Captives in paradise
Why should companies creating a captive consider Hawaii?
Companies that are evaluating domiciles for a captive should absolutely consider Hawaii. For over 30 years, Hawaii has distinguished itself as one of the world’s premier captive insurance jurisdictions.
Hawaii’s tradition of stability and excellence is why so many Fortune 500 companies select Hawaii over other captive insurance jurisdictions. At the core of Hawaii’s success is the public-private partnership between the State of Hawaii Insurance Division and the Hawaii Captive Insurance Council (HCIC)—the trade association which represents Hawaii’s captive owners and service providers.
As a pioneer in the industry, Hawaii has vast knowledge and experience with captive insurance and alternative risk. The state maintains a dedicated, self-sustaining captives regulatory branch, with knowledgeable and experienced staff who are responsive to the needs of captive owners and managers. It can keep nearly all captive regulatory examinations in-house, which drastically reduces the cost of doing business for Hawaii captive owners.
As a result of Hawaii’s long-standing commitment to captive insurance, we’re also proud to maintain a robust, multidisciplinary service provider infrastructure that is deep, highly experienced, and responsive to the needs of our captive owners.
Captive owners can find some of the industry’s best captive managers, attorneys, certified public accountants (CPAs) and investment advisors in Hawaii.
Does Hawaii do business with captive owners based outside the US?
Although the majority—around 85 percent or more—of Hawaii’s captive owners are US-based, Hawaii has become the world’s leading jurisdiction for Japanese captive insurers. In partnership with the State of Hawaii, the HCIC has travelled to Japan to conduct educational sessions for nearly 15 years, to show Japanese business owners how they can benefit from captive insurance.
Hawaii’s captives expertise, geographical location and cultural alignment all make the state an ideal domicile for Japanese captives. Since Japanese captive insurance business is fronted and the State of Hawaii does not assess premium taxes on assumed reinsurance, Hawaii is cost-effective for Japanese captives.
The State of Hawaii also allows Japanese companies to maintain bank accounts and financial statements in Japanese yen, which mitigates foreign currency translation and transaction risks.
What developments have there been in the Hawaiian captives space?
Hawaii has a new insurance commissioner, Colin Hayashida, who took office in January 2019. The HCIC is excited and optimistic about commissioner Hayashida’s appointment and we have been working with him and deputy commissioner and captive insurance administrator Andrew Kurata.
Together we want to further enhance Hawaii’s marketing efforts, while ensuring that Hawaii continues its reputation for being a well-regulated and business-friendly captive domicile.
What can you do to be even more competitive?
In partnership with the private sector, the State of Hawaii Insurance Division has been doing an excellent job of attracting and keeping high-quality captives business to the state. The State of Hawaii should continue to maintain and develop its dedicated regulatory branch, which enables it to bring responsive and expert regulatory resources to our captive owners.
The HCIC is appreciative of the collaborative nature of the State of Hawaii Insurance Division and of our public-private partnership. We continue to work with the State of Hawaii Insurance Division on how to best utilise resources for growth.
How much of a challenge is it finding the necessary expertise to service the captives industry on the island?
It is not challenging at all. Hawaii’s service provider infrastructure is robust, deep, and highly experienced—we have among the best anywhere.
What advice would you offer to a company considering creating a captive in Hawaii?
Mahalo (thank you) for considering Hawaii. I would recommend any company considering forming a captive to consult with a knowledgeable and reputable captive manager who will be able to prepare a detailed domicile analysis. The domicile analysis will highlight each jurisdiction’s pros and cons, and will ultimately lead them to the best choice for their company. They would find that Hawaii measures up very well.
I would also recommend them to meet Hawaii’s captive insurance regulators, who are very accessible, knowledgeable and happy to work with partners to help them achieve their objectives.
Matt Takamine is executive managing director–captive operations leader at Beecher Carlson, and president and director of the Hawaii Captive Insurance Council. He can be contacted at: mtakamine@beechercarlson.com
Paul Shimomoto is a partner at Goodsill Anderson Quinn & Stifel and the chair of the HCIC’s marketing committee. He can be contacted at: pshimomoto@goodsill.com
