Hawaii: House Condominiums Insurance Stabilization Bill Passes Out Committee

HB 2686, Relating to the Stabilization of Property Insurance, has passed out of the House Committee on Consumer Protection and Commerce on a 7-0-4 vote, with minor amendments, which have yet to be posted online, to move the bill forward for continued policymaker and stakeholder negotiations. The bill will next be heard in the House Committee on Finance. No public hearing has been scheduled to date.

The legislation amends the laws relating to the Hawaii Hurricane Relief Fund and Hawaii Property Insurance Association. The bill also expands the HPIA’s authority to include the issuance of property insurance other than fire insurance for certain real properties organized as a condominium. The bill would impose new assessments on all insurers, which may be directly recouped from insurance policyholders.

NAMIC submitted written testimony raising concerns and suggesting revisions to address basic foundational insurance concerns with the bill. Specifically, in its testimony, NAMIC stated:

“NAMIC recommends that the committee be mindful of the fact that the proposed legislation and market stabilization program need to comply with two foundational principles of property and casualty insurance: 1) Insurance products, whether they are provided directly by private insurers or through a market stabilization program, must be based upon actuarially sounds rates. Risk-based pricing is the cornerstone to a healthy marketplace; and 2) The underlying risk of loss exposure problem that caused or contributed to the availability of insurance coverage challenges for condominium associations and condominium unit policymakers needs to be properly and comprehensively resolved in order for the insurance market to once again be healthy and competitive.”