RELATING TO INSURANCE.

HB2226

HOUSE OF REPRESENTATIVES

H.B. NO.

2226

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to insurance
.

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

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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.

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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.

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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.

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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.

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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.
�

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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.

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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.
�

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

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(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.

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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

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�
-1
�
Definitions.
�

As used in this chapter:

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"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.

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

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"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.

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"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.

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

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(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;

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

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(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.

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�
-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;

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(2)
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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

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(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)
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An
increased premium;

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(C)
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A
higher cost of coverage through a non-admitted insurer;

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(D)
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An
insurer withdrawal;

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(E)
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A
reduction in coverage availability; or

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

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

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

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(2)
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Restitution;

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(3)
�
Disgorgement;

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

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

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(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.
�

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(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:

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

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(2)
�
Restitution;

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(3)
�
Disgorgement;

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

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

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(e)
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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.

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(f)
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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.

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(g)
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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.

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

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(i)
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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.

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

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

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(l)
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This section shall not be construed to:

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

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

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

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

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

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

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

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

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

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

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

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

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(2)
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Due
consideration shall be given to:

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(A)
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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;

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

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(C)
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Any proceeds recovered through any civil actions filed pursuant
to section -2;

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

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[
(D)
]
�
(E)

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Dividends,
savings, or unabsorbed premium deposits allowed or returned by insurers to
their policyholders, members, or subscribers;

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[
(E)
]
�
(F)

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Past and
prospective expenses both country‑wide and those specially applicable to
this State;

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[
(F)
]
�
(G)

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Investment income
from unearned premium and loss reserve funds; and

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[
(G)
]
�
(H)

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All other
relevant factors within and outside this State.

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(3)
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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.

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(4)
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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.

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(5)
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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.

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

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

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(B)
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Specifically
rated inland marine risks.

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(7)
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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;

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(B)
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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;

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(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;

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(D)
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Permitted
under article 12; or

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(E)
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Otherwise
expressly provided by law."

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

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"(c)
�

The plan of operation:

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

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

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(3)
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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;

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

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(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;

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

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(7)
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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;

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(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;

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

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

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

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

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

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(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;

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

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(C)
�
Provisions authorizing the association
to decline providing coverage;

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(D)
�
Potential annual premium rate
increases; and

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

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(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

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(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

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

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(16)
�
M
ay
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

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(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.
"

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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;

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(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;

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(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;

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(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.

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SECTION 9.
�

This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

AG; HPIA;
HHRF; Property Insurance; Subrogation; Climate Change; Climate Disasters;
Climate Attributable Harm; Civil Actions; Insurance Rates

Description:

Authorizes
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, including costs and losses incurred by the Hawaii Property
Insurance Association, Hawaii Hurricane Relief Fund, or other state entities,
resulting from climate attributable harm or costs for risk of future climate
attributable harm.
�
Authorizes the Hawaii
Property Insurance Association and Hawaii Hurricane Relief Fund, or any private
insurer licensed in the State to bring a civil cause of action against a
responsible party to recover its costs and losses resulting from climate
attributable harm.
�

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.