OFFICE OF THE GOVERNOR STATE OF HAWAI'I PROCLAMATION

OFFICE

OF

THE

GOVERNOR

STATE

OF

HAWAI’I

PROCLAMATION

RELATING

TO

CONDOMINIUM

INSURANCE

STABILIZATION

By

the

authority

vested

in

me

by

the

Constitution

and

laws

of

the

State

of

Hawai’i,

to

provide

relief

for

disaster damages,

losses,

and

suffering,

and

to

protect

the

health,

safety,

and

welfare

ofthe

people,

I,

JOSH

GREEN,

M.D.,

Governor

of

the

State

of

Hawaii,

hereby

determine,

designate

and

proclaim

as

follows:

WHEREAS,

under

chapter

127A,

Hawaii

Revised

Statutes

(HRS),

emergency

powers

are

conferred

on

the

Governor

of

the

State

of

Hawaii

to

respond

to

disasters

or

emergencies,

and generally

to

protect

the

public

health,

safety,

and

welfare,

and

to

preserve

the

lives,

property,

and

environment

of

the

State.

WHEREAS,

in

2023,

the

U.S.

experienced

28

separate

weather

or

climate

disasters

that

each

resulted

in

at

least

$1

billion

in

damages;

WHEREAS,

in

2023,

the

reinsurance

market

had

over

$100

billion

in

losses

for

the

4th

consecutive

year

in

a

row;

WHEREAS,

due

to

the

increase

in

worldwide

climate

events,

reinsurance

has

become

more

expensive

and

less

available.

Reinsurance

rates

have

increased

20-50%

per

year

for

the

past

few

years.

Primary

insurers

have

passed

these

increased

costs

on

to

policyholders;

WHEREAS,

in

Hawai’i,

condominium

associations

are

facing

the challenge

of

limited

insurance

options

for

hurricane

insurance

because

of

the

tightening

reinsurance

market;

WHEREAS,

only

3

insurers

are

offering

master

policies,

which

insure

the

common

areas ofthe

condominium,

to

condominium

associations

in

Hawaii,

often

covering

just

20-30%

of

a

building’s

hurricane

exposure;

WHEREAS, this

has

forced

associations

to

use

surplus

lines

insurers

to

cover

the

rest

of

the

building’s

hurricane

exposure,

at

higher

rates

not

approved

by

the

Insurance

Commissioner,

pushing

up

master

policy

premiums

and

deductibles;

WHEREAS,

the

State

of

Hawai’i

Insurance

Division

is

not

authorized

to

regulate

the

rates

charged

by

surplus

lines

insurers.

These

rates

contribute

significantly

to

the

increase

in

condominium

associations’

master

policy

premiums;

WHEREAS,

due

to

the substantial

increases

in

master

policy

premiums,

certain

condominium

associations

have

chosen

to

insure

the

building for

less

than

full

value

or

not

at

all;

WHEREAS,

if

the

building

is

not

fully

insured,

many

mortgage

lenders

will

not

issue

loans

on

the

individual

units,

preventing

purchases

or

sales

of

units

within

that

building.

Individual

unit

owners

selling

their

units

in

these

buildings

would

be

forced

to

find

an

all-cash

buyer.

Individual

unit

buyers

would

be

unable

to

obtain

mortgages

to

buy

units

in

these

buildings.

Individual

unit

owners

would

also

not

be

able

to

obtain

a

home

equity

loans;

WHEREAS,

even

before

the

Maui

wildfires,

insurance

rates

in

Hawaii

and

nationwide

have started

to

increase

since

2021

.

The

Maui

wildfires

are

starting

to

have

an

impact

on

the

insurance

market

in

terms

of

further

increasing

the

cost

of

premiums;

and

WHEREAS,

the

current

state

of

the

condominium

insurance

market

will

likely

result

in

substantial

injury

or

harm

to

the

population,

or

substantial

damage

to

or

loss

of

property,

and

therefore

constitutes

an

emergency

under

section

127A-2, HRS;

WHEREAS,

to

immediately

stabilize

the

State’s

condominium

insurance

market,

the

Executive

and

Legislative

Condo

and Property

Insurance

Task

Force

(Task

Force)

has

proposed

allowing

the

Hawaii

Hurricane

Relief

Fund

(HHRF)

and the

Hawaii

Property

Insurance

Association

(HPIA)

to

issue

master

policies

to

condominium

associations;

WHEREAS,

to

equip

HHRF

and

HPIA

to

issue

master

policies

to

condominium

associations,

the Task

Force

has

also

proposed

the

issuing

of

a

loan

to

HHRF

and

HPIA

for

startup

administration

costs

and

to

obtain

reinsurance;

WHEREAS,

without

the

suspension

of

laws

under

an

emergency

proclamation,

the

stabilization

measure

cannot

be

implemented

in

an

efficient

and

timely

manner;

NOW,

THEREFORE,

I,

JOSH

GREEN,

M.D.,

Governor

of

the

State

of

Hawaii,

hereby

determine

and

proclaim

that

an

emergency

or

disaster

contemplated

by

section

127A-14, HRS,

has

occurred

in

the

State

of

Hawaii.

I

hereby

authorize

and

invoke

the

following

emergency

provisions,

if

not

already

effective

by

virtue

of

this

Proclamation:

2

I.

State

Cooperation

Under

subsection

127412(b),

HRS,

I

hereby

direct

all

state

agencies

and

officers

to

cooperate

with

and

extend

services,

materials, and

facilities

as

may

be

required

to

assist

in

all

efforts

to

address

the

objectives

of

this

Proclamation.

II.

Suspension

of

Laws

I

hereby

exercise

my

authority

under

paragraph

127A-13(a)(2)

and

127A-

13(a)(3),

HRS,

and

suspend

the

following

state

laws,

as

allowed

by

federal

law,

only

to

the

extent

necessary

to

allow

HPIA

and

HHRF

issue

master

policies

to

condominium

associations:

Section

36-24,

HRS,

loans

to

state

and county

agencies,

to

the

extent

necessary

to

allow

loans

to

be

issued

to

the Department

of

Commerce

and

Consumer

Affairs

and

HHRF

without

a

requirement that

they be bond-issuing

agencies;

Section

37-41

,

HRS,

appropriations

to

revert

to

state

treasury; exceptions,

to

the

extent

that appropriations

lapse

at

the end

of

the

fiscal

year

prior

to

completion

of

the

emergency

actions.

Subsection

37-74(d)(1),

HRS,

program execution,

to

the

extent

necessary

to

provide

funding

to

complete

the

emergency

actions.

Chapter

76, HRS,

civil

service

law,

to

the extent

necessary

to

allow

qualified

personnel

to

be

hired

that

would

be

directly

involved

in

the

expeditious

and

efficient

execution

of

emergency

actions.

Chapter

89,

HRS,

collective

bargaining

in

public

employment,

to

the extent

that

compliance

with

this

chapter

requires

additional

time

detrimental

to

the

expeditious

and

efficient

execution

of

emergency

actions.

Chapter

89C,

HRS,

public

officers

and

employees

excluded

from

collective

bargaining,

to

the extent

that

compliance

with

this

chapter

requires

additional

time

detrimental

to

the

expeditious

and

efficient

execution

of

emergency

actions.

Section

103-53,

HRS,

contracts

with

the

State

or

counties;

tax

clearances,

assignments,

to

the extent

that compliance

requires

additional

time

detrimental

to

the

expeditious

and

efficient

execution

of

emergency

actions.

3

Section

103-55,

HRS,

wages,

hours,

and

working

conditions

of

employees

of

contractors

performing

services,

to

the

extent

that

compliance

requires

additional

time

detrimental

to

the

expeditious

and

efficient

execution

of

emergency

actions.

Chapter

103D, HRS,

Hawaii

public

procurement

code,

to

the

extent

that

compliance

might

delay

the

State

in

quickly

obtaining

the

goods

and

services

needed

to

address

the emergency.

Section

1

27A-30,

HRS,

rental or

sale

of

essential

commodities

during

a

state

of

emergency;

prohibition

against

price

increases,

because

the

automatic

statewide

invocation

of

this

provision

is

not

needed

for

this

emergency.

This

Proclamation

does

not

affect

the

invocation

and

suspensions

of

section

1

27A-30,

HRS,

contained

in

the

July

1

9,

2024,

Sixteenth Proclamation

Relating

to

Wildfires.

Section

431

P-I

,

HRS,

definitions,

to

the

extent

necessary

to

eliminate

the

phrase

“of

one

to

four

units”

from

the

definition

of

“Eligible

property”

to

allow

HHRF

to

issue

master

policies

to

condominium

associations.

Section

431

P-I

,

HRS,

definitions,

to

the

extent

necessary

to

eliminate

the

monetary

coverage

limits

and

other

limitations

from

the

definition

of

“Policy

of

hurricane

property insurance”

to

allow

HHRF

to

set

its

own

coverage

limits

for

master

policies

issued

to

condominium

associations.

Section

431P-IO(a),

coverage

available

from

the

fund;

deductible,

to

the

extent

necessary

to

eliminate

the monetary

coverage

limits

and

other

limitations

to

allow

HHRF to

set

its

own

coverage

limits

for

master

policies

issued

to

condominium

associations.

Ill.

Severability

If

any

provision

of

this

Proclamation

is

rendered

or

declared

illegal

for

any

reason,

or shall

be

invalid

or

unenforceable,

such

provision

shall

be

modified

or

deleted,

and

the remainder

of

this

Proclamation

and

the

application

of

such

provision

to

other

persons

or

circumstances

shall

not

be

affected

thereby

but

shall

be

enforced

to

the

greatest

extent

permitted

by

applicable

law.

IV.

Enforcement

No

provision

of

this

Proclamation,

or

any

rule

or

regulation

hereunder,

shall

be

construed

as

authorizing

any

private

right

of

action

to

enforce

any

requirement

of

this

4

Proclamation,

or

of

any

rule

or

regulation.

Unless

the

Governor,

Director

of

Emergency

Management,

or

their

designee

issues

an

express

order

to

a

non-judicial

public

officer,

no

provision

of

this

Proclamation,

or

any

rule

or

regulation

hereunder,

shall

be

construed

as

imposing

any

ministerial

duty

upon

any

non-judicial

public

officer

and

shall

not

bind

the

officer

to

any

specific

course

of

action

or

planning

in

response

to

the

emergency

or

interfere

with

the

officer’s

authority

to

utilize

his

or

her

discretion.

I

FURTHER

DECLARE

that

this

Proclamation

is

not

intended

to

create,

and

does

not

create,

any

rights

or

benefits,

whether

substantive

or

procedural,

or

enforceable

at

law

or

in

equity,

against

the

State

of

Hawaii,

the

counties

of

this

State,

or

any

State

or

County

agencies,

departments,

entities,

officers,

employees,

or

any

other

person.

I

FURTHER

DECLARE

that the

disaster

emergency

relief

period

shall

commence

immediately

and

continue

through

October

6,

2024,

unless

terminated

or

superseded

by

separate

proclamation,

whichever

shall

occur

first.

Notwithstanding

the

termination

of

a

disaster

emergency

relief

period,

any

contracts,

agreements,

procurements,

programs,

or

employment

of

personnel

entered

into,

started,

amended,

or

continued

by

reason

of

the

provisions

of

the

proclamation

relating

to

this

emergency

shall

continue

in

full

force

and

effect.

Done

at

the

State

Capitol,

this

7th

day

of

August,

2024

Josh

reen,

M.D.

Governor

of

Hawai’i

APPROVED:

Matthew

S.

Dvonch

Acting

Attorney

General

State

of

Hawai’i

5