The Senate Committee on Commerce and Consumer Protection on Jan. 31 advanced a set of bills intended to stabilize Hawaii's property insurance market, passing several measures with amendments, deferring others for further work and asking for follow-ups that could include requests for proposals to let private insurers bid to administer programs.

The measures respond to a multi-year disruption in the admitted property market that has pushed many condominium associations and homeowners into the surplus (nonadmitted) market and produced steep premium increases, testimony and regulators said.

The committee voted to pass or advance bills that expand the Hawaii Property Insurance Association and Hawaii Hurricane Relief Fund’s authorities, require more transparency for condominium associations and owners, convene workgroups to study risk-transfer options, and permit electronic delivery of insurer claim proceeds. Several measures were amended to add technical clarifications, require reports, or defer effective dates to July 1, 2050, to allow time for implementation and rulemaking.

Why it matters

The package targets a visible, ongoing problem: condo boards and unit owners who have experienced nonrenewals and large premium hikes say they often receive limited notice and explanation. That gap, members said, prevents associations from budgeting for reserves or seeking alternative coverage. Committee members repeatedly cited constituent reports of potential displacement and financial harm among older condominium owners.

What the committee did and why

Insurance-division staff and the Office of the Attorney General urged careful statutory drafting and flagged areas where administrative capacity, treasury placement of funds or tax status must be explicit. Jerry Vump, chief deputy (Insurance Division), told the committee that the bills stemmed from the administration’s condo task force: “This measure came out of the governor’s executive and legislative condo property task force.”

Kathleen Nakasone, rate and policy analysis manager at the Hawaii Insurance Division, described repeated complaints from condo owners: “I myself have taken many calls, and so we acknowledge that it it's a problem.” She and other witnesses said the communication breakdown is often between agents, boards and unit owners: agents typically work with boards or management companies, and not all boards relay full information to unit owners.

Industry groups voiced caution. Michael O’Frieni of the Hawaii Insurers Council and other carriers warned of unintended consequences from coverage mandates and noted the necessary role the surplus market currently plays when admitted carriers withdraw. Regulators and industry witnesses emphasized that admitted carriers may avoid writing certain condo risks until buildings’ risk profiles improve, and that surplus-market pricing can appear high because it must reflect current risk and market conditions.

Committee changes and follow up

During decision making the committee adopted multiple amendments across the package, including attorney-general clarifications and changes to governance, procurement and fee structures. The chair asked the committee report to reflect an administration preference that the Hawaii Property Insurance Association (HPIA) side receive a $50 million general fund loan if the legislature proceeds, and added a directive that both entities consider requests for proposals so domestic private insurers with operating capacity can bid to manage programs.

Several technical steps were adopted to accelerate implementation: a flat-fee agent compensation structure was favored over commission for at least some programs; reports and studies were ordered with specific due dates; and the committee delayed some effective dates to give agencies time to prepare.

Votes at a glance (selected measures tracked in the hearing record)

- SB 1044 — Expand HPIA/HHRF powers; study and stabilization measures: Passed with amendments. Committee report to include administration’s recommended $50 million loan preference; effective date deferred to July 1, 2050. (Recorded: Chair Keohokalole — aye; Vice Chair Fukunaga — aye; Senator McKelvey — yes; Senators Richards and Awa — excused.)

- SB 1140 — Fair Access to Insurance Requirements Program (program of last resort under DCCA): Passed with amendments; attorney-general clarifications adopted; effective date deferred to July 1, 2050.

- SB 803 — Require insurers to provide advance premium-change notices and loss-run reports to common-interest communities and report to the insurance commissioner: Passed with amendments (added automatic loss-run issuance at policy year end); effective date deferred to July 1, 2050.

- SB 1129 — Require insurance commissioner to convene a working group on risk-transfer mechanisms: Passed with amendments; report due 20 days before the 2026 legislative session; committee added a general-fund appropriation placeholder to support the group; effective date deferred to July 1, 2050.

- SB 1128 — Additional Living Expenses (ALE) requirements for homeowners policies after declared emergencies: Passed with amendments; effective date deferred to July 1, 2050.

- SB 142 — Clarify insurer/mortgagee claim-check handling and allow electronic delivery of insurer claim proceeds to mortgagees: Passed with amendments to allow electronic transfer in lieu of certified-mail checks; effective date deferred to July 1, 2050.

Deferred or continued

- SB 805 — Establish Hawaii condominium mutual insurance company and loan fund (COMIC): Decision making deferred to Feb. 4, 2025, to allow additional amendments and review of capital, tax, and operational issues.

- SB 1141 — Homeowners insurance protections for wildfire losses: Deferred to Feb. 4, 2025 for further consideration.

- SB 525 — Notice and consent requirement for cremation services contracts (heard later in the agenda): Deferred to Feb. 4, 2025.

Voices from the hearing

Condominium representatives, bankers and nonprofit groups urged stronger access to capital and clearer mechanisms for temporary financing and credit enhancement. The Hawaii Bankers Association suggested credit-enhancement mechanisms and CDFI partnerships as potential tools to help associations access capital. The Ygrene Infrastructure Authority said it had received roughly 15 inquiry packages from condominiums seeking financing but, as of the hearing, no condominium loans had closed.

Regulatory limits and next steps

Insurance-division witnesses explained that surplus lines are not regulated the same as admitted carriers; surplus lines can provide rapid coverage but are priced based on present risk. Committee members emphasized they wanted statutory guardrails that would encourage risk mitigation (building repairs, resilience measures) and restore greater participation in the admitted market over time.

The committee directed authors and staff to supply amended language and to craft committee-report language that: (1) clarifies treasury placement and tax treatment for any new funds; (2) requires procurement/RFPs to evaluate private insurers’ operational capacity; and (3) sets reporting deadlines and implementation phases so vendors and entities can stand up programs more quickly.

What’s next

Final floor action will follow committee reports and subsequent Senate floor scheduling. Deferred measures, including the mutual insurer bill (SB 805) and wildfire-protections bill (SB 1141), will return to the committee on Feb. 4 for additional amendment and decision making.

Ending note

Committee members repeatedly framed the package as an urgent response to an ongoing affordability and access problem. With amendments adopted and additional work requested, the committee moved to align statutory tools, administrative capacity and funding signals in hopes of stabilizing the market for condominiums and homeowner policyholders across Hawaii.