(a) Each captive insurance company licensed pursuant to this article shall possess and thereafter maintain unimpaired capital and surplus in the amount established by the commissioner; provided that:

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Terms Used In Hawaii Revised Statutes 431:19-104

  • Branch captive insurance company: means an outside captive insurance company licensed under this article by the commissioner to transact the business of insurance in this State through a business unit that has its principal place of business in this State. See Hawaii Revised Statutes 431:19-101
  • Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
  • Governing body: means the board of directors, subscriber's advisory committee, membership, or other entity responsible for the governance of a captive insurance company. See Hawaii Revised Statutes 431:19-101
  • Outside captive insurance company: means an insurance company licensed under the laws of a jurisdiction other than this State and not otherwise admitted to do business as an insurance company in this State, that insures the risks of its parent or any affiliated entities. See Hawaii Revised Statutes 431:19-101
(1) The commissioner shall take into account the nature and volume of business transacted by each captive insurance company, and any other factors deemed appropriate by the commissioner;
(2) Class 3 companies shall be subject to other applicable provisions of this chapter that may require capital and surplus in excess of those established by the commissioner; and
(3) Minimum capital and surplus established by the commissioner shall be no less than the following amounts:

(A) Class 1 company: $100,000;
(B) Class 2 company: $250,000;
(C) Class 3 company: $500,000;
(D) Class 4 company: $500,000; and
(E) Class 5 company: An amount as determined by the commissioner on a case by case basis.
(b) Minimum required capital and surplus established by the commissioner pursuant to subsection (a) shall be in any one or combination of the following forms: cash, irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System, public obligations as defined in § 431:6-301, or other form approved by the commissioner; provided that minimum required capital and surplus in excess of the amounts listed in subsection (a)(3) shall be allowed to be invested in accordance with a strategic investment policy adopted and monitored by the captive insurance company’s governing body, and approved by the commissioner.
(c) In the case of a branch captive insurance company, and in lieu of minimum capital and surplus under this section, the commissioner shall determine the amount and form of security to be maintained by the branch captive insurance company in this State after taking into consideration:

(1) The amount and nature of risk written through and retained by the branch captive insurance company in this State;
(2) The financial condition of the outside captive insurance company whose branch office is located in this State;
(3) Trusts or other security posted for ceding insurers; and
(4) Any other factors the commissioner deems appropriate.

The security required by the commissioner may be in the form of cash, an irrevocable letter of credit issued by a bank chartered in this State or a member bank of the Federal Reserve System, a trust, public obligations as defined in § 431:6-301, or any other forms of security deemed appropriate by the commissioner.

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