HB1341 creates a new Hawaii insurance premium tax credit aimed at encouraging insurers to provide full property coverage for condominium owners and condominium associations. The bill defines qualifying coverage broadly to include 100% of insurable value and specific perils such as windstorm, hurricane, hail, flood, fire, and localized perils. An insurer that writes qualifying condominium policies may claim a nonrefundable credit equal to 20% of the insurance premium tax otherwise due, while insurers incorporated in Hawaii may claim a larger 30% credit on premiums written by those local insurers.
The bill is framed as a response to aging condominium buildings, rising hurricane insurance costs, and the resulting difficulty condominium owners face in buying, selling, or financing units. It sets a statewide annual cap of $5 million in total credits, limits the credit to one claim per structure per taxable year, and applies beginning with taxable years after December 31, 2025. The insurance commissioner would administer the program, issue tax credit certificates, require documentation, adopt rules, and monitor claims.
Impact
HB1341 would amend Chapter 431, Hawaii Revised Statutes, by adding a new tax credit provision for property and casualty insurers that provide full condominium coverage. It would reduce insurance premium tax liability for eligible insurers, with a higher incentive for insurers incorporated in Hawaii, and would require administrative procedures for certification, filing, and oversight by the insurance commissioner. The measure would not directly regulate condominium associations or owners, but it is intended to influence the insurance market so that more condominium properties can obtain full coverage needed for mortgage financing and real estate transactions.
Sentiment
The bill’s stated purpose and framing suggest generally supportive sentiment toward addressing Hawaii’s condominium insurance and financing problems. The measure is presented as a housing and market-stability tool designed to help condominium owners, associations, and prospective buyers by making full coverage more available and affordable. No committee transcripts or recorded votes were provided, so there is no documented opposition or formal support in the available record beyond the bill’s explanatory findings.
Contention
The main policy tension is fiscal and market-based: the bill uses tax credits to subsidize insurers, which may be viewed as necessary to expand coverage but also reduces state tax revenue and creates a capped incentive pool. Another likely point of contention is whether the credit is sufficient to change insurer behavior in a high-risk hurricane market, and whether the preference for Hawaii-incorporated insurers is appropriate. The bill also implicitly raises questions about fairness among property owners and insurers, since the benefit is targeted specifically to condominium coverage rather than the broader property insurance market.