BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
HONOLULULegislation signed into law last month by Hawaii Gov. Linda Lingle intends to increase Hawaii's appeal as a captive domicile.
The new law, supported by both captive regulators and the state's captive insurance industry, places an annual $200,000 cap on premium taxes--regardless of how much business is generated--paid by Hawaii captives.
While only one or two of the state's 163 captives now do enough business to benefit from the cap on premium taxes, it could encourage other employers to set up captives in the state, according to captive managers,.
"We are thinking of the future," said Mike Coulter, deputy managing director with Aon Insurance Managers in Honolulu.
Additionally, the measure, which amends Hawaii's 21-year-old captive statute, allows captives to be licensed as limited liability companies, clarifies capital and surplus requirements, adds flexibility in how captive assets can be invested and elevates the state's top captive regulatory position to deputy commissioner from captive administrator in the insurance department.
"It gives that position much more visibility and emphasizes its importance," said Gerald Yoshida, director and partner at law firm at Char Hamilton Campbell & Yoshida. He also is chairman of the Hawaii Captive Insurance Council.
These changes come as Hawaii--the longtime second-largest captive domicile in the United States--faces stiff competition from fast-growing and relatively new Southwest domiciles such as Arizona and Nevada that offer greater geographic proximity to West Coast businesses, which sponsor the overwhelming majority of Hawaii's 163 captives entities.
Last year, for example, Hawaii added only three captives to its roster compared with 37 new captives in Nevada and 23 in Arizona (see chart).
By the end of this year, captive regulators in South Carolina, another rapidly growing domicile, with 153 captives, expect to overtake Hawaii as the No. 2 U.S. domicile. Vermont is the nation's largest domicile, with 563 captives.
While acknowledging the competition, Hawaii captive managers say the state remains an appealing domicile.
Because it has been regulating captives for so long, Hawaii has long-established regulatory procedures and a well-developed network of captive service providers, said Mr. Coulter of Aon, which manages 21 Hawaii captives.
Hawaii also has made a point of marketing to foreign corporations, especially Japanese companies. "Hawaii really has reached out to the Japanese market," Mr. Coulter said. Ten Hawaii captives have foreign parents.
While the number of U.S. captive domiciles and the competition among them have increased, "We remain very much of a player," Mr. Yoshida said.