STAND. COM. REP. NO. 2509

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 3190
                                        S.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 S.B. No. 3190 entitled: 

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

begs leave to report as follows:
     
     The purpose of this measure is to allow captive insurance
companies to offer personal motor vehicle and homeowners'
insurance to the general public.

     The Insurance Commissioner, Hawaii Insurers Council, Pacific
Century Trust, Becher and Carlson Risk Management, Inc., and
Hawaii Captive Insurance Council submitted testimony on the
measure.

     Your Committee finds that changes in the marketing and sale
of insurance products have made the purchase of insurance easier
and more convenient for consumers.  This measure would be
consistent with the industry trend since it repeals the general
prohibition against the provision of personal motor vehicle and
homeowners' insurance coverage by captives, thereby giving
consumers greater options for the purchase of insurance.

     Your Committee further finds that authorizing the
establishment of branch captive insurance companies will enable
captives to better meet the needs of their organizers.  Branch
captives are already allowed in Vermont, and the State has
received inquiries from insurance organizations and businesses
interested in establishing branches in Hawaii. 

 
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                                   STAND. COM. REP. NO. 2509
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     Upon careful consideration, your Committee has amended this
measure by:

     (1)  Retaining the prohibition on the provision of personal
          motor vehicle and homeowners' insurance coverage by
          captives, except where provided as employee benefits,
          but creating another exception that allows coverage on
          personal motor vehicles and property located outside of
          the State; and

     (2)  Creating a new class of captive insurance company for
          branch captives, and establishing requirements for
          branch captives related to licensing, names,
          capitalization, financial statements and other reports,
          and examination by the commissioner. 

     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 S.B. No. 3190, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as
S.B. No. 3190, S.D. 1, 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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