Hawaii: NAMIC Testifies Against Utilities-Sponsored Liabilities Protection Wildfire Relief Fund Bill

HB 2700, Wildfire Relief Fund Corporation, was heard on Feb. 13 in the Hawaii House Committee on Judiciary and Hawaiian Affairs. NAMIC submitted written testimony opposing the bill, but the bill passed out the committee with non-substantive, technical amendments. The legislation was passed with the expressed understanding that interested stakeholders would continue discussions with the bill sponsor and proponents about amendments to address concerns raised at the hearing. The bill previously passed out of the House Committee on Consumer Protection and Commerce and House Committee on Water and Land.

HB 2700, HD-1 would create a Wildfire Relief Fund that homeowners have to opt-out of, and insurers would have to opt in to that would limit their damages recovery for a wildfire claim and effectuate a waiver of the civil liability claim against an at-fault utility that may have caused the property damages. The at-fault utility would be limited to having to contribute a damages assessment to the fund that would then be paid to consumers and insurers in an amount determined by the fund.

In its testimony, NAMIC opposed the legislation for the following reasons:

• It is likely to create consumer confusion that could adversely impact a consumer’s ability to protect their legal rights;
• It would provide utilities with a mechanism to reduce their legal liability exposure without requiring them to engage in any proactive, pro-consumer protection wildfire risk mitigation management; and
• It creates an unworkable legal relationship for homeowners’ insurance companies and adversely impacts insurer subrogation rights.