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Governor warns of looming insurance crisis while approving recovery aid from Maui wildfires

HONOLULU (HawaiiNewsNow) – Gov. Josh Green raised further fears of an insurance crisis in Hawaii on Thursday, saying the state needs to be prepared as climate change increases the risk of disasters.

He said that could mean lawmakers would have to return to the capital later this year.

The governor called two consecutive news conferences Thursday afternoon.

The first was to sign the emergency aid for Maui and praise lawmakers for their work, the second was to say they may have to come back to avert a possible insurance crisis.

“What you will hear in the coming weeks and months is that insurers will not insure states like Hawaii where there is high risk,” Green said.

Green said the state generally needs to be financially prepared to protect itself against disasters.

He supports three bills he proposed but were rejected by lawmakers this session: a $25 climate fee for tourists, giving HECO the authority to borrow government-guaranteed bonds with customer money, and a state insurance fund in case That insurers are giving up servicing some condo and homeowners.

Forest fire disaster on Maui

“Without that, and after suffering a disaster of this magnitude, we could lag behind every other market in the country, paying the worst rates and the highest premiums,” Green said.

Green said he is forming a so-called Climate Advisory Team, led by former Alexander and Baldwin CEO Chris Benjamin, to analyze the risk and the cost of mitigating it.

A&B is a major landowner, including on Maui, where it is involved in the debate over water rights on the island.

Hawaii News Now asked if there was a conflict of interest in having someone with ties to a major landowner lead this team.

“No,” Green replied. “He’s retired and is actually one of our climate advisors.”

The legislative session adjourns tomorrow — but the governor said if HECO destabilizes or insurers pull out of Hawaii, he could ask them to reconvene this year.

Green began the afternoon on a brighter note, inviting Maui lawmakers and leaders to watch as he approved nearly $400 million in emergency funds.

The money will primarily benefit home fire survivors who are not eligible for federal assistance, as well as the Ohana Fund, which he said 55 families have turned to for quick compensation in the event of death or injury.

The package and another bill to fund Maui costs in the coming fiscal year do not include direct aid to Maui County. House Finance Chairman Kyle Yamashita, who represents part of central Maui, said he has concluded the county can manage its costs for now with federal assistance.

“I would rather they work within their means right now and we help them when they need it,” Yamashita said. “I think things will get tighter for them in the future.”

Maui Mayor Richard Bissen had requested $75 million in cash and $50 million in bonds, which he said would be needed to finance housing and infrastructure repairs and improvements.

Green also congratulated lawmakers on a multibillion-dollar income tax cut over the next seven years that, if fully implemented, would save a family with income in the $80,000 to $90,000 range $4,000 in taxes.

“It helps with their living expenses,” Green said. “It’s actually about giving Kamaaina an incentive to come home and that will stimulate our economy.”

Lawmakers who opposed the insurance fund and aid for HECO said not enough was known about the costs or whether the risk was real. Green said his climate advisory team will help figure this out.

Anna Harden

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