HB1057 is a broad property-insurance stabilization measure aimed primarily at condominium associations, but it also creates authority to address future market failures affecting other residential property types. The bill expands the Hawaii Property Insurance Association (HPIA) and the Hawaii Hurricane Relief Fund (HHRF) so they can provide coverage where the standard market is unwilling or unable to do so, especially for condominium buildings that are in insurable condition but cannot obtain adequate master property or hurricane coverage. It adds definitions for “condominium” and “high-rise condominium,” authorizes short-term coverage for high-rise condominiums for up to 60 months, and requires the insurance commissioner to study long-term solutions, including possible mutual or captive insurance models and mechanisms to keep condominiums maintained and insurable.
The bill also revises the funding structure for these state insurance entities. It repeals the existing special mortgage recording fee and replaces it with a temporary flat recording fee that can be activated, reduced, or terminated by the HHRF board, with proceeds deposited into the hurricane reserve trust fund. In addition, it authorizes renewed insurer assessments for both the HPIA and HHRF, allows recoupment through policy surcharges, and appropriates $50 million as a loan to the HPIA for startup, solvency, and reinsurance costs, plus $100,000 for the commissioner’s study. The bill also updates trust-fund, assessment, and recoupment provisions, and makes conforming changes to bureau of conveyances fee statutes.
In terms of state law impact, HB1057 would significantly amend chapters 431:21 and 431P of the Hawaii Revised Statutes by expanding the powers, coverage eligibility, underwriting rules, and financing tools of the HPIA and HHRF. It would allow the HPIA to provide additional property coverages statewide if the commissioner and association determine a casualty/property insurance market failure exists, and it would broaden the HHRF’s authority to assess insurers, collect surcharges, and support hurricane coverage financing. The bill also changes how insurance-related costs are spread across the market by shifting from a mortgage-based fee to a per-document recording fee, while exempting agricultural land documents from that fee.
The overall sentiment reflected in the bill text is strongly supportive of intervention. The findings section describes a severe and worsening insurance-market problem, with rising premiums, shrinking carrier participation, underinsured condominiums, and knock-on effects for mortgage lending and housing affordability. The bill is framed as a stop-gap public-purpose response intended to keep insurers in the market, preserve access to financing, and protect homeowners and condominium owners from losing insurability after disasters such as the Lahaina wildfire and prior hurricane risk concerns.
The main points of contention embedded in the bill are financial burden and market discipline. The bill explicitly acknowledges that the former special mortgage recording fee was regressive, and it replaces it with a flat temporary fee to spread costs more evenly. It also imposes new obligations on condominium associations, including inspections, disclosure of governing documents, and possible denial of coverage for buildings with maintenance issues that materially affect insurability. Another likely tension is the use of public funds and insurer assessments to backstop a market that the bill itself says is not meant to be a long-term solution, which may raise concerns about cost, fairness, and whether the measure could affect premiums for policyholders statewide.
HB1057 would amend Hawaii’s insurance code to expand the Hawaii Property Insurance Association and Hawaii Hurricane Relief Fund’s authority to insure certain condominium and other properties when the private market fails, while also creating new funding and recoupment mechanisms. It would add new statutory definitions, authorize temporary condominium coverage, permit statewide coverage for other property classes during market failure, repeal the special mortgage recording fee, create a temporary recording fee, and establish new insurer assessment and surcharge provisions. The bill also appropriates $50 million for HPIA capitalization and $100,000 for a market study, and it would require conforming changes to bureau of conveyances fee statutes and trust-fund provisions.
The bill is presented in a strongly problem-solving and interventionist tone, with the legislature describing a serious insurance availability and affordability crisis that threatens condominium ownership, mortgage lending, and housing stability. The findings emphasize urgency, market instability, and the need for a temporary state backstop while longer-term reforms are studied. No committee votes or transcript record were provided, so there is no separate recorded floor or committee sentiment beyond the bill’s own supportive framing.
The most notable tensions are between stabilizing the insurance market and avoiding new costs or burdens on property owners, insurers, and buyers. The bill explicitly recognizes criticism that the prior mortgage recording fee was regressive, and it replaces it with a flat temporary fee that still spreads costs across recorded documents. It also gives the HPIA and HHRF authority to impose assessments and surcharges that insurers may pass through to policyholders, which could draw concern about higher premiums. Condominium associations may also object to the bill’s inspection, disclosure, and maintenance-based eligibility requirements, especially because coverage can be denied for buildings with unresolved maintenance issues that materially affect insurability.