February 10, 2002
Rep. Galen Fox
Tel.: 586-8520


House to Vote to Return Hurricane Fund to Policyholders

Honolulu House Republicans said today that the House of Representatives will debate and vote on Monday, February 11, 2002, whether to return the $230 million surplus in the Hawaii Hurricane Relief Fund to the ratepayers who paid into the Fund. Republicans used the constitutional recall provision to recall House Bill 865 from the Committee on Commerce and Consumer Protection, where the measure had languished for more than a year.

"That surplus belongs to the ratepayers -- not the State of Hawaii," said Rep. Joe Gomes (R, Waimanalo, Keolu Hills, Lanikai). "Returning the surplus in a fair and equitable manner is the legally proper thing to do and the right thing to do. Also, we don't want this measure `ice-boxed,' that's why we recalled it for debate and a vote," stated Gomes.

The law currently authorizes the State to transfer to the general fund the "net moneys" remaining in the Fund. This transfer would occur only after the Fund was "dissolved."

Republicans said the fact that the Fund has such a huge surplus is a clear indication that the policyholders and ratepayers were overcharged. If this was a private insurance company doing business in this State with this size surplus, the State would surely require that company to refund that surplus to the policyholders. (more)

"The State has long argued that the policy holders are not entitled to a refund of their `premiums' because they got what they paid for, namely insurance coverage in the event they suffered property loses from a hurricane. That argument is flawed," said Rep Mark Moses (R-Makakilo, Ewa, Kapolei) "The fact is that workers' compensation carriers and mutual insurance companies refund premiums as a regular course of business. The Democrats are merely looking for excuses to grab the Fund and use it to pay for our overpriced government," concluded Moses.

Republicans said that one other excuse used by the State to avoid a refund is its claim that it does not have any, or adequate, records of whom paid into the Fund or how much they paid. If this is true, then the State has violated the law governing the Fund, which requires the Fund's Board of Directors to maintain the proper records. It also breaches the State's fiduciary obligations as trustee of the Fund.

"Even if they don't have the records, we can find a way to make this work," said Gomes. "After all, the United States government found a way to compensate thousands of Japanese Americans interned during World War II, and the European community has found a way to return the billions stolen during that War from tens of thousands of Jews."

Rep. Jerry Chang (D, South Hilo) introduced House Bill 865 during the 2001 regular session. Along with this bill two other important measures will be up for a vote as well. House Bill 255 would do away with the current state Board of Education and create eight separate districts. House Bill 310 would place General Excise Tax exclusions on food, residential rent, and health care.