SB706 amends Hawaii law governing the Hawaii Property Insurance Association (HPIA) by requiring its plan of operation to include coverage for commercial property risks that have been denied by at least two private insurers. Under current law, the association already serves as a residual market mechanism for certain property insurance needs; this bill specifically expands and clarifies that commercial properties can be included in that safety-net coverage, subject to the existing denial requirement. The bill also preserves the commissioner’s approval authority over any additional coverages added by the association.
The measure is narrowly focused on section 431:21-105 of the Hawaii Revised Statutes, which sets out the HPIA’s powers and duties. It does not create a new insurance program from scratch, but instead modifies the association’s plan-of-operation authority so that commercial risks are expressly covered in the same framework used for other property insurance needs. The bill is set to take effect on July 1, 2050, and the description indicates it is a Senate draft version (SD1).
Impact
If enacted, SB706 would change the statutory duties of the Hawaii Property Insurance Association by making commercial property coverage an explicit part of its required plan of operation for eligible applicants who have been denied by at least two insurers. This would affect the state’s residual property insurance market, commercial property owners seeking coverage in hard-to-insure areas, member insurers that support the association, and the insurance commissioner, who retains oversight and approval authority. The bill amends Hawaii Revised Statutes section 431:21-105 and does not otherwise alter the broader insurance code.
Sentiment
The available voting history suggests generally favorable sentiment toward the bill. The Senate Commerce and Consumer Protection Committee passed the measure with amendments by a 3-0 vote, indicating unanimous support among those voting at that stage. No committee transcript excerpts were provided, so there is no recorded debate to indicate opposition or concerns beyond the amendment process.
Contention
The main policy issue is the expansion of residual-market coverage to commercial properties, which may raise questions about insurer exposure, the scope of the Hawaii Property Insurance Association’s obligations, and how broadly commercial risks should be supported when private coverage is unavailable. The bill’s requirement that a commercial applicant be denied by at least two insurers appears designed to limit access to the association and may reflect a compromise between market access and limiting the association’s role. The commissioner’s approval authority over added coverages remains an important control point and could be a source of administrative or industry concern.