STAND. COM. REP. NO. 740

Honolulu, Hawaii

RE:    S.B. No. 1409

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1409 entitled:

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

begs leave to report as follows:

     The purpose of this measure is to set an annual maximum aggregate tax of $200,000 on gross premiums to be paid by a captive insurance company.

     Your Committee received comments from the Department of Commerce and Consumer Affairs, State Insurance Commissioner, in support of this measure.  Your Committee also received  comments on this measure from the Tax Foundation of Hawaii.

     Your Committee notes that presently the annual premium tax paid by Hawaii captive insurance companies is based on a percentage of the total amount of premiums that are written.  Putting a maximum cap on the annual premium taxes paid to the State will encourage more insurance companies to conduct more business in the State through Hawaii captive insurance companies.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1409 and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair