In a move which looks set to escalate the growth of Hawaii’s Captive insurance and domiciling markets, Hawaii Governor Linda Lingle has signed into law a bill that enhances securitization within the states Captive insurance industry.
The bill allows captive insurers to transfer risks to the capital markets more efficiently and aims to put Hawaii at the forefront of such markets. Hawaii is already the leading Pacific domicile for captive business and this places them perfectly to open up to insurers wanting to place their capital market linked entities there. Hawaii is the No. 1 U.S. domicile for Japanese companies who form captive insurance companies which should put them in a unique place to attract Japanese reinsurers and others looking to securitize Japanese windstorm and earthquake risks.
This is also good news for those who are used to domiciling their special purpose vehicles in the Caymen Islands or Bermuda. The rise of a third choice for domiciling can only help to increase issuance within the marketplace and provide more investment capacity for those looking to diversify their portfolios.