Gov. Green signs emergency proclamation to address condo insurance crisis

Gov. Josh Green, M.D., signed an emergency proclamation on Wednesday aimed at stabilizing Hawai‘i’s volatile condominium insurance market, which he said has seen unprecedented rate increases due to a hardening global insurance industry and recent increase of catastrophic events around the world.

Hawai‘i’s property insurance market faces significant challenges due to its small size, high real estate costs and unique risk profile, according to the governor’s announcement.

“The wildfire in Maui has highlighted these issues for our state, leading to skyrocketing insurance rates for condos, some increasing by as much as 1,000%. With the possibility of similar rate hikes for townhouses, immediate action is required to protect Hawaiʻi homeowners and maintain market stability,” according to a news release from the Governor’s Office.

Green emphasized the urgency of the situation, stating, “The recent surge in condo insurance rates is placing an unbearable burden on homeowners across our state. He called the emergency proclamation “a critical step” to stabilize the insurance market and protect residents from further financial strain.

“By working closely with industry experts, federal partners and legislative leaders, we aim to ensure that Hawai‘i remains a viable and secure place to live, even in the face of global insurance challenges. Our commitment is to safeguard the interests of our communities and provide stability for people living and working in Hawaiʻi,” he said.

Green established a Joint Executive and Legislative Task Force to monitor the insurance market, implement short-term fixes and recommend emergency changes or legislative proposals. The task force is headed by State Insurance Commissioner Gordon I. Ito, House Speaker, Rep. Scott K. Saiki (D-25, Ala Moana, Kaka‘ako, Downtown) and Senate Leader Sen. Jarrett Keohokalole, (District 24, Kāne‘ohe, Kailua), with members from the insurance, mortgage lending and real estate industries.

The governor said this emergency proclamation will lead to providing additional options for condominium associations to purchase hurricane and property insurance for their buildings including the following: 

• Allows loans to be made to the Hawaiʻi Hurricane Relief Fund (HHRF) and the Hawaiʻi Property Insurance Association to facilitate issuance of hurricane and property insurance policies to condo associations
• Allows HHRF to issue hurricane insurance policies for large condominium buildings and set its own coverage limits

“I want to thank the governor for accepting the recommendation of the Insurance Task Force and recognizing that we are in a state of emergency,” said House Speaker Saiki. “The Emergency Proclamation will allow the Administration to help Hawaiʻi’s condominiums access a layer of property insurance coverage. We know that condominium owners are frustrated and worried about the rising cost of property insurance and our Task Force will continue to work to identify potential solutions.”

The Task Force met and this emergency proclamation was the result of their work and evaluation which included:

• Examining the insurance marketplace for trouble spots and urgent changes in insurers’ rates, refusals to write policies, or market exits.
• Determining existing legal authority for immediate fixes.
• Identifying statutory changes that can be waived via emergency proclamation or require legislative action, making recommendations for such actions.
• Engaging with federal stakeholders like Fannie Mae and Freddie Mac to support these efforts.