THE SENATE S.R. NO. 41 THIRTY-THIRD LEGISLATURE, 2025 S.D. 1 STATE OF HAWAII SENATE RESOLUTION Urging the Congress of the United States to enact a national reinsurance program to address the multi-state insurance crisis resulting from catastrophic natural disasters.
THE SENATE S.R. NO. 41
THIRTY-THIRD LEGISLATURE, 2025 S.D. 1
STATE OF HAWAII
THE SENATE
S.R. NO.
41
THIRTY-THIRD LEGISLATURE, 2025
S.D. 1
STATE OF HAWAII
SENATE RESOLUTION
Urging the Congress of the United States to enact a national reinsurance program to address the multi-state insurance crisis resulting from catastrophic natural disasters.
WHEREAS, the frequency and severity of catastrophic natural disasters, including hurricanes, wildfires, floods, and earthquakes, have increased due to climate change, causing billions of dollars in insured losses and creating instability in state insurance markets across the United States; and WHEREAS, major private insurers and reinsurers have begun withdrawing from high-risk areas, leading to a significant reduction in available coverage, and skyrocketing premiums; and WHEREAS, the withdrawal of private insurers in high-risk areas has resulted in an insurance crisis affecting homeowners, businesses, and agricultural producers, many of whom struggle to secure adequate coverage at reasonable rates; and WHEREAS, some states have attempted to resolve the insurance crisis by establishing not-for-profit insurers of last resort, such as California's FAIR Plan, Florida's Citizens Property Insurance Corporation, and the State's Hawaii Property Insurance Association consisting of persons authorized to transact property and casualty insurance in the State; and WHEREAS, unfortunately, these state-established insurers of last resort now often bear a disproportionate share of catastrophic risk in the market and face solvency issues as the licensed private insurers that are required to help fund them flee their respective states; and WHEREAS, legislative measures recently introduced in the United States Congress, including the Disaster Resiliency and Coverage Act of 2025, H.R. 1105, 119th Cong. (2025), and the Emergency Conservation Program Improvement Act of 2025, S. 629, 119th Cong. (2025), aim to enhance natural disaster resilience and accelerate recovery efforts, but do not address the fundamental insurance crisis that requires a long‑term reinsurance solution; and WHEREAS, the National Disaster Risk Reinsurance Program Act of 2023, H.R. 3525, 118th Cong. (2023), sought to establish a federal reinsurance program to provide stability in disaster‑prone areas by offering an additional layer of risk protection for insurers, but was not enacted; and WHEREAS, a similar federal reinsurance program for natural disasters could increase insurance availability, reduce premium volatility, and protect state-instituted insurance funds by covering only the most extreme catastrophic losses; and WHEREAS, a national reinsurance program could be structured to operate at defined loss thresholds, ensuring that private insurers and reinsurers continue to bear primary responsibility while the federal government intervenes only in cases of severe financial strain; and WHEREAS, the national reinsurance program could also operate on an opt-in basis for states, allowing state insurance regulators the flexibility to decide whether participation would benefit their respective markets; and WHEREAS, establishing a national reinsurance program to stabilize insurance markets nationwide will promote economic security, homeownership sustainability, and disaster preparedness while reducing the need for post-disaster federal aid; now, therefore, BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, that the Congress of the United States is urged to establish a National Reinsurance Program to address the multi-state insurance crisis resulting from catastrophic natural disasters by serving as a financial backstop for catastrophic natural disasters and ensuring insurance market stability and consumer affordability across multiple states; and BE IT FURTHER RESOLVED that the National Reinsurance Program is requested to be structured as a public-private partnership that includes: (1) Actuarial soundness; (2) State opt-in mechanisms; and (3) Clearly defined loss thresholds to protect taxpayers while ensuring continued private market participation; and BE IT FURTHER RESOLVED that the Congress of the United States is urged to provide mitigation incentives, including premium discounts, tax credits, and grant programs, to encourage homeowners and businesses to invest in disaster-resistant infrastructure, thereby reducing insurance costs and federal disaster relief expenditures in the long-term; and BE IT FURTHER RESOLVED that the President of the United States and the Secretary of the Treasury, in consultation with the Federal Insurance Office and the Federal Emergency Management Agency, are encouraged to develop interim measures to stabilize insurance markets, including expanding access to federal risk modeling and offering financial incentives for insurers reentering high-risk markets; and BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, Speaker of the United States House of Representatives, President Pro Tempore of the United States Senate, Secretary of the Treasury, Administrator of the Federal Emergency Management Agency, Director of the Federal Insurance Office, and Governor and Insurance Commissioner of each state. Report Title: Congress of the United States; POTUS; FIO; FEMA; HPIA; Natural Disasters; Insurance; National Reinsurance Program
WHEREAS, the frequency and severity of catastrophic natural disasters, including hurricanes, wildfires, floods, and earthquakes, have increased due to climate change, causing billions of dollars in insured losses and creating instability in state insurance markets across the United States; and
WHEREAS, major private insurers and reinsurers have begun withdrawing from high-risk areas, leading to a significant reduction in available coverage, and skyrocketing premiums; and
WHEREAS, the withdrawal of private insurers in high-risk areas has resulted in an insurance crisis affecting homeowners, businesses, and agricultural producers, many of whom struggle to secure adequate coverage at reasonable rates; and
WHEREAS, some states have attempted to resolve the insurance crisis by establishing not-for-profit insurers of last resort, such as California's FAIR Plan, Florida's Citizens Property Insurance Corporation, and the State's Hawaii Property Insurance Association consisting of persons authorized to transact property and casualty insurance in the State; and
WHEREAS, unfortunately, these state-established insurers of last resort now often bear a disproportionate share of catastrophic risk in the market and face solvency issues as the licensed private insurers that are required to help fund them flee their respective states; and
WHEREAS, legislative measures recently introduced in the United States Congress, including the Disaster Resiliency and Coverage Act of 2025, H.R. 1105, 119th Cong. (2025), and the Emergency Conservation Program Improvement Act of 2025, S. 629, 119th Cong. (2025), aim to enhance natural disaster resilience and accelerate recovery efforts, but do not address the fundamental insurance crisis that requires a long‑term reinsurance solution; and
WHEREAS, the National Disaster Risk Reinsurance Program Act of 2023, H.R. 3525, 118th Cong. (2023), sought to establish a federal reinsurance program to provide stability in disaster‑prone areas by offering an additional layer of risk protection for insurers, but was not enacted; and
WHEREAS, a similar federal reinsurance program for natural disasters could increase insurance availability, reduce premium volatility, and protect state-instituted insurance funds by covering only the most extreme catastrophic losses; and
WHEREAS, a national reinsurance program could be structured to operate at defined loss thresholds, ensuring that private insurers and reinsurers continue to bear primary responsibility while the federal government intervenes only in cases of severe financial strain; and
WHEREAS, the national reinsurance program could also operate on an opt-in basis for states, allowing state insurance regulators the flexibility to decide whether participation would benefit their respective markets; and
WHEREAS, establishing a national reinsurance program to stabilize insurance markets nationwide will promote economic security, homeownership sustainability, and disaster preparedness while reducing the need for post-disaster federal aid; now, therefore,
BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, that the Congress of the United States is urged to establish a National Reinsurance Program to address the multi-state insurance crisis resulting from catastrophic natural disasters by serving as a financial backstop for catastrophic natural disasters and ensuring insurance market stability and consumer affordability across multiple states; and
BE IT FURTHER RESOLVED that the National Reinsurance Program is requested to be structured as a public-private partnership that includes:
(1) Actuarial soundness;
(2) State opt-in mechanisms; and
(3) Clearly defined loss thresholds to protect taxpayers while ensuring continued private market participation; and
BE IT FURTHER RESOLVED that the Congress of the United States is urged to provide mitigation incentives, including premium discounts, tax credits, and grant programs, to encourage homeowners and businesses to invest in disaster-resistant infrastructure, thereby reducing insurance costs and federal disaster relief expenditures in the long-term; and
BE IT FURTHER RESOLVED that the President of the United States and the Secretary of the Treasury, in consultation with the Federal Insurance Office and the Federal Emergency Management Agency, are encouraged to develop interim measures to stabilize insurance markets, including expanding access to federal risk modeling and offering financial incentives for insurers reentering high-risk markets; and
BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, Speaker of the United States House of Representatives, President Pro Tempore of the United States Senate, Secretary of the Treasury, Administrator of the Federal Emergency Management Agency, Director of the Federal Insurance Office, and Governor and Insurance Commissioner of each state.
Report Title:
Congress of the United States; POTUS; FIO; FEMA; HPIA; Natural Disasters; Insurance; National Reinsurance Program