The separate premium-explanation duty

Section 1 of the Act adds a new section to ch. 431, article 10, and it is easy to miss because it is one sentence: “Insurers shall reasonably explain changes in premium upon written request by the policyholder for any premium increase at renewal.”

Two features of that sentence do work. It is request-triggered — nothing arrives automatically, and a board that does not write does not get an explanation. And it attaches to any premium increase at renewal, with no threshold percentage, so it is available for a nine per cent rise as much as a ninety per cent one.

Why this matters more in Hawaii than the text suggests

Hawaii condominium associations have spent three years at the centre of a master-policy market that contracted sharply after the August 2023 Lahaina fire, and the practical experience boards describe is not primarily about price — it is about being told late, and being told nothing. Act 40 answers both of those directly for policies written from 2027:

Thirty days is a placement window. A nonrenewal that arrives three weeks out is a board negotiating from no position at all. Thirty days is not generous, but it is a floor, and it is now a floor the insurer must be able to prove it met.

A stated reason is a negotiable reason. “Underwriting appetite” and a blank line are not the same as “deferred maintenance on the roof” or “the building has no updated valuation.” The second kind of answer is something a board can act on, and something it can take to another carrier.

Evidence of mailing is a validity condition, not a formality. The Act does not say a defective notice creates a cause of action; it says the cancellation or nonrenewal “shall not be deemed valid” without the evidence. That is a defence to the fact of termination, which is a different and stronger thing than a complaint about process.

What it does not do

Act 40 does not require an insurer to renew, does not cap a premium, does not create an association-specific right, and does not touch the association’s own statutory insurance duties under HRS § 514B-143. A board reading it as relief from the underlying market is reading it wrong. It is a procedural floor.

This is the second bite, not the first

Act 40 lands on ground the 2025 session already worked. Act 110 (2025) amended the same notice regime effective January 1, 2026, and the Insurance Division then issued Commissioner’s Memorandum 2025-6R (August 26, 2025) to settle the question association boards were asking about it:

“the amended notice requirements apply to both personal and commercial insurance policies if the covered property is used, in whole or in part, for residential purposes.”⁴

The memorandum gives two worked examples, and both are condominium buildings: a building with ground-floor retail and upper-floor apartments on one policy, and a mixed-use tower with commercial office floors plus residential penthouses. Both are covered. Wholly non-residential property is not.

That is the clarification that matters most for a mixed-use AOAO, and it is already in force — a board receiving a short-notice nonrenewal on a mixed-use master policy today has an argument, without waiting for 2027.

The 2027 date, and what to do before it

The Act took effect on approval, “provided that sections 1, 2, 3, 4, and 5 shall take effect on January 1, 2027.” Sections 1 and 5 are the association-relevant ones, so a nonrenewal notice received in the interim is governed by the old rules.

Two things a board can do in the meantime. Confirm the address of record the master-policy carrier holds — the evidence-of-mailing rule turns on where the notice was sent, and a stale managing-agent address is the failure mode that makes the protection useless. And diary the renewal date far enough out that a thirty-day notice is a confirmation of what you already expected rather than the first news.

What to watch

Whether the Insurance Division issues implementing guidance or a bulletin before January 1, 2027 — none has appeared as of this writing — and whether the 2027 session is asked to extend the stated-reason duty to mid-term premium changes, which Act 40 leaves alone.