Insurance was purpose of state hurricane fund


POSTED: Tuesday, September 01, 2009

QUESTION: In the event of a hurricane catastrophe, how will the state disburse the $180 million in the hurricane fund?

ANSWER: The money in the Hawaii Hurricane Relief Fund won't be disbursed to anyone because of losses suffered in a hurricane.

The fund is dormant, and there are no policies in force. That means there will be no disbursement of the money in the fund unless there is some kind of additional legislative action, explained Lloyd Lim, program administrator of the state Department of Commerce and Consumer Affairs' Health Insurance Branch and acting executive director of the Hawaii Hurricane Relief Fund.

The fund was set up after Hurricane Iniki devastated Kauai and other parts of the state. In the aftermath of an estimated $1.6 billion-plus in insured losses, many private insurers left the state or cut back on writing policies.

“;It was a problem for the public, Realtors and banks,”; Lim said.

The state stepped in and created the hurricane fund in 1994.

Eventually, Zephyr Insurance Co. came into the Hawaii market, “;so we shut down our operation (in 2001) and all we do now is monitor the fund,”; Lim said.

The current law says the state is “;supposed to restart (the fund) in the event there's another market scarcity,”; he said. “;So we're really just laying in wait for when we're needed again.”;

Since the fund shut down eight years ago, there have been various proposals and attempts to raid the fund to pay for other state expenses.

Lim said there are two ways the money could be taken out: One is to repeal the statute creating it, in which case there is nothing to restart later, if needed, or the statute would have to be re-enacted to set up the fund again.

The other possibility is to do what former Gov. Ben Cayetano suggested in 2002, he said, when there also was a budget crisis: take the money out but leave the statute in place.

“;So you still have to restart, but now you're restarting with nothing,”; Lim said.

Regarding what happens if another hurricane causes widespread damage to the islands, Lim said, “;Unless you have a crystal ball, you just don't know what's going to happen.”;

QUESTION: Regarding vehicles registered in Hawaii to have two license plates (”;Kokua Line,”; Aug. 27), aren't military vehicles exempt?

ANSWER: Not if a Hawaii registration is involved.

However, military vehicles are not required to be registered by the state, explained Dennis Kamimura, administrator of the city Motor Vehicle and Licensing Division.

Civilian vehicles owned or leased by the military carry license plates issued by the General Services Administration. Nonresident military personnel may retain their home state registration and license plate(s) as long as the registrations are current, Kamimura said.

“;If their home state issues only one license plate, they may operate on public roads with the one plate,”; he said. If their home state issues two plates, the vehicle must have two plates attached, one on the front and one on the rear.

However, if nonresident military personnel register their cars here and are issued Hawaii plates, they are required to have one on the front and one on the rear, he said.