Hawaii's Captive Growth Continues with 17 Formations in 2021

Captive growth is continuing in Hawaii, with the state licensing 17 new captive insurance companies in 2021.

Those new captives brought Hawaii's total captive count to 251. "The captive growth has been steady over the last couple of years, resulting in the net increase of 9 and 11 captive insurance companies over the last 2 years," said Andrew Kurata, deputy commissioner and captive insurance administrator for the Hawaii Department of Commerce and Consumer Affairs, Insurance Division, in Honolulu.

Mr. Kurata expects more growth ahead. "We have continued to hear about a hard market in the traditional insurance space and interest in forming new captive insurance companies. As such, we would expect to see steady growth in the upcoming year," he said.

As experts have earlier noted, 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. There is 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 a long-standing captive insurance domicile. State lawmakers passed the legislation authorizing captive formations in 1986.