SB3000

SECTION 1. The legislature finds that climate disasters have caused widespread harm to the State and its residents, including the destruction of homes and property, loss of wages, escalating insurance costs and losses, depletion of public resources, and injuries to the health, safety, and livelihoods of residents of the State.

The legislature further finds that climate disasters pose many costly risks to the residents of the State, including the destabilization and potential collapse of insurance infrastructure in the State. Climate disasters threaten the functionality of the regular insurance market and the residual market, or "insurers of last resort", like the Hawaii Property Insurance Association, as well as taxpayer resources in the state-funded Hawaii hurricane relief fund, which was reactivated by Act 296, Session Laws of Hawaii 2025, to provide insurance coverage in scenarios where the private market fails to do so.

The legislature believes that access to affordable insurance is necessary for the stability and financial health of residents of the State, but is threatened by increasing nonrenewal rates and rapidly rising premiums. Therefore, the legislature further believes there is a compelling state interest in preserving insurance market stability, essential coverage for property owners and lenders, and affordable housing for the State's residents.

The legislature further finds that property and casualty insurance providers have been destabilized by increasingly severe climate disasters, which has led to increased nonrenewal rates and premiums across the State. Between 2018 and 2023, insurance nonrenewal rates increased by ninety-one per cent in the county of Kauai, two hundred ninety-six per cent in the city and county of Honolulu, one hundred eighty-four per cent in the county of Maui, and seventy per cent in the county of Hawaii.

The climate disasters underlying the insurance crisis in the State are the result of a decades-long, coordinated campaign of deception launched and orchestrated by major fossil fuel companies. These companies have known for decades that their products cause global warming and increase the frequency and severity of climate disasters. Despite this knowledge, these companies concealed and misrepresented the associated risks, sowed confusion, and failed to warn the public of the dangers created and exacerbated by their products.

The consequence of this deceptive conduct by responsible parties is making insurance coverage harder to obtain and less affordable, which negatively impacts credit and housing markets. The loss or unaffordability of coverage impedes access to mortgage financing, which in turn depresses property values, heightens the risk of defaults and foreclosures, and slows the rate of new housing development, further exacerbating the State's housing shortage.

The legislature believes that the costs of climate disasters should be borne by those responsible for causing them, rather than taxpayers, insurance policyholders, and residents harmed by climate disasters. By adopting Senate Concurrent Resolution No. 198, SD1 (2025), the legislature affirmed its belief that the fossil fuel industry's actions have caused significant harm to the residents of the State and the stability of the State's insurance market.

Accordingly, this Act serves an important public purpose, which is to:

(1) Authorize the attorney general to bring a civil action in the name of the people of the State as parens patriae against any responsible party to recover certain costs or obtain certain relief; and

(2) Authorize the Hawaii Property Insurance Association, Hawaii hurricane relief fund, or any private insurer licensed in the State, to bring a civil action against a responsible party to recover its costs and losses resulting from climate attributable harm or other certain relief.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to title 36 to be appropriately designated and to read as follows:

"Chapter

CIVIL LIABILITY FOR CLIMATE ATTRIBUTABLE HARM

§ -1 Definitions. As used in this chapter:

"Affiliated entity" means any parent or subsidiary corporation, as well as any other business entity that is related through common ownership or control, where the relationship is established for financial purposes, including but not limited to consolidated financial reporting or the enhancement of profitability for the parent entity.

"Climate attributable harm" means insurance-related harm in the State to property, tangible assets, or economic interests connected to a climate disaster.

"Climate disaster" means an extreme weather event, including a wildfire, heatwave, drought, windstorm, hurricane, flood, tornado, or other storm; provided that climate change was a factor in the event's frequency, severity, location, timing, or extent.

"Fossil fuel product" means crude petroleum oil and all other hydrocarbons, regardless of gravity, that are produced at the wellhead in liquid form by ordinary production methods, including natural, manufactured, mixed, and byproduct hydrocarbon gas, refined crude oil, crude tops, topped crude, processed crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, fuel oil, treated crude oil, residuum, gas oil, casinghead gasoline, natural-gas gasoline, kerosene, benzine, wash oil, waste oil, blended gasoline, lubricating oil, and blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas.

"Responsible party" means a firm, corporation, company, partnership, society, joint stock company, or any other affiliated entity that:

(1) Has an aggregate market capitalization or worldwide annual revenue across the parent entity and all affiliated entities of at least $500,000,000, determined by an average capitalization or revenue over the preceding three years;

(2) Engaged in the extraction, production, manufacture, marketing, or sale of fossil fuel products; and

(3) Did business in the State, was registered to do business in the State, was appointed an agent of the State, or otherwise had sufficient contacts with the State to be subject to the State's jurisdiction.

"Responsible party" shall not include the federal government, tribal governments or bodies, the State, a political subdivision of the federal, tribal, or state government, or an employee of the federal, tribal, or state government or body on the basis of acts or omissions in the course of the employee's official duties.

§ -2 Civil liability; responsible parties; damages related to climate attributable harm. (a) The attorney general may bring a civil action in the name of the people of the State as parens patriae against any responsible party for any of the following:

(1) Recovery of costs and losses incurred by the Hawaii Property Insurance Association for climate attributable harm;

(2) Recovery of costs and losses incurred by the Hawaii hurricane relief fund established under chapter 431P, or other state entity, for climate attributable harm; or

(3) Recovery of costs and losses resulting from climate attributable harm or risk of future climate attributable harm including:

(A) Real property fortification measures necessary to obtain or maintain affordable insurance coverage;

(B) An increased premium;

(D) An insurer withdrawal;

(E) A reduction in coverage availability; or

(F) Cessation of the insurance of new residential property insurance policies.

(b) In any civil action against a responsible party under this chapter, the attorney general may recover or obtain any of the following relief:

(1) The costs and losses of all climate attributable harm;

(2) Restitution;

(3) Disgorgement;

(4) Court costs, litigation expenses, and reasonable attorneys' fees; and

(5) Any other relief that the court or a jury deems proper.

(c) The Hawaii Property Insurance Association, Hawaii hurricane relief fund, or any private insurer licensed in the State shall also have a civil cause of action against a responsible party to recover its costs and losses resulting from climate attributable harm from a responsible party.

(d) In any civil action against a responsible party under this section, the Hawaii Property Insurance Association, Hawaii hurricane relief fund, or any private insurer may recover or obtain any of the following relief:

(1) Costs and losses of all climate attributable harm;

(2) Restitution;

(3) Disgorgement;

(4) Court costs, litigation expenses, and reasonable attorneys' fees; and

(5) Any other relief that the court or a jury deems proper.

(e) In any settlement of claims under this section, the attorney general may intervene and review the proposed terms for the impact on all residents of the State, including upstreaming of recoveries to out-of-state parent companies.

(f) In any action brought under this section, the court shall offset any restitution award by amounts already reimbursed to the Hawaii Property Insurance Association and its member insurers, or the Hawaii hurricane relief fund, to avoid duplicative recovery. The attorney general shall require each claimant seeking restitution to certify, under penalty of perjury, any amounts received from an insurer for the same loss.

(g) Any action brought under this section shall be commenced within two years of the relevant climate disaster; provided that if an insurer or any affiliated entity fails to commence an action under this section, the insurer shall give notice to the attorney general within thirty days after the date on which the climate attributable harm occurred; provided further that the attorney general, within two years of receiving the notice, may bring a claim to recoup the insurer's costs and losses resulting from climate attributable harm.

(h) Insurers shall not assign or transfer rights under this section.

(i) An insured in this State may submit a written request to the attorney general to pursue enforcement of an insurer's right of recovery for climate attributable harm under this section.

(j) Responsible parties shall be strictly liable for any damages, restitution, or disgorgement of profits afforded under this section.

(k) The rights assigned in this section shall not be waived.

(l) This section shall not be construed to:

(1) Limit the enforceability of any existing right, action, or remedy available under any other law;

(2) Create a defense to liability under, or enforcement of, any other law;

(3) Replace legally mandated disaster recovery funds, designated disaster recovery funds established by legislation or administrative rule, or legally mandated insurance claim payouts;

(4) Modify any equitable statutory right of subrogation or indemnification, or any contractual right or obligation, except as expressly provided in this section;

(5) Alter the Hawaii supreme court's precedent, interpretation, or application of section 663-10 relating to insurer subrogation claims;

(6) Impair, expand, or otherwise modify the powers and duties of the insurance commissioner under the insurance code; or

(7) Impose liability on speech or conduct protected by:

(A) The First Amendment to the Constitution of the United States; or

(B) Article I, section 4, of the Hawaii State Constitution."

SECTION 3. Section 431:14-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Rates shall be made in accordance with the following provisions:

(1) Rates shall not be excessive, inadequate, or unfairly discriminatory.

(2) Due consideration shall be given to:

(A) Past and prospective loss experience within and outside this State; provided that if the claim does not exceed the selected deductible amount pursuant to section 386-100, and the employer reimburses the insurer for the amount, the claims shall not be calculated in the employer's experience rating or risk category;

(B) The conflagration and catastrophe hazards, if any;

[~~(C)~~] (D) A reasonable margin for underwriting profit and contingencies;

[~~(D)~~] (E) Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

[~~(E)~~] (F) Past and prospective expenses both country‑wide and those specially applicable to this State;

[~~(F)~~] (G) Investment income from unearned premium and loss reserve funds; and

[~~(G)~~] (H) All other relevant factors within and outside this State.

(3) In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which that experience is available.

(4) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any insurer or group with respect to any class of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

(5) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both. These standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. No risk classification may be based upon race, creed, national origin, or the religion of the insured.

(6) Manual, minimum, class rates, rating schedules, or rating plans shall be made and adopted, except in the case of:

(A) Special rates where manual, minimum, class rates, rating schedules, or rating plans are not applicable; and

(B) Specifically rated inland marine risks.

(7) No insurer authorized to do business in this State shall issue any policy that provides or makes available to any risks preferred rates based upon any grouping of persons, firms, or corporations by way of membership, license, franchise, contract, agreement, or any other means, other than common majority ownership of the risks, or except where:

(A) A common stock ownership in and management control of the risks are held by the same person, corporation, or firm;

(B) Permitted or authorized by filings in existence as of January 1, 1988, under the casualty rating law and the fire rating law, as these filings may be amended from time to time;

(C) Health care providers, as defined in section 671‑1 that could have joined the patients' compensation fund as it existed in chapter 671, part III, prior to May 31, 1984, joined together with one or more groups of related or unrelated health care providers;

(D) Permitted under article 12; or

(E) Otherwise expressly provided by law."

SECTION 4. Section 431:21-106, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The plan of operation:

(1) Shall establish procedures for performance of all the powers and duties of the association under section 431:21-105;

(2) Shall establish maximum limits of liability to be placed through the association;

(3) Shall establish reasonable underwriting standards for determining insurability of a risk that are comparable to the standards used to determine insurability of a risk located outside the area designated by the commissioner as eligible for association coverage;

(4) Shall establish a schedule of deductibles, if appropriate;

(5) Shall establish a maximum period of time during which a high-rise condominium may be eligible to be insured by the association, which shall not exceed sixty months;

(6) Shall establish the commission to be paid to licensed producers;

(7) Shall establish the rates to be charged for the insurance coverages, so that the total premium income from all association policies, when combined with the investment income, shall annually fund the administration of the association. The administration of the association shall include the expenses incurred in processing applications, conducting inspections, issuing and servicing policies, paying commissions, and paying claims, but shall not include assessments approved by the commissioner[;]. Rates shall account for any proceeds obtained by the association from any civil actions against a responsible party for costs and losses resulting from climate attributable harm pursuant to section -2. For the purposes of this paragraph:

"Climate attributable harm" and "responsible party" shall have the same meanings as defined in section -1;

(8) Shall establish the manner and scope of the inspection and the form of the inspection report. The inspection guidelines may include setting minimum conditions the property must meet before an inspection is required;

(9) Shall establish procedures whereby selections for the board of directors will be submitted to the commissioner for the commissioner's information;

(10) Shall establish procedures for records to be kept of all financial transactions of the association, its producers, and its board of directors;

(11) Shall establish procedures by which applications will be received and serviced by the association;

(12) Establish guidelines for the investigation and payment of claims;

(13) Shall establish procedures whereby the association may assume and cede reinsurance on risks written through the association;

(14) Shall include the following:

(A) Coverage forms, endorsements, limits, and deductibles for the covered condominium; provided that the association may categorize these forms, endorsements, limits, and deductibles by the type of peril being covered;

(B) Rate tiers, including potential high deductible options and surcharges for condominiums that remain in the plan of operation;

(D) Potential annual premium rate increases; and

(E) Establishment of adequate rates to avoid assessment of the voluntary market;

(15) Shall require, prior to issuance or renewal of coverage, the applicant for condominium property insurance coverage or renewal to:

(A) Provide the following to the association:

(i) The condominium association's declarations, bylaws, or other documents that describe the condominium association's process for paying claims, including the portion of the claim to be paid by the condominium association and the portion to be paid by each unit owner; and

(ii) The condominium association's declarations, bylaws, or other documents that describe the condominium association's process for handling losses both pursuant to the applicable master policy and by the applicable condominium association;

(B) Cause to be completed an inspection of the applicable condominium; provided that the inspection shall be consistent with any inspection and reporting standards established by the board of directors of the association and incorporated into the plan of operation pursuant to paragraph (8); and

(C) Satisfy any relevant requirements established by the board of directors of the association and incorporated into the plan of operation;

(16) May prohibit coverage under this article for any high‑rise condominium for which the association or its servicing entities or any agents thereof have identified maintenance issues that materially affect the insurability of the high‑rise condominium for the type of coverage being sought; and

(17) Shall adopt procedures, guidelines, installment amounts, and a timetable for the repayment of any general fund moneys that are loaned to sufficiently capitalize the reserve trust fund established pursuant to section 431:21‑105(b)(9) and deposited into the separate account within the reserve trust fund; provided that the repayment shall not commence until the reserve trust fund is sufficiently capitalized as determined by the board of directors."

SECTION 5. Section 431P-7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The plan of operation:

(1) Shall establish procedures for performance of all powers and duties of the fund;

(2) Shall establish procedures for providing notice to all persons with interests insurable by the fund in the State of the type of insurance available from the fund if the fund offers insurance;

(3) Shall provide for and adopt all necessary forms, including insurance policies to be used by and on behalf of the fund, for use by the fund and servicing facilities;

(4) Shall adopt actuarially sound rates, based on reasonable assumptions relative to expectations of hurricane frequency and severity, to be charged for insurance provided by the fund, in accordance with article 14 of chapter 431[;], and accounting for and proceeds obtained by the fund from any civil actions against a responsible party for costs and losses resulting from climate attributable harm pursuant to section -2. For the purposes of this paragraph:

"Climate attributable harm" and "responsible party" shall have the same meanings as defined in section ‑1;

(5) Shall publish manuals of rules, rates, and rating and classification plans, which shall address mandatory deductibles, limits of coverage, and the classification of risks and rate modifications based on the exposure of insureds, subject to the approval of the commissioner;

(6) Shall establish procedures for receiving and servicing applications to the fund;

(7) Shall establish procedures for processing and maintaining records of the fund relating to its financial transactions, its agents, its employees, its operations, and all transactions with any servicing facility;

(8) Shall establish procedures for the collection and remittance of the premiums and return of unearned premiums where applicable;

(9) Shall establish procedures for the payment of valid claims;

(10) Shall establish procedures for prorating available funds pursuant to section 431P-15;

(11) Shall establish procedures for obtaining reinsurance;

(12) Shall establish procedures to borrow funds;

(13) Shall develop a plan for the investment of moneys held by the fund;

(14) Shall require, prior to issuance or renewal of coverage, the applicant for condominium insurance coverage or renewal to:

(A) Cause to be completed an inspection of the applicable condominium; provided that the inspection shall be consistent with any inspection and reporting standards established by the board and incorporated into the plan of operation; and

(B) Satisfy any relevant requirements established by the board and incorporated into the plan of operation; and

(15) May prohibit coverage under this chapter for any high‑rise condominium for which the fund or its servicing entities or any agents thereof have identified maintenance issues materially affecting the insurability of the high‑rise condominium for hurricane property insurance."

SECTION 6. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 7. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3000
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII