REPORT TITLE:
HHRF


DESCRIPTION:
Makes amendments to make possible a post-huricane issuance of
revenue bonds to pay claims made under HHRF policies.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2487
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO FINANCING THE HAWAII HURRICANE RELIEF FUND.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 431P-5.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "�[[]431P-5.5[]]  Accumulation of $500,000,000 in funds and
 
 4 commitments.(a)  Upon written confirmation from the insurance
 
 5 commissioner that the director of finance has secured
 
 6 $500,000,000, in the aggregate, in the form of:
 
 7      (1)  Commitments from either the federal government or an
 
 8           agency of the federal government or a financial
 
 9           institution;
 
10      (2)  Revenue bonds[;] other than those issued or to be
 
11           issued in response to the occurrence of a covered
 
12           event; or
 
13      (3)  A combination of the commitments or bonds;
 
14 the Hawaii hurricane relief fund shall:
 
15      (1)  Control or freeze rates; and
 
16      (2)  [Begin] Continue accumulating premiums from policies of
 
17           hurricane property insurance[,] and the special
 
18           mortgage recording fee, [the 3.75 per cent annual
 
19           assessment on insurance companies' property and
 
20           casualty premiums, and the interest thereon,] net of
 

 
Page 2                                                     2487
                                     H.B. NO.           H.D. 1
                                                        
                                                        


 1           any [required] reinsurance payments, operating expenses
 
 2           and funds necessary for the development of a
 
 3           comprehensive loss reduction plan.
 
 4      (b)  When the balance of the net moneys accumulated totals
 
 5 $500,000,000, the Hawaii hurricane relief fund [shall] may notify
 
 6 the insurance commissioner of that fact.  The insurance
 
 7 commissioner, in turn, [shall] may order, following the receipt
 
 8 of the notice, a reduction in the rates for policies of hurricane
 
 9 property insurance.
 
10      (c)  In the event of a loss from a covered event, the net
 
11 moneys accumulated shall be used to [reduce the commitments and
 
12 bonds described under subsection (a).  The commitments, plus
 
13 bonds, plus the net moneys accumulated shall be used to settle
 
14 claims in the event of a covered event in an amount not exceeding
 
15 $500,000,000 in the aggregate, per covered event.] settle claims
 
16 and pay current and ongoing expenses of the Hawaii hurricane
 
17 relief fund.  The net accumulated moneys, commitments, and bonds
 
18 described in subsection (a)(2) shall be used only in the event
 
19 losses from a covered event exceed the assessment pursuant to
 
20 section 431P-5(b)(8)(B).
 
21      (d)  In the event the balance of the net accumulated moneys
 
22 falls below $400,000,000, the Hawaii hurricane relief fund shall
 
23 establish rates, subject to the approval of the insurance
 

 
Page 3                                                     2487
                                     H.B. NO.           H.D. 1
                                                        
                                                        


 1 commissioner, necessary to replenish the account balance to
 
 2 $500,000,000[.] as promptly as reasonably practicable.  The
 
 3 director of finance shall seek to arrange [for] additional
 
 4 commitments whenever the account balance falls below
 
 5 $400,000,000.
 
 6      (e)  The Hawaii hurricane relief fund shall be exempt from
 
 7 paying all taxes and fees levied by the State on other insurers."
 
 8      SECTION 2.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored. 
 
10      SECTION 3.  This Act shall take effect upon its approvaL.