RELATING TO INSURANCE.

SB2947

THE SENATE

S.B. NO.

2947

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 wildfires in the
State have caused loss of life, displacement, and major damage to homes,
businesses, and public infrastructure, and have disrupted the availability and
affordability of residential property insurance.
�
The legislature further finds that insurers
increasingly use wildfire risk scores, wildfire risk models, catastrophe
models, and similar scoring methods to underwrite, price, surcharge, or discontinue
residential property insurance, but policyholders and applicants often cannot
obtain meaningful information about how these scores are determined or how
risk-reducing actions may affect underwriting and pricing outcomes.

����
The
legislature further finds that science-based wildfire mitigation measures at
the property level and community level can reduce wildfire risk and expected
loss.
�
The legislature believes that
insurers should account for verified mitigation actions in underwriting and
pricing or, if an insurer�s model does not incorporate mitigation actions,
provide meaningful premium discounts or other premium adjustments for
demonstrated mitigation actions.
�
The
legislature further finds that policyholders should receive timely notice of
their wildfire risk score or classification, applicable mitigation discounts,
and a clear and accessible process to appeal inaccurate scores or discount
determinations.

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The
legislature further finds that state policymakers across the western region
have identified wildfire-driven insurance disruption as a shared and escalating
challenge requiring coordinated, state-led solutions.
�
The legislature further finds that the
consumer transparency, mitigation recognition, and accountability measures
contained in this Act reflect model policy concepts advanced through the
Council of State Governments West annual meeting process and are consistent
with reforms enacted in other western states as part of a multi-state effort to
stabilize insurance markets, better align pricing with verified risk reduction,
and protect consumers.

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Accordingly,
the purpose of this Act is to establish a comprehensive wildfire insurance
consumer-protection framework that:

����
(1)
�
Increases transparency for wildfire
risk scoring and modeling used in residential property insurance;

����
(2)
�
Ensures mitigation is recognized
through underwriting, pricing, and premium discounts;

����
(3)
�
Provides standardized notices and a
right to appeal; and

����
(4)
�
Authorizes insurers to offer premium
reductions and other benefits for wildfire risk-preventative measures.

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SECTION
2.
�
Chapter 431, Hawaii Revised Statutes,
is amended by adding a new part to article 10E to be appropriately designated
and to read as follows:

"
Part
.
�
WILDFIRE
RISK MODEL TRANSPARENCY; MITIGATION INCENTIVES

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�431:10E-A
�
Definitions.

�
(a)
�
As
used in this part:

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"Applicant"
means a person who has submitted a completed application for residential
property insurance coverage.

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"Catastrophe
model" means a tool, instrumentality, means, product, or process,
including a map-based tool, computer-based tool, or simulation, used by an
insurer to estimate potential losses from catastrophic events, including
wildfire-related events.

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"Community-level
mitigation action" means a science-based mitigation action demonstrated by
a community- or neighborhood-level designation, certification, or verification,
or undertaken by a government entity, that reduces wildfire risk for a
residential property or a community, including fuel reduction activities,
forest treatment, wildfire-fighting and mitigation equipment investments,
utility wildfire mitigation activities undertaken pursuant to a wildfire
mitigation plan approved by the public utilities commission pursuant to chapter
269, and other risk-reduction activities identified by rule of the
commissioner.

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"Property-specific
mitigation action" means a science-based mitigation action that reduces
wildfire risk for a residential property, including defensible space,
ignition-resistant or fire-resistive building hardening measures, and
mitigation verified or certified through a program recognized by the
commissioner by rule.

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"Public
plan-type association" means any public, quasi-public, or statutorily
created plan-type association established under this chapter to facilitate
access to residential property insurance when coverage is not otherwise
available in the voluntary market, including any residual market mechanism or
joint underwriting-type association established under this chapter.

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"Residential
property insurance" means a policy of insurance that provides coverage for
a residential structure or dwelling, residential condominium unit, multi-family
residential housing, or appurtenant structures, and includes coverage provided
through any residual market mechanism, joint underwriting association, or
public plan-type association established under this chapter, as applicable.

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"Risk
score" or "wildfire risk score" means a numerical value, rating,
score, tier, or categorization derived from a statistical tool, modeling
system, algorithm, scoring method, or other process used, in whole or in part,
to measure or assess wildfire risk associated with a residential property or
community for purposes of underwriting, pricing, rating, classification,
establishing a rate differential, applying a surcharge, determining
eligibility, renewing, or nonrenewing residential property insurance.

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"Scoring
method" means an algorithmic or model-based method, including vendor
products, that assigns a score, tier, class, or categorization used for
underwriting or pricing decisions for residential property insurance, including
wildfire risk scoring.

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(b)
�
The commissioner may adopt rules to further
define definitions in this section consistent with this part.

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�431:10E-B
�
Wildfire risk score disclosures; requests;
required content; timelines.
�

(a)
�
An insurer that uses a
wildfire risk score in connection with underwriting, property evaluation, or
rating of residential property insurance shall, upon the request of the
insured, the insured's insurance producer, or an applicant, provide the
requester with the following information for the residential property:

����
(1)
�
The current wildfire risk score or
other wildfire risk classification assigned to the residential property by the
insurer;

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(2)
�
The range of possible wildfire risk
scores or classifications under the model or scoring method used by the
insurer;

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(3)
�
The name of the person or entity that
created the wildfire risk score, model, or scoring method used to assign the
score or classification, including the name of any vendor product used, if
applicable;

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(4)
�
The date on which the wildfire risk
score or classification was created or last updated for the residential
property; and

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(5)
�
The key factors that adversely affected
the wildfire risk score or classification assigned to the residential property,
stated in plain language.

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(b)
�
The insurer shall provide the information
required by subsection (a) in writing no later than thirty calendar days after
receiving the request.

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(c)
�
Nothing in this section shall be construed to
require an insurer to publicly disclose proprietary source code, trade secrets,
or confidential vendor materials; provided that the insurer shall disclose
sufficient information to comply with subsection (a).

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�431:10E-C
�
Model and scoring method filings;
incorporation of mitigation; trade secret treatment.
�
(a)
�
An
insurer that uses a wildfire risk model, catastrophe model, or scoring method
to assign wildfire risk for underwriting, pricing, rating, establishing a rate
differential, applying a surcharge, renewal, or nonrenewal decisions for
residential property insurance shall provide to the commissioner, as part of
the insurer's rate filings or other filings required by the commissioner by
rule:

����
(1)
�
A description of each wildfire risk
model, catastrophe model, or scoring method used, including how the model or
scoring method is used in underwriting and pricing decisions;

����
(2)
�
The impact of the model or scoring
method on rates, surcharges, rating tiers, eligibility, and nonrenewal
decisions;

����
(3)
�
An actuarial justification for rating
factors, including mitigation discounts and other premium adjustments offered;
and

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(4)
�
Any additional information required by
rule, to the extent data is available.

����
(b)
�
To the extent data is available and as
established by rule, an insurer shall submit information as part of filings
required by subsection (a) that describes how and whether the insurer's models
or scoring methods account for statewide mitigation activities and
risk-reduction investments, including forest treatment, wildfire-fighting and
mitigation equipment investments, and utility wildfire mitigation activities
undertaken pursuant to a wildfire mitigation plan approved by the public
utilities commission pursuant to chapter 269, and other mitigation activities
undertaken by government entities or utilities.

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(c)
�
An insurer that uses a wildfire risk model,
catastrophe model, or combination of models shall ensure that the following are
either incorporated in the insurer's model or scoring method or are otherwise
demonstrably included in the insurer's underwriting and pricing:

����
(1)
�
Property-specific mitigation actions;
and

����
(2)
�
Community-level mitigation actions.

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(d)
�
If an insurer does not incorporate
property-specific mitigation actions and community-level mitigation actions
into its wildfire risk model, catastrophe model, or scoring method, the insurer
shall provide mitigation discounts, incentives, or other premium adjustments to
policyholders and applicants who demonstrate that:

����
(1)
�
Property-specific mitigation actions
have been undertaken on the property;

����
(2)
�
Community-level mitigation actions have
been undertaken in sufficient proximity to the property to reduce the risk of
loss; or

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(3)
�
As determined by rule of the
commissioner.

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(e)
�
Information submitted to the commissioner
under this section that constitutes a trade secret or confidential commercial
information shall be treated as confidential to the extent permitted by law;
provided that this subsection shall not limit the commissioner's authority to
require disclosures to policyholders and applicants under this part.

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�431:10E-D
�
Public website disclosures; notices; timing;
right to appeal; reconsideration.
�

(a)
�
An insurer subject to this
part shall post on its public website readily accessible information
describing:

����
(1)
�
Premium discounts, incentives, or other
premium adjustments available for property-specific mitigation actions and
community-level mitigation actions;

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(2)
�
The process by which a policyholder or
applicant may submit evidence of mitigation actions;

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(3)
�
The process to request a wildfire risk
score or classification under section 431:10E-B;

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(4)
�
The process to appeal a wildfire risk
score or classification and any mitigation discount determination under this
section; and

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(5)
�
For each discount, incentive, or
premium adjustment, the amount or range of the discount or adjustment, if
applicable, and the mitigation actions associated with eligibility for the
discount or adjustment.

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(b)
�
An insurer that provides a mitigation
discount, or that uses a wildfire risk score, wildfire risk classification,
wildfire risk model, catastrophe model, or scoring method to underwrite, price,
create a rate differential, apply a surcharge, renew, or not renew residential
property insurance based upon wildfire risk shall provide a written notice to
each policyholder and applicant at the following times:

����
(1)
�
For applicants, upon application for
coverage and no later than thirty calendar days after receipt of a completed
application;

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(2)
�
For policyholders being offered
renewal, with the offer of renewal;

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(3)
�
For policyholders not being offered
renewal, with the notice of nonrenewal; and

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(4)
�
For policyholders, at least annually,
at a time and in a manner prescribed by rule of the commissioner.

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(c)
�
The notice required by subsection (b) shall
include:

����
(1)
�
A plain-language explanation of the
wildfire risk score or classification, including that different insurers may
use different models and score ranges;

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(2)
�
The range of possible scores or
classifications that could be assigned to the property under the insurer's
model or scoring method;

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(3)
�
The relative position of the property's
assigned score or classification within the insurer's range;

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(4)
�
A written explanation of why the
policyholder or applicant received the assigned score or classification,
identifying the primary property features or other primary factors that
influenced the assignment; and

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(5)
�
The impact, if any, that each
property-specific mitigation action or community-level mitigation action could
have on the wildfire risk score or classification assigned to the property.

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(d)
�
A policyholder or applicant whose wildfire
risk score, wildfire risk classification, or applicable mitigation discount
determination is inaccurate, or who believes the insurer failed to account for
submitted mitigation evidence, may appeal directly to the insurer.

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(e)
�
The insurer shall notify the policyholder or
applicant in writing of the right to appeal at the time the insurer provides a
score, classification, or discount information under subsection (b).

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(f)
�
Upon receipt of an appeal under subsection
(d), the insurer shall:

����
(1)
�
Acknowledge receipt of the appeal in
writing within ten calendar days; and

����
(2)
�
Provide a written reconsideration and
decision within thirty calendar days after receiving the appeal.

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(g)
�
If an appeal is denied, the insurer shall,
upon request by the commissioner, forward a copy of the appeal and the insurer's
response to the commissioner within the timeframe required by the commissioner.

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(h)
�
If a policyholder or applicant completes a
property-specific mitigation action, or provides evidence of a community-level
mitigation action in sufficient proximity to reduce risk of loss, after the
last application or renewal, the insurer shall provide a revised wildfire risk
score or classification no later than thirty calendar days after the
policyholder or applicant submits a written request and supporting evidence, as
determined by rule of the commissioner.

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�431:10E-E
�
Benefits and premium reductions for wildfire
risk-preventative measures; disclosures; rate filings.
�
(a)
�
An
insurer may provide a benefit or premium reduction to a residential property
insurance policyholder for wildfire risk-preventative measures taken by the
policyholder. Preventative measures include actions that reduce the risk of
damage to property from wildfire, including but not limited to:

����
(1)
�
Using ignition-resistant,
fire-resistive, or noncombustible building materials in construction or
retrofit, including noncombustible roofing or coatings and exterior glazing for
fire protection;

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(2)
�
Establishing and maintaining defensible
space landscaping around structures;

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(3)
�
Providing annual confirmation, if
requested by the insurer, that the insured has employed defensible space
landscaping around the insured�s structures;

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(4)
�
Installing fire alarms or emergency
alarm systems;

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(5)
�
Providing adequate access to the
property for firefighting equipment and authorized emergency vehicles;

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(6)
�
Maintaining an adequate outside water
source or other on-site suppression resources, as determined by rule;

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(7)
�
Complying with local, state, or federal
fire prevention or community preparedness programs recognized by the
commissioner by rule; and

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(8)
�
Complying with the International
Wildland-Urban Interface Code if a building is located in a wildland-urban
interface area.

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(b)
�
An insurer that provides a benefit or premium
reduction under subsection (a) shall disclose the benefit or premium reduction
in writing to the policyholder in a manner prescribed by rule of the
commissioner.

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(c)
�
An insurer that offers benefits or premium
reductions under this section shall file the preventative measures agreement
and any associated rate impacts with the commissioner in a manner prescribed by
rule.

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(d)
�
For the purposes of this section:

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"Benefit"
means a rebate, discount, abatement, credit, reduction of premium, or other
advantage to the policyholder provided under the terms of a preventative
measures agreement or program established by the insurer.

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"Preventative
measures agreement" means an insurer program or agreement that specifies
the preventative measures eligible for a benefit or premium reduction and any
verification requirements.

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�431:10E-F
�
Rules; enforcement; remedies; coordination.
�
(a)
�

The commissioner shall adopt rules pursuant to chapter 91 to implement
this part, including rules that:

����
(1)
�
Establish minimum standards for
notices, mitigation evidence, verification, and appeals;

����
(2)
�
Identify acceptable mitigation
certifications and verification programs;

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(3)
�
Specify filings required under section
431:10E-C;

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(4)
�
Provide standards for determining
whether community-level mitigation actions are in sufficient proximity to
reduce risk of loss; and

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(5)
�
Establish standardized formats to
improve consumer understanding and comparability.

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(b)
�
The commissioner may examine and investigate
insurer practices for compliance with this part and may take any action
authorized under this chapter for violations, including orders, fines, or other
administrative remedies authorized by law.

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(c)
�
The commissioner shall coordinate, as
appropriate, with state and county agencies involved in wildfire preparedness,
fuel reduction, building safety, and emergency management to align verification
standards for mitigation actions.

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�431:10E-G
�
Reports to the legislature.
�
(a)
�
No
later than twenty days prior to the convening of each regular session, the
commissioner shall submit a report to the legislature on implementation of this
part, including:

����
(1)
�
Insurer compliance trends and common
consumer issues;

����
(2)
�
Aggregate information on appeals,
reconsiderations, and outcomes;

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(3)
�
Aggregate information on mitigation
discounts offered and utilized;

����
(4)
�
Recommendations for statutory or
administrative changes to improve insurance availability, transparency, and
mitigation incentives; and

����
(5)
�
Any other information the commissioner
deems necessary.

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(b)
�
The report shall not disclose trade secrets
or confidential proprietary information."

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SECTION

3
.
�
Section
431:13-103, Hawaii Revised Statutes, is amended by amending subsection (a) to
read as follows:

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"
(a)
�
The following are
defined as unfair methods of competition and unfair or deceptive acts or
practices in the business of insurance:

����
(1)
�
Misrepresentations and false
advertising of insurance policies.
�

Making, issuing, circulating, or causing to be made, issued, or
circulated, any estimate, illustration, circular, statement, sales
presentation, omission, or comparison that:

���������
(A)
�
Misrepresents the benefits, advantages,
conditions, or terms of any insurance policy;

���������
(B)
�
Misrepresents the
dividends or share of the surplus to be received on any insurance policy;

���������
(C)
�
Makes any false
or misleading statement as to the dividends or share of surplus previously paid
on any insurance policy;

���������
(D)
�
Is misleading or
is a misrepresentation as to the financial condition of any insurer, or as to
the legal reserve system upon which any life insurer operates;

���������
(E)
�
Uses any name or
title of any insurance policy or class of insurance policies misrepresenting
the true nature thereof;

���������
(F)
�
Is a
misrepresentation for the purpose of inducing or tending to induce the lapse,
forfeiture, exchange, conversion, or surrender of any insurance policy;

���������
(G)
�
Is a
misrepresentation for the purpose of effecting a pledge or assignment of or
effecting a loan against any insurance policy;

���������
(H)
�
Misrepresents any
insurance policy as being shares of stock;

���������
(I)
�
Publishes or
advertises the assets of any insurer without publishing or advertising with
equal conspicuousness the liabilities of the insurer, both as shown by its last
annual statement; or

���������
(J)
�
Publishes or
advertises the capital of any insurer without stating specifically the amount
of paid-in and subscribed capital;

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(2)
�
False information and advertising
generally.
�
Making, publishing,
disseminating, circulating, or placing before the public, or causing, directly
or indirectly, to be made, published, disseminated, circulated, or placed
before the public, in a newspaper, magazine, or other publication, or in the
form of a notice, circular, pamphlet, letter, or poster, or over any radio or
television station, or in any other way, an advertisement, announcement, or
statement containing any assertion, representation, or statement with respect
to the business of insurance or with respect to any person in the conduct of
the person's insurance business, which is untrue, deceptive, or misleading;

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(3)
�
Defamation.
�
Making, publishing, disseminating, or
circulating, directly or indirectly, or aiding, abetting, or encouraging the
making, publishing, disseminating, or circulating of any oral or written
statement or any pamphlet, circular, article, or literature [
which
]
that

is false, or maliciously critical of or derogatory to the financial condition
of an insurer, and [
which
]
that
is calculated to injure any
person engaged in the business of insurance;

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(4)
�
Boycott, coercion, and
intimidation.

���������
(A)
�
Entering into any agreement to commit,
or by any action committing, any act of boycott, coercion, or intimidation
resulting in or tending to result in unreasonable restraint of, or monopoly in,
the business of insurance; or

���������
(B)
�
Entering into any agreement on the
condition, agreement, or understanding that a policy will not be issued or
renewed unless the prospective insured contracts for another class or an
additional policy of the same class of insurance with the same insurer;

����
(5)
�
False financial statements.

���������
(A)
�
Knowingly filing with any supervisory
or other public official, or knowingly making, publishing, disseminating,
circulating, or delivering to any person, or placing before the public, or
knowingly causing, directly or indirectly, to be made, published, disseminated,
circulated, delivered to any person, or placed before the public, any false
statement of a material fact as to the financial condition of an insurer; or

���������
(B)
�
Knowingly making any false entry of a
material fact in any book, report, or statement of any insurer with intent to
deceive any agent or examiner lawfully appointed to examine into its condition
or into any of its affairs, or any public official to whom the insurer is
required by law to report, or who has authority by law to examine into its
condition or into any of its affairs, or, with like intent, knowingly omitting
to make a true entry of any material fact pertaining to the business of the
insurer in any book, report, or statement of the insurer;

����
(6)
�
Stock operations and advisory board
contracts.
�
Issuing or delivering or
permitting agents, officers, or employees to issue or deliver, agency company
stock or other capital stock, or benefit certificates or shares in any
common-law corporation, or securities or any special or advisory board
contracts or other contracts of any kind promising returns and profits as an
inducement to insurance;

����
(7)
�
Unfair discrimination.

���������
(A)
�
Making or permitting any unfair
discrimination between individuals of the same class and equal expectation of
life in the rates charged for any policy of life insurance or annuity contract
or in the dividends or other benefits payable thereon, or in any other of the
terms and conditions of the contract;

���������
(B)
�
Making or permitting any unfair
discrimination in favor of particular individuals or persons, or between
insureds or subjects of insurance having substantially like insuring, risk, and
exposure factors, or expense elements, in the terms or conditions of any
insurance contract, or in the rate or amount of premium charge therefor, or in
the benefits payable or in any other rights or privilege accruing thereunder;

���������
(C)
�
Making or
permitting any unfair discrimination between individuals or risks of the same
class and of essentially the same hazards by refusing to issue, refusing to
renew, canceling, or limiting the amount of insurance coverage on a property or
casualty risk because of the geographic location of the risk, unless:

��������������
(i)
�
The refusal, cancellation, or
limitation is for a business purpose [
which
]
that
is not a mere
pretext for unfair discrimination; or

�������������
(ii)
�
The refusal, cancellation, or
limitation is required by law or regulatory mandate;

���������
(D)
�
Making or permitting any unfair
discrimination between individuals or risks of the same class and of
essentially the same hazards by refusing to issue, refusing to renew,
canceling, or limiting the amount of insurance coverage on a residential
property risk, or the personal property contained therein, because of the age
of the residential property, unless:

��������������
(i)
�
The refusal, cancellation, or
limitation is for a business purpose [
which
]
that
is not a mere
pretext for unfair discrimination; or

�������������
(ii)
�
The refusal, cancellation, or
limitation is required by law or regulatory mandate;

���������
(E)
�
Refusing to insure, refusing to
continue to insure, or limiting the amount of coverage available to an
individual because of the sex or marital status of the individual; however,
nothing in this subsection shall prohibit an insurer from taking marital status
into account for the purpose of defining persons eligible for dependent
benefits;

����
����
(F)
�
Terminating or modifying coverage, or refusing
to issue or renew any property or casualty policy or contract of insurance
solely because the applicant or insured or any employee of either is mentally
or physically impaired; provided that this subparagraph shall not apply to
accident and health or sickness insurance sold by a casualty insurer; provided
further that this subparagraph shall not be interpreted to modify any other
provision of law relating to the termination, modification, issuance, or renewal
of any insurance policy or contract;

���������
(G)
�
Refusing to
insure, refusing to continue to insure, or limiting the amount of coverage
available to an individual based solely upon the individual's having taken a
human immunodeficiency virus (HIV) test prior to applying for insurance; or

���������
(H)
�
Refusing to
insure, refusing to continue to insure, or limiting the amount of coverage
available to an individual because the individual refuses to consent to the
release of information
[
which
]
that

is confidential as provided in section 325‑101; provided
that nothing in this subparagraph shall prohibit an insurer from obtaining and
using the results of a test satisfying the requirements of the commissioner,
which was taken with the consent of an applicant for insurance; provided
further that any applicant for insurance who is tested for HIV infection shall
be afforded the opportunity to obtain the test results, within a reasonable
time after being tested, and that the confidentiality of the test results shall
be maintained as provided by section 325‑101;

����
(8)
�
Rebates.
�
Except as otherwise expressly provided by
law:

���������
(A)
�
Knowingly permitting or offering to
make or making any contract of insurance, or agreement as to the contract other
than as plainly expressed in the contract, or paying or allowing, or giving or
offering to pay, allow, or give, directly or indirectly, as inducement to the
insurance, any rebate of premiums payable on the contract, or any special favor
or advantage in the dividends or other benefits, or any valuable consideration
or inducement not specified in the contract; or

���������
(B)
�
Giving, selling, or purchasing, or
offering to give, sell, or purchase as inducement to the insurance or in
connection therewith, any stocks, bonds, or other securities of any insurance
company or other corporation, association, or partnership, or any dividends or
profits accrued thereon, or anything of value not specified in the contract;

����
(9)
�
Nothing in paragraph (7) or (8) shall
be construed as including within the definition of discrimination or rebates
any of the following practices:

���������
(A)
�
In the case of any life insurance
policy or annuity contract, paying bonuses to policyholders or otherwise
abating their premiums in whole or in part out of surplus accumulated from
nonparticipating insurance; provided that any bonus or abatement of premiums
shall be fair and equitable to policyholders and in the best interests of the
insurer and its policyholders;

���������
(B)
�
In the case of life insurance policies
issued on the industrial debit plan, making allowance to policyholders who have
continuously for a specified period made premium payments directly to an office
of the insurer in an amount which fairly represents the saving in collection
expense;

���������
(C)
�
Readjustment of the rate of premium for
a group insurance policy based on the loss or expense experience thereunder, at
the end of the first or any subsequent policy year of insurance thereunder,
which may be made retroactive only for the policy year;

���������
(D)
�
In the case of any contract of
insurance, the distribution of savings, earnings, or surplus equitably among a
class of policyholders, all in accordance with this article; [
and
]

���������
(E)
�
A reward under a wellness program established under a health
care plan that favors an individual if the wellness program meets the following
requirements:

��������������
(i)
�
The wellness program is reasonably
designed to promote health or prevent disease;

�������������
(ii)
�
An individual has an opportunity to
qualify for the reward at least once a year;

������������
(iii)
�
The reward is available for all
similarly situated individuals;

�������������
(iv)
�
The wellness program has alternative
standards for individuals who are unable to obtain the reward because of a
health factor;

��������������
(v)
�
Alternative standards are available for
an individual who is unable to participate in a reward program because of a
health condition;

�������������
(vi)
�
The insurer provides information
explaining the standard for achieving the reward and discloses the alternative
standards; and

������������
(vii)
�
The total rewards for all wellness
programs under the health care plan do not exceed twenty per cent of the cost
of coverage;
and

���������
(F)
�
A benefit or premium reduction
provided pursuant to section 431:10E-E for wildfire risk-preventative measures,
including any benefit or premium reduction offered under an insurer program
filed with the commissioner in accordance with section 431:10E-E;

���
(10)
�
Refusing to provide or limiting
coverage available to an individual because the individual may have a
third-party claim for recovery of damages; provided that:

���������
(A)
�
Where damages are recovered by judgment
or settlement of a third-party claim, reimbursement of past benefits paid shall
be allowed pursuant to section 663-10;

���������
(B)
�
This paragraph shall not apply to entities
licensed under chapter 386 or 431:10C; and

���������
(C)
�
For entities licensed under chapter 432
or 432D:

��������������
(i)
�
It shall not be a violation of this
section to refuse to provide or limit coverage available to an individual
because the entity determines that the individual reasonably appears to have
coverage available under chapter 386 or 431:10C; and

�������������
(ii)
�
Payment of
claims to an individual who may have a third-party claim for recovery of
damages may be conditioned upon the individual first signing and submitting to
the entity documents to secure the lien and reimbursement rights of the entity
and providing information reasonably related to the entity's investigation of
its liability for coverage.

��������������
Any
individual who knows or reasonably should know that the individual may have a
third-party claim for recovery of damages and who fails to provide timely
notice of the potential claim to the entity, shall be deemed to have waived the
prohibition of this paragraph against refusal or limitation of coverage.
�
"Third-party claim" for purposes of
this paragraph means any tort claim for monetary recovery or damages that the
individual has against any person, entity, or insurer, other than the entity
licensed under chapter 432 or 432D;

���
(11)
�
Unfair claim settlement practices.
�
Committing or performing with [
such
]
a

frequency as to indicate a general business practice any of the following:

���������
(A)
�
Misrepresenting pertinent facts or
insurance policy provisions relating to coverages at issue;

���������
(B)
�
With respect to claims arising under
its policies, failing to respond with reasonable promptness, in no case more
than fifteen working days, to communications received from:

��������������
(i)
�
The insurer's policyholder;

�������������
(ii)
�
Any other
persons, including the commissioner; or

������������
(iii)
�
The insurer
of a person involved in an incident in which the insurer's policyholder is also
involved.

��������������
The
response shall be more than an acknowledgment that [
such
]
the

person's communication has been received and shall adequately address the
concerns stated in the communication;

���������
(C)
�
Failing to adopt
and implement reasonable standards for the prompt investigation of claims
arising under insurance policies;

���������
(D)
�
Refusing to pay
claims without conducting a reasonable investigation based upon all available
information;

���������
(E)
�
Failing to affirm
or deny coverage of claims within a reasonable time after proof of loss
statements have been completed;

���������
(F)
�
Failing to offer
payment within thirty calendar days of affirmation of liability, if the amount
of the claim has been determined and is not in dispute;

���������
(G)
�
Failing to
provide the insured, or when applicable the insured's beneficiary, with a
reasonable written explanation for any delay, on every claim remaining
unresolved for thirty calendar days from the date it was reported;

���������
(H)
�
Not attempting in
good faith to effectuate prompt, fair, and equitable settlements of claims in
which liability has become reasonably clear;

���������
(I)
�
Compelling
insureds to institute litigation to recover amounts due under an insurance
policy by offering substantially less than the amounts ultimately recovered in
actions brought by the insureds;

���������
(J)
�
Attempting to
settle a claim for less than the amount to which a reasonable person would have
believed the person was entitled by reference to written or printed advertising
material accompanying or made part of an application;

���������
(K)
�
Attempting to
settle claims on the basis of an application that was altered without notice,
knowledge, or consent of the insured;

���������
(L)
�
Making claims
payments to insureds or beneficiaries not accompanied by a statement setting
forth the coverage under which the payments are being made;

���������
(M)
�
Making known to
insureds or claimants a policy of appealing from arbitration awards in favor of
insureds or claimants for the purpose of compelling them to accept settlements
or compromises less than the amount awarded in arbitration;

���������
(N)
�
Delaying the
investigation or payment of claims by requiring an insured, claimant, or the
physician or advanced practice registered nurse of either to submit a
preliminary claim report and then requiring the subsequent submission of formal
proof of loss forms, both of which submissions contain substantially the same
information;

���������
(O)
�
Failing to
promptly settle claims, where liability has become reasonably clear, under one
portion of the insurance policy coverage to influence settlements under other
portions of the insurance policy coverage;

���������
(P)
�
Failing to
promptly provide a reasonable explanation of the basis in the insurance policy
in relation to the facts or applicable law for denial of a claim or for the
offer of a compromise settlement; and

���������
(Q)
�
Indicating to the
insured on any payment draft, check, or in any accompanying letter that the
payment is "final" or is "a release" of any claim if
additional benefits relating to the claim are probable under coverages afforded
by the policy; unless the policy limit has been paid or there is a bona fide
dispute over either the coverage or the amount payable under the policy;

���
(12)
�
Failure to maintain complaint handling
procedures.
�
Failure of any insurer to
maintain a complete record of all the complaints that it has received since the
date of its last examination under section 431:2-302.
�
This record shall indicate the total number
of complaints, their classification by line of insurance, the nature of each
complaint, the disposition of the complaints, and the time it took to process
each complaint.
�
For purposes of this
section, "complaint" means any written communication primarily
expressing a grievance;

���
(13)
�
Misrepresentation in insurance
applications.
�
Making false or fraudulent
statements or representations on or relative to an application for an insurance
policy, for the purpose of obtaining a fee, commission, money, or other benefit
from any insurer, producer, or individual; and

���
(14)
�
Failure to
obtain information.
�
Failure of any
insurance producer, or an insurer where no producer is involved, to comply with
section 431:10D-623(a), (b), or (c) by making reasonable efforts to obtain
information about a consumer before making a recommendation to the consumer to
purchase or exchange an annuity."

����
SECTION 4.
�

There is appropriated out of the general revenues of the State of Hawaii
the sum of $ or so
much thereof as may be necessary for fiscal year 2026-2027 for the department
of commerce and consumer affairs to implement the wildfire risk model
transparency and mitigation incentives framework pursuant to this Act.

����
The sum appropriated shall be expended by
the department of commerce and consumer affairs for the purposes of this Act.

����
SECTION 5.
�

In codifying the new sections added by section 2 and referenced in
section 3 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

����
SECTION 6.
�

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

����
SECTION 7.
�

This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Department
of Commerce and Consumer Affairs; Insurance; Insurance Commissioner; Wildfires;
Risk Scores; Risk Models; Transparency; Mitigation; Rebates; Discounts;
Consumer Notice; Appeals; Reports; Appropriation

Description:

Requires
residential property insurers to disclose wildfire risk scores upon request and
at renewal, nonrenewal, and application.
�
Requires insurers using wildfire risk models,
catastrophe models, or scoring methods to file model-use information with the Insurance
Commissioner and incorporate property-level and community-level wildfire
mitigation.
�
Requires insurers to provide
mitigation discounts if property-level and community-level wildfire mitigations
are not incorporated into risk models.
�
Establishes
a standardized notice and an appeal process for wildfire risk scores and
mitigation discounts.
�
Authorizes
insurers to provide benefits or premium reductions for wildfire
risk-preventative measures and clarifies treatment for midterm premium
increases and anti-rebate laws.
�
Requires
reports to the Legislature.
�
Appropriates
funds.

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