Senate Standing Committee on Commerce and Consumer Protection

Good morning and welcome to the Hawaii State Senate Committee on Commerce and Consumer Protection. This is our Wednesday, February 25 9:30am agenda in Conference Room 2 to 9 at the Hawaii State Capitol. This meeting is being streamed live on YouTube and we're here for one measure, which is a short form measure that we will be making.

We will be voting on adopting the proposed Senate draft that was made available on the notice and recommitting the Bill back to this Committee for a further public hearing to be scheduled next week. So just to note, this is a licensing measure.

This is an administrative agency request to correct to clarify the renewal provisions on a Bill that was passed last year or the year before. So it's a technical change that's necessary and requested by the Administration. The recommendation is to adopt a proposed Senate draft and recommit back to this CPN Committee Members. Any comments or questions?

Okay, Seeing none. Vice Chair for the vote. Passing with amendments. Chair votes Aye.

[Roll Call]

Thank you we're adjourned.

Okay, Good morning and welcome. This is the Hawaii State Senate Committee on Commerce and Consumer Protection. This is our Wednesday, February 25, 2026, 9:32am Committee Hearing Agenda in Conference Room 229 at the Hawaii State Capitol.

This meeting is being streamed live on YouTube, and if we need to abruptly end the feed because of technical difficulties, we will reconvene tomorrow, Thursday, February 26, 2026, at 9:30 am in this room 2 to 9 and a notice will be posted on the Legislature's website. First up, we have SB2876 relating to natural hair braiding.

This measure exempts natural hair braiders from licensing requirements under certain conditions. First, we have the DCCA Board of Barbering and Cosmetology with comments.

Good morning to chair and Members of the Committee. My name is Alan Yim. I'm the Executive Officer for the Board of Barbering and Cosmetology. At its February 10, 2026, meeting, the board reaffirmed its position that hair braiding falls within the scope of practice of cosmetologists, hairdressers and barbers.

However, because the training and examination requirements to natural hair braiding are minimal, the Board determined that individuals who engage solely in hair braiding are not required to be licensed. The Board also identified the following activities often associated with hair braiding are subject to licensure, which would be waxing, cleansing, cutting, singeing, coloring, trimming, shampooing and relaxing.

The Board is concerned that exempting natural hair braiders from licensure will create a gap for consumer protection in respects to sanitation training and enforcement. The use of braiding devices with the practice of natural hair breeding may present health and safety risks if proper sanitation standards are not followed.

If natural hair braiders are exempted under this Bill, the board will have limited authority to enforce consumer safety requirements related to these services.

As was brought up in the hearing yesterday with the House, there was a mention of if the board could look into providing or identifying safety for courses online or through in person that could make up for these risks. And I'll be bringing that to the board to identify and put forward to the Committee as well.

Okay. Thank you.

Thank you for the opportunity.

Thank you very much. We have the Grassroot Institute of Hawaii in support. We have the Institute for Justice in support online. Okay. And we also have Connor Morris from the Knee Regulatory Research Center of West Virginia University with comments. Is there anyone else who would like to testify on this measure? Members, any questions? Okay, we'll move on.

Thank you very much. Next measure is SB2950 relating to insurance. This measure authorizes captive insurance companies to underwrite, reinsure, or otherwise assume catastrophic property and casualty risks subject to the approval and continuing supervision of the insurance commissioner. First up, the DCCA Insurance Division in opposition online. Good morning.

Aloha, Chair, Vice chair, Members of the Committee, Matt Tsujimura, on behalf of the Insurance Division, we will stand on our written testimony in opposition, but happy to answer questions. Thank you.

Thank you very much. Jackie Keefe in support online. Okay. And written comments from Paul Shimomura. Sorry. Sorry.

I'm here. I'm here, I'm here.

Okay. Good morning.

Good morning. Chair, vice chair, Members of the Committee, quick introduction. So I am going to be testifying on the next four bills as well. So to give you an overview, my name is Jackie Keefe. I have been an advocate for fire survivors in various capacities over the past 30 months. So I have witnessed a lot of.

A lot of the challenges that folks have come across, and I'm really disappointed to see that DCCA is in opposition to this Bill because we have. Our homeowners have been fighting tooth and nail for everything that they get this whole time. So this Bill authorizes insurance providers to operate in areas that they otherwise might not choose to.

So basically, it's just. It's protecting places that are subject to disaster. So it's protecting things like Lahaina's disaster, it's protecting folks that live in areas like Volcano. And I just think that it's really important to consider this measure.

And I know that Sherry Peterson has been working really closely with you folks over the past couple of years, really trying to get these bills written in a way that, that suits what everyone want, wants to see and what would really protect our homeowners.

So I just asked that you please pass this Bill and I'm available for questions. Thanks.

Thank you very much. That's all the testimony we've received. Is there anyone else who would like to testify on this measure? Okay, Members, questions. Vice Chair,

I guess ask Mr. Kimura to return from.

Yes, Vice Chair.

Okay. You know, we had previously had heard legislation or heard testimonies and legislation which seemed to indicate that the department's position was that, you know, the current captive statute allows for coverage in this arena.

So, you know, I was under the impression that Senate Bill 2950 was really trying to help make that possible for those types of categories of property casualty residents and say condo owners, for example, who were having difficulty in obtaining affordable insurance, you know, as we went through a very unstable period does, you know, I mean, it just seems sort of inconsistent in a way that on one hand your Department is kind of saying that we already have the capacity or the capability to offer this kind of assistance, and then this Bill, which is seeking to actually, you know, expressly authorize it, is something that your Department is opposing.

Where do you see the, you know, the current, I guess, statutory framework as providing avenues for consumers to pursue?

Yeah. Vice Chair, thank you for the question. You know, I, I have to admit, so I believe our, our head of our captive branch is trying to jump into the zoom. He was actually intending to testify on this Bill as he has more of the background knowledge for the substantive knowledge for that.

So, unfortunately, I'm not able to answer your question at this moment, but I can definitely get back to you on that.

I think for, you know, the purposes that we're, we're seeking to provide additional assistance and coverage, you know, to those who have had difficulty in maintaining coverage over the last few years.

It would seem that, you know, the Captive Insurance Council perspective is something that is a lot more supportive of working together to try and find an appropriate pathway to that.

Yeah. So I'll actually defer to Andrew Kurata, who is the head of our captive branch, for your questions. Vice Chair

Hi. I'm so sorry. I had trouble with getting in and I really just caught the kind of the tail end of that. So I apologize. But what I did here and my comment behind it would be that.

Andrew, can you introduce yourself first please?

Sure. Hi. Hi. My name is Andrew Kurata. I am the captive insurance administrator here with this with as part of the insurance division.

Thank you. Good morning. Please go ahead.

Okay. And, and I think our, our opposition is mainly just in terms of the, of allowing or the standpoint from captive insurance. As kind of noted in our testimony, the captive insurance framework is really based around formalized self insurance for companies and not offering insurance to the public.

And that's why our captive laws are a little bit different from our insurance laws because of that framework.

So with this Bill, if a captive insurance company were to be allowed to offer its insurance to the public like a typical like admitted commercial insurance company, the, the regulatory frameworks don't quite match because there are certain say consumer protections, there are certain other regulatory standards that a commercial carrier, an admitted carrier are subject to which a captive is not because of the premise that the captive is, is operating in a manner where it's providing insurance to its parent company and affiliates.

Okay. Could your division offer amendments or proposed additions to the BISH to the Bill which would kind of help address your concern?

I think we could and would be open to more discussions in terms of how it, you know, there, there could be other fits within the insurance code that, that would allow this. I'm just speaking specifically about the captive insurance, you know, statutes.

Okay, thank you.

Thank you.

Any other questions? I have a follow up. I'm not totally sure what we're talking about here in terms of amendments. Are there specific requirements that you would desire or have in mind if captive elects to submit itself to the regulated market apart from what's required of any other property casualty insurer?

I think when we're talking about solutions for the public market it would dramatically change or having captives be part of that solution would dramatically change the overall just frameworks of how captive insurance operates.

So I think this is in terms of maybe solutions and other ways of I guess supporting this issue would be something that I think we would need to. This I would need to discuss with say the insurance commissioner and the insurance as a whole.

And I may be speaking, I'm speaking outside of captives, which is not really my, my specialty. I would, or I guess you know, where I work with. But my understanding is there are things like say like the Hawaii Hurricane Relief Fund. Right.

And, and the actions that were done with that this past year that provide, you know, are outside of the captive area that might be helping to provide solutions in this area. So but in terms of captives itself, that would be a. Is very difficult.

It would really be a dramatic shift of what captive insurance laws are and how they operate. If we were to make a Bill that allows a captive to cover the public.

Okay, thank you. Any questions?

This idea actually came from an ANCOIL meeting and New Jersey did this. And when the idea was first floated, we were told by your insurance commissioner that they can already do this. It's not needed. But we just want to clarify in law that if they so choose to desire to do it, that it's definitely allowed.

And so that's what the genesis of the Bill came from. So just so you know, and the idea is to try to see and create a regulatory framework for if captains decide to enter and be a part of the solution, they could do so. That's kind of the gist, just so you know the background a little bit.

Okay. Anyway, thanks, Chair.

Appreciate that. Any other questions, Members? Okay. If not, thank you very much. We'll move on to SB2951 relating to insurance proceeds. This measure requires mortgage servicers to comply with certain requirements regarding the disbursement of insurance proceeds for residential real estate that has been destroyed or damaged. DCCA Division of Financial Institutions. Dwight Young with comments online.

Good morning, Members of the Committee. White Young, Commissioner of Financial Institutions. We stand on our written testimony. I'm here if you. If you guys have any questions.

Thank you very much. Amy Bach, Executive Director of United Policyholders in Support Online

Not present, Chair.

Thank you. Tiffany Ajima for the Hawaii Bankers Association with comments.

Excuse me. Oh, I'm sorry, I'm sorry, I'm not Amy Bach. I'm Sherry Peterson, here to testify on behalf of United Policyholders for this Bill, if I may do so.

Okay, go ahead, please. Good morning.

Okay, so good morning, Chair, Vice Chair and Members of the Committee. And thank you for the opportunity to testify this morning. Just by way of quick introduction, I'm Sherry Peterson, and for the last two years I've been working as an Equal Justice Fellow and as the roadmap to recovery liaison for United Policyholders.

In that capacity, I've held many workshops and worked with many of the nonprofits on helping insureds during the rebuild process. And I have been working directly with Wildfire survivors.

This Bill is incredibly important to the survivors in this disaster and in any future disaster, as many of them have had to sign their insurance proceeds over to mortgage companies who've been helding those proceeds and not paying interest on those, while the Hawaii banks have in large part been paying interest on the proceeds.

Many of the other banking institutions have not. Additionally, I work with fire survivors every day who are having difficulty in getting their funds released so that they can rebuild. And the delays in getting these funds released prevents them from getting to getting home sooner. So we are in strong support of this Bill.

If you have any questions, I'm here to respond to those. And thank you for your time this morning.

Thank you very much. Jackie Keefe in support online.

Yes. Mahalo Chair. Aloha Inga, it's nice to see you. Thank you so much for these bills. I just, I want to kak'o what Sherry said she's been doing such important work with our fire survivors over the past 30 months and, you know, came here as a volunteer and just stayed. So I appreciate you, Sherry.

I think that it's important to add to what she said about, you know, it's been preventing folks from getting home because, you know, this rebuild process is already so challenging. But add on to the fact that people are having trouble accessing their own funds and we lost, you know, over 22,000 homes.

Like we don't, we already have this housing crisis. Right. And so the longer it takes for individuals to get in their own homes, the longer it takes to open up those places for other people. And more and more people are leaving.

We are still seeing a consistent out migration from Lahaina families and they are like the most detrimentally impacted by this. And so yeah, I just this Bill, it's really about consumer protection and transparency in the insurance proceeds disbursement.

And yeah, I just, you know, kind of to a comment about what the DCCA said on the last Bill is, you know, oh, so and so allows for this but like allows for doesn't mean it happens. Right. So I think it's an important distinction between allows for and like mandates. So thank you so much for your time.

Thank you very much. Is there anyone else who would like to testify on this measure? Okay. If not, we have written testimony from the Mortgage Bankers Association of Hawaii in opposition comments from the Hawaii Credit Union League, opposition testimony from the Hawaii Financial Services association, and support from Stacey Ann Caskill Members. Any questions?

Seeing none, we'll move on. The next measure is SB2952 relating to insurance. This measure, beginning January 12027 requires certain insurers to notify policyholders of rate changes at least 60 days before the effective date of the rate change. First up, DCCA Insurance Division with comments online. Good morning.

Aloha Chair, Vice chair, Members of the Committee, Matt Tsujimura, on behalf of the Insurance Division. The division will stand on its written comments. Thank you.

Thank you very much. Hawaii Insurers Council, excuse me, Hawaiian Insurance Council with comments.

We stand on our written testimony offering comments.

Thank you very much. Jackie Keefe in support online.

Yes, Mahalo. Chair. I just wanted to stress that the importance of tackling transparency gaps for policyholders. We are seeing a lot of time frame limitations and the disaster, it's not, you know, it's a little bit different when a single home burns down versus an entire town burns down.

The timelines are not going to be what are written into insurance policies automatically. And so SB 2952 corrects that. So it provides a minimum of 36 months to recover full replacement cost value after a declared disaster, allows for reasonable six month extensions for good cause, recognizes permit delays, labor shortages and supply chain disruptions.

I think you're testifying to the next Bill. This is the 60 day notification before a rate change.

Could you say the number again?

I'm so sorry, this is 2952. I think your comments are directed to the next Bill, SB 2960, but we can note them.

Okay. Yeah, I think my numbers might have been mixed up, but yes, important to tackle transparency gaps. So thank you, Chair.

No worries. Thank you. We also have written testimony from the National Association of Mutual Insurance Companies in opposition and the American Property Casualty Insurance Association in opposition and Johnny Mae Perry in support. Is there anyone else who would like to testify on this measure? Members questions? Okay, we'll move to the next measure, SB2960 relating to property insurance.

This measure establishes a minimum time frame of 36 months following loss to declared disaster or emergency for the policyholder to submit documentation to recover full replacement cost value of a covered dwelling or structure. It also allows extensions for good cause and does a number of other items. First up, DCCA with comments online.

Aloha Chair, Vice Chair, Members of the Committee, Matt Sujima on behalf of the Insurance Division, the division will stand on its written comments. Thank you.

Thank you very much. Mike Onafrietti, Insurers Counsel in opposition.

We stand on our written testimony in oppositional.

Thank you very much. United Policyholders in support online.

And thank you, Chair, Vice Chair and Members of the Committee and in particular Senator McKelvey for drafting and championing these bills. I work directly with WILD survivors every week as an Equal justice fellow and also as United Policyholders Roadmap to Recovery Liaison.

And one of the most common problems that I saw and we had to scramble on was policyholders racing against insurance deadlines that don't resemble any reality regarding Hawaii's rebuilding timelines. So rebuilding after a catastrophic loss takes years. Permitting can be slow time getting materials shipped can be slow. Contractors are scarce and in the meantime families are displaced.

Many of the policies only give two years or some of the policies and 2960 provides a minimum of 36 months to to with extensions for good cause to get your replacement cost value. This measure does not cost the insurance companies any money. It only provides policyholders the opportunity to provide the benefit of what they've already paid for.

So this measure would bring Hawaii in line with other states who have enacted similar legislation to allow policyholders to obtain the full benefit of their policies. So I respectively urge your support and thank you for your consideration of this matter and I'm available for questions.

Thank you. Jackie Keefe in support.

Yes, Mahalo Chair and you're correct. I went back and reread the things and I did have some numbers wrong, but kind of just Kako Owing what Sherry just shared but also really want to express my concern that DCCA is opposed to a lot of these bills. They're supposed to be in charge of protecting us as consumers.

And that's exactly what these bills were written to do. And so I just ask that I'm here in support of all of these bills. So I really respectfully urge with this Bill, as well as the others that I've testified on to please pass these bills to protect our community.

Unfortunately, we know that Lahaina is not going to be the only disaster that we see. So we need to be prepared.

Thank you very much. Is there anyone else who would like to testify on this measure? Okay. Written testimony from the National Association of Mutual Insurance Companies in opposition comments from the American Property Casualty Insurance association and written testimony and support from hi' Ile Cascal and Stacey Ann Caskill. Is there Members questions? Okay.

If not, we'll move on to SB2964 relating to property insurance. This measure requires homeowners insurers to provide policyholders with annual disclosures of replacement cost value and the sufficiency of the policyholders coverage. DCCA Insurance Division with comments.

Hello Chair Vice Chair Members of the Committee Matt Sujimura on behalf of the insurance Division. The division will stand on its written comments. Thank you.

Thank you very much. Mike Onifredi Insurers Counsel in opposition

Morning Chair. Members of the Committee HIC does oppose the Bill. I'm just going to summarize just a couple of quick points. The effort to do this as the Bill is drafted is very significant and that cost is going to be passed on to policyholders. I've been in the industry a long, long time.

Depressingly long actually, as I think about it. And the phone calls that we get from the agents that represent our customers are generally to reduce coverage because they don't like the limits that insurers provide.

And the reason for that, most insurance companies that I'm aware of have what's called an inflation guard provision in the policy that increases the building value every year as an effort to keep up with inflation. And finally, this is sort of a three legged stool.

These the insurer is providing the coverage, but in the independent insurance agent market, that agent actually owns the risk. It is their customer. And then of course you have the insured who makes renovations to their home and has some obligation to inform their agent who then in turn informs the insurance company.

And I'm available for any of your questions. Thank you.

Thank you very much. United Policyholders in support online.

Good morning and thank you again, Chair, Vice chair, Members of the Committee, and in particular Senator McKelvey for getting this Bill before us today. I would, I had some written testimony that I was going to provide, but what I want to do is provide you with some stories of what I've seen and these are just a few.

Without exception, every person that I have met with since I began my job in March 2024 with United Policyholders has been underinsured. And when I speak to those underinsured, there is a very common issue that emerges and that is that they do not understand their insurance policies.

They have relied on their agen to set the value of their property and they believed that they were fully insured and heartbreakingly, they found out that they were not.

Next Friday I will go to a house blessing for a family of eight who is having their home rebuilt by the Mennonites because they they had $400,000 of insurance, I believe, and which was not enough to rebuild for the family to replace what even to replace what they had.

The underinsurance has been such a prevalent problem in this disaster and it will be in future disasters unless this measure is adopted and insurance agents and companies are tasked with allowing insureds and informing them about the actual cost to replace their property. So thank you and I'm here for any questions.

Thank you very much. Jackie Keefe in support.

Aloha Chair yes, thank you so much. I just once again want to want to say that we have been working directly with fire survivors for the past 30 months.

And so while I understand the perspective of the folks who are saying, you know, generally this is what we see, but we are, we are seeing these things on an individual basis and we are watching it impact our fire survivors who have deep seated trauma that they have been unable to address.

And housing instability is one of the things that makes it incredibly difficult for you to actually cope with your trauma. And that is what our entire community has been experiencing for one. And then I also just wanted to say that I understand that it is on the individual agents. The liability is on them.

But I also understand that I think the way that those formulas are set up don't necessarily reflect reality. And I think that is why Sheri with United Policyholders has written this to be more specific, so that, that people are understanding am I fully covered were something to happen?

Because even if what they're typically seeing in the insurance companies is people like dropping their coverage, I think that is a cost thing. That doesn't necessarily mean that they have any understanding of what is actually covered if a disaster happens. And while it is the individual policyholder's responsibility to contact their, their insurance company.

I know someone who had done a ton of renovations on their house and they literally had the insurance people coming out August 9th, so they lost hundreds of thousand dollars in value even though they were doing the correct steps to be able, like they were following the, like how you're supposed to do things.

And they still got screwed. And so I just think it's really. Thank you so much.

Thank you. Is there anyone else who would like to testify on this measure? Okay. Again we have opposition from the National Association of Mutual Insurance Companies, opposition from the American Property Casualty Insurance association, and written testimony and support from. Hi. Lei and Stacey Ann Casco Members. Questions? I have a question for Mike. Yeah. Insurers, console.

If I'm not mistaken, the sort of minimum amount of insurance you need to carry if you elect. Well, the minimum amount of insurance that a homeowner needs to carry is the amount that the bank requires, which actually.

No. Well, what insurance companies should do is they should insure to the replacement cost of the building at the time the policy is applied for. And again, they'll apply inflationary increases. The reason, it's not necessarily what the bank is requiring. Sometimes the banks are insuring for a value greater than the coverage amount.

So if your loan is a million dollar house, maybe you can rebuild it for $650,000, but you have an $800,000 loan. Now, some banks may require that, and if they do, we will comply as the insurer. But we are trying to insure just to the replacement value of the property, of the home, not the entire property.

Okay. I guess I'm, you know, I'm not sure how, absent this, absent a concept like the one in this measure, we could address this issue. And I haven't seen the specific data on it, but the anecdotal data that we've. Well, that the anecdotal stories we've gotten are.

I mean, they line pretty closely with Ms. Peterson's experience that most likely if you have homeowners insurance, you're not appropriately covered to actually replace the value of the home. So I guess how else are we supposed to try to address that concern?

It's a difficult question. I can speak for my company. Our insureds generally were okay. Now we have a very old book of business and therefore they've been getting inflationary increases for a very, very long time.

If you look at construction inflation, there are some years where it's 1 or 2% or a couple years where it's 9 or 11% on average. If you have an inflation factor that works, things can work out. I can't speak to what other insurers do.

I can say that the way the Bill is drafted, it would require insurers effectively to do physical inspections every year, including things like architectural fees and all those things. I mean, we're talking.

Right. So I get that part. And I think it's difficult. Well, it's difficult to decipher from the testimony and the Bill whether the rate of underinsurance is a function of year to year uncertainty or whether there's a systemic pattern of underestimating inflationary costs increases or the value of the property. Right. Because it is volatile.

But there's a pretty clear trend line in Hawaii and that trend line is that property values never go down and construction costs never go down. Right. So it's just a matter of how high they go, how high you estimate the increases. Right.

Well, let me say this. Insurers have zero desire to underinsure. That means we're not collecting adequate premium because in situations which are tragic when they occur, I do not minimize how difficult it is. There's going to be litigation that insurers will be engaged in or the agents or both. So we don't have a desire to underinsure anybody.

There's no benefit to us. Our goal is to charge the right premium and collect the correct premium for the value of the home, as it should be.

I just think that the way this is drafted, I don't think we get there because we're just going to increase costs so much that we're going to probably force business back into the surplus lines market, which I don't think we want to do.

I appreciate that. And just so that we're clear, I don't think the Bill was introduced or scheduled with the underlying assumption that, you know, the insurers weren't trying to get this right. It's just we have some pretty glaring examples of it not being right.

And a general maybe mistrust of the insurance industry's desire to be accurate over time, year to year, I think is a different conversation that's obviously really complicated. So. Okay, any other follow-up, Senator McKelvey?

Yeah, no, I mean, who pays for. Who pays for it when you have rampant under insurance, who pays for it? It's a real easy answer, because I can tell you the answer already.

Well, the answer that you're seeking is it's the homeowner.

No, it's the government. Well, it's the government. The reason why we invested so much money in the line though, because so many people are insured. And what I don't understand is why the industry isn't proactively notifying people that you're under insured. Because everybody here isn't trying to get a benefit.

They're trying to say is had I known I was underinsured, I would have scrambled to provide more in coverage in case of a disaster. And they don't know, they're not being informed and when.

So when you have all this rampant underinsurance to the chair's point, and the companies aren't going to pay out beyond that, guess who's going to pay? The Federal Government, the state government. They're the ones that are going to pay So I would. And again, if people know this, they're more likely to buy increased coverage.

So it helps the industry. So I guess I put the Bill in. But I'm thinking to myself, why should this be in a Bill and a mandated thing when the company should be proactively going out there and alerting their customers, hey, your coverage hasn't increased in five years. And according to our data, you're underinsured.

You may need to take steps immediately to address your coverage. Nobody got anything like that.

They under the safe assumption, I bought my policy, I can rebuild, and then a disaster happens and they find out that's not the case, and then we have to come in and appropriate hundreds of millions, if not billions of dollars to help people rebuild. So I guess that's the reason.

I understand some of the mechanics may be, you know, have unintended consequences, but I think that's the drive of the intention of the legislation is to provide homeowners with this kind of information so they can proactively protect themselves so that we, the government, don't have to come in to help them rebuild what they thought they could rebuild had they known that the policy was indeed adequate.

So appreciate that, but that's kind of why. I just don't understand why the industry itself isn't being more aggressive and proactive on alerting people. Hey, you need to take a look at this. According to our numbers, you may be slipping into underinsurance or heavily underinsured. Right.

I very much appreciate the issue, and as I said, we have an interest in doing that. The questions are, do insurers capture the level of data to do what you're suggesting? So some insurers work with local contractors to get an average cost per square foot, and they do periodic reviews and they talk to the agent.

Again, we don't talk directly to the insurer or the insured because we don't own the relationship. Okay, so.

And then we'll do that, but we don't necessarily, as an insurer or I don't want to speak to the entire insurance industry, most don't have all the data necessary to do the things in this Bill or to even do as you suggest, more generally.

That's why they provide this automatic inflationary increase in their policies, which is approved by the regulator, so that coverage values do increase each year. That's how the industry has done this for a long time. We're certainly open to having discussions to see if there's something we can do to help.

I think we need to, because these Underinsurance is rampant and it's not just a Lahaina issue. I think, to Chair's point, you're gonna find it exists everywhere right now. So. Thank you, Chair. I appreciate your question.

Yeah, I guess I have a question. So, you know, let me see here. Your comment was that insurers should. Right now there's no requirement, but insurers should insure up to replacement value.

It does seem like, aside from the standard inflationary cost adjustment, The other point in which there is typically, you know, a demonstrated increase in coverage happens when people refi. And that usually happens because the value of the property is reassessed via an appraisal that's required by the bank, you know, in order to get approval for the refi.

You know, aside from the standard inflationary cost adjustment, when. When, as a best practice, do insurers, is there some sort of threshold or internal flag when, you know, absent an appraisal, when it becomes clear that there's a significant gap between what the replacement cost value is and the coverages?

Also, we don't have eyes on the refi process and those sorts of things. So when that does occur, typically the insured will talk to their agent, says, hey, we refi'd. We got this appraisal from the bank that says our house is worth X.

The loan officers almost always will recommend an increase to cover the appraised value. Different changes.

So that insured then has that information. The agent doesn't as yet, until the insured has a conversation with the agent and the agent has a conversation with the agent.

Well, so now that sounds like we should get Tsujimura back up here online and go, when are you guys going to fix the inflationary cost adjustment? If there's no other trigger, then. Right. It seems like the formula doesn't work. Yeah. Okay. Okay. Okay. Okay. Any other questions? Thank you very much for that. Thank you. We'll move on.

SB3016, relating to privacy is next. This measure adds definitions of identifier and specified data element and amends the definition of personal information for the purposes of notifying affected persons of data and security breaches under existing state law. DCCA Office of Consumer Protection in support. Good morning.

Good morning. Good morning, Chair and Members. Mana Moriarty, Executive Director, OCP. We're in support. We requested an amendment taking out the exemption for insurance licenses. Frankly, an exemption is not warranted. We want insurance licensees to report to consumers just as every other business has to report to consumers when their information has been subjected to a breach.

I wanted to take a moment though, to urge the Committee to, you know, just, well, to acknowledge the good work that was done last session on Senate Bill 1038. Senate Bill 1038, I think the question is, how do we get to a place where we have a better data security breach law?

There's no question that we're about 20 years behind right now. We have protections in place for driver's licenses and Social Security numbers, but the world has changed. We live in an age where we can take a swab and submit it to a DNA company and that data can get hacked.

Our law does not protect against that particular scenario. So we need, we sorely need an update. The question is how we get there. That's what takes me back to Senate Bill 1038. So I'd encourage the Committee to look at that. Some good, good work was done.

In particular, I was reading through the testimony on this Bill from the State Privacy and Security Coalition, and I believe if you look at that testimony and you look at Senate Bill 1038. Senate Bill 1038 actually addresses points 12 and 4 raised in the testimony by the State Privacy and Security Coalition.

My time is running a little bit short. But with respect to 0.4 it doesn't particularly do it in the way that the coalition suggested, but it does amend the definition of a personal identifier. I'll stop there, but I can take questions if you'd like.

Thank you very much. DCCA Insurance Division with comments.

Aloha Chair, Vice Chair, Members of the Committee, Matt Tsujimura on about half of the Insurance Division. We'll stand on our written comments echoing the same sentiments for the deletion of the exemption language for insurance licensees, but happy to answer any questions. Thank you.

Thank you very much. Jeannine Souki for Hawaiian Telcom with comments.

Aloha, Chair, vice Chair and Members of the Committee. I'm here to respectfully request a clarifying amendment to ensure the Bill does not create duplicative or conflicting requirements for telecommunications carriers that are already regulared under the federal CPA and I rules. And we have offered some language for the committee's consideration regarding this amendment. And I'm available for any questions if you have any.

Thank you very much. The Consumer Data Industry Association in opposition.

Thanks, Chair. We'll stand on our testimony.

Thank you very much. Thank you for standing on your testimony. Hawaii Bankers Association also has comments.

We will stand on our written testimony with comments requesting. Thank you.

Thank you very much. We also have written testimony from the State Privacy and Security Coalition. Johnny May, that was in opposition. And then supporting testimony from Michael Older and Johnny May Perry, Is there anyone else who would like to testify on this measure? Members questions? Okay, seeing none.

We will move on to the last measure on this agenda, SB3255 relating to currency. This measure requires retail merchants to accept cash payments in in person transactions. First up, Lauren Zirbel, Hawaii Food Industry association with comments.

Thank you, Chair. Vice Chair. We have comments on this measure. We are actually in opposition to mandating cash payments because it can require additional staffing and requirements that some startups don't have.

And we were wondering if you'd be willing to insert a different measure that this title would allow for because we didn't get it passed in the House.

But I don't know if you're aware, the Federal Government has stopped printing the penny and it's created a lot of issues with rounding because they did not provide guidance on how we can legally round a tender. We have a shortage of pennies now, so we can't provide correct change.

This House Bill that I was recommending we use would allow us to round up and down. So it would sort of solve this penny shortage crisis that we have, which is actually becoming kind of significant. We have asked many times for guidance from the Federal Government and we have not received it.

So it's actually kind of becoming a big problem at this point. So thank you very much for the opportunity to testify.

Thank you. We also have comments from the retail merchants of Hawaii online not present here. Thank you very much. Written testimony from Laura Iano in support. Johnny Mae Perry in support. Comments from Richard McClellan. Supporting testimony from the following individuals. Emily Mossman, Marie Mossman, Angela Matsumoto, Penelope Mackenzie and Blaine de Ramos.

Is there anyone else who would like to test. Okay, Members questions. Lauren, I have your testimony is depressing. This is a bummer. I happened to find myself in the UK last year and you cannot use cash to buy food in England. You cannot. They do not accept it.

And it's, I don't know, some people would consider it scary. I just think it's depressing. Is there. I'm very sensitive to your comments about the small food businesses because these are mostly local people that are just starting out or where the food establishment is their entire life.

And so those are the last people that we want to hurt. But this is depressing. Is there perhaps a threat threshold in which this might make sense for larger establishments? I mean, we have plenty of people in the community that are unbanked. We have whole sections of our.

Even on this island, we have whole swaths of the community where a bank is not within walking distance and is difficult to access even by public transportation.

And so if people don't have a debit card and we move to this world where nobody accepts cash, then, you know, I mean those folks will be required to go to the government for assistance. Right. And that's the concern.

I mean most people prefer cash because then you don't have to pay those huge transaction fees. That part too. But yeah, I mean we put on Maiden Hawaii festival. Right.

We try not to accept cash because we have to have armed guards if you have over a certain amount of cash and it creates problems with like people stick stealing or you know, you don't know what's going to happen with that or being mismanaged and misplaced. So it does. Cash is great. But it also presents significant challenges.

You know, depending on what kind of business you operate, we end up. We ended up accepting cash. We do accept cash actually in very limited circumstances. But yeah, I mean you could. I can't give you like a specific dollar amount and like what. You know, this penny rounding thing is a serious problem though.

So if you could, you know, put that lang in there.

Yeah, saw it. Noted. Thank you. Members any.

I mean if you didn't focus on the cash for. I hear you on the penny thing. That's a totally separate thing. This is just. I get the burden that some businesses. But cash is cash like denying it. I don't see how it. How we can even be arguing it. So I get the penny thing but. But this.

There's got to be it. Yeah. Surprises opposition to this.

I'm sure that most of our Members do accept cash. We mostly just wanted the penny language put in there was our main point. Yeah.

Right. And then because you came in person now we're asking you all kind of questions.

I would have rather heard the retail merchants.

Yeah. I mean here's the thing. A lot of your merchants will charge the consumer a percentage for using their credit cards or debit cards.

They don't charge the consumer, they eat it. But that was. Drives up the cost of it. I could think a whole bunch of places illegal to pass it on a lot of the times. I mean like so basically the cash price is. That is usually is almost always in grocery stores the same as the credit card price.

But credit cards are charging 2 to 4%.

I'm talking about the small food vendors, not the great grocery stores.

Same difference.

I mean I can. I'm not going to put them out there, but I can give you 100 businesses where if you go in there, can I use cash? Oh, great. Let me take the 3% off.

Oh, yeah. So some of them do.

To say that it doesn't happen. It's happening all the time. So I mean, this is one of the events. And then of course, we just got done hearing a horrible state of our PII Bill before.

Enforcing everybody to do digital creates all sorts of interesting tracking and cyber security issues, especially with a state with the worst PII in the United States. Yeah, sorry, I had to get that in there.

Yeah, I mean, I get your point. I think the vast majority of our businesses are accepting cash, but we are having trouble accepting cash now because we don't have proper rounding.

Again, noted from your testimony. Thank you. Any other questions? Okay, seeing none. Thank you for coming up here and enduring that. That's all the testimony and all the questions. So we will recess for decision-making. Okay, we're back for a decision-making on this 9:32 am agenda on Wednesday, February 25, 2026.

The first measure is SB2876 relating to natural hair braiding. The recommendation is to pass this measure out unamended. Members, any questions or comments?

Seeing none, Chair votes I of the CPN Members present. Are there any voting with reservations or objections? Hearing none. Your recommendation is adopted.

Thank you. The next measure is SB2950 relating to insurance. This is the captive insurance Bill. The recommendation is to pass with a defective effective date of July 12050 to keep the conversation going on this measure. It does sound like it warrants further conversation on a number of the pieces of the Bill. Any discussion? Okay, Seeing none.

Passing with amendments. Chair votes aye.

Thank you. Of the CPN Members present. Any voting with reservations, objections? Hearing none. Your recommendation is adopted.

Thank you very much. The next measure is SB 2951 relating to insurance proceeds. The recommendation on this measure is to defer. This Committee passed out SB 1366 last year, which was a more robust version, and it is sitting in the House right now ready to move. The next measure is SB2952 relating to insurance.

The recommendation is to defect the date pass with amendments, defecting the effective date of this measure to July 12050 and making technical, non substantive changes. Members, any comments or questions? Okay. Seeing non Passing with amendments. Chair votes I thank you.

Of the Members present. Any voting with reservations or objections? Hearing none. Your recommendation is adopted.

Thank you very much. The next measure is SB 2960 relating to property insurance. The recommendation on this measure is to pass with a defective effective date of July 12050 to keep the discussion moving. Members any discussion, comments, questions? Seeing none. Passing with amendments Chair votes I thank you.

Of the Members present any voting with objections hearing none. Your recommendation is adopted.

Thank you very much. The next measure is SB 2964 relating to property insurance. This is the inflationary cost under insurance measure. I appreciate the concern from the insurance industry, but the recommendation here is to pass with a defective effective date of July 1st and technical non substantive amendments.

We have a deadline coming up next week and I would like to keep this vehicle moving so that we can continue to have a conversation about how exactly to address this issue. Members, any comments or questions? Okay. Seeing none. Passing with amendments Chair votes I thank you.

Of the Members present any voting with reservations objections Hearing none. Your recommendation is adopted.

Thank you. The next measure is SB 313-01-63016 relating to privacy. The recommendation is to pass with amendments adopting the proposed recommendations from the DCCA's Office of Consumer Protection and from their insurance division and also adopting the proposed recommendations from Hawaiian Telcom. We'll also defect the effective date of this measure to July 12050.

Members any comments or questions? Okay. If not passing with amendments, Chair votes aye.

Thank you. Up the Members present any voting with reservations objections Hearing none. Recommendation is adopted.

Thank you very much. The last measure on this agenda is SB 3255 relating to currency. The recommendation is to pass with a defective effective date of July 1, 2050. Members any discussion?

We will also note in the Committee report that the need in the continuing discussions about this measure, the need for potentially establishing a business size threshold to account for the hardships of smaller run food establishments. Any comments, questions?

Appreciate you putting the two cents in there.

Except we won't. Thank you. Passing with amendments. Chair votes aye.

Of the Members present, any voting with reservations, objections? Hearing none. Your recommendation is adopted.

Thank you. We're adjourned.

Okay. Convening this 9:45am Wednesday, February 252026 decision making agenda in the Hawaii State Senate Committee on Commerce and Consumer Protection. These measures were all heard by their previous subject matter Committee and we've received written testimony on these measures, reviewed it and are making recommendations. The first measure is SB 1163 SD1 relating to privacy.

The recommendation on this measure is to pass with amendments. We'll change the definition of precise location to align with current FTC rules, make some technical non substantive amendments and defect the effective date of this. zero, there's already a defective date, so we'll keep it as it is. Members Any discussion Okay. Seeing non passing with amendments, Chair votes.

I thank you. Of the CPN Members present any voting with reservations, objections, hearing none, your recommendation is adopted.

Thank you. The next measure is SB2400 relating to transportation. The recommendation on this measure is to pass with technical, non substantive amendments. Members, any discussion? Okay. Seeing none passing with amendments, Chair votes.

I thank you. The Members present any voting with reservations or objections noting the absence of Senator Lamal. Your recommendation is adopted.

Thank you very much. Next measure is SB3102SD1 relating to port pilotage. The recommendation is to pass with amendments adopting the recommended changes from the Hawaii Harbor Users Group and several other testifiers to amend the definition of pilotage waters to exclude Port Allen.

There are also technical, non substantive amendments and will defect the effective date of this measure to July 12050. Any discussion? Okay. Seeing none passing with amendments, Chair votes.

I thank you. Of the Members present any voting with reservations, objections, hearing none, your recommendation is adopted.

Thank you very much. Last measure on this agenda is SB3248SD1 relating to Okolehau well labeling requirements. This is the Okolehau Bill. The recommendation is to pass with technical, non substantive amendments and note that there is a defective effective date. Any comments or concerns? Okay. Seeing none passing with amendments, Chair votes.

I thank you. If the Members present any voting with reservations or objections, hearing none, your recommendation is adopted.

Thank you very much. We're adjourned.

SA.