STAND. COM. REP. NO. 891

Honolulu, Hawaii

RE: S.B. No. 802

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committees on Ways and Means and Judiciary, to which was referred S.B. No. 802, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

beg leave to report as follows:

The purpose and intent of this measure is to require more transparency in property insurance rate pricing.

Specifically, this measure:

(1) Requires insurers to provide advance written notice to policyholders and the Insurance Commissioner, with reasonable explanations and primary factors, of any policy cancellation, non-renewal, or proposed premium increase, if, upon renewal, premiums are scheduled to increase more than ten percent;

(2) Requires insurers that provide property insurance to file rate schedules and underlying criteria with the Insurance Commissioner;

(3) Requires the Insurance Commissioner to:

(A) Conduct periodic reviews of insurance rates and submit annual reports to the Legislature; and

(B) Establish a Public Reporting and Dispute Resolution Program to handle complaints and appeals regarding premium increases; and

(4) Requires insurers to provide premium discounts or credits to policyholders that implement disaster risk mitigation measures.

Your Committees received written comments in support of this measure from two individuals.

Your Committees received written comments in opposition to this measure from the American Property Casualty Insurance Association and State Farm.

Your Committees received written comments on this measure from the Attorney General and Department of Commerce of Consumer Affairs, Insurance Division.

Your Committees find that insurers are able to increase premiums with little or no warning and without explanation. Your Committees further find that this measure will increase transparency in property insurance rate pricing by requiring insurers to provide advanced notice of, and justifications for, premium rate increases that exceed ten percent.

Your Committees have amended this measure by:

(1) Adding a savings clause to clarify that the measure does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before the measure's effective date; and

(2) Adding language to clarify that the measure shall not be applied to impair any contract existing as of the measure's effective date in a manner that violates the Hawaii State Constitution or Article I, Section 10, of the United States Constitution.

As affirmed by the records of votes of the members of your Committees on Ways and Means and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 802, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 802, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Ways and Means and Judiciary,

________________________________ KARL RHOADS, Chair

________________________________ DONOVAN M. DELA CRUZ, Chair