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State to exit
hurricane insurance
business

The relief fund stops
writing new policies

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Star-Bulletin staff

The state's hurricane insurance fund is going out of business -- just like it was designed to do.

The Hawaii Hurricane Relief Fund today stops issuing new policies or renewals and will phase out over the next year as the roughly 80,000 existing policies lapse, according to Lloyd Lim, the fund's acting executive director.

Yesterday was the last day of hurricane season.

"We're getting out of the insurance game," Lim said. "The hurricane fund was always designed to be temporary."

The state created the fund in 1993 after most private insurers abandoned the market following Hurricane Iniki in 1992. More than $1 billion in claims resulted from Iniki.

Many companies, however, have since returned to the market. At its peak in 1998, the fund had about 160,000 policies.

The industry in the past has opposed shutting down the fund, fearing consumers will one day find hurricane coverage scarce again.

The industry also liked the fund because it effectively capped what the industry could loss from hurricane claims.