THE SENATE	S.C.R. NO.	48
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII

SENATE CONCURRENT

RESOLUTION

REQUESTING THAT THE DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS COMPILE PERTINENT DATA TO DETERMINE THE APPROPRIATE SCOPE OF A STUDY ANALYZING WHETHER IMPLEMENTATION IN THIS STATE OF LAWS SIMILAR TO CAPTIVE INSURANCE LAWS OF MASSACHUSETTS WOULD ADDRESS THIS STATE'S RESIDENTIAL CONDOMINIUM PROPERTY INSURANCE NEEDS.

WHEREAS, associations of apartment owners throughout the State have faced steep increases in residential condominium property insurance since 2021; and

WHEREAS, the increases are due in part to City and County of Honolulu ordinances Nos. 19-4 and 22-2, which require the installation of automatic fire sprinkler systems in certain residential condominium buildings; and

WHEREAS, although an association of apartment owners may opt out of the sprinkler installation requirements if the association of apartment owners pursues other fire safety improvements, insurance rates have escalated sharply for almost all residential condominium properties regardless of whether a condominium property has received an acceptable score; and

WHEREAS, Massachusetts' approach to captive insurance may provide an alternative to traditional condominium property insurance at a time when insurance offered by major Hawaii insurers is increasingly becoming unaffordable for many homeowners and associations of apartment owners; now, therefore,

BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2023, the House of Representatives concurring, that the Department of Commerce and Consumer Affairs is requested to survey the applicable association of apartment owners for each of the three hundred nine condominium properties that are subject to the requirements of Honolulu Ordinances Nos. 19-4 and 22-2 to determine:

(1) Whether the captive insurance approach of Massachusetts may offer a practical means of addressing the skyrocketing insurance premiums for each applicable condominium property;

(2) Whether the association of apartment owners has either 10 filed a notice of its intention to install automatic fire sprinkler systems in individual units within the applicable condominium property or, before September 2022, undertaken a life safety evaluation conducted by a licensed design professional;

(3) If the association of apartment owners has conducted a life safety evaluation in lieu of installing or retrofitting a sprinkler system, whether the condominium property has received an acceptable score or sustained increased property insurance premiums since 2020, or both; and

(4) If the association of apartment owners has filed a notice of its intention to install or retrofit sprinkler systems in individual units, whether the condominium property has sustained increased property insurance premiums since 2020; and

BE IT FURTHER RESOLVED that, no later than six months after the adoption of this measure, the Department of Commerce and Consumer Affairs is also requested to compile the information received from the survey responses and submit to the Legislature an interim report containing the compiled information; provided that, for any condominium property that has sustained increased property insurance premiums since 2020, the report shall include the percentage by which the condominium property's insurance premiums have increased each year from the prior year during this period; and

BE IT FURTHER RESOLVED that, no later than twenty days prior to the convening of the Regular Session of 2024, the Department of Commerce and Consumer Affairs is also requested to submit to the Legislature a final report of its findings and recommendations, including any proposed legislation, regarding the appropriate scope of a study analyzing whether implementation of a captive insurance system in the State that is modeled after the captive insurance system of Massachusetts would adequately and appropriately address the State's residential condominium property insurance needs; and

BE IT FURTHER RESOLVED that the Department of Commerce and Consumer Affairs is also requested to share the information compiled pursuant to this measure with, and include in its final report to the Legislature recommendations from, condominium property management companies, the Hawaii Captive Insurance Council, Hawaii Council of Community Associations, Kokua Council, and the Hawaii Chapter of the Community Associations Institute; and

BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Director of Commerce and Consumer Affairs.

Report Title:

Insurance Division; Department of Commerce and Consumer Affairs; Captive Insurance Study