Honolulu, HI (WorkersCompensation.com)- The State of Hawaii saw impressive growth for its captive industry in 2017. The Department of Commerce and Consumer Affairs Insurance Division licensed a sizable 30 new captive insurance companies in 2017. The amount ties the most captive insurance companies licensed in a single year for the State since its enactment of captive insurance law in 1986.
The newly licensed captives are comprised of 24 pure captives, 2 risk retention groups, 1 sponsored captive, and 3 reinsurance only captives, with 14 of the captive owners located in the Western U.S., 11 in Japan, and 5 in Central U.S. The captive owners come from various industries, which include financial services, retail, manufacturing, construction, real estate, health, and transportation.
As of December 31, 2017, there were 230 active licensed captive insurance companies domiciled in the State of Hawaii. There were eight dissolved captive insurance in 2017, two of which were conversions to protected cells under a sponsored captive.
“The quantity and quality of new captive insurance companies in 2017 proves the strength of Hawaii as an ideal domicile,” said Insurance Commissioner Gordon Ito. “The State of Hawaii's focus will continue to be providing a strong infrastructure for its captive insurance companies.”
“A main reason for success is the State's experience and ability to foster collaborative partnerships with captive owners and its service providers to achieve risk management objectives. Our dedicated captive insurance staff, knowledgeable service providers, and prudent regulatory environment all help to make Hawaii an attractive domicile,” stated Acting Captive Insurance Administrator Andrew Kurata.
In 2016, Hawaii's captive insurers wrote more than $6.22 billion in premium volume, invested nearly $1.05 billion in assets through Hawaii financial institutions and generated approximately $23 million in economic benefits to Hawaii through various taxes and fees, professional services, annual conferences and visitor industry business. Hawaii was ranked third in the U.S. based upon total premium, fourth in the U.S. for largest captive domiciles and eleventh in the world based on total number of active captive licenses.
Captive insurance is a regulated form of self-insurance formed by companies or groups of companies as a form of alternative insurance to better manage their own risk. Captives are typically used for corporate lines of insurance such as property, general liability, products liability, or professional liability.
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