CONFERENCE COMMITTEE REPORT NO. 11

                            Honolulu, Hawaii
                                            , 1999

                            RE:   S.B. No. 1262
                                  H.D. 1
                                  C.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 1262, H.D. 1, entitled:  

     "A BILL FOR AN ACT RELATING TO CAPTIVE INSURANCE," 

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this measure is to expand the definition of
"captive insurance company"(CIC) to:

     (1)  Establish four classes of CICs, subject to specified
          minimum capital or surplus requirements that may be
          increased by the Insurance Commissioner as necessary to
          preserve solvency;

     (2)  Limit the first two classes to pure CICs and the third
          class to companies formed as association and risk
          retention CICs;


 
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     (3)  Designate class 4 CICs as leased capital facilities
          that, as newly authorized under this measure, are
          allowed to be owned by persons or entities that are not
          members of the CIC;

     (4)  Exempt class 3 and 4 CICs from any National Association
          of Insurance Commissioners (NAIC) risk-based capital
          reports filing requirements; and

     (5)  Subject class 4 CICs to the same one percent tax
          imposed on the gross premiums of association CICs and
          risk retention CICs, where no premium tax is otherwise
          paid to this State on those amounts.

     Your Commitee on Conference, upon further consideration, has
amended this measure to:

     (1)  Establish different minimum capital surplus
          requirements for Class 3 risk retention CICs
          ($500,000), and Class 3 association CICs ($750,000);
          and

     (2)  Make technical, non-substantive amendments. 

     Your Committee on Conference is in accord with the intent
and purpose of S.B. No. 1262, H.D. 1, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as S.B. No. 1262, H.D. 1, C.D. 1.

 
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                                   Respectfully submitted,

MANAGERS ON THE PART OF THE        MANAGERS ON THE PART OF THE
            HOUSE                             SENATE
                                   
                                   
                                   
______________________________     ______________________________
RON MENOR, Chair                   BRIAN T. TANIGUCHI, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
ROMY M. CACHOLA, Member            BRIAN KANNO, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
ROBERT N. HERKES, Member           SAM SLOM, Member



______________________________
MARILYN B. LEE, Member



______________________________
PAUL WHALEN, Member


 
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