STAND. COM. REP. NO. 2880

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2218
                                        H.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 2218, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose of this measure is to facilitate the promotion
of Hawaii as a captive insurance domicile.

     Testimony in support of the measure was submitted by the
Insurance Commissioner and Hawaii Captive Insurance Council
Corporation.

     Since the enactment of Hawaii's captive insurance law in
1986, the State and the private sector have worked together to
develop a regulatory framework and supporting infrastructure for
the establishment of a captive insurance industry.  

     Captive insurance companies are risk-financing facilities
that insure the risks of a parent or affiliated company, or other
specialized risks.  They are valued for their flexibility and
ability to insure risks at cost-effective rates as well as for
their ability to insure risks not normally covered by traditional
insurance companies.  Hawaii is a leading captive insurance
domicile in the Asian-Pacific region and is poised to become a
major domicile in the global captive insurance industry.

     Your Committee finds that the State may take advantage of
these opportunities by promoting its status as a captive

 
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insurance domicile and the flexibility and effectiveness of its
regulatory scheme.  This measure enables the State to undertake
promotional activities by requiring that ten per cent of the
moneys from the captive insurance administration fund be
transferred to the insurance regulation fund and used for the
purpose of promoting Hawaii as a captive insurance domicile.  The
development of Hawaii's captive insurance industry will further
diversify the State's economic base and enhance its financial
services industries.  

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 2218, H.D. 1, and recommends that it pass
Second Reading and be referred to the Committee on Ways and
Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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