STAND. COM. REP. NO. 2510

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 3192
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 3192 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to establish a new category
of captive insurance company for a captive that acts only as a
reinsurer or excess insurer and to clarify financial reporting
requirements for captives.

     The Insurance Commissioner, Marsh Management Services,
Hawaii Captive Insurance Council, and Hawaii Captive Insurance
Management, Inc., submitted testimony on the measure.

     This measure establishes a new class of captive insurance
companies for captives limited to insuring risks on a reinsurance
or excess basis only.  The measure will enable organizers to
utilize Hawaii-based facilities to participate in the retention
of higher levels of risk from sources based in and outside of the
United States.

     Your Committee has amended this measure to:

     (1)  Clarify that a class 5 company is one that does not
          fall within any other category of captive insurance
          company;


 
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     (2)  Expand the definition of "pure captive insurance
          company" to include a company that reinsures risks of
          its parent and affiliated companies;

     (3)  Delete the amendments to sections 431:19-107(a) and
          (b), Hawaii Revised Statutes, in section 5 of this bill
          as received by your Committee since these amendments
          will be addressed in another measure being heard by
          your Committee; and

     (4)  Authorize all captive insurance companies, except for
          class 3 companies, to utilize an actuarial opinion
          prepared by a qualified loss reserve specialist deemed
          appropriate by the commissioner when filing statements
          of financial condition.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 3192, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 3192, S.D. 1, and be placed on the calendar for Third
Reading.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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