Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1262

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1262 entitled: 


begs leave to report as follows:

     The purpose of this measure is to establish five classes of
captive insurance companies, with specific requirements for each

     The Hawaii Captive Insurance Council, J&H Marsh & McLennan
Management, Inc., and the 50th State Risk Management Services,
Inc. presented testimony in favor of this measure.  The
Department of Commerce and Consumer Affairs presented testimony
in favor of this measure with proposed amendments.  The
Reinsurance Association of America presented testimony in
opposition to this measure.

     Your Committee finds that the captive insurance industry has
grown in the past five years.  Hawaii has become the second
largest home for captive insurance companies in the United
States, and is the premier domicile in the Pacific Basin.
Currently, sixty-five captive insurance companies are licensed in
Hawaii, contributing to the economic diversification of our
     Your Committee believes that establishing classes of captive
insurance companies and licensing criteria, will give Hawaii a
competitive edge over other leading captive insurance domiciles in

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                                   STAND. COM. REP. NO. 547
                                   Page 2

the United States.  This would create a basis for further
development of the captive insurance industry by allowing for
captive organizers to include reinsurers and other sponsors of
captive programs via Class 4 and Class 5 licenses.  Furthermore,
this measure will provide Hawaii with additional insurance
vehicles attractive to the international business community. 

     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. 1262 and recommends that it pass Second
Reading 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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