Hawaii Governor Josh Green (pictured above) has signed legislation establishing a trust fund to manage the $4.04 billion global settlement related to the 2023 Maui wildfires.
The law formalizes the state’s $807.5 million share of the settlement and outlines a funding schedule that allocates $400 million both the 2025 to 2026 and 2026 to 2027 fiscal years. The money will be used to pay eligible claims and cover administrative expenses. Any remaining funds will return to the state’s general fund after obligations are met, the report said.
The legislation follows a multi-party settlement agreement reached in 2024 between wildfire claimants and seven defendants, namely, the State of Hawaii, the County of Maui, Hawaiian Electric, Kamehameha Schools, Charter Communications/Spectrum, Hawaiian Telcom, and West Maui Land Co. Claimants, who accept payment through the trust must agree to release these parties from any future liability related to the wildfires.
While the legislation has been presented as a way to expedite recovery for affected residents, it has prompted concern among insurers, a Best Wire report said. The settlement terms restrict subrogation rights, effectively limiting insurers' ability to recover wildfire-related claim costs from liable third parties.
In May 2025, the Hawaii Supreme Court ruled that insurers’ only path to recovery would be through liens on individual settlement payouts. This decision prevents insurers from pursuing separate legal action against the settling entities. Legal observers noted that this could set a precedent for future large-scale disaster settlements, where public entities and corporations contribute to victim compensation in exchange for immunity from further legal claims.
Industry stakeholders have expressed concern that the ruling and the structure of the settlement may have long-term implications for risk transfer and claims recovery in Hawaii’s insurance market. Some insurers are reportedly reviewing their exposure in the state, particularly in high-risk wildfire zones, as litigation and settlement conditions evolve, according to the report.
Efforts to reach the trade association Property Insurers for Hawaii for comment were unsuccessful, the report said.
According to 2024 data from BestLink, the top five writers of homeowners’ multiple peril insurance in Hawaii, based on direct premiums written, were: State Farm Group (32.74%), Tokio Marine US PC Group (14.26%), Allstate Insurance Group (9.61%), USAA Group (6.53%), and RLI Group (5.67%). These carriers collectively account for nearly 70% of the state’s homeowners insurance market, giving them substantial exposure to wildfire-related losses and potential interest in subrogation outcomes.
