Hawaii Governor Josh Green signs Senate Bill 2043 into law as Act 255, introducing a more risk-based approach to the financial examination of captive insurance companies in the domicile. The Act amends section 431:19-108 of the Hawaii Revised Statutes. Under the revised framework, each captive insurance company, other than a risk retention captive insurance company, remains subject to an examination no later than five years after licensure. Thereafter, until 31 December 2031, further examinations are conducted at the discretion of the insurance commissioner, based on the individual risk profile and regulatory considerations of each captive. From 1 January 2032, the statutory cycle resumes, with each affected captive subject to examination at least once every five years unless amended by future legislative action. Examinations of risk retention captive insurance companies are unaffected. Such companies continue to be examined no later than three years after formation and at least once every five years thereafter. The Act requires the insurance commissioner to submit a report to the legislature no later than twenty days before the convening of the 2031 regular session, evaluating the effectiveness of the discretionary examination framework. The report must assess whether the discretionary approach adequately protects policyholders and ensures the financial condition and regulatory compliance of captives, compare examination frequency, costs and resource allocation before and after implementation, and recommend whether to continue, modify or repeal the framework. The legislation was developed through collaboration among the Hawaii Insurance Division, the Hawaii State Legislature, the Hawaii Captive Insurance Council (HCIC) and industry stakeholders. Insurance commissioner Scott Saiki and deputy commissioner Andrew Kurata led the process on behalf of the Insurance Division, with senator Jarrett Keohokalole and representative Scot Matayoshi among the legislators supporting the measure. Act 255 takes effect on 1 July 2026.
