HB253 would create a new exception in Hawaii insurance law for condominium master insurance and condominium master hurricane insurance policies. If a condominium association has been covered for at least the prior three years by a surplus lines insurer, an admitted insurer could offer comparable coverage at no more than 50% of the amount charged by the surplus lines insurer. The discounted rate could be used for up to six years, and the insurer could condition the offer on the association contributing to replacement reserves or completing specified maintenance or repairs.
The bill is aimed at giving condominium associations an alternative to higher-cost surplus lines coverage by encouraging admitted insurers to compete for that business. It defines “condominium association” by reference to existing law in chapter 514B and would be added to chapter 431, the state’s insurance code. The bill’s stated effective date is July 1, 3000, which appears to function as a placeholder date rather than a practical implementation date.
Impact
HB253 would amend chapter 431, Hawaii Revised Statutes, by adding a new insurance provision specifically for condominium master and hurricane master policies. It would affect admitted insurers, surplus lines insurers, and condominium associations by authorizing a temporary discounted pricing mechanism tied to prior surplus-lines coverage and by allowing underwriting conditions related to reserves, maintenance, and repairs. The measure would not broadly rewrite insurance regulation, but it would create a targeted market incentive and new statutory authority for condominium insurance pricing and conditions.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the overall sentiment appears neutral to supportive in purpose, with the bill framed as a consumer-cost relief measure for condominium associations. The report title and description emphasize lower rates and expanded access to admitted insurers, suggesting the bill is intended to address high insurance costs rather than impose new burdens. No formal opposition or support is documented in the provided materials.
Contention
The main potential point of contention is the bill’s pricing mandate, which would require admitted insurers to offer coverage at no more than half of the surplus lines premium for qualifying associations. Insurers may view that as too restrictive or not actuarially aligned, especially given the ability to impose reserve deposits or maintenance requirements. Condominium associations may support the lower rates but could object to the conditions attached to the discount, while surplus lines insurers could be affected indirectly by competition from admitted carriers. The placeholder effective date of July 1, 3000 may also raise drafting or implementation questions.