Hawaii Shows H


Aloha to Captives In Hawaii, the captive industry is a leading example of government and private


sectors working together.


awaii may have been the 50th state admitted to the Union, but it’s no Johnny-come-lately when it comes to being a captive domicile. Best’s Review spoke with Hawaii’s Captive Insurance Administrator George Sum-


ner to find out more. BEST’S REVIEW: A lot of states are facing budget constraints


these days. What’s going on in Hawaii and how does that relate to captive insurance? SUMNER: We are fortunate, because Hawaii’s captive insurance


branch is specially funded. In fact, we hired two additional examin- ers in January and just got approved for a third which gives us a total of nine examiners. This is a good thing because we’re seeing increased activity in new formations. Since October, we’ve formed eight new captives, there are two about to be licensed and another 10 in the pipeline. I keep thinking about what it’s going to be like when the market hardens. BR: What are you doing to make the domicile more attractive to


captives? SUMNER: We loosened up the annual meeting requirements. The


law requires that you have an annual meeting in the state; however, Hawaii’s corporate laws allow you to call into those meetings and if you are calling into the meeting you are deemed in the meeting. We recommend that you come out here, but are flexible. We also want to emphasize that when you form a captive, you are taking on risk, so we expect you to focus on your captive. What better way to focus on the business than by having a retreat in Hawaii? We’ve also improved our laws, we’ve created a bit more flexibility in the exam side, we’ve moved from three to five years with the ability to examine sooner if there is a reason to do so. We’ve also clarified our cell captive laws to allow incorporated cells, LLC cells. We’re also working with Hawaii Captive Insurance Council to review and update our Hawaii admin- istrative rules, which I call the rules of engagement between the private and public sector, to improve them to make it easier to do business here. We believe in common sense regulation. We recognize that companies have choices when it comes to domiciles and we want to be as accommodating as possible without jeopardizing the solvency of our captives. BR: What makes Hawaii different from other states as a captive? SUMNER: We’ve been around for longer than most. Our first


captive was formed in 1987 so we do have a lot of experience. Because we’ve been around for so long, the infrastructure here is excellent. We have a lot of seasoned professionals in the private and public sector. We look at it as a partnership between the pri- vate and public sectors to serve the captive industry. We may not always agree on everything, but we do have great discussions to determine the best answers. Last and not least is accessibility and prudent oversight. We’re focused on common sense regulation while treating our captives with aloha!


BR Click here to isten to the full interview Best’s Review August 2010


George Sumner Captive Insurance Administrator


“


When I started in the captive arena 10 years ago there were just two main captive domiciles, Vermont and Hawaii. Now there are more than 30 captive domiciles just in the U.S. so we recognize there’s a lot of competi- tion out there.


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