Honolulu Economic Development: Captive Insurance

Hawaii is a Captive Insurance Haven for Large Corporations

"Hawaii is the state of choice for captive insurance due to a multitude of reasons, including our favorable financial and tax environment, the ease of working with regulatory officials and our geographical location in the center of the Pacific Basin." - Alison Mortlock, Marsh Management Services Inc.

Hawaii's captive insurance domicile is the 10th largest in the world and 2nd largest in the United States. Hawaii's captive insurance industry contributes $17 million to the Hawaiian economy. In 2002, Hawaii was home to 101 active captive insurance companies and $1.9 billion worth of assets. The number of premiums written in 2002 alone was estimated at $538 million, a growth of 21% from the previous year.

"The key to Hawaii's success in the captive insurance marketplace has been, and continues to be, a flexible and prudent regulatory environment. The State is committed to meet the changing needs of businesses and organizations that decide to pursue the captive insurance option, while maintaining sufficient regulatory authority for prudent oversight by the Insurance Division. Hawaii has taken always taken a long term approach to its captive insurance industry, that focuses on the ongoing development of it laws and regulations, as well as, the local infrastructure that is needed to sustain the long term growth of this unique industry."  - Craig Watanabe, Captive Insurance Branch, State of Hawaii

Some of the compelling propositions that created the large inflow of captives into Hawaii are:

• Responsive regulatory system that enacts changes as required, according to the expanding needs of the Captive Insurance industry in Hawaii.



• Favorable premium tax structure usually lower than other U.S domiciles. It also compares very favorably against Federal Excise Tax payable in non-US domiciles instead of income tax.



• Hawaii's captives benefit from a highly experienced financial industry. Hawaii's captive insurance industry is served by major international captive management companies, CPA firms, financial institutions, attorneys, reinsurance companies, claims managers, and actuaries.



• Hawaii Captive Insurance Industry has access to an excellent telecommunication infrastructure which facilitates easy communication with mainland U.S. and Asia.



• Hawaii's strategic mid-pacific location provides captive insurance companies with a time zone advantage enabling multiple hours of communication with customers and partners in U.S mainland and Asia.



• Hawaii has direct flights from 18 major US and 22 international destinations. Flight time is only 4.5 hours from the US West Coast. Time from the airport to downtown Honolulu is only 10 minutes.



• Hawaii's captive insurance companies have access to our educated, multilingual, loyal, productive workforce.



• Hawaii Captive Insurance Council works diligently in supporting and strengthening Hawaii's captive insurance industry.



• Department of Commerce & Consumer Affairs under the State of Hawaii maintains a Captive Insurance Branch providing dedicated resources to facilitate the monitoring, regulation and prudent development of the captive insurance industry in the State of Hawaii.

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