Report Title:
HHRF; Funds
Description:
Prohibits the transfer of the principal of moneys in the hurricane reserve trust fund to the general fund prior to the dissolution of the fund.
HOUSE OF REPRESENTATIVES |
H.B. NO. |
46 |
TWENTY-SECOND LEGISLATURE, 2003 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE HAWAII HURRICANE RELIEF FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that although the Hawaii hurricane relief fund is no longer providing hurricane insurance as of December 1, 2001, there is still a risk that a future hurricane or other catastrophic event that affects the reinsurance or insurance markets will cause insurance companies to cut back significantly on their writing of homeowner's policies just as they did after Hurricane Iniki in 1992. Therefore, the Hawaii hurricane relief fund may be needed in the future to provide hurricane insurance if the private market fails to do so. To provide adequate funding for losses in the future, it is vital to the public interest that the Hawaii hurricane relief fund be allowed to retain its monetary reserves.
Hurricane insurance is required of homeowners by mortgage lenders. If hurricane insurance is not available, either mortgage lenders cannot lend or they may force place insurance for the homeowners at high rates. By providing hurricane insurance when it is unavailable from the private sector, the Hawaii hurricane relief fund helps the public get loans on their homes and a fair price on their hurricane insurance. This in turn helps to avoid the economic downturn that might otherwise result from a decline in the mortgage lending, real estate, and property insurance industries.
The purpose of this Act is to clarify that the principal of moneys in the Hawaii hurricane relief fund shall not be transferred into the general fund, but shall be retained for the purpose for which they were originally collected. However, the ability of the board of directors of the Hawaii hurricane relief fund to pay ongoing expenses and the expenses of restarting its program should not be altered.
SECTION 2. Chapter 431P, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§431P- Retention of moneys. If the fund no longer provides coverage for a covered event, the principal of moneys in the hurricane reserve trust fund shall be retained in the fund and shall not be transferred to the general fund. Nothing in this section shall affect the power of the board to spend moneys in the hurricane reserve trust fund in accordance with this chapter. This section shall have no effect upon the transfer of moneys from the hurricane reserve trust fund to the general fund upon the dissolution of the fund pursuant to section 431P-16."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
INTRODUCED BY: |
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