Report Title:
Hurricane Mutual Insurance Company; Mitigation Grants
Description:
Authorizes HEMIC to establish a subsidiary mutual insurance company that provides hurricane insurance. Repeals the Hawaii Hurricane Relief Fund and transfers fund moneys to HEMIC. Requires the Insurance Commissioner to administer a hazard mitigation grant program.
THE SENATE |
S.B. NO. |
2463 |
TWENTY-FIRST LEGISLATURE, 2002 |
||
STATE OF HAWAII |
||
|
A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 431:14A, Hawaii Revised Statutes, is amended by designating sections 431:14A-101 to 431:14A-119 as part I, and by adding a new part to read as follows:
"PART II. HURRICANE MUTUAL INSURANCE COMPANY
§431:14A-A Definitions. As used in this part:
"Administrator" means the president and chief executive officer of the hurricane mutual insurance company.
"Board" means the board of directors of the hurricane mutual insurance company.
"Company" means the hurricane mutual insurance company established as a subsidiary of the Hawaii employers' mutual insurance company pursuant to section 431:14A-103.
"Council" means the Hawaii employers' mutual insurance company oversight council.
"Investment manager" means any fiduciary, who has been designated by the board to manage, acquire, or dispose of the company's assets, a bank as defined by law, or an insurance company qualified to perform services under the laws of more than one state.
"Qualified actuary" means a member of the American Academy of Actuaries who is either a fellow of the Casualty Actuarial Society or an Associate of the Casualty Actuarial Society who has five or more years of experience.
§431:14A-B Hurricane mutual insurance company; board. (a) The hurricane mutual insurance company established pursuant to section 431:14A-103 to provide hurricane insurance coverage to Hawaii, shall be governed by a board of directors.
(b) The board of directors of the company shall be responsible for the organization, management, policies, and activities of the company. The board shall consist of nine voting members and one nonvoting member. The voting members shall consist of the following:
(1) Eight directors who shall be owners, officers, or employees of policyholders of the company and shall represent property owners from various counties of the State; and
(2) One director who shall be a public, at-large member elected by the board of directors.
The administrator shall be the nonvoting member of the board.
(c) The initial eight directors described in subsection (b)(1) shall be appointed by the governor within sixty days of June 30, 2002, and shall serve for terms of one year each. The governor shall ensure adequate representation from the major types of property owners from across the State.
The public, at-large member initially elected by the board shall serve for a term of one year.
The initial board of directors shall determine the staggering and length of future directors' terms; provided that no term shall exceed three years. Upon the expiration of the terms of the initial directors, the company's policyholders shall elect the directors. Each director shall serve for terms as specified by the board unless sooner removed for cause pursuant to rules adopted by the board. Each director shall hold office until a successor is elected as provided in this section. No person shall serve more than two full terms as director. Any other law to the contrary notwithstanding, the election and composition of the board of directors as provided in this section shall be deemed adequate to qualify the company as a mutual insurer under chapter 431.
(d) A vacancy on the board shall be filled by appointment of the governor or insurance commissioner in the case of appointed directors, or by election by the company's policyholders or the board of directors in the case of positions formerly occupied by a director elected by the company division's policyholders or by the board of directors, respectively. The person appointed to fill a vacancy shall serve for the remainder of the term of the person's predecessor.
(e) Within one year after appointment, each director shall be a member or an employee of a policyholder of the company and shall continue in such status during the director's term of office. Any director representing a member that fails to maintain hurricane insurance from the company shall be disqualified from serving on the board.
(f) Each director shall receive necessary traveling and board expenses incurred in the performance of duty as director and a fee commensurate with the duties expected of actual attendance at board meetings.
(g) No person shall be a director who has a direct and substantial interest in a competing insurer as:
(1) A stockholder (excluding the holding of less than one per cent of the outstanding shares in a publicly traded insurer);
(2) An employee;
(3) An attorney; or
(4) A contracting party (excluding an independent contractor or business owner who does less than twenty-five per cent of its total annual volume of business per year with competing insurers).
§431:14A-C Powers; generally. Except as otherwise limited by this chapter, the company may:
(1) Sue, be sued, complain, and defend, in its corporate name;
(2) Have a corporate seal, which may be altered at pleasure, and use the seal by causing it, or a facsimile thereof, to be impressed, affixed, or in any other manner reproduced;
(3) Purchase, take, receive, lease, take by gift, devise, or bequest, or otherwise acquire, own, hold, improve, use, and otherwise deal in and with real or personal property, or any interest therein, wherever situated;
(4) Sell, convey, mortgage, pledge, lease, exchange, transfer, and otherwise dispose of all and any part of its property and assets;
(5) Make contracts and incur liabilities, borrow money at such rates of interest as the board may determine, issue guaranty capital shares and surplus notes, require capital contributions, issue its notes, debenture bonds, and other obligations, secure any of its obligations by mortgage or pledge of all or any portion of its property or income, and secure financing by any board approved mechanism;
(6) Allocate fiduciary responsibilities among the directors and designate other persons to carry out fiduciary responsibilities;
(7) Collect, receive, hold, and disburse all money payable to or by the company;
(8) Deposit the company's money in banks or depositories selected by the board and withdraw the company's money from such banks or depositories; provided that the withdrawal shall be made or authorized only upon the signatures of at least two persons approved by the board;
(9) Pay money from the subsidiary company to effectuate the company's purpose and administration, including amounts for costs incurred to establish the company; and
(10) Exercise all powers necessary or convenient to effect the purposes of the company.
§431:14A-D Duties and responsibilities of board. (a) All corporate powers shall be exercised by or under the authority of the board, unless otherwise provided in this part or in the articles of incorporation.
(b) The board shall discharge its duties:
(1) In accordance with the company's purpose;
(2) With the care, skill, prudence, and diligence under the circumstances that a prudent director, acting in a like capacity and familiar with such matters would use in conducting a similar enterprise and purpose;
(3) By diversifying the company's investments to minimize the risk of losses, unless it is prudent not to do so;
(4) In accordance with governing legal documents;
(5) By having an annual audit of the company by an independent certified public accountant;
(6) By securing a fidelity bond for the administrator and in its discretion for other agents dealing with the company's assets at the company's expense;
(7) By purchasing liability insurance for errors and omissions for the board, each director, and any other fiduciary employed or contracted by the company to cover liability or losses caused by the act or omission of a fiduciary;
(8) By maintaining proper books of accounts and records of the company's administration;
(9) By carrying out the reporting and disclosure requirements required by law;
(10) By appointing a qualified actuary to develop and recommend a responsible schedule of premium rates with consideration of the company's investment income or refunds, or both, and to provide actuarial certification of the company's loss reserves; and
(11) By cooperating with and assisting the council in its duties and responsibilities.
(c) Except as otherwise provided by law, the board may:
(1) Transact hurricane insurance policies required or authorized by state law to the same extent as any other insurer;
(2) Provide the terms and conditions of an insurance policy;
(3) Provide that any written instrument be executed for the company by the administrator or the administrator's agent;
(4) Enter into agreements to reinsure all or part of the company's exposure to loss and to limit the risk to the company; and
(5) Employ persons to administer the company, including legal counsel, accountants, insurance consultants, administrators, qualified actuaries, investment managers, adjustors, other experts, and clerical employees and pay compensation and expenses in connection therewith.
§431:14A-E Administrator; appointment; duties. (a) The board shall hire an administrator, who shall serve at the pleasure of the board. The administrator may be the same person who serves as the administrator of the mutual insurance company established pursuant to part I of this article. The administrator shall be the president of the company and the chief executive officer, who shall be responsible for the day-to-day operations and management of the company.
(b) The administrator shall have a proven successful experience as an executive at the general management level in the insurance business. The administrator shall manage and conduct the business of the company according to the board's direction and policies. The administrator shall receive compensation authorized by the board.
(c) Before entering the duties of office, the administrator shall give a fidelity bond in an amount and with sureties approved by the board. The premium for the bond shall be paid by the company.
(d) The administrator shall be an ex officio, nonvoting member of the board.
§431:14A-F Financial management. (a) The board shall select a custodial trustee to collect, receive, hold, or disburse moneys payable to or by the company.
(b) The board shall invest the company's principal and income without distinction between principal and income and keep the company's assets invested in real or personal property or other securities. The board may retain cash temporarily awaiting investment or to meet contemplated payments without liability for interest thereon.
(c) The board shall manage the company's assets, except to the extent that the authority to manage the company's assets is delegated to other qualified investment managers. The board may appoint investment managers to manage, acquire, or dispose of any of the company's assets. An investment manager may be designated as an "investment agent". The investment manager shall acknowledge in writing that the investment manager is a fiduciary under the company.
(d) The board may:
(1) Sell the company's securities. No purchaser of the company's securities is bound to see to the application of the purchase money or inquire as to the validity of such sale;
(2) Vote on behalf of any stocks, bonds, or securities of any corporation or issuer held in the company or request any action to such corporation or issuer. The board may give general or special proxies or powers of attorney with or without powers of substitution;
(3) Participate in reorganizations, recapitalization, consolidations, mergers, and similar transactions for stocks, bonds, or other securities of any corporation that are held by the company, and accept and retain any property received thereunder for the subsidiary company;
(4) Exercise any subscription rights and conversion privileges for the company's stocks or securities;
(5) Compromise, compound, and settle any debt or obligation due to or from the company; reduce the amount of principal and interest, damages, and costs of collection in settling such debts;
(6) Cause securities held by it to be registered in its own name or in the name of a nominee without indicating that the securities are held in a fiduciary capacity and to hold any securities in bearer form. The company's records, however, shall show that such investments are part of the company;
(7) Delegate its investment powers to investment managers of the company to expedite the purchase and sale of securities. The purchase or sale of securities by these managers shall be in the name selected by the board. The authority of these managers to purchase or sell securities for the company shall be evidenced by written authority executed by the administrator. The board shall require these managers to keep it currently informed as to the nature and amount of the investments made for the company by them. The board may enter into appropriate agreements with these managers setting forth their investment powers and limitations. The board may terminate the services of these managers. These managers shall be subject to the board's instructions;
(8) Pay taxes or assessments that are assessed against the company;
(9) Require any applicant or policyholder to furnish the board with such information necessary for the company's administration; and
(10) Delegate its authority to the administrator or any authorized representative to maintain any legal proceedings necessary to protect the company or the directors or to secure payment due to the company. In connection with this delegation, the board or the administrator or their representative may compromise, settle, or release claims on behalf of or against the company or the board.
§431:14A-G Premium rates, determination. (a) The board shall establish the premium rates to be charged for insurance sold by the company. The company shall comply with the requirements set forth in article 14 of this chapter. Premium rates shall be set at levels sufficient, when invested, to carry all claims to maturity, to meet the reasonable expenses for administering the company, and to maintain a reasonable surplus.
(b) The board shall hire a qualified actuary to assist with the development of sound premium rates.
§431:14A-H Reserves, investment. (a) The board may invest or reinvest any surplus or reserves within the limitations established for insurance companies under chapter 431.
(b) Notwithstanding any law to the contrary, the company shall be excluded from the surplus requirements of domestic mutual insurers from July 1, 2002, through December 31, 2012.
§431:14A-I Financial statements and other reports. (a) The company shall submit to the commissioner an annual statement of financial condition audited by an independent certified accountant. The audit report shall contain an actuarial opinion prepared by a qualified actuary on the company's claims reserves and expenses. The financial statement shall be on a form prescribed by the commissioner and shall include actuarially appropriate reserves for:
(1) Known claims and associated expenses;
(2) Claims incurred but not reported and associated expenses;
(3) Unearned premiums; and
(4) Bad debts, reserves for which shall be shown as liabilities.
(b) The company shall compile and maintain statistical and actuarial data relating to the determination of premium rate levels and other data relating to property loss or damage from hurricanes, wind damage, and other natural catastrophes. The compiled information shall be submitted annually to the commissioner.
§431:14A-J Annual accounting; dividends. (a) The company shall conduct an annual accounting of its incurred loss experience and expenses.
(b) The board may declare and apportion reasonable dividends to policyholders, determined by an actuarial opinion prepared by a qualified actuary after evaluating the impact of the dividends on the solvency of the company. The dividends may be paid or credited to policyholders according to classifications of policies established by the board.
(c) No dividends shall be:
(1) Paid or credited in a manner that unfairly discriminates between policies within the same classification;
(2) Made contingent upon payment of any renewal premium on any policy; or
(3) Paid or credited in the first three years of operation of the subsidiary company.
§431:14A-K Audits. The administrator, or designated representative, shall have reasonable access to any policyholder's payroll and employment records during regular working hours to carry out audits of payroll reported, the number of employees on the payroll, and other information necessary for the administration of this part.
§431:14A-L Denial, cancellation, and termination. The company may deny coverage or renewal of an existing policy or may terminate an existing policy of a policyholder or applicant for:
(1) Nonpayment of an undisputed premium;
(2) Refusal to permit on-site hurricane loss prevention and mitigation examinations;
(3) Failure to comply with hurricane loss prevention and mitigation programs required by the company; or
(4) Failure to accurately disclose information concerning the applicant's or policyholder's ownership, change of ownership, and other information necessary for the board to determine premium rates.
§431:14A-M Wilful misrepresentation and fraud. The company shall develop and implement a program to identify and investigate fraudulent insurance acts.
§431:14A-N Separate records, accounts, liability; required. All records, accounts, and liabilities of the hurricane mutual insurance company established pursuant to this part shall be kept separate from the records, accounts, and liabilities of the Hawaii employers' mutual insurance company established pursuant to part I of this article."
SECTION 2. Section 431:14A-101, Hawaii Revised Statutes, is amended to read as follows:
§[[]§431:14A-101[]] Purpose. The Hawaii employers' mutual insurance company is established to [provide]:
(1) Provide workers' compensation coverage to employers of the State at the highest level of service with the lowest possible cost, consistent with reasonable and applicable actuarial standards and the sound financial integrity of the company. The purposes of the company are to provide the highest standard of workplace safety and loss prevention, to encourage employer involvement, and to be responsive to each policyholder's experience, practice, and operating effectiveness[.]; and
(2) Provide hurricane insurance coverage to property owners in the State at the highest level of service with the lowest possible cost, consistent with reasonable and applicable actuarial standards and the sound financial integrity of the company."
SECTION 3. Section 431:14A-102, Hawaii Revised Statutes, is amended to read as follows:
"§431:14A-102 Definitions. As used in this [article:] part:
"Administrator" means the president and chief executive officer of the Hawaii employers' mutual insurance company.
"Board" means the board of directors of the Hawaii employers' mutual insurance company.
"Company" means the Hawaii employers' mutual insurance company established by this article.
"Council" means the Hawaii employers' mutual insurance company oversight council.
"Investment manager" means any fiduciary, who has been designated by the board to manage, acquire, or dispose of the company's assets, a bank as defined by law, or an insurance company qualified to perform services under the laws of more than one state.
"Qualified actuary" means a member of the American Academy of Actuaries who is either a fellow of the Casualty Actuarial Society or an Associate of the Casualty Actuarial Society who has five or more years of experience."
SECTION 4. Section 431:14A-103, Hawaii Revised Statutes, is amended to read as follows:
"§431:14A-103 Hawaii employers' mutual insurance company, established. (a) The Hawaii employers' mutual insurance company is established as an independent corporation to provide workers' compensation insurance and related services to Hawaii employers[.] and, through a subsidiary, to provide hurricane insurance to Hawaii property owners. The company may be reorganized as a nonprofit corporation under chapter 415B.
(b) The company and its subsidiary shall be organized and operated as [a] separate domestic mutual insurance [company.] companies. The company and its subsidiary shall comply with, unless specifically excluded, all requirements of the insurance code regarding a domestic mutual insurance company. The company and its subsidiary shall not be [an agency] agencies of the State. The company, its subsidiary, or its liabilities shall not be deemed to constitute debts or liabilities of the State of Hawaii or pledges of the full faith and credit of the State. The company shall [write]:
(1) Write workers' compensation insurance policies covering Hawaii employers as required or authorized by law and employers' liability to the same extent as any other private insurer[.]; and
(2) Establish a subsidiary company to write hurricane property insurance policies.
The company shall not write other lines of insurance, reinsurance, or excess insurance.
(c) The company may insure Hawaii employers against their liability for compensation or damages for injury or death under the United States Longshoremen's and Harbor Workers' Compensation Act or federal or maritime laws like any other private insurer.
(d) The [company's] company and its subsidiary's assets shall consist of real and personal property and shall include all premiums and other moneys paid to the company[,] or its subsidiary, all property, and other income acquired, earned, or otherwise gained by the use of premiums and other moneys paid to the company or its subsidiary by deposits, investments, exchanges, and other transactions. The company's assets shall be the sole property of the company and shall be used exclusively by the company for the operation and obligations of the company. The subsidiary's assets shall be the sole property of the subsidiary and shall be used exclusively by the subsidiary for the operation and obligations of the subsidiary.
(e) Notwithstanding any other law to the contrary, the company shall be excluded from the surplus requirements of domestic mutual insurers from January 1, 1997, through December 31, 2007. [The company is also excluded during this time period from any assessments by the Hawaii hurricane relief fund otherwise required by section 431P-5(b)(8); provided that the exclusion shall apply to the first $25,000,000 of written premiums in each calendar year; and provided further that annual written premiums in excess of $25,000,000 shall be assessed in accordance with section 431P-5(b)(8).]
(f) The company [is] and its subsidiary are exempt from participation, and shall not join, contribute financially to, nor be entitled to the protection of, any plan, association, guaranty, insolvency fund, or education and training fund authorized or required by this chapter. Notwithstanding the foregoing exemptions, beginning January 1, 2008, the company shall participate in the property and liability insurance guaranty association, pursuant to sections 431:16-101 to 431:16-117; provided that the company shall meet the surplus requirements applicable to all other domestic insurers under chapter 431 effective January 1, 2008.
(g) On or after January 1, 1997, the company shall provide workers' compensation coverage to Hawaii employers otherwise entitled to coverage but not able to or not electing to purchase coverage in the voluntary insurance market, and are not authorized, either individually or as a part of a group, to self-insure. An authorized self-insured is eligible for coverage upon termination of self-insurance."
SECTION 5. Section 431:14A-109.5, Hawaii Revised Statutes, is amended to read as follows:
"[[]§431:14A-109.5[]] Oversight council. (a) There is established the Hawaii employers' mutual insurance company oversight council which shall meet at least once annually. For administrative purposes only, the council shall be assigned to the department of commerce and consumer affairs. The council shall oversee the activities of the company and its subsidiary to ensure that the company and its subsidiary fulfills [its purpose as] the purposes set forth in this article.
(b) The council shall consist of five members who shall include:
(1) A member of the senate appointed by the president of the senate;
(2) A member of the house of representatives appointed by the speaker of the house of representatives;
(3) The director of the department of labor and industrial relations;
(4) The director of the department of commerce and consumer affairs; and
(5) An at-large member who is an owner, officer, or employee of the company policyholder appointed by the governor;
provided that if any designee under paragraphs (1) to (4) does not meet the test in subsection (c), the president of the senate, speaker of the house, or governor, as applicable, shall designate an appropriate representative. Section 26-34 shall not apply to appointments under this section.
(c) No person shall serve on the council who within the second degree of consanguinity or affinity has a direct and substantial interest in an insurer that competes with the company[,] or its subsidiary, including but not limited to:
(1) A stockholder of a competing company (excluding a holder of less than one per cent of the outstanding shares in a publicly traded company);
(2) An employee of a competing company;
(3) An attorney who represents a competing company; or
(4) A party who contracts with a competing company (excluding an independent contractor or business owner who does less than twenty-five per cent of its total annual volume of business per year with competing insurers).
(d) Members of the council shall serve without compensation, but shall be reimbursed for reasonable expenses necessary for the performance of their duties.
(e) The administrator shall serve as liaison officer to the council. Not later than sixty days after July 20, 1998 and every June 15 thereafter, the board shall provide to the council any and all data and information the council may require, including but not limited to:
(1) The [company's] company and its subsidiary's statutorily required annual financial statement;
(2) Copies of any reports issued by the insurance division in connection with the triennial examination of the company[;] and its subsidiary; and
(3) Actuarial certification of loss reserves.
(f) After receipt of the data and information required pursuant to subsection (e), the council shall review the activities of the company and its subsidiary and determine whether the company [is] and its subsidiary are fulfilling [its purpose as] the purposes set forth in this article. The council shall promptly, but in no event later than October 15, [1998,] 2002, and every October 15 thereafter, submit a report to the governor with a copy to the board of directors, stating whether the company [is] and its subsidiary are fulfilling [its purpose as] the purposes set forth in this article. If the council determines that there are any deficiencies in the [company's] company or subsidiary's fulfillment of its purposes as set forth in this article, it shall include in its report a detailed description of any deficiencies. Within a time frame established by the council, but in no event later than six months after delivery of the council's report in accordance with this section, the company or its subsidiary, as the case may be, shall respond in writing to any deficiencies identified in the council's report. The Hawaii employers' mutual insurance company shall provide staff support to the council.
(g) If the governor determines that corrective action is appropriate after reviewing the council's report and the company's or subsidiary's response, the governor shall inform the legislature, and the legislature shall consider what action is needed."
SECTION 6. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:
"§36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:
(1) Special out-of-school time instructional program fund under section 302A-1310;
(2) School cafeteria special funds of the department of education;
(3) Special funds of the University of Hawaii;
(4) State educational facilities improvement special fund;
(5) Convention center capital and operations special fund under section 206X-10.5;
(6) Special funds established by section 206E-6;
(7) Housing loan program revenue bond special fund;
(8) Housing project bond special fund;
(9) Aloha Tower fund created by section 206J-17;
(10) Domestic violence prevention special fund under section 321-1.3;
(11) Spouse and child abuse special account under section 346-7.5;
(12) Spouse and child abuse special account under section 601-3.6;
(13) Funds of the employees' retirement system created by section 88-109;
(14) Unemployment compensation fund established under section 383-121;
(15) [Hawaii hurricane relief fund established under chapter 431P;
(16)] Hawaii health systems corporation special funds;
[(17)] (16) Boiler and elevator safety revolving fund established under section 397-5.5;
[(18)] (17) Tourism special fund established under section 201B-11;
[(19)] (18) Department of commerce and consumer affairs' special funds;
[(20)] (19) Compliance resolution fund established under section 26-9;
[(21)] (20) Universal service fund established under chapter 269;
[(22)] (21) Integrated tax information management systems special fund under section 231-3.2;
[(23)] (22) Insurance regulation fund under section 431:2-215;
[(24)] (23) Hawaii tobacco settlement special fund under section 328L-2;
[(25)] (24) Emergency budget and reserve fund under section 328L-3;
[(26)] (25) Probation services special fund under section 706-649;
[(27)] (26) High technology special fund under section 206M-15.5;
[(28)] (27) Public schools special fees and charges fund under section 302A-1130(f);
[(29)] (28) Cigarette tax stamp enforcement special fund established by section 28-14;
[(30)] (29) Cigarette tax stamp administrative special fund established by section 245-41.5; and
[(31)] (30) Tobacco enforcement special fund established by section 28-15;
shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."
SECTION 7. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Each special fund, except the:
(1) Transportation use special fund established by section 261D-1;
(2) Special out-of-school time instructional program fund under section 302A-1310;
(3) School cafeteria special funds of the department of education;
(4) Special funds of the University of Hawaii;
(5) State educational facilities improvement special fund;
(6) Special funds established by section 206E-6;
(7) Aloha Tower fund created by section 206J-17;
(8) Domestic violence prevention special fund under section 321-1.3;
(9) Spouse and child abuse special account under section 346-7.5;
(10) Spouse and child abuse special account under section 601-3.6;
(11) Funds of the employees' retirement system created by section 88-109;
(12) Unemployment compensation fund established under section 383-121;
(13) [Hawaii hurricane relief fund established under chapter 431P;
(14)] Convention center capital and operations special fund established under section 206X-10.5;
[(15)] (14) Hawaii health systems corporation special funds;
[(16)] (15) Tourism special fund established under section 201B-11;
[(17)] (16) Compliance resolution fund established under section 26-9;
[(18)] (17) Universal service fund established under chapter 269;
[(19)] (18) Integrated tax information management systems special fund under section 231-3.2;
[(20)] (19) Insurance regulation fund under section 431:2-215;
[(21)] (20) Hawaii tobacco settlement special fund under section 328L-2;
[(22)] (21) Emergency and budget reserve fund under section 328L-3;
[(23)] (22) Probation services special fund under section 706-649;
[(24)] (23) High technology special fund under section 206M-15.5;
[(25)] (24) Public schools special fees and charges fund under section 302A-1130(f);
[(26)] (25) Cigarette tax stamp enforcement special fund established by section 28-14;
[(27)] (26) Cigarette tax stamp administrative special fund established by section 245-41.5; and
[(28)] (27) Tobacco enforcement special fund established by section 28-15;
shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."
SECTION 8. Section 219.1, Hawaiian Homes Commission Act of 1920, as amended, is amended by amending subsection (b) to read as follows:
"(b) Notwithstanding any law to the contrary, the department either alone or together with any other governmental agency, may:
(1) Form an insurance company, association (nonprofit or otherwise), pool, or trust;
(2) Acquire an existing insurance company;
(3) Enter into arrangements with one or more insurance companies; or
(4) Undertake any combination of the foregoing; upon such terms and conditions and for such periods, as the commission shall approve, to provide homeowner protection, including hurricane coverage, for lessees participating in such undertaking. Such undertaking shall be subject to the provisions of chapter [431P, including but not limited to section 431P-10(b), and chapter] 431."
SECTION 9. Chapter 431P, Hawaii Revised Statutes, is repealed.
SECTION 10. The insurance commissioner shall establish and administer a wind resistive device grant program, consistent with the recommendations of the technical advisory committee on hazard mitigation issued pursuant to Act 153, Session Laws of Hawaii 2000.
SECTION 11. There is appropriated out of the Hawaii hurricane relief fund the sum of $30,000,000, or so much thereof as may be necessary for fiscal year 2002-2003, for the wind resistive device grant program in section 10 of this Act.
SECTION 12. The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.
SECTION 13. On July 1, 2002, all unencumbered funds available in the Hawaii hurricane relief fund shall be transferred to the Hawaii employers mutual insurance company for the purpose of providing for the initial capitalization of its subsidiary hurricane mutual insurance company established pursuant to this Act. The moneys transferred to the Hawaii employers mutual insurance company under this section shall be a loan by the State to offset initial capitalization and operation costs associated with establishing the hurricane mutual insurance company. The moneys loaned under this section shall be repaid upon sufficient capitalization of the company as determined by the insurance commissioner.
SECTION 14. The Hawaii employers mutual insurance company shall submit a report of its plan of implementation and operation a hurricane mutual insurance company to the legislature not later than twenty days prior to the convening of the 2003 regular session.
SECTION 15. In codifying the new sections added by section 1 and referenced in this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 16. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 17. This Act shall take effect on July 1, 2002; provided that sections 6 and 7 shall take effect on June 30, 2002.
INTRODUCED BY: |
_____________________________ |