Proposal to let insurers sue fossil-fuel companies divides insurers, environmental groups and industry

Lawmakers heard prolonged testimony on SB 1166, which would allow the state residual insurer (Hawaii Property Insurance Association), private insurers and the Hawaii Hurricane Relief Fund to recover payments for climate-driven disaster losses from responsible parties.

Advocates framed the bill as a response to rising premiums, insurer nonrenewals and increasingly severe climate events. "Hawaii is on the front lines of a climate crisis and an insurance crisis," Kayla Economo of the Polluters Pay Hawaii coalition told the committee, urging inclusion of the Hurricane Relief Fund as an eligible claimant. David Jones, former California insurance commissioner, testified in support and said insurers can pursue upstream accountability for loss drivers and that reinsurance contracts typically address double-recovery concerns.

The American Petroleum Institute urged the committee to hold the measure, warning of due-process and investment risks tied to a novel civil-liability framework on lawful products; API said ongoing litigation raises legal and policy concerns. The Hawaii Association for Justice also raised concerns about conflicts with existing judicial lien and recovery statutes and urged careful drafting to preserve victims’ priorities under civil-judgment processes.

Committee discussion centered on amendments to add the Hawaii Hurricane Relief Fund as an eligible claimant and on clarifying qualifying damages and savings clauses to address ongoing litigation risks and avoid unintended consequences. The chair and several members supported amendments to broaden claimants and to limit double recovery through careful statutory language. The measure advanced with committee amendments that added the hurricane fund and authorized recovery of litigation costs and attorney fees for successful plaintiffs.

Supporters said the bill would offer another tool to offset climate-driven insurance losses and help stabilize rates; opponents warned of legal uncertainty. The measure will proceed to subsequent committees where drafting details and interaction with existing case law will be examined further.