§431P-5  Powers, duties, and
functions.  (a)  The Hawaii hurricane relief fund shall have the following
general powers:



(1)  To sue and be sued;



(2)  To make and alter policies for its organization
and internal administration;



(3)  To adopt rules in accordance with chapter 91 to
effectuate the purposes of this chapter;



(4)  To borrow moneys, including but not limited to
moneys from state or federal sources and to issue notes or other obligations of
the fund for the purposes of providing funds for any of its purposes as
authorized by the legislature from time to time;



(5)  To pledge, assign, or grant a security interest
in all or any part of the moneys, rents, charges, assessments, or other revenue
and any proceeds thereof derived by the fund; provided that any pledge,
assignment, or grant of security interest shall constitute a lien and security
interest on such money, rents, charges, assessments, or other revenue, and any
proceeds thereof to the extent and with the priority set forth in the document
establishing the pledge, assignment, or security interest, without the
necessity for physical delivery, recording, or further act; and provided
further that in effectuating any pledge, assignment, or grant of security
interest, the fund may do either or both of the following:



(A)  Transfer possession of collateral to its
secured parties; or



(B)  Execute and cause to be filed at the
bureau of conveyances of the State of Hawaii, Uniform Commercial Code financing
statements for the purpose of providing notice to third parties of a pledge,
assignment, or grant of security interest; provided that any failure to file a
financing statement or the filing of a financing statement that contains
incomplete or inaccurate information shall not affect the perfected lien and security
interest of the pledge, assignment, or grant of security interest; and



(6)  Enter into contracts as necessary to effectuate
the purposes of this chapter.



(b)  In addition to the general powers under
subsection (a), the fund shall have the specific power to:



(1)  Adopt and administer a plan of operation in
accordance with section 431P-7, and a manual of rules and rates to provide
persons having an insurable interest in eligible property with insurance
coverage provided by the fund;



(2)  Authorize the provision of hurricane coverage by
the fund for real property and tangible personal property located in or on real
property and establish limits of liability for specific coverages within the
range of authorized coverage;



(3)  Adopt actuarially sound rates based on reasonable
assumptions relative to expectations of hurricane frequency and severity for
all coverage provided under policies or endorsements issued by the fund.  Rates
adopted shall be subject to approval by the commissioner pursuant to article 14
of chapter 431.  Rates adopted shall provide for classification of risks and
shall include past and prospective losses and expense experience in this State;



(4)  Adopt procedures, guidelines, and surcharges
applicable to policies of hurricane property insurance issued in connection
with an underlying property policy issued by an unauthorized insurer;



(5)  Adopt any form of insurance policy necessary for
providing policies of hurricane property insurance by the fund, with the
approval of the commissioner;



(6)  Issue policies of hurricane property insurance
and pay claims for coverage over the mandatory deductible or other deductible
provided in the plan of operation or any manual of rules and rates adopted
under the plan of operation;



(7)  Require every licensed property and casualty
insurer transacting direct property insurance business in this State to act as
a servicing facility, and by contract with that insurer authorize the insurer
to inspect eligible properties, service policies and policyholders of hurricane
property insurance, provide claim services, and perform any other duties as
authorized by the fund for applicants to the fund and those insured by it;



(8)  (A)  Assess all licensed property and casualty
insurers the amounts which, together with the other assets of the fund, are
sufficient to meet all necessary obligations of the fund.  The assessment shall
be made on the insurer's gross direct written premiums for property and
casualty insurance in this State for the preceding calendar year.  The rate of
assessment in a year in which a covered event has not occurred shall be 3.75
per cent and shall not include the insurer's gross direct written premiums for
motor vehicle insurance in this State; provided that following a covered event,
the rate of assessment may be increased to an amount not to exceed five per
cent and may include the insurer's gross direct written premiums for motor
vehicle insurance in this State.  This increase shall remain in effect until
such time as all claims and other obligations, including but not limited to
bonds and notes, arising out of a covered event shall have been fully
discharged.  An insurer authorized to provide comparable coverage under section
431P-10(b) and which is providing hurricane property insurance in the State
shall be assessed an amount that excludes gross direct written premiums for
property insurance in this State.  The assessment for a year in which a covered
event has not occurred shall be collected quarterly during each calendar year;



(B)  In the event of a loss from a covered
event the fund, in addition to the assessment in subparagraph (A), shall assess
those insurers which acted as servicing facilities during the twelve months
ending at the start of the month preceding the month in which the covered event
occurs.  The total assessment shall be a fixed percentage of the total coverage
provided by the fund under its policies of hurricane property insurance during
the month preceding the month in which the covered event occurs.  The
percentage to be used in calculating the total assessment shall be as follows:



(i)  For calendar year 1998, a percentage as
fixed by the board in the plan of operation, but in no event shall the total
assessment exceed $500,000,000;



(ii)  For calendar year 1999, 1.125 per cent;



(iii)  For calendar year 2000, 1.25 per cent; and



(iv)  For calendar year 2001, and each calendar
year thereafter, 1.5 per cent.



A separate total assessment shall be
made for each covered event.  The total assessment shall be allocated to each
servicing facility based on the proportion of the total amount of the fund's
gross direct written premiums for policies of hurricane property insurance
serviced by each servicing facility to the total amount of the fund's gross
direct written premiums for policies of hurricane property insurance, in each
case, during the twelve months ending at the start of the month preceding the
month in which the covered event occurs.  Assessments made under this
subparagraph and those under subparagraph (A) in a year in which a covered
event has occurred are due from each insurer based on assessment procedures
established by the fund to meet its obligations to policyholders in a timely
manner; and



(C)  The fund may exempt or defer, in whole or
in part, the assessment of any insurer if the assessment would cause the
insurer's financial statement to reflect amounts of capital or surplus less
than the minimum amounts required for a certificate of authority in this State;



(9)  Develop a program of incentives to encourage
insurers to provide policies of hurricane property insurance in the event the
commissioner authorizes the provision of comparable insurance pursuant to
section 431P-10(b) which may include but are not limited to exemption of the
insurer's gross direct written premium for property insurance from the
assessment pursuant to paragraph (8)(A);



(10)  Develop a credit based on the difference between
premiums written in 1993 and the premiums written in 1992 by each property
insurer against the assessment for gross direct written premiums written in
1993;



(11)  Develop procedures regarding policies written by
unauthorized insurers comparable to the assessments, surcharges, and other
contributions made by insurers authorized to do business in this State;



(12)  Accumulate reserves or funds, including the
investment income thereon, to be used for paying expenses, making or repaying
loans or other obligations of the fund, providing loss mitigation incentives,
and paying valid claims for covered events insured by the fund;



(13)  Collect and maintain statistical and other data
as may be required by the commissioner;



(14)  Exempt mortgage transactions from payments of the
special mortgage recording fee and provide for maximum limits on or, uniform
reduction of the special mortgage recording fee, pursuant to rules adopted by
the board;



(15)  Suspend or reactivate the special mortgage
recording fee pursuant to resolution of the board;



(16)  Impose fines for each incident of nonpayment of
amounts due to the fund under this chapter; provided that the fines shall not
exceed twenty-five per cent of the amount then due;



(17)  Create loss mitigation incentives, including but
not limited to premium credits, premium rebates, loans, or cash payments;



(18)  Enter into claims financing transactions,
including but not limited to reinsurance transactions, debt transactions, and
other transactions incorporating elements of reinsurance, insurance, debt, or
equity;



(19)  Establish business and corporate entities or
organizations pursuant to the purposes of this chapter; and



(20)  Perform any and all acts reasonably necessary to
carry out the purposes of this chapter. [L 1993, c 339, pt of §2; am L Sp 1995,
c 17, §2; am L 1996, c 307, §7; am L 1998, c 106, §4 and c 304, §2; am L 2001,
c 153, §1]