(1) Prohibit the escheat of funds to the State from the hurricane reserve trust fund to ensure the continuation of the Hawaii hurricane relief fund. In addition, this Act prohibits the dissolution of the fund except by enactment of law, and clarifies the investment of funds to maximize the fund's corpus. The legislature finds that 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. The legislature further 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 $1,000,000,000 would be needed for this purpose;

(2) Establish the new century scholarships program endowment special fund to provide scholarships, stipends, and mandatory fees for academically deserving students in the University of Hawaii system, provide that a percentage of the investment income derived from the Hawaii hurricane relief fund shall be deposited into the new special fund, and appropriate funds from the endowment special fund to implement the Hawaii new century scholarship program. The legislature finds that the public interest will be served by using a percentage of the investment income earned from moneys in the Hawaii hurricane relief fund to create and fund this program at the University of Hawaii;

(3) Specify that the board of the fund is required to accumulate sufficient moneys as determined by the board in reserve in the fund to settle claims from a covered event; provided that investment income derived from the Hawaii hurricane relief fund is to be used for the following purposes:

(4) Require the Hawaii hurricane relief fund to implement a grant program to provide financial assistance to residential property owners who install wind damage mitigation devices, and appropriate funds for that purpose.

(1) Providing funds to award scholarships, stipends, and mandatory fees to Hawaii residents who graduate from a Hawaii high school with a cumulative high school grade point average of at least 3.0 and who are accepted for admission by the University of Hawaii system; and

(2) Pay all costs incident to the prudent investment of the principal and income deposited in the endowment special fund.

(1) All moneys received and collected by the University of Hawaii from the Hawaii hurricane relief fund pursuant to section 431P-5(b)(12), that are not otherwise pledged, obligated, or required by law to be placed in that fund or expended for any other purpose;

(2) Appropriations made by the legislature to the special fund;

(3) All interest earned from moneys in the special fund; and

(4) Any contributions, grants, endowments, donations, or gifts in cash or otherwise from any source, including the State, corporations, or other businesses, foundations, government, private organizations, individuals, and other interested parties."

(1) Adopt and administer a plan of operation in accordance with section 431P-7, and a manual of rules and rates to provide persons having an insurable interest in eligible property with insurance coverage provided by the fund;

(2) Authorize the provision of hurricane coverage by the fund for real property and tangible personal property located in or on real property and establish limits of liability for specific coverages within the range of authorized coverage;

(3) Adopt actuarially sound rates based on reasonable assumptions relative to expectations of hurricane frequency and severity for all coverage provided under policies or endorsements issued by the fund. Rates adopted shall be subject to approval by the commissioner pursuant to article 14 of chapter 431. Rates adopted shall provide for classification of risks and shall include past and prospective losses and expense experience in this State;

(4) Adopt procedures, guidelines, and surcharges applicable to policies of hurricane property insurance issued in connection with an underlying property policy issued by an unauthorized insurer;

(5) Adopt any form of insurance policy necessary for providing policies of hurricane property insurance by the fund, with the approval of the commissioner;

(6) Issue policies of hurricane property insurance and pay claims for coverage over the mandatory deductible or other deductible provided in the plan of operation or any manual of rules and rates adopted under the plan of operation;

(7) Require every licensed property and casualty insurer transacting direct property insurance business in this State to act as a servicing facility, and by contract with that insurer authorize the insurer to inspect eligible properties, service policies and policyholders of hurricane property insurance, provide claim services, and perform any other duties as authorized by the fund for applicants to the fund and those insured by it;

(9) Develop a program of incentives to encourage insurers to provide policies of hurricane property insurance in the event the commissioner authorizes the provision of comparable insurance pursuant to section 431P-10(b) which may include but are not limited to exemption of the insurer's gross direct written premium for property insurance from the assessment pursuant to paragraph (8)(A);

(10) Develop a credit based on the difference between premiums written in 1993 and the premiums written in 1992 by each property insurer against the assessment for gross direct written premiums written in 1993;

(11) Develop procedures regarding policies written by unauthorized insurers comparable to the assessments, surcharges, and other contributions made by insurers authorized to do business in this State;

(12) Accumulate reserves or funds[, including the investment income thereon,] to be used for paying expenses, making or repaying loans or other obligations of the fund, providing loss mitigation incentives, and paying valid claims for covered events insured by the fund[;]. The board shall accumulate sufficient moneys as determined by the board in reserve in the fund to settle claims from a covered event; provided that investment income derived from accumulated reserves or funds in the Hawaii hurricane relief fund shall be used for the following purposes:

(13) Collect and maintain statistical and other data as may be required by the commissioner;

(14) Exempt mortgage transactions from payments of the special mortgage recording fee and provide for maximum limits on or uniform reduction of the special mortgage recording fee, pursuant to rules adopted by the board;

(15) Impose fines for each incident of nonpayment of amounts due to the fund under this chapter; provided that the fines shall not exceed twenty-five per cent of the amount then due;

(16) Create loss mitigation incentives, including but not limited to premium credits, premium rebates, loans, or cash payments;

(17) Enter into claims financing transactions, including but not limited to reinsurance transactions, debt transactions, and other transactions incorporating elements of reinsurance, insurance, debt or equity;

(18) Establish business and corporate entities or organizations pursuant to the purposes of this chapter; and

(19) Perform any and all acts reasonably necessary to carry out the purposes of this chapter."

(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."