Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1070
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1070 entitled: 


begs leave to report as follows:
     The purpose of this bill is to change the frequency of
examinations by the Insurance Commission of captive insurance
companies from once a year to a minimum of once every three
years, as determined by the Insurance Commissioner.

     The Department of Commerce and Consumer Affairs, the Hawaii
Captive Insurance Council, J&H Marsh & McLennan Management, Inc.,
and 50th State Risk Management Services, Inc., testified in
support of the bill.

     Under current law, a captive insurance company may apply to
lengthen its examination schedule to once every three years.  The
Insurance Commissioner noted in his testimony that due to the
financial strength of captives admitted in this State, all are
currently on a three-year examination schedule.  Your Committee
finds that this bill will conform the Insurance Code to the
current practice, while giving the Insurance Commissioner
discretion to perform examinations more often, if warranted.

     Your Committee has made technical, nonsubstantive amendments
to the bill for purposes of style, clarity, and consistency.

                                 STAND. COM. REP. NO. 873
                                 Page 2


     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 H.B. No. 1070, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1070, 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