STAND. COM. REP. NO.  189

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 1323

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1323 entitled:

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

begs leave to report as follows:

     The purpose of this bill is to encourage growth in the captive insurance industry by establishing an annual maximum aggregate tax on gross premiums for captive insurance companies.

     The Department of Commerce and Consumer Affairs; Bank of Hawaii; Arthur J. Gallagher Captive Services (Hawaii); Alliance Captive Insurance Services, LLC; and several concerned individuals testified in support of this bill.  The Tax Foundation of Hawaii submitted comments.

     Your Committee finds that establishing a maximum annual premium tax for captive insurers will encourage more business to be conducted through these companies and make Hawaii's captive insurance premium tax structure comparable with those of other U.S. jurisdictions that have imposed similar limits.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1323 and recommends that it pass Second Reading and be referred to the Committee on Finance.

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

____________________________

ROBERT N. HERKES, Chair