July 16, 2026
Governor Josh Green has signed Senate Bill 2043 into law as Act 255, marking another important milestone in the continued evolution of Hawaii’s captive insurance regulatory framework.
Act 255 modernizes Hawaii’s captive examination framework by adopting a more risk-based approach to financial examinations for most captive insurance companies. Under the new law, each captive (other than risk retention groups) will continue to undergo a first examination within five years of licensure. Thereafter, through December 31, 2031, the Insurance Commissioner will have the discretion to determine the necessity of future examinations based on each captive's individual risk profile and regulatory considerations. Beginning January 1, 2032, the statutory five-year examination cycle will resume unless modified by future legislative action. Risk retention group examinations are unaffected by Act 255. The legislation also requires the Insurance Commissioner to report to the Legislature in 2031 regarding the effectiveness of this discretionary framework for possible extension or permanence.
This legislation is significant because it reflects one of the principles that has long distinguished Hawaii as a premier captive domicile: strong regulation that is practical, responsive, and proportionate to risk. Rather than imposing a one-size-fits-all examination schedule, Act 255 provides the Hawaii Insurance Division with greater flexibility to focus its regulatory resources where they are most needed while preserving the Commissioner's authority to examine any captive whenever circumstances warrant.
For captive owners, this means a regulatory framework that continues to emphasize sound oversight while recognizing that mature, well-managed captives may not require the same examination cadence as newer or higher-risk entities. It is a thoughtful modernization that aligns Hawaii with evolving regulatory best practices while maintaining the high standards that have earned the confidence of captive owners around the world.
Act 255 is also an excellent example of what makes Hawaii unique and forward-thinking. This legislation was the product of close collaboration among the Hawaii Insurance Division, the Hawaii State Legislature, HCIC, and industry stakeholders. By working together, we were able to develop legislation that supports regulatory efficiency without compromising policyholder protection or the financial integrity of our captive industry.
As President of HCIC, I want to express my sincere appreciation to Governor Josh Green for signing this important legislation into law, Insurance Commissioner Scott Saiki, Deputy Commissioner Andrew Kurata and the dedicated professionals of the Hawaii Insurance Division for their leadership throughout the legislative process, and Senator Jarrett Keohokalole, Representative Scot Matayoshi and the other members of the Hawaii Legislature for their continued support of Hawaii’s captive insurance industry. I also extend my gratitude to the many HCIC members and industry professionals whose expertise and engagement helped shape this legislation.
For more than forty years, Hawaii has earned a reputation as one of the world's leading captive insurance domiciles by embracing innovation while maintaining regulatory excellence. Act 255 is another example of that commitment. It demonstrates that Hawaii continues to evolve thoughtfully to meet the changing needs of captive owners while preserving the collaborative regulatory environment that has long been one of our greatest strengths.