Hawaii Enacts New Law Allowing for Dormant Captive Insurance Companies

Hawaii has introduced a significant update to its Insurance Code with the enactment of Act 069, signed into law by Governor Josh Green, M.D., on June 21, 2024. This new legislation creates a pathway for captive insurance companies that are no longer actively underwriting policies to apply for a certificate of dormancy. 

Under the new § 431:19 added to the Hawaii Revised Statutes, a dormant captive insurance company "may apply to the commissioner for a certificate of dormancy," which is subject to renewal every 5 years. Once granted, this certificate places the captive's authority in inactive status and exempts the company from specific tax and reporting requirements, including filing audited annual financial statements and paying taxes under section § 431:19–116. 

The law is designed to reduce the regulatory burden on captive insurers that have ceased operations but wish to remain legally recognized. A dormant captive must maintain a minimum capital and surplus of $25,000 and submit an annual financial condition report. 

For more information on Act 069 and its implications, visit the Hawaii State Legislature's website.