Hawaii Senate Bill SB142

Hawaii 2026 Regular Session

• Introduced: 1/15/25
• Refer: 1/17/25
• Report Pass: 2/14/25
• Refer: 2/14/25
• Report Pass: 2/28/25
• Engrossed: 3/4/25
• Refer: 3/6/25

Caption

RELATING TO INSURANCE.

Summary

SB142 amends Hawaii’s insurance code to create a new rule for homeowners insurance claims involving mortgaged property. If a policy already allows claim proceeds to be paid by check, the insured may give written authorization for the insurer to send those proceeds electronically to the mortgagee, with the payment made payable only to the mortgagee. The bill also requires the mortgagee, once it receives the electronically delivered proceeds, to pass the claim funds on to the insured in accordance with the mortgage agreement and the insurance policy. The bill defines key terms such as “electronic delivery,” “check,” and “mortgage agreement” to clarify how the process works and to tie the new procedure to existing insurance and mortgage documents. It is a narrow procedural change focused on modernizing the method of transmitting insurance claim proceeds rather than changing who is entitled to the money under the policy or mortgage contract. The act is set to take effect on July 1, 2050.

Impact

SB142 would add a new section to chapter 431, Hawaii Revised Statutes, within the homeowners insurance provisions, creating an express statutory option for electronic remittance of claim proceeds to a mortgagee when the insured authorizes it in writing. It would affect insurers, insured homeowners, and mortgage lenders/servicers by permitting a more electronic claims-payment workflow for mortgaged properties and by imposing a statutory duty on mortgagees to forward proceeds to the insured consistent with the mortgage agreement and policy terms. The bill does not appear to alter substantive coverage obligations or claim valuation rules, but it would provide legal authorization and structure for electronic payment handling in this specific context.

Sentiment

The available voting history suggests broad support for the bill. It passed the Senate Commerce and Consumer Protection Committee unanimously and later passed the Senate Judiciary Committee unanimously, both with amendments. No committee transcript objections are provided, and the bill’s progression indicates a generally favorable view of the measure as a practical insurance administration update.

Contention

The bill appears to have little overt controversy in the available record, but any potential points of concern would likely center on implementation details: whether insurers, mortgagees, and servicers can securely handle electronic delivery; how written authorization is obtained and documented; and whether the new process could create disputes over timing or forwarding of funds. Because the bill requires mortgagees to deliver proceeds to the insured in accordance with the mortgage agreement and policy, lenders or servicers could be attentive to compliance burdens, while consumer advocates may focus on ensuring that electronic transfer does not delay access to claim funds. The amendments adopted in committee suggest some refinement of the language, but no specific opposition is documented.