SCR 155: REQUESTING THE INSURANCE COMMISSIONER to produce a detailed report regarding THE STATE OF THE PRIVATE PROPERTY INSURANCE INDUSTRY in hawaiʻi.

SENATE CONCURRENT

RESOLUTION

REQUESTING THE INSURANCE COMMISSIONER to produce a detailed report regarding THE STATE OF THE PRIVATE PROPERTY INSURANCE INDUSTRY in hawaiʻi.

     WHEREAS, Hawaiʻi is experiencing an increase in natural disasters, including hurricanes, wildfires, and volcanic eruptions, which are causing widespread damage and contributing to the growing financial strain on the State's residents; and

     WHEREAS, these natural disasters have led to an increase in insurance premiums, with some private insurers raising their rates significantly and others considering withdrawing from the market altogether; and

     WHEREAS, insurers have claimed that the high financial costs and regulatory burdens associated with providing insurance in Hawaiʻi are threatening the survival of the private insurance industry; and

     WHEREAS, the widespread withdrawal of private insurers from the property insurance market would have severe consequences for the State's residents and homeowners, further exacerbating the housing crisis and threatening the ability of homeowners to secure lending and to have a financial safety net in the event of property loss or damage; and

     WHEREAS, the potential withdrawal of private insurers from the State would leave many residents without access to necessary homeowners' insurance coverage, including by threatening the survival of essential insurance of last resort programs, such as the Hawaiʻi Property Insurance Association, which would place significant burdens on taxpayers and the State; and

     WHEREAS, to effectively respond to these concerns, the Legislature must fully understand the state of the private insurance market, including the financial health of insurers, factors driving the rising premiums, and the potential impact of more insurers withdrawing from the State; and

     WHEREAS, it is crucial to assess whether the State will be left without any private insurers, and if so, what steps the State can take to mitigate the potential risks to homeowners and residents; and

     WHEREAS, the State must prepare for the possibility of a universal withdrawal of private insurers from the property insurance market, including by exploring the feasibility of the State entering the market as a primary property insurance provider, either through public insurance mechanisms or other means, such as eminent domain, to acquire private insurance companies if necessary; now, therefore,

     BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, the House of Representatives concurring, that the Insurance Commissioner is requested to produce a detailed report on the current state of private insurance companies operating in Hawaiʻi; and

     BE IT FURTHER RESOLVED that the report is requested to include specific findings regarding the factors that are driving the increases in premiums, particularly in high-risk areas affected by wildfires, hurricanes, and volcanic eruptions, as well as the potential cost and regulation involved if the State were to create a publicly administered insurance program; and

     BE IT FURTHER RESOLVED that the report is requested to include information on the number of private entities providing property insurance in the State and information on those insurers' revenues, profits and losses, valuations, messages to shareholders, and any other information the Insurance Commissioner finds relevant to inform the Legislature about the economic health of the private property insurance industry in the State; and

     BE IT FURTHER RESOLVED that the report assess the likelihood that one or more private property insurers will cease operations in Hawaiʻi and the risk that the State will be left without any private insurers; and

     BE IT FURTHER RESOLVED that the report provide recommendations on the State's ability to enter the insurance market as a primary property insurance provider if private insurers exit the State, including an evaluation of whether and how the State could use eminent domain to seize private property insurance companies; and

     BE IT FURTHER RESOLVED that the Insurance Commissioner is requested to submit the report to the Legislature no later than twenty days prior to the convening of the Regular Session of 2026; and

     BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Insurance Commissioner.

Report Title:

DCCA; Insurance Commissioner; Private Property Insurance; Report

STAND. COM. REP. NO. 1600

Honolulu, Hawaii

RE:    S.C.R. No. 155

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.C.R. No. 155 entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE INSURANCE COMMISSIONER TO PRODUCE A DETAILED REPORT REGARDING THE STATE OF THE PRIVATE PROPERTY INSURANCE INDUSTRY IN HAWAIʻI,"

begs leave to report as follows:

     The purpose and intent of this measure is to request the Insurance Commissioner to produce a detailed report regarding the state of the private property insurance industry in Hawaii.

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

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

     Your Committee finds that there has been an increase in the number of natural disasters in the State, including hurricanes, wildfires, and volcanic eruptions, all of which are causing widespread damage and financial strain on residents.  Your Committee further finds that these natural disasters have led to a rise in insurance premiums in the State, with some insurers either raising their rates significantly or withdrawing from the insurance market altogether.  Additionally, your Committee finds that an effective response to address these concerns requires a thorough understanding of the current state of the private insurance market in Hawaii, including the financial health of insurers, factors contributing to the rising premiums, and the potential impact of more insurers withdrawing from the State.  Your Committee therefore believes that this measure will help the State prepare for the possibility of a universal withdrawal of private insurers from the property insurance market, as well as explore the feasibility of the State to enter the market as a primary property insurance provider.

     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 concurs with the intent and purpose of S.C.R. No. 155 and recommends its adoption.

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