(BIVN) – A bill is moving forward at the State Legislature that will study the feasibility of a state-run reinsurance program that would ensure property owners are covered against catastrophic events in Hawaiʻi.  

HB2056 HD1 SD1, introduced by Puna’s State Representative Greggor Ilagan, establishes the State Reinsurance Exploratory Working Group within the Department of Commerce and Consumer Affairs. The working group will “gather information to assist the Legislature in generating innovative solutions that address increasing insurance costs to consumers in the State.”

The bill makes mention of the Florida Hurricane Catastrophe Fund, which is “a state trust fund that provides reimbursement to residential property insurance companies for a portion of their catastrophic hurricane losses, with reinsurance coverage provided to insurers at a lower cost than the private reinsurance market.”

“Establishing a similar program in Hawaii may help homeowners and insurance companies address the increased risk of catastrophic events like the August 2023 Maui wildfires,” the bill states.

The bill has already passed through the State House and on Thursday was given a recommendation of passage, with amendments, by the Senate Committee on Commerce and Consumer Protection.

If the bill passes the legislature and is enacted into law, the working group “shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2025.”

Former Hawaiʻi County Councilwoman Eileen OʻHara, who is currently the board President of Hawaiian Shores Community Association in Puna, provided this testimony on the measure:

As you are aware, the property insurance industry is in a state of disarray with the increase in climate change related events. While the Hawaii Property Insurance Agency (HPIA) was created in 1991 and ONLY focused on lava events on the Big Island using USGS hazard maps as if they were actual risk assessments to discriminate against homeowners and businesses in certain parts of Lava Zones 1 & 2, the reality in 2024 is that most of the State of Hawaii is subject to natural disasters due to impacts of climate change. There has been an increase in fires, floods, droughts, hurricanes, extreme wind events and we’re just starting to experience the negative impacts of sea level rise on private and commercial properties. On top of those potential natural disasters, we also have earthquakes and tsunamis that can affect multiple islands.

Please take this seriously! We need to take steps now to reshape the HPIA to address these changing conditions. The Big Island isn’t the only place subject to natural disasters driven by climate change. The fires on Maui last year resulted in significant loss of life while at the same time, Hawaii County Fire Department was struggling to contain fires in the north end of the island. We need to investigate ways to improve the reinsurance markets to provide equitable relief to all of the state rather than attempt to extract exorbitant insurance fees to live in the Puna district of the Big Island which is now home to over 50,000 people out of the island’s 200,000+ individuals. Puna is also the only affordable place for many Hawaiian families to locate and raise their families. This bill is an attempt to make the changes necessary to keep our population safe while residing in the state. Please support HB 2056 HD1.

I submit this testimony as an individual, yet am also the board President of Hawaiian Shores Community Association one of the many subdivisions that are located in Lava Zone 2 with nearly 1,300 residential properties. While we’re right on the border of Lava Zones 2 & 3, we are being very adversely impacted by HPIA’s practices which have resulted in a rise of annual property insurance policies by anywhere from 4 to 10 times what we previously paid before Universal Property Insurance pulled out of the state. With tens of thousands of people impacted, we need your help to develop an appropriate path forward as many are losing their homes to foreclosure as they can’t afford this tremendous increase in insurance policy costs.

HB2056 has also been referred to the Senate Committee on Ways and Means.