HB 1047 Summary

• Creates new section 412:14 requiring Hawaii financial institutions to contact borrowers within 30 days of receiving insurance proceeds for damaged residential property to determine if proceeds should be applied to the mortgage or placed in an interest-bearing escrow account.

• Requires Hawaii financial institutions and mortgage servicers to hold insurance proceeds in interest-bearing accounts when borrower intends to rebuild, with monthly crediting of accrued interest to the borrower's account.

• Prohibits charging borrowers any fees for maintenance or disbursement of interest earned on insurance proceeds held in escrow accounts.

• Applies requirements during declared states of emergency under section 127A-14, and to mortgage servicers under chapter 454M regardless of emergency status.

• Effective July 1, 2025.