The Hawaiian insurance division has reported that Hawaii domiciled captive insurance companies ended 2012 with just over $14 billion in assets.
According to the Hawaii Captive Insurance Council (HCIC), Hawaii currently has 180 actively licensed captive insurers that contribute $20 million in direct spending on professional services and tourism related activities.
The HCIC recently sought the professional opinion of Paul Brewbaker, a local economist, to better understand the captive insurance industry’s quantitative and qualitative impact on the local economy.
Brewbaker explained that Hawaii’s captive insurance industry has benefited from starting early and “scaling up ahead of its rivals”.
The state’s cost of regulating the Hawaii-domiciled captive insurance companies is funded by the premium taxes and fees collected by the state from the captives.
Gordon Ito, Hawaii’s insurance commissioner, said: “With four new examiners, we are excited to be able to expand our outreach and support to our captives and potential new captives. We will continue to maintain prudent regulatory oversight while being responsive to our captives to ensure its continued success.”
“Hawaii is fortunate to have a tremendous infrastructure consisting of knowledgeable and experienced regulators, captive managers, attorneys, and financial institutions who support our captives.”
Fay Okamoto, chair and director of the HCIC, said: “What’s great about this business segment is that we’ve built an internationally competitive industry here in Hawaii that has grown organically, leverages local professional expertise and infrastructure, and attracts long-term business into the state.”
Chris Mertes, president and captive owner executive of the HCIC, added: “Hawaii attracts high quality companies in good measure because of the prudent regulation from the insurance division. When Hawaii first passed its captive law, Vermont was the only real leading US captive domicile but today over 30 states have captive insurance laws on their books.”
“Hawaii is now facing meaningful competition from multiple domestic domiciles, and as a result, now more than ever, regulatory and legislative innovation and drive from the state are key elements that will assist the captive industry in maintaining its competitive position and grow.”
