SB 803: RELATING TO INSURANCE.

A BILL FOR AN ACT

RELATING TO INSURANCE.

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

     SECTION 1.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10E to be appropriately designated and to read as follows:

     "§431:10E-    Property insurance; notice of premium increase; policy renewal; notice requirements; common interest communities.  (a)  Beginning January 1,     , this section shall apply to any insurer that renews a master property insurance policy for a policyholder that is a condominium association, planned community association, or cooperative housing corporation in the State.

     (b)  An insurer shall automatically provide a written premium change notice to the policyholder disclosing the causes of any premium increase for the insurance policy if, upon renewal, the premium will increase by      per cent or more; provided that the notice required under this subsection shall be provided to the policyholder no less than      calendar days before the effective date of the renewed policy.  The premium change notice shall include reasonable explanations and the primary factors contributing to any premium increase, which shall include the following categories:

     (1)  Water damage claims;

     (2)  Wastewater plumbing replacements;

     (3)  Fire safety devices and practices;

     (4)  Directors' and officers' liability claims;

     (5)  Reinsurance costs; and

     (6)  Catastrophic losses to the insurance industry;

provided that the notice shall include the extent to which each of these categories contributes to the premium increase.

     (c)  In addition to the requirements of subsection (b), insurers shall automatically issue a loss run report to the policyholder at the end of each policy year.

     (d)  Insurers shall include a statement in all premium change notices that the policyholder may contact their insurer to request additional information about the policyholder's premium increase.  Insurers shall respond to and provide additional information for a policyholder's subsequent requests for premium change transparency no less than      calendar days from the receipt of any request.

     (e)  Insurers shall send premium change notices to policyholders in writing and may send either explanations or notices via postal mail or electronic mail if the policyholder has consented to receive notifications electronically.

     (f)  All insurers shall file electronically with the commissioner a copy of any premium change notice provided to a policyholder pursuant to this section.  An insurer's failure to send the notice required by this section to the policyholder or file a copy with the commissioner shall be considered a violation of this chapter."

     SECTION 2.  (a)  Any insurer that renewed a property insurance policy between the dates of January 1, 2022, to December 31, 2024, for a policyholder that was a condominium association, planned community association, or cooperative housing corporation in the State, shall prepare a written statement, with reasonable explanations and primary factors, disclosing the cause for any premium increase that was effective upon renewal between this period; provided that the premium increased by at least      per cent during this period.  The insurer shall send its written statement to the insurance commissioner and the respective policyholder no later than      days after the effective date of this Act.

     (b)  The insurance commissioner shall review all written statements submitted by insurers pursuant to subsection (a) and shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026; provided that the report shall not be required to include any information concerning premium changes that were warranted due to the structural condition of any insured property.

     (c)  Upon the effective date of this Act, the insurance commissioner shall notify all applicable insurers of their duty to comply with the requirements of this Act.

     SECTION 3.  New statutory material is underscored.

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

Report Title:

Insurance Commissioner; Property Insurance; Premium Change Notice; Common Interest Communities; Loss Run Report; Notice Requirements; Disclosures; Report

Description:

Requires insurers to provide automatic, advance written premium change notices to common interest community policyholders and the Insurance Commissioner, with reasonable explanations and primary factors, disclosing the causes of any premium increase if, upon renewal, premiums are scheduled to increase more than an unspecified per cent.  Requires insurers to automatically issue a loss run report to the policyholder at the end of each policy year.  Requires insurers that renewed property insurance policies between 2022 and 2024 for policyholders that were condominium associations, planned community associations, or cooperative housing corporations in the State to provide an explanation for certain premium increases during this period.  Requires the Insurance Commissioner to submit a report to the Legislature.  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.  Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10E to be appropriately designated and to read as follows:

     "§431:10E-    Property insurance; notice of premium increase; policy renewal; notice requirements; common interest communities.  (a)  Beginning January 1,     , this section shall apply to any insurer that renews a master property insurance policy for a policyholder that is a condominium association, planned community association, or cooperative housing corporation in this State.

     (b)  An insurer shall automatically provide a written premium change notice to the policyholder disclosing the causes of any premium increase for the insurance policy if, upon renewal, the premium will increase by      per cent or more; provided that the notice required under this subsection shall be provided to the policyholder no less than      calendar days before the effective date of the renewed policy.  The premium change notice shall include reasonable explanations and the primary factors contributing to any premium increase, which shall include the following categories:

     (1)  Water damage claims;

     (2)  Wastewater plumbing replacements;

     (3)  Fire safety devices and practices;

     (4)  Directors' and officers' liability claims;

     (5)  Reinsurance costs; and

     (6)  Catastrophic losses to the insurance industry;

provided that the notice shall include the extent to which each of these categories contributes to the premium increase.

     (c)  Insurers shall include a statement in all premium change notices that the policyholder may contact their insurer to request additional information about the policyholder's premium increase.  Insurers shall respond to and provide additional information for a policyholder's subsequent requests for premium change transparency no less than      calendar days from the receipt of any request.

     (d)  Insurers shall send premium change notices to policyholders in writing and may send either explanations or notices via postal mail or electronic mail if the policyholder has consented to receive notifications electronically.

     (e)  All insurers shall file electronically with the commissioner a copy of any premium change notice provided to a policyholder pursuant to this section.  An insurer's failure to send the notice required by this section to the policyholder or file a copy with the commissioner shall be considered a violation of this chapter."

     SECTION 2.  (a)  Any insurer that renewed a property insurance policy between the dates of January 1, 2022, to December 31, 2024, for a policyholder that was a condominium association, planned community association, or cooperative housing corporation in this State, shall prepare a written statement, with reasonable explanations and primary factors, disclosing the cause for any premium increase that was effective upon renewal between this period; provided that the premium increased by at least      per cent during this period.  The insurer shall send its written statement to the insurance commissioner and the respective policyholder no later than      days after the effective date of this Act.

     (b)  The insurance commissioner shall review all written statements submitted by insurers pursuant to subsection (a) and shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026; provided that the report shall not be required to include any information concerning premium changes that were warranted due to the structural condition of any insured property.

     (c)  Upon the effective date of this Act, the insurance commissioner shall notify all applicable insurers of their duty to comply with the requirements of this Act.

     SECTION 3.  New statutory material is underscored.

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

Report Title:

Insurance Commissioner; Property Insurance; Premium Change Notice; Common Interest Communities; Notice Requirements; Disclosures; Report

Description:

Requires insurers to provide automatic, advance written premium change notices to common interest community policyholders and the Insurance Commissioner, with reasonable explanations and primary factors, disclosing the causes of any premium increase if, upon renewal, premiums are scheduled to increase more than an unspecified per cent.  Requires insurers that renewed property insurance policies between 2022 and 2024 for policyholders that were condominium associations, planned community associations, or cooperative housing corporations in the State, to provide an explanation for certain premium increases during this period.  Requires the Insurance Commissioner to submit a report to the Legislature.

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. 170

Honolulu, Hawaii

RE:    S.B. No. 803

       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. 803 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 insurers to provide automatic, advance written premium change notices to common interest community policyholders and the Insurance Commissioner, with reasonable explanations and primary factors, disclosing the causes of any premium increase if, upon renewal, premiums are scheduled to increase more than an unspecified percent;

     (2)  Require insurers that renewed property insurance policies between 2022 and 2024 for policyholders that were condominium associations, planned community associations, or cooperative housing corporations in the State, to provide an explanation for certain premium increases during this period; and

     (3)  Require the Insurance Commissioner to submit a report to the Legislature.

     Your Committee received testimony in support of this measure from the Palehua Townhouse Association and seven individuals.

     Your Committee received testimony in opposition to this measure from the American Property Casualty Insurance Association and Hawaii Insurers Council.

     Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs and National Association of Mutual Insurance Companies.

     Your Committee finds that the cost of insurance for condominium associations, planned community associations, and cooperative housing corporations has significantly increased in the last decade, some without any sufficient explanation or warning.  Various unforeseen emergencies such as natural disasters have attributed to the rising cost of insurance, which is then passed on to individual homeowners.  Creating greater transparency for the increase in costs of annual insurance premiums will provide consumers with information necessary to make informed decisions about existing policies and conduct financial planning.  Therefore, this measure empowers consumers statewide by promoting transparency within the insurance industry.

     Your Committee has amended this measure by:

     (1)  Inserting language requiring insurers to automatically issue a loss run report to the policyholder at the end of each policy year;

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

     (3)  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. 803, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 803, 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,