Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1111 entitled:

begs leave to report as follows:

The purpose of this bill is to establish a catastrophic relief fund for the residents of Hawaii, which will provide reinsurance for the risks of catastrophic events and mitigate the impact of a catastrophic or emergency condition in Hawaii. Specifically, this bill will:

(1) Repeal the Hawaii Hurricane Relief Fund (HHRF); and

Your Committee received testimony in support of this measure from the Mayor of the County of Hawaii. Testimony supporting the intent of this bill was received from the state Department of Defense and a concerned citizen. Testimony in opposition to this measure was received from the Hawaii Independent Insurance Agents Association, Hawaii Insurers Council, Hawaii Association of Realtors, and Department of Commerce and Consumer Affairs. Comments on this measure were received from State Farm Insurance Companies and a professor of environmental studies.

Your Committee finds that, while a state-funded HCRF may be a reasonable and prudent strategy for offsetting the insurance industry's ability to finance risks of natural disasters, a more comprehensive review should be conducted to measure the bill's impact on the State's eligibility to receive federal funding for future disasters. Furthermore, your Committee has reservations regarding the transferring of monies specifically designated for hurricane relief into a newly created fund designated for all natural disasters.

Nonetheless, your Committee feels that discussion on the merits of this bill should continue and has amended this bill by providing an effective date of July 1, 2099, in the interest of facilitating further discussion.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1111, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1111, H.D. 1, and be referred to the Committee on Finance.