STAND. COM. REP. NO.2090
RE: S.B. No. 2582
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2582 entitled:
"A BILL FOR AN ACT RELATING TO CAPTIVE INSURANCE,"
begs leave to report as follows:
The purpose of this measure is to make the State's premium tax structure more equitable for current and prospective captive insurance licensees while maintaining an adequate funding base to support the regulatory and development activities of the Captive Insurance Branch of the Insurance Division.
Your Committee received testimony in support of this measure from the Insurance Commissioner, Bank of Hawaii, Marsh Management Services, Inc., Becher and Carlson Risk Management, Inc., and the Hawaii Captive Insurance Council.
This measure removes the distinction between single owner captives and multiple owner captives with respect to premium tax rates, and subjects all captives to the same declining premium tax rate schedule. This equitable tax structure is comparable to that used in other major captive jurisdictions, such as the state of Vermont, and makes Hawaii a more attractive domiciliary for captives with large premium bases.
To avoid the potentially adverse effects of establishing a single tax rate for all captives, this measure also increases the minimum funding for the Captive Insurance Administration Fund from $250,000 to $1,500,000, to support the regulatory and promotional activities of the Captive Insurance Branch. Your Committee finds that these changes to the captive insurance law will enable the State to grow and compete as a captive insurance domiciliary.
As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2582 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,
RON MENOR, Chair