STAND. COM. REP. NO. 1312-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2278
                                     S.D. 1
                                     H.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. 2278, 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 create an insurance
regulatory mechanism by which captive insurance companies that
are formed as stock, mutual corporations, or captive reciprocal
insurers, and domiciled in the State under Article 19 of the
Insurance Code, may be converted to, or merged with or into,
another form of captive insurer.

     Testimony in support of this measure was submitted by the
Hawaii Captive Insurance Council Corporation, Hawaii Captive
Insurance Management Inc., and a private attorney.

     Testimony in support of this measure, with proposed
amendments, was submitted by the Insurance Division of the
Department of Commerce and Consumer Affairs. 

     Your Committee finds that this measure will benefit existing
captive insurance companies by allowing them the flexibility to
change their corporate form.  This bill would also demonstrate to
potential captive insurance companies that Hawaii law allows for
such conversions.


 
 
 
                                 STAND. COM. REP. NO. 1312-00
                                 Page 2

 
     Your Committee has amended this bill by making
nonsubstantive changes for style and clarity by replacing the
contents of the bill with the provisions of H.B. No. 2220, a
similar bill that was reported from your Committee on Consumer
Protection and Commerce earlier in this session.

     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. 2278, S.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 2278, S.D. 1, H.D. 1, 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