Hawaii Senate Bill SR43

Hawaii 2023 Regular Session

• Introduced: 3/7/23
• Refer: 3/10/23

Caption

Requesting That The Insurance Division Of The Department Of Commerce And Consumer Affairs Conduct A Study Analyzing Whether Implementation In This State Of Laws Similar To Massachusetts' Captive Insurance Laws Would Address This State's Residential Condominium Property Insurance Needs.

Impact

The proposed study aims to explore alternative insurance solutions that could alleviate financial burdens placed on condominium owners and associations in Hawaii. By examining Massachusetts' model, the resolution suggests that a captive insurance framework could provide a more tailored approach suited to the unique needs of Hawaii's residential properties. The potential adoption of such a model could lead to more competitive pricing and availability of insurance options for homeowners, a necessity given the recent market trends of skyrocketing costs.

Summary

Senate Resolution 43 requests that the Insurance Division of the Department of Commerce and Consumer Affairs conduct a study to assess the feasibility of implementing laws modeled after Massachusetts' captive insurance system in Hawaii. This comes in response to significant increases in residential condominium property insurance rates across the state since 2021, which have been partly attributed to new local ordinances requiring the installation of automatic fire sprinkler systems in certain condominium buildings. These ordinances have led to a sharp rise in insurance costs, affecting associations of apartment owners even if properties have not been found to require sprinkler installation.

Contention

While proponents of the study argue for the need to explore innovative insurance solutions, there may be concerns about the implications of adopting a captive insurance system. Critics could point to the regulatory challenges and potential limitations inherent in captive insurance arrangements compared to traditional insurance markets. Additionally, the effectiveness of such a system in addressing diverse property insurance needs across the state will likely be debated during the study's analysis and in subsequent legislative discussions.