STAND. COM. REP. NO. 1311-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 3192
                                     S.D. 1
                                     




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 3192, S.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Establish "class 5" which is a new category of captive
          insurance for a captive insurance company that acts
          only as a reinsurer or excess insurer;

     (2)  Expand the definition of "pure captive insurance
          company" to include a company that reinsures risks of
          its parent and affiliated companies; and 

     (3)  Authorize all captive insurance companies, except for
          class 3 companies, to utilize an actuarial opinion
          prepared by a qualified loss reserve specialist deemed
          appropriate by the Insurance Commissioner when filing
          statements of financial condition.

     This measure will enable organizers to utilize Hawaii-based
facilities to participate in the retention of higher levels of
risk from sources based in and outside of the United States. 


 
 
 
 
                                 STAND. COM. REP. NO. 1311-00
                                 Page 2

 
     Testimony in support of this measure was submitted by the
Department of Commerce and Consumer Affairs, Hawaii Captive
Insurance Council Corporation, and Hawaii Captive Insurance
Management Inc.

     Testimony in opposition to this measure, with proposed
amendments, was submitted by the Reinsurance Association of
America.

     Your Committee finds that this measure has the potential to
attract large insurers, reinsurers and other entities in the
capital market to form Class 5 companies in this State, thus
adding capital resources, support private sector jobs, and
enhancing the business image of this State as a captive insurance
and reinsurance/excess insurance center of the Pacific Rim.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 3192, S.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 Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair