HOUSE OF REPRESENTATIVES

H.B. NO.

737

TWENTY-EIGHTH LEGISLATURE, 2015

H.D. 2

STATE OF HAWAII

PROPOSED

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PROPERTY INSURANCE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Residents and businesses in the Puna district of Hawaii have been severely impacted by the June 27, 2014, Puu OO lava flow. Part of the impact is due to the imposition of a moratorium on the sale of new insurance policies in certain areas in the district.

The purpose of this Act is to help current and future homeowners who reside in lava zone areas that the mayor of the county of Hawaii has declared to be in a state of emergency to obtain and renew property insurance policies. This Act also enables a homeowner, in such a lava zone, who had no prior property insurance coverage to purchase insurance coverage to be effective within six months from the date of policy acceptance.

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding two new sections to article 10E to be appropriately designated and to read as follows:

"431:10E- Lava zones defined. As used in this article, "lava zones" means volcanic hazard zones identified by the United States Geological Survey on the island of Hawaii.

431:10E- Provisions for properties in lava zones in the county of Hawaii. (a) Where the mayor of the county of Hawaii has issued a proclamation declaring that a state of emergency exists due to the threat of imminent disaster from a lava flow in a lava zone, the total number (rounded to the nearest whole number) of property insurance policies that an insurer may non-renew in the lava zone shall be limited for each calendar year to five per cent of the total number of covered policies of the insurer in force in that lava zone; provided that if approved by the commissioner, this five per cent limit may be exceeded by an insurer in any calendar year as a result of cancellations or nonrenewals made pursuant to subsection (b).

(b) Notwithstanding subsection (a), an insurer may cancel or refuse to renew a property insurance policy where:

(1) Premium payments for the policy are not made after reasonable demand therefor; or

(2) The commissioner determines the financial soundness of the insurer would be impaired."

SECTION 3. Chapter 431, article 21, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"431:21- Issuance of new policies; removal of moratorium. If residential property insurance is unavailable due to a moratorium on the issuance of policies on property situated in a lava zone and if the mayor of the county of Hawaii has issued a proclamation declaring that a state of emergency exists in that lava zone due to the threat of imminent disaster from a lava flow, the association shall remove its moratorium. For residential properties in the lava zone that do not have property insurance coverage, upon the moratorium's removal, the association shall issue new policies and may provide a waiting period no longer than six months for the policy coverage to take effect."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2015.


 


 

Report Title:

HPIA; Mandatory Issuance of Policies; Removal of Moratorium

 

 

Description:

Limits the total number of property insurance policies that an insurer may non-renew in a lava zone for each calendar year to five per cent of the total number of covered policies of the insurer in force in that lava zone when a state of emergency exists. Lifts the moratorium of residential property insurance for the Hawaii Property Insurance Association on property situated in lava zones where the Mayor of the County of Hawaii has issued a proclamation declaring a state of emergency exists due to the threat of imminent disaster from a lava flow. (HB737 HD2 PROPOSED)

 

 

 

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