STAND. COM. REP. NO. 3281

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2219
                                        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. 2219, 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 reorganize the provisions
relating to the confidentiality of nonpublic information of
captive insurance companies licensed in the State, and clarify
the financial reporting requirements of captive insurers.

     This measure:

     (1)  Provides for the continuing confidentiality of
          nonpublic information submitted to the Insurance
          Commissioner (Commissioner) by a captive insurance
          company or its parent or member organizations;

     (2)  Authorizes the Commissioner to disclose this nonpublic
          information only under appropriate circumstances;

     (3)  Gives the Commissioner flexibility in determining the
          type of accounting methods required, and auditors that
          may be employed by captive insurance companies other
          than class 3 captives in writing their statements of
          financial condition;

     (4)  Makes financial reporting requirements under section
          431:19-107, Hawaii Revised Statutes, applicable to all

 
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                                   STAND. COM. REP. NO. 3281
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          captive insurers other than class 3 insurers, thereby
          establishing a basic standard for financial reports;

     (5)  Removes the reference to class 4 captives from the
          paragraph exempting class 3 captives from any required
          filing of risk-based capital reports with the National
          Association of Insurance Commissioners; and

     (6)  Repeals section 431:19-102.5, Hawaii Revised Statutes.

     Testimony in support of this measure was received from the
Department of Commerce and Consumer Affairs and the Hawaii
Captive Insurance Council.

     Your Committee finds that this measure, which protects the
confidentiality of captive insurance company nonpublic financial
information while allowing for the public interest, and which
gives the Insurance Commission some discretion with regard to
financial reporting by captive insurance companies, will give
existing and potential captive owners increased confidence in the
Hawaii captive infrastructure, attract new captives, and support
Hawaii's position as an industry leader.

     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. 2219, H.D. 1, and recommends that it pass
Second Reading and be placed on the calendar for Third Reading.

                                   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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