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Committee narrows Hawaii Hurricane Relief Fund financing request to $50 million and asks agency to use existing funds first
Summary
DCCA insurance testimony, Aon vendor analysis and stakeholder comments led the House Finance Committee to amend SB1044: it limited immediate supplemental financing to $50 million in FY2026 via reimbursable bonds, requested the HHRF to use HSSR funds first, and kept technical changes and authority to consider TPAs for servicing.
The House Committee on Finance advanced Senate Bill 1044 SD2 HD1 with amendments that narrow the bill's immediate financing ask for the Hawaii Hurricane Relief Fund and add technical clarifications on who may service the fund.
At the hearing, Jerry Bump, acting commissioner at the DCCA Division of Financial Institutions, said the department supports expanding the pool of potential servicers for the Hawaii Hurricane Relief Fund (HHRF) to include third-party administrators (TPAs) in addition to admitted insurers. Bump testified that the HHRF's contracted vendor (Aon) modeled scenarios and recommended that if demand turned out to be high, an additional $200 million of capital could be needed; DCCA proposed spreading that authority across two fiscal years (FY26, FY27) as reimbursable general obligation bonds backed by a revenue source of insurance premiums so as not to affect the state's debt ceiling or CIP budget.
Officials and stakeholders said market conditions have shifted since Aon's peak-market analysis. DCCA told the committee the HHRF already has capital to begin offering coverage to the most-ready market segment (concrete, high-rise buildings) and that additional capital authority would only be tapped if demand required it. The department also cited concerns that admitted insurers are sometimes reluctant to service residual-market mechanisms, so expanding servicer eligibility could accelerate market entry.
Several witnesses urged prudence and transparency in the market analysis. Greg Masakian, an elder-advocacy leader and condominium owner, urged the committee to include experienced condominium stakeholders in task forces and to scrutinize vendor fees. He warned that single-family homeowners are increasingly at risk of being denied hurricane coverage and urged the committee to consider how deferred maintenance and other issues affect insurability.
Committee amendments and action: During decision-making the committee amended SB 1044 to allocate $50 million in FY2026 as a reimbursable bond authority (rather than the larger $200 million scenario described by Aon) and added language directing the HHRF to use existing HSSR funds first before tapping the $50 million. The committee also adopted technical edits and authorized consideration of TPA servicers to expand bidding and speed market deployment.
Why it matters: HHRF is part of the state's strategy to restore market functioning for hurricane coverage. How it is capitalized and serviced affects availability of insurance for condominium associations, townhomes and single-family homeowners, and affects insurers' willingness to participate. The committee's amendments reduced near-term fiscal exposure while preserving the option for additional funds if demand and analysis support it.
Next steps: The bill advances with the committee's amendments; committee members requested additional documentation from the Aon vendor and said they would seek more detailed modeling and vendor contract disclosures in follow-up discussions.
Sources: Testimony from Jerry Bump (DCCA Division of Financial Institutions), Greg Masakian (individual stakeholder), and committee decision-making transcript.
