  Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; and

          (Q)  Indicating to the insured on any payment draft, check, or in any accompanying letter that the payment is "final" or is "a release" of any claim if additional benefits relating to the claim are probable under coverages afforded by the policy; unless the policy limit has been paid or there is a bona fide dispute over either the coverage or the amount payable under the policy;

    (12)  Failure to maintain complaint handling procedures.  Failure of any insurer to maintain a complete record of all the complaints that it has received since the date of its last examination under section 431:2-302.  This record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of the complaints, and the time it took to process each complaint.  For purposes of this section, "complaint" means any written communication primarily expressing a grievance;

    (13)  Misrepresentation in insurance applications.  Making false or fraudulent statements or representations on or relative to an application for an insurance policy, for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, producer, or individual; and

    (14)  Failure to obtain information.  Failure of any insurance producer, or an insurer where no producer is involved, to comply with section 431:10D-623(a), (b), or (c) by making reasonable efforts to obtain information about a consumer before making a recommendation to the consumer to purchase or exchange an annuity."

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2026-2027 for the department of commerce and consumer affairs to implement the wildfire risk model transparency and mitigation incentives framework pursuant to this Act.

     The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

     SECTION 5.  In codifying the new sections added by section 2 and referenced in section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     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, 2026.

 

INTRODUCED BY:	_____________________________

 

 

 

Report Title:

Department of Commerce and Consumer Affairs; Insurance; Insurance Commissioner; Wildfires; Risk Scores; Risk Models; Transparency; Mitigation; Rebates; Discounts; Consumer Notice; Appeals; Reports; Appropriation

 

Description:

Requires residential property insurers to disclose wildfire risk scores upon request and at renewal, nonrenewal, and application.  Requires insurers using wildfire risk models, catastrophe models, or scoring methods to file model-use information with the Insurance Commissioner and incorporate property-level and community-level wildfire mitigation.  Requires insurers to provide mitigation discounts if property-level and community-level wildfire mitigations are not incorporated into risk models.  Establishes a standardized notice and an appeal process for wildfire risk scores and mitigation discounts.  Authorizes insurers to provide benefits or premium reductions for wildfire risk-preventative measures and clarifies treatment for midterm premium increases and anti-rebate laws.  Requires reports to the Legislature.  Appropriates funds.

 

 

 

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