A Colorado-based company is poised to enter the Hawai'i hurricane insurance market, providing an antidote to worries about the availability of such coverage as the hurricane season begins Thursday.

Boulder, Colo.-based International Catastrophe Insurance Managers LLC, or ICAT, has told the state it intends to begin coverage here and has leased office space in Honolulu, state Insurance Commissioner J.P. Schmidt said yesterday.

Having enough coverage for the hurricane season was a concern because the largest writer of residential coverage, Zephyr Insurance Co., announced last month it was not issuing new policies for certain types of homes. At the same time, some insurance brokers are recommending clients move their policies from the state's No. 4 insurer of homes, the Hawaii Insurance & Guaranty Co., because of financial problems being experienced by its Alabama-based parent company.

ICAT, which needs to fulfill a few minor state regulatory requirements, may start business in June, Schmidt said. He said ICAT, along with the recent market entries by Dongbu Insurance Co., and AAA Hawaii offering insurance, is helping to pick up some of the slack in the market.

An ICAT employee in Boulder confirmed the company is planning to do business in Hawai'i but declined to comment further. The ICAT employees most involved in the expansion were not available for comment late yesterday.

"If people were not able to get insurance, it would significantly affect our industry," said John Riggins, a Honolulu real estate broker. He said home sales can slow if buyers can't get hurricane insurance required by lenders, such as they did after Hurricane Iniki in 1992.

"The more who come into the market, the better off we are."

The Honolulu Board of Realtors, an industry group, had voiced concern about a possible problem developing after Zephyr made its announcement last month. Zephyr said it was having to stop selling new policies for single-wall homes — once a popular construction method here — because of problems with hurricane reinsurance availability and costs.

Riggins said his clients hadn't had a problem getting the coverage, though Schmidt said his office had heard about a couple of cases where obtaining the insurance was a problem.

"A couple of them have recounted particular instances where their clients were having some difficulties," Schmidt said. "But mostly, it's been a concern about what will happen."

Ernest Fukeda Jr., president and chief operating officer of Hawaiian Insurance & Guaranty or HIG, acknowledged that he was losing some customers because of the financial condition of Vesta Insurance Group, the parent company. He said he is hoping for a resolution of the situation soon, either through an injection of money into the company, or a sale of it or some of its subsidiaries.

In March, A.M. Best, a ratings company for insurers, downgraded Vesta and its subsidiaries to C++, a level that's unacceptable to some property lenders. Several Hawai'i-based financial institutions have sent letters to homeowners noting HIG's ratings. The rating is an indication of an insurer's ability to meet obligations.

Schmidt said he and other insurance commissioners had been monitoring Vesta's situation, and that it appeared the company had a few offers for a capital infusion or sale. He said HIG as an individual unit is in "fairly good shape" and meets standards for being able to pay off claims.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.