Insurance Law Hawaii

ABA's ICLC Insurance Conference

    We presented at the ABA's  Insurance Coverage Litigation Committee's annual seminar in Tucson yesterday. We delved into "The Ins and Outs of Outside Adjusters."  Thanks to my co-presenters, Karin S. Aldama, Esq., from Gallagher Kennedy and Rina Carmel, Esq., from Anderson, McPharlin & Conners LLP. 

 

Back to Tucson for Insurance Coverage Litigation Committee's Annual Seminar

    Headed to Tucson this week to attend the ABA's annual Insurance Coverage Litigation Committee seminar. Always great presentations and discussions on a variety of coverage topics. Along with my co-panelists, Rina Carmel and Karin S. Aldama, we will lead a discussion on The Ins and Outs of Outside Adjusters. Looking forward to it, as always.

 

Blog Completes Seventeenth Year

    Insurance Law Hawaii reaches the end of its seventeenth year this month. We began posting long ago, in December 2007.

    We seek to keep readers apprised of developments in insurance-related cases from Hawaii and across the country. Coverage issues surrounding the Maui fires have been top of mind this year. We will continue posting on important coverage developments in the next year.

    Thank you for following along as we enter our eighteenth year. 

Only A Few Insurance-Related Bills Enacted By The Hawaii Legislature

    Several insurance-related bills were introduced by the Hawaii Legislature, but only a few were passed before the session ended on May 3, 2024. Here are the bills that were passed by the Legislature and sent to the Governor for signature.

    HB 1686 - Increases the reimbursement rate for chiropractic treatments for personal injury protection benefits under motor vehicle insurance from $75 to $100.

    HB 2394 - Amends various provisions of the Insurance Code to update and improve existing provisions related to captive insurers, trade names, continuing education provider filing requirements, reinsurance, surety bonds, and amends certain definitions.

    SB 3083 - Amends various sections of Article 11 of the Insurance Code to adopt revisions to the National Association of Insurance Commissioners Model No. 440, Insurance Holding Company System Regulatory Act. 

    Major revisions to regulating property insurance were introduced in SB 3234, but did not pass the Legislature, The bill would have amended laws relating to the Hawaii Hurricane Relief Fund and the Hawaii Property Insurance Association by imposing a different transient accommodation tax rate for transient vacation rentals. The bill would have imposed a property insurance surcharge on conveyance tax and a temporary property insurance stabilization fee on real property transactions to capitalise the Hawaii Property Insurance Association and Hawaii Hurricane Relief Fund. The bill would have amended the designated geographic areas eligible for coverage to specifically include lava zones 1 and 2. Further, the bill would have mandated that the Hawaii Hurricane Relief Fund and Hawaii Property Insurance Association to be insurers of last resort. 

Blog Completes Sixteenth Year

    Insurance Law Hawaii completes its sixteenth year this month. We began posting in December 2007, 1761 posts ago. The year 2023 has added 105 new posts.

    The goal is to keep readers in tune with new developments in insurance-related cases from Hawaii and across the country. This year included a big case handled successfully by our office regarding insurers attempt to gain reimbursement of defense costs for uncovered claims. St. Paul Fire & Marine Ins. Co., et. al v. Bodell Construction Co., et. al, 2023 Haw. LEXIS 194 (Haw. Nov. 14, 2023). We will continue posting important coverage developments in the next year.

    Thank you for following along as we enter our seventeenth year. 

Maui Fire Claims Addressed on Think Tech Hawaii

    Thank you to Think Tech Hawaii and my partner Na Lan for inviting me to discuss pursuing claims after the Lahaina fire. The video of the interview is here.

Insurance Policy to Protect Hawaii's Coral Reefs

    The New York Times recently reported on an insurance policy issued to the non-profit Nature Conservancy to protect coral reefs in Hawaii. Cihistopher Flavelle, Catrin Einhorn, In a First, Nonprofit Buys Insurance for Hawaii's Threatened Coral Reefs, N.Y. Times, Nov. 21, 2022. 

    If damaged by a storm, coral reefs need immediate attention if they are going to recover. The Nature Conservancy plans a four step process to save damaged reefs:

•     Purchase a policy for all 400,000 acres of coral reefs surrounding the Hawaii island.
•     If reefs are sufficiently damaged by a storm the policy will pay out within two weeks.
•     The Nature Conservancy will ask the State of Hawaii, owner of the reefs, for a permit to repair the storm damage. 
•     Finally, if the state officials issue the permit, the insurance proceeds will pay teams of divers to repair the damage. Crews will have about six weeks     before coral begins to die.

      The payout of proceeds will not depend upon an inspection of the reefs for damage, which would take too long. Instead, the payment of benefits will depend on the force of the winds measured in real time. Under a scheme known as parametric insurance, a storm with winds of 50 knots, or 57 miles per hour, or more will generate a pay out. Such winds are strong enough to cause damage to the reefs, causing large waves that break off pieces of coral or knock tree limbs or other debris into the water, further damaging the reefs.

    The Times reports that reefs act much like sea wall, slowing down the destructive force of waves crashing toward the shore. 

    The two million dollar policy is the first of its kind in the United States for a natural structure. Insuring reefs has been used in Latin America with mixed success.

    

Rest in Peace, Justice Moon

    The Hawaii legal community lost a legendary member of the judiciary with the passing of retired Chief Justice Ronald T.Y. Moon on July 4, 2022. While serving as Chief Justice, the Supreme Court decided landmark cases including same sex marriage to protecting native Hawaiian rights and the environment. Justice Moon served as Chief Justice of the Hawaii Supreme Court for 17 years before retiring in 2010.

    Justice Moon was also instrumental in developing Hawaii jurisprudence in insurance law. Some of the significant insurance-related cases he authored are as follows:

AIG Hawaii Ins. Co. v. Smith, 78 Haw. 174, 891 P.2d 261 (1995) - insurer is estopped from denying coverage after failing to reserve rights and retaining control of the defense.

Christiansen v. First Ins. Co., 88 Haw. 136, 963 P.2d 345 (1998) - application of equitable tolling in coverage action. 

Enoka v. AIG Hawaii Ins. Co., 109 Haw. 537, 128 P.3d 850 (2006) - insurer may be in bad faith even if there is no coverage under the policy.

Hough v. Pacific Ins. Co., 83 Haw. 457, 927 P.2d 858 (1996) - workers' compensation insurer owes contractual duties to the worker, as an intended beneficiary of the employer's policy; employee may enforce those duties, including the duty to handle and pay claims in good faith. 

Sentinel Ins. Co., Ltd. v. First Ins. Co. of Hawaii, Ltd., 76 Haw. 277, 875 P.2d 894 (1994) - adopted the Legal Ambiguity rule for duty to defend, whereby, if there is no Hawaii decision on a coverage issue and competing decision exist across the country, the interpretation most favorable to the insured is used. Justice Moon also found the injury-in-fact trigger was applicable in CGL policies where progressive bodily injury or property damage continued across many policy periods. Finally, the decision addressed the consequences when an insurer breaches the duty to defend.

    A special session of the Hawaii Supreme Court will convene on August 8, 2022, at 3:30 p.m. to honor Justice Moon. Due to social distancing, the ceremony is by invitation-only, but the session will be live-streamed for public viewing on the Judiciary's YouTube Channel. 

    Rest in Peace, Justice Moon

Hawaii Legislature Passes Two Insurance-Related Bills in 2022 Session

    The 2022 Hawaii legislative session has adjourned with two insurance-related bills passed and and now pending before the governor. The new legislation amends existing statutes that are not within the everyday parlance of coverage lawyers. The bills are as follows:

    HB1980 - The bill modifies Haw. Rev. Stat. 346-59.1 regarding coverage for telehealth. Medicaid, health insurers, mutual benefit societies and health maintenance organizations are permitted, but not required, to cover telephonic behavioral health services under certain circumstances. The legislation further clarifies that telephonic services do not constitute telehealth. 

    HB 2112 - This legislation would amend Haw. Rev. Stat. 431:4A-101, or the National Association of Insurance Commissioners' Credit for Reinsurance Model Law. The Act conforms to the requirements of the bilateral agreements on insurance and reinsurance between the United States and the European Union and the United Kingdom, and ensures the states' regulatory authority remains intact and is not preempted by federal law. 

"Why Can't We Settle" Presentation Today

This afternoon, our panel discussed "Why Can't We Settle? Consequences When Insurer and Insured Disagree not he Value of the Underlying Claim" at the ABA's Insurance Coverage Litigation Committee seminar in Tucson. My co-panelists are Winter Wheeler of Winter Wheeler Mediation and Arbitration in Atlanta and Rina Carmel from Anderson, McParlin & Conners LLP in Los Angeles