Colin Hayashida’s career was launched from a University of Hawaii bachelor’s degree in political science, leading to his hire as a committee clerk for then-Sen. David Ige.
But after that, the insurance industry found him, his first private employer being the Hawaii Medical Service Association, where he handled health providers’ claims appeals.
In January, now-Gov. Ige tapped him to take over as state insurance commissioner. That capped his nearly 19 years with the state’s insurance division, part of the Department of Commerce and Consumer Affairs.
Hayashida had to hit the ground running, because the Legislature was just convening; he hopes to spend time this year developing his own legislative agenda.
And even before the current hurricane season brought it to mind, he is already planning to propose a program that could help homeowners lower their hurricane risk — and premium costs.
Further, he’s still dealing with insurance issues raised by the devastation of last year’s Kilauea volcanic eruption. The signs of more activity beneath the surface of Mauna Loa serves to remind everyone of the ongoing risk.
As it is, the last-resort entity remaining to write new policies is the state-mandated Hawaii Property Insurance Association, to which all commercial insurance agencies working in Hawaii continue to contribute.
At 48, Hayashida is focused on his new position, but earlier in his career he found time for a personal passion, coaching wrestling, the sport that had drawn him in his youth to compete at Lahainaluna High School. Now at mid-career, Hayashida acknowledged that the general perception of his profession is that jobs are all sales-driven. Part of his mission lies in workforce development, he said.
Hayashida wants to advocate at schools for math curriculum enhancements that can prepare students for some of the information-technology skills being sought and the professionally rewarding aspects of the industry. These days, for example, there is a much greater emphasis in analytics, he said.
“And different industries are moving toward creating models — computer modeling, analytical modeling,” he said. “So a foundation of that is going to be the math piece. It’s a combination of IT, math and science.”
Question: What is the primary function of the commission in regulating insurance?
Answer: Solvency. Basically making sure that domestic insurance companies can pay claims. The Insurance Division oversees the Hawaii insurance industry; issues licenses, examines the fiscal condition of Hawaii-based companies, reviews rate and policy filings, and investigates insurance related complaints.
Q: One year after the Kilauea eruption, how will your agency deal with insurance for rebuilt properties? Will the coverage or availability of insurance change?
A: With various lava events throughout the past decades, private market coverage has been diminishing. If no insurance is being offered in the area, consumers’ only option would be the Hawaii Property Insurance Association (HPIA). However, the maximum dwelling coverage limit is currently only $350,000.
HPIA is an unincorporated association of insurance companies in Hawaii that provides basic property insurance for consumers who are unable to purchase homeowners coverage in the private market. All property and casualty companies licensed to do business in the state of Hawaii are automatically members of the association. …
One of the concerns that is happening right now is that the people who are choosing to stay there after the eruption, they may be having a hard time finding insurance, because the regular commercial market and the surplus-lines market are no longer writing (policies) there.
So that leaves the only option, HPIA. And the problem with HIPA is their coverage limit only goes up to $350,000. So for some people that may have a bigger structure or a bigger dwelling, that might be a problem. … There wasn’t much regular commercial market activity there. A lot of the companies in the standard market … had stopped writing in homeowners insurance for a while.
Q: When you say a while ago, are we talking decades?
A: Yes, decades. … It seems like a lot of people bought these surplus- lines coverage, like Lloyd’s of London, which is cheaper and doesn’t cover as much.
Q: Do you have any input into what will be allowed there in the future?
A: I can’t predict what’s going to happen in that market. … It’s a challenge because on one hand, these people are living now in a very high-risk area. On the other hand, you know, for some of these people, that’s their home. And so what is the compromise? Where do we go from here? I think that’s really a county decision of how they handle their building permits and how they enforce their code, and so forth.
Q: Any developments to insurance law you would like to see, going forward?
A: What I would like to see … is if we could do more in terms of hurricane mitigation.
Q: Can you define what you mean by that?
A: If someone has a home, there’re different types of things they could do — clips, the windows, fiber concrete they could attach to their home — to make it more sturdy, to make it more wind resistant. … Some states have a program where they allow for that.
Q: Meaning, that can lower the insurance premium?
A: Almost all the hurricane writers, if you do some mitigation, you get a discount in your premium. What some states have done is actually put out grant money for consumers to utilize, to help purchase these mitigation devices.
Q: Can you describe the problem the Medical Cannabis Insurance Reimbursement Working Group is trying to resolve?
A: The main problem is that it is a federal crime to possess, buy or sell marijuana. The working group was tasked to address reimbursement by health insurance for medical cannabis for qualifying patients.
However, if the federal government decides to enforce rules, anyone participating in the cash transaction of medical marijuana could be prosecuted. Insurers would be putting themselves at risk similar to banks allowing accounts for dispensaries. … It’s kind of like there’s hesitation for the banks to get involved with it, too.
Q: Act 111 passed last year, requiring that Hawaii law ensure key provisions of Obamacare — covering dependents up to age 26, including all pre-existing conditions, prohibiting premiums to be based on gender. Can this work, despite the uncertainty for the Affordable Care Act?
A: Act 111 was not part of the Insurance Division’s legislative package, but it appears to be intended to preserve three provisions of the Affordable Care Act by adding benefits to the state’s insurance laws crafted to mimic those federal provisions.
We will enforce complaints with the provisions of Act 111, as we would with other laws under our jurisdiction.
Q: There are some who have flagged “peer-to-peer car sharing,” in which an app enables renting directly from a car owner. Do you have any concerns, from an insurance standpoint?
A: The Insurance Division wants to reiterate the importance of having proper coverage and sufficient limits for all scenarios. Peer-to-peer car sharing would need suitable commercial coverage for this type of enterprise, which may impact personal policies and rates.
Q: Your degree was in political science, which explains your work at the Legislature. How did you end up in insurance?
A: I learned about insurance at HMSA. … I think insurance is one of those things where you kind of just fall into it, you know? I hope we get to that point where people want to be in the industry, and from a younger age.
Q: It’s an interesting goal to have: workforce development.
A: I think part of it is being here as a manager and seeing the challenge of trying to find good talent. We have some very good people here in this state that can do some very good work. It’s a challenge when you’re competing against the private sector, and both of you are competing against the mainland.
