Report Title:
Hawaii Hurricane Relief Fund; Termination; Escheat of Funds
Description:
Prohibits escheat of funds to the State from the hurricane reserve trust fund; prohibits repeal of dissolution of fund except by enactment of law; clarifies investment of funds to maximize corpus.
|
THE SENATE |
S.B. NO. |
838 |
|
TWENTY-FIRST LEGISLATURE, 2001 |
||
|
STATE OF HAWAII |
||
|
|
A BILL FOR AN ACT
relating to hawaii hurricane relief fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The Hawaii hurricane relief fund was established to remedy a critical problem facing the community following Hurricane Iniki. Since its inception, insurers have begun to return to the market and the Hawaii hurricane relief fund has suspended some of the assessments on insurers. Numerous ideas have been discussed about the disposition of moneys in the fund, including returning moneys to policyholders or depositing into the state general fund to meet obligations under public employee contracts.
The legislature finds that the Hawaii hurricane relief fund should not be dissolved and that current funds should be reinvested to increase the corpus to an amount that could provide sufficient coverage for a major hurricane catastrophe. Prior testimony indicates that a sum of at least one billion dollars would be needed for this purpose.
The purpose of this Act is to prohibit the escheat of moneys in the hurricane reserve trust fund to the state general fund and to ensure the continuation of the Hawaii hurricane relief fund.
SECTION 2. Section 431P-2, Hawaii Revised Statutes, is amended to read as follows:
"[[]§431P-2[]] Establishment of Hawaii hurricane relief fund[.]; dissolution. There shall be a Hawaii hurricane relief fund to be placed within the department of commerce and consumer affairs for administrative purposes. The fund shall be a public body and a body corporate and politic. The fund shall not be dissolved except upon enactment of a law to repeal this chapter."
SECTION 3. Section 431P-7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) The plan of operation shall:
(1) Establish procedures for performance of all powers and duties of the fund;
(2) Establish procedures for providing notice to all persons with interests insurable by the fund in the State of the type of insurance available from the fund in the event the fund offers insurance;
(3) Provide for and adopt all necessary forms, including insurance policies to be used by and on behalf of the fund, for use by the fund and servicing facilities;
(4) Adopt actuarially sound rates, based on reasonable assumptions relative to expectations of hurricane frequency and severity, to be charged for insurance provided by the fund, in accordance with article 14 of chapter 431;
(5) Publish manuals of rules, rates, and rating and classification plans, which shall address mandatory deductibles, limits of coverage, and the classification of risks and rate modifications based on the exposure of insureds;
(6) Establish procedures for receiving and servicing applications to the fund;
(7) Establish procedures for processing and maintaining records of the fund relating to its financial transactions, its agents, its employees, its operations, and all transactions with any servicing facility;
(8) Establish procedures for the collection and remittance of the premiums and return of unearned premiums where applicable;
(9) Establish procedures for the payment of valid claims;
(10) Establish procedures for prorating available funds pursuant to section 431P-15;
(11) Establish procedures for obtaining reinsurance;
(12) Establish procedures to borrow funds; and
(13) Develop a plan for the investment of moneys held by the fund to invest and reinvest the moneys so as to increase the moneys accumulated in the fund to an amount sufficient to settle claims from a covered event under section 431P-5.5, subject to the limitations in article 6 of chapter 431."
SECTION 4. Section 431P-16, Hawaii Revised Statutes, is amended by amending subsection (i) to read as follows:
"(i) Solely upon dissolution of the Hawaii hurricane relief fund[,] under section 431P-2, the net moneys in the hurricane reserve trust fund shall revert to the state general fund[,] upon enactment of a law to authorize a reversion, after any payments by the fund on behalf of licensed property and casualty insurers or the State that are required to be made pursuant to any federal disaster insurance program enacted to provide insurance or reinsurance for hurricane risks. [In the event such] If moneys are paid on behalf of licensed property and casualty insurers, payment shall be made in proportion to the premiums from policies of hurricane property insurance serviced by the insurers in the twelve months prior to dissolution of the fund. If no law is enacted to authorize a reversion to the general fund, the moneys shall be paid into the fund or appropriated for the purpose of ."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.
|
INTRODUCED BY: |
_____________________________ |