Relating To State Self-insurance Against Property And Casualty Risks.
If enacted, this bill will modify the Hawaii Revised Statutes by adding provisions for a special fund that will be managed by the comptroller and focused on self-insuring state property and casualty risks. This redesign of insurance practices is expected to save the state money on insurance premiums and potentially enhance the efficiency of risk management operations. The special fund will allow moneys collected from various state agencies to be allocated specifically for claims related to property damage and loss caused by unforeseen events, thus ensuring direct support to state property recovery processes.
House Bill 565, also known as the State Self-Insurance Against Property and Casualty Risks Act, seeks to establish a special fund to facilitate the state’s ability to self-insure against various property and casualty risks. The act aims to create a financial mechanism that can reduce reliance on third-party insurance, allowing the state to mitigate premium costs that have been rising significantly. By introducing a state self-insurance program, the bill intends to provide better management of the state's risks, especially with increasing environmental and operational challenges.
While supporters of HB 565 argue that the shift towards self-insurance can lead to significant cost reductions and increased control over risk management, opponents may raise concerns about the potential inadequacies of state-managed insurance compared to private sector options. The bill does not fully outline how premiums will be managed across different agencies or address the potential need for capital and reserves that may exceed initial funding. Additionally, the long-term sustainability of the self-insurance initiative may require careful oversight to ensure financial stability and act in accordance with actuarial principles.