SR 41: Urging the Congress of the United States to enact a national reinsurance program to address the multi-state insurance crisis resulting from catastrophic natural disasters.

SENATE RESOLUTION

Urging the Congress of the United States to enact a national reinsurance program to address the multi-state insurance crisis resulting from catastrophic natural disasters.

     WHEREAS, the frequency and severity of catastrophic natural disasters, including hurricanes, wildfires, floods, and earthquakes, have increased due to climate change, causing billions of dollars in insured losses and creating instability in state insurance markets across the United States; and

     WHEREAS, major private insurers and reinsurers have begun withdrawing from high-risk areas, leading to a significant reduction in available coverage, and skyrocketing premiums; and

     WHEREAS, the withdrawal of private insurers in high-risk areas has resulted in an insurance crisis affecting homeowners, businesses, and agricultural producers, many of whom struggle to secure adequate coverage at reasonable rates; and

     WHEREAS, some states have attempted to resolve the insurance crisis by establishing not-for-profit insurers of last resort, such as California's FAIR Plan, Florida's Citizens Property Insurance Corporation, and the State's Hawaii Property Insurance Association consisting of persons authorized to transact property and casualty insurance in the State; and

     WHEREAS, unfortunately, these state-established insurers of last resort now often bear a disproportionate share of catastrophic risk in the market and face solvency issues as the licensed private insurers that are required to help fund them flee their respective states; and

     WHEREAS, legislative measures recently introduced in the United States Congress, including the Disaster Resiliency and Coverage Act of 2025, H.R. 1105, 119th Cong. (2025), and the Emergency Conservation Program Improvement Act of 2025, S. 629, 119th Cong. (2025), aim to enhance natural disaster resilience and accelerate recovery efforts, but do not address the fundamental insurance crisis that requires a long‑term reinsurance solution; and

     WHEREAS, the National Disaster Risk Reinsurance Program Act of 2023, H.R. 3525, 118th Cong. (2023), sought to establish a federal reinsurance program to provide stability in disaster‑prone areas by offering an additional layer of risk protection for insurers, but was not enacted; and

     WHEREAS, a similar federal reinsurance program for natural disasters could increase insurance availability, reduce premium volatility, and protect state-instituted insurance funds by covering only the most extreme catastrophic losses; and

     WHEREAS, a national reinsurance program could be structured to operate at defined loss thresholds, ensuring that private insurers and reinsurers continue to bear primary responsibility while the federal government intervenes only in cases of severe financial strain; and

     WHEREAS, the national reinsurance program could also operate on an opt-in basis for states, allowing state insurance regulators the flexibility to decide whether participation would benefit their respective markets; and

     WHEREAS, establishing a national reinsurance program to stabilize insurance markets nationwide will promote economic security, homeownership sustainability, and disaster preparedness while reducing the need for post-disaster federal aid; now, therefore,

     BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, that the Congress of the United States is urged to establish a National Reinsurance Program to address the multi-state insurance crisis resulting from catastrophic natural disasters by serving as a financial backstop for catastrophic natural disasters and ensuring insurance market stability and consumer affordability across multiple states; and

     BE IT FURTHER RESOLVED that the National Reinsurance Program is requested to be structured as a public-private partnership that includes:

     (1)  Actuarial soundness;

     (2)  State opt-in mechanisms; and

     (3)  Clearly defined loss thresholds to protect taxpayers while ensuring continued private market participation; and

     BE IT FURTHER RESOLVED that the Congress of the United States is urged to provide mitigation incentives, including premium discounts, tax credits, and grant programs, to encourage homeowners and businesses to invest in disaster-resistant infrastructure, thereby reducing insurance costs and federal disaster relief expenditures in the long-term; and

     BE IT FURTHER RESOLVED that the President of the United States and the Secretary of the Treasury, in consultation with the Federal Insurance Office and the Federal Emergency Management Agency, are encouraged to develop interim measures to stabilize insurance markets, including expanding access to federal risk modeling and offering financial incentives for insurers reentering high-risk markets; and

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, Speaker of the United States House of Representatives, President Pro Tempore of the United States Senate, Secretary of the Treasury, Administrator of the Federal Emergency Management Agency, Director of the Federal Insurance Office, and Governor and Insurance Commissioner of each state.

Report Title: 

Congress of the United States; POTUS; FIO; FEMA; HPIA; Natural Disasters; Insurance; National Reinsurance Program

SENATE RESOLUTION

Urging the Congress of the United States to enact a national reinsurance program to address the multi-state insurance crisis resulting from catastrophic natural disasters.

     WHEREAS, the frequency and severity of catastrophic natural disasters, including hurricanes, wildfires, floods, and earthquakes, have increased due to climate change, causing billions of dollars in insured losses and creating instability in state insurance markets across the United States; and

     WHEREAS, major private insurers and reinsurers have begun withdrawing from high-risk areas, leading to a significant reduction in available coverage, and skyrocketing premiums; and

     WHEREAS, the withdrawal of private insurers in high-risk areas has resulted in an insurance crisis affecting homeowners, businesses, and agricultural producers, many of whom struggle to secure adequate coverage at reasonable rates; and

     WHEREAS, some states have attempted to resolve the insurance crisis by establishing not-for-profit insurers of last resort, such as California's FAIR Plan, Florida's Citizens Property Insurance Corporation, and the State's Hawaii Property Insurance Association consisting of all persons authorized to transact property or casualty insurance in the State; and

     WHEREAS, unfortunately, these state-established insurers of last resort now often bear a disproportionate share of catastrophic risk in the market and face solvency issues as the licensed private insurers that are required to help fund them flee their respective states; and

     WHEREAS, legislative measures recently introduced in the United States Congress, including the Disaster Resiliency and Coverage Act of 2025, H.R. 1105. 119th Cong. (2025) and the Emergency Conservation Program Improvement Act of 2025, S. 629. 119th Cong. (2025), aim to enhance natural disaster resilience and accelerate recovery efforts, but do not address the fundamental insurance crisis that requires a long-term reinsurance solution; and

     WHEREAS, the National Disaster Risk Reinsurance Program Act of 2023, H.R. 3525. 118th Cong. (2023) sought to establish a federal reinsurance program to provide stability in disaster‑prone areas by offering an additional layer of risk protection for insurers, but was not enacted; and

     WHEREAS, a similar federal reinsurance program for natural disasters could increase insurance availability, reduce premium volatility, and protect state-instituted insurance funds by covering only the most extreme catastrophic losses; and

     WHEREAS, a national reinsurance program could be structured to operate at defined loss thresholds, ensuring that private insurers and reinsurers continue to bear primary responsibility while the federal government intervenes only in cases of severe financial strain; and

     WHEREAS, the national reinsurance program could also operate on an opt-in basis for states, allowing state insurance regulators the flexibility to decide whether participation would benefit their respective markets; and

     WHEREAS, establishing a national reinsurance program to stabilize insurance markets nationwide will promote economic security, homeownership sustainability, and disaster preparedness while reducing the need for post-disaster federal aid; now, therefore,

     BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, that the Congress of the United States is urged to establish a National Reinsurance Program to address the multi-state insurance crisis resulting from catastrophic natural disasters by serving as a financial backstop for catastrophic natural disasters and ensuring insurance market stability and consumer affordability across multiple states; and

     BE IT FURTHER RESOLVED that the National Reinsurance Program is requested to be structured as a public-private partnership that includes:

     (1)  Actuarial soundness;

     (2)  State opt-in mechanisms; and

     (3)  Clearly defined loss thresholds to protect taxpayers while ensuring continued private market participation; and

     BE IT FURTHER RESOLVED that the Congress of the United States is urged to provide mitigation incentives, including premium discounts, tax credits, and grant programs, to encourage homeowners and businesses to invest in disaster-resistant infrastructure, thereby reducing insurance costs and federal disaster relief expenditures in the long-term; and

     BE IT FURTHER RESOLVED that the President of the United States and the Secretary of the Treasury, in consultation with the Federal Insurance Office and the Federal Emergency Management Agency, are encouraged to develop interim measures to stabilize insurance markets, including expanding access to federal risk modeling and offering financial incentives for insurers reentering high-risk markets; and

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, Speaker of the United States House of Representatives, President of the United States Senate, United States Secretary of the Treasury, Administrator of the Federal Emergency Management Agency, Director of the Federal Insurance Office, Governor, and Insurance Commissioner of each state.

Report Title: 

Congress of the United States; POTUS; FIO; FEMA; HPIA; Natural Disasters; Insurance; National Reinsurance Program

STAND. COM. REP. NO. 1595

Honolulu, Hawaii

RE:    S.R. No. 41

       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.R. No. 41 entitled:

"SENATE RESOLUTION URGING THE CONGRESS OF THE UNITED STATES TO ENACT A NATIONAL REINSURANCE PROGRAM TO ADDRESS THE MULTI-STATE INSURANCE CRISIS RESULTING FROM CATASTROPHIC NATURAL DISASTERS,"

begs leave to report as follows:

The purpose and intent of this measure is to urge the Congress of the United States to enact a national reinsurance program to address the multi-state insurance crisis resulting from catastrophic natural disasters.

     Your Committee received testimony in support of this measure from three individuals.

     Your Committee finds that major private insurance and reinsurance providers have been withdrawing from the insurance markets in high-risk areas, resulting in a reduction of available coverage and skyrocketing premiums.  Your Committee also finds that states have sought to address this issue by establishing nonprofit insurers of last resort, such as California's FAIR Plan, Florida's Citizens Property Insurance Corporation, and the Hawaii Property Insurance Association.  These state-established insurers of last resort have been burdened with a disproportionate share of catastrophic risk in the market and are now facing solvency issues.  Your Committee further finds that a national reinsurance program could be better suited to provide stability in disaster‑prone areas, increase insurance availability, mitigate premium volatility issues, and protect state-instituted insurance funds by covering only the most extreme catastrophic losses.  This measure urges Congress to establish a national reinsurance program to help stabilize the insurance markets, promote economic security and disaster preparedness, and reduce the need for post‑disaster federal aid.

     Your Committee has amended this measure by 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 concurs with the intent and purpose of S.R. No. 41, as amended herein, and recommends its adoption in the form attached hereto as S.R. No. 41, S.D. 1.

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