STAND. COM. REP. NO. 3550

Honolulu, Hawaii

RE: S.R. No. 79

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.R. No. 79 entitled:

"SENATE RESOLUTION REQUESTING THE INSURANCE COMMISSIONER TO COORDINATE AND DEVELOP A WILDFIRE INSURANCE COMPACT,"

begs leave to report as follows:

The purpose and intent of this measure is to request the Insurance Commissioner to coordinate and develop a Wildfire Insurance Compact.

Your Committee received comments on this measure from the Insurance Division of the Department of Commerce and Consumer Affairs.

Your Committee finds that the State is facing the growing challenge of managing and preventing dangerous wildfires, which has only been exacerbated by the rising temperatures associated with climate change. As property insurance markets continue to adjust to the uncertainty of and increased risks posed by wildfires, your Committee finds that the State should also consider exploring new, coordinated approaches that could help manage costs, expedite recovery, and ensure that insurance coverage remains available and affordable for Hawaii residents. Therefore, this measure requests the Insurance Commissioner to coordinate and develop new risk sharing approaches to wildfires, specifically, a compact that focuses primarily on risk pooling, with strategic partner states to provide mutual aid among members.

Your Committee notes the concerns raised by the testimony of the Insurance Division of the Department of Commerce and Consumer Affairs that this measure is unclear as to how a compact would provide a mechanism for risk pooling or the specifications for risk pooling, including the focus points, definitions, and parameters to consider in an assessment for risk pooling. Therefore, amendments to this measure are necessary to address this concern.

Accordingly, your Committee has amended this measure by:

(1) Requesting the Insurance Commissioner to research and convene stakeholder discussions to consider the concept of a Wildfire Insurance Compact with strategic partner states that have similar wildfire risks or robust disaster management systems, rather than coordinate and develop a Wildfire Insurance Compact;

(2) Amending its title to reflect its amended purpose; and

(3) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee concurs with the intent and purpose of S.R. No. 79, as amended herein, and recommends its adoption in the form attached hereto as S.R. No. 79, S.D. 1.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

________________________________

JARRETT KEOHOKALOLE, Chair