Hawaii Adds to Captive Total, Licensing 21 New Captive Insurers in 2020

Captive growth continued in Hawaii in 2020 as the state licensed 21 new captive insurance companies during the year.

After the dissolution of 9 captives, the new formations brought Hawaii's captive total to 242, making the state one of the largest US captive domiciles.

At the same time, Hawaii-licensed captive insurance companies are taking on more business. "Premiums written and assumed in Hawaii have continued to increase over the past couple of years even though the number" of captives has not significantly increased, said Andrew Kurata, deputy commissioner and captive insurance administrator for the Hawaii Department of Consumer Affairs Insurance Division in Honolulu.

Observers have noted that Hawaii has numerous attractions as a captive domicile, including modest premium taxes. A 0.25 percent tax is assessed on captive insurance company premiums up to $25 million, with the tax rate falling to 0.15 percent on captive premiums between $25 million and $50 million, and a 0.05 percent tax rate on premiums from $50 million to $250 million. Premium taxes are not assessed on premiums over $250 million.

Hawaii is one of the older US captive domiciles, with the legislation authorizing the formation of captives in the state passed in 1986.

Since 2013, when Hawaii had 184 captives, the number of Hawaii captive insurance companies has increased by more than 30 percent.