STAND. COM. REP. NO.  504-16

Honolulu, Hawaii

                , 2016

RE:   H.B. No. 370

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 370 entitled:

"A BILL FOR AN ACT RELATING TO HAWAII PROPERTY INSURANCE ASSOCIATION,"

begs leave to report as follows:

The purpose of this measure is to enhance insurance protections for properties falling in geographical areas eligible for and under coverage by member insurers of the Hawaii Property Insurance Association (HPIA).  Specifically, this measure:

     (1)  Prevents the nonrenewal of an existing policy in effect as of January 1, 2014, where the sole criterion for nonrenewal is a pending natural disaster; and

     (2)  Provides for continued coverage under an existing policy upon a transfer in ownership of the property.

The Hawaiian Shores Community Association and two individuals testified in support of this measure.  The National Association of Mutual Insurance Companies, Hawaii Insurers Council, and State Farm Mutual Automobile Insurance Company testified in opposition to this measure.  The Department of Commerce and Consumer Affairs provided comments.

Upon careful consideration, your Committee has amended this measure by deleting its contents and inserting the provisions of H.B. No. 2322, which also amends HPIA coverage requirements in the context of a looming or past natural disaster such as a lava flow.  As amended, this measure grants the Insurance Commissioner the discretion, subject to certain conditions, to lift an existing moratorium on the issuance of policies for properties situated in a lava zone.

     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. 370, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 370, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ANGUS L.K. McKELVEY, Chair