Bill Text: HI SB589 | 2015 | Regular Session | Amended
Bill Title: Property Insurance; Hawaii Property Insurance Association; Policies; Non-renewal; Lava Zone; State of Emergency; Moratorium
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2015-05-07 - Act 032, 5/5/2015 (Gov. Msg. No. 1132). [SB589 Detail]
Download: Hawaii-2015-SB589-Amended.html
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THE SENATE |
S.B. NO. |
589 |
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TWENTY-EIGHTH LEGISLATURE, 2015 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 2 |
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A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that residents and businesses in the Puna district on the island 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 Puna district.
Accordingly, the purpose of this Act is to allow some homeowners who have had continuous insurance in lava zone areas that the mayor of the county of Hawaii has declared to be in a state of emergency to:
(1) Have those insurance policies renewed;
(2) Provide for continued insurance coverage for homeowners who wish to sell their homes;
(3) Provide the opportunity for insurance coverage for new buyers of an insured property; and
(4) Allow a homeowner who had no prior insurance to purchase insurance coverage from the Hawaii Property Insurance Association, with the effective date of the coverage being no longer than six months from the date of the offer.
The legislature notes that upon this Act's enactment, the Hawaii Property Insurance Association will lift its moratorium.
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 zone defined. As used in this article, "lava zone" means a volcanic hazard zone 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 the existence of a state of emergency 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 a 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.
(b) Notwithstanding subsection (a), an insurer may cancel or non-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, Hawaii Revised Statutes, is amended by adding a new section to article 21 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 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, the association shall remove its
moratorium. Upon the moratorium's removal, the association shall offer new
policies and may provide a waiting period of no longer than six months for the
policy coverage to take effect; provided that the residential property in the
lava zone does not have current insurance."
SECTION 4. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.
Report Title:
Property Insurance; Hawaii Property Insurance Association; Policies; Non-renewal; Lava Zone; State of Emergency; Moratorium
Description:
Specifies the total percentage of property insurance policies that an insurer may non-renew in a lava zone during a state of emergency due to lava flow in that lava zone, with specific exceptions. Specifies that if residential property insurance is unavailable due to a moratorium on insurance policies in a lava zone during a state of emergency due to lava flow, the Hawaii Property Insurance Association shall remove its moratorium; requires the Hawaii Property Insurance Association to offer new policies and provide a maximum waiting period of six months for the policy coverage to take effect after the moratorium is removed. (SB589 HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
