Clarifies the circumstances under which standard extended
coverage endorsements qualify as comparable coverage for purposes
of levying assessments on property insurance premiums.
Establishes a study of providing matching grants to homeowners
installing hurricane mitigation devices. (HB2314 CD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                S.D. 2
STATE OF HAWAII                                            C.D. 1

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 431P-10, Hawaii Revised Statutes, is
 2 amended by amending subsection (b) to read as follows:
 3      "(b)  Upon the authorization of the commissioner, insurers
 4 may provide standard extended coverage endorsements[,] for
 5 residential property, including coverage of hurricane risks,
 6 subject to the fund's program for incentives and credits;
 7 provided that in the absence of such authorization, no other
 8 policy of residential property insurance or endorsement to a
 9 policy of residential property insurance on eligible residential
10 property located in this State shall be issued to provide
11 insurance for damages or losses caused by a covered event if such
12 coverage is less than that offered by the fund.  If standard
13 extended coverage endorsements on commercial property are no
14 longer being offered by the fund, any standard extended coverage
15 endorsements on commercial property offered by an insurer shall
16 qualify as a comparable coverage under section 431P-5(b)(8)(A).
17 Standard extended coverage endorsements on residential property
18 which include coverage for hurricane losses offered by an insurer

Page 2                                                     2314
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        C.D. 1

 1 shall qualify as a comparable coverage under section
 2 431P-5(b)(8)(A)."
 3      SECTION 2.  The Hawaii hurricane relief fund's advisory
 4 committee shall study, at the fund's expense, the issue of hazard
 5 mitigation, including the providing of matching grants to
 6 policyholders who install mitigative devices.  The study shall
 7 include whether the fund can achieve a hazard mitigation program
 8 without additional statutory authority.  The study shall include
 9 an evaluation of the feasibility and pros and cons of a program
10 in which:
11      (1)  The fund sets aside an annual amount equal to five per
12           cent (or other more appropriate percentage determined
13           by the study) of the amount remaining after deducting
14           any outstanding liabilities from the hurricane reserve
15           trust fund in an amount not less than $700,000, and not
16           more than $5,000,000 (or other more appropriate amount
17           as determined by the study), for the purpose of
18           providing matching grants to policyholders under the
19           fund who:
20           (A) Properly install fund-approved:
21               (i)  Wind-resistive devices; or
22               (ii) Opening protection coverings for all plate and
23                    sliding glass openings larger than two by two

Page 3                                                     2314
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        C.D. 1

 1                    feet that are installed along with sufficient
 2                    single, double, and garage door retention
 3                    devices, as applicable; and
 4           (B) Pay any established fees to offset the
 5               administrative and sufficient marketing costs of
 6               the grant program; and
 7      (2)  Each policyholder would be eligible to receive a grant
 8           up to $3,500, matching dollar-for-dollar their
 9           expenditures under paragraph (1), with no minimum grant
10           eligibility threshold.
11 For purposes of the study, the advisory committee shall assume
12 that the grants would not be subject to chapter 91; and that the
13 grant program would be extended to former fund policyholders when
14 the number of policyholders falls below eighty per cent of the
15 number of residential fund policyholders as of January 1, 2000.
16      The advisory committee shall submit its findings and
17 recommendations, including:
18      (1)  Any proposed legislation, if necessary; and
19      (2)  Which hazard mitigation program will provide the most
20           benefit to residential homeowners,
21 to the legislature no later than twenty days before the convening
22 of the regular session of 2001.

Page 4                                                     2314
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        C.D. 1

 1      SECTION 3.  If the study finds that:
 2      (1)  Legislative enactment is not necessary to enable this
 3           grant program; 
 4      (2)  It is feasible to implement the grants program; and
 5      (3)  The pros of the grant program outweigh the cons,
 6 then the study shall contain specific details on the
 7 implementation of the grant program.
 8      SECTION 4.  Statutory material to be repealed is bracketed.
 9 New statutory material is underscored.
10      SECTION 5.  This Act shall take effect upon its approval,
11 except that section 1 shall take effect retroactively to
12 September 1, 1998.