RELATING TO INTEREST ON INSURANCE PROCEEDS RELATED TO A MORTGAGE LOAN.

2025 Regular Session Introduced by Nadine Nakamura

House Bill 1047 ensures homeowners receive fair interest on insurance proceeds tied to mortgage loans, clarifying mortgage servicers' responsibilities for better consumer protection.

Carried over to 2026 Regular Session.

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Summary of House Bill 1047

Bill Information:
- Bill Number: HB 1047
- Title: Relating to Interest on Insurance Proceeds Related to a Mortgage Loan
- Status: Reported from CPC (Stand. Com. Rep. No. 674) as amended in HD 1, recommending passage on Second Reading and referral to FIN.
- Introduced: November 21, 2024
- Classification: Bill
- Subject: Hawaii Financial Institutions, Interest on Insurance Proceeds, Mortgage Loans, Mortgage Servicers

Purpose and Intent

House Bill 1047 aims to address the handling of interest on insurance proceeds that are related to mortgage loans. The bill seeks to clarify the responsibilities of mortgage servicers regarding the management of insurance proceeds, ensuring that homeowners receive fair treatment in the event of a claim.

Key Provisions

Interest on Insurance Proceeds: The bill proposes to establish guidelines for how interest on insurance proceeds should be calculated and distributed to homeowners.

Mortgage Servicer Responsibilities: It delineates the obligations of mortgage servicers in managing these proceeds, ensuring that they act in the best interests of the mortgage holders.

Consumer Protection: The legislation is designed to enhance consumer protection by ensuring that homeowners are not unfairly deprived of interest that accrues on insurance proceeds while claims are being processed.

Affected Parties

Homeowners: The primary beneficiaries of this bill are homeowners who have mortgage loans and may need to file insurance claims related to their properties.

Mortgage Servicers: The bill places specific requirements on mortgage servicers, impacting how they manage insurance proceeds and their associated interest.

Insurance Companies: Insurers may also be affected as they will need to comply with the new regulations regarding the disbursement of proceeds.

Procedural Aspects and Timeline

Introduced: The bill was filed on November 21, 2024.

Committee Actions:

It was referred to the Committee on Public Health, Welfare, and Labor on January 23, 2025.
The bill passed its second reading on February 14, 2025, after being reported from the Committee on Consumer Protection and Commerce (CPC) with amendments.
The bill is currently referred to the Finance Committee (FIN) for further consideration.

Voting Record: The CPC committee recommended the bill with amendments, with unanimous support and no opposition noted.

Conclusion

House Bill 1047 represents a significant step towards improving the management of insurance proceeds related to mortgage loans in Hawaii. By establishing clear guidelines and responsibilities for mortgage servicers, the bill aims to protect homeowners and ensure they receive fair treatment during the claims process. As it moves through the legislative process, further discussions and amendments may shape its final form.