P.O. Box 2815 Honolulu, Hawaii  96803   

Minutes  

Hawaii Captive Insurance Council Corporation Meeting of the Executive Committee 

Wednesday, April 8, 2015 Honolulu, HI 

10:00 am (Hawaii Standard Time) ‐ 1:00pm (Pacific Standard Time)  

Offices of AON Insurance Managers 201 Merchant Street, 24th Floor 

Honolulu, Hawaii  96813  Attendees:  Excused: 

Fay Okamoto  Jerelyn Brown  Matthew Takamine ‐ Teleconference  Ward Ching – Teleconference Paul Wagner ‐ Teleconference Ryan Nobriga Christina Kamaka Jamie Asato  Invited Guests: Gerald Yoshida – Teleconference Jill Miura ‐ Teleconference Scot Sterenberg Ed Haik  

Jason Palmer          

  Agenda Item  Comments/Follow Up 

A.  

Call to order  

Meeting was called to order by Fay Okamoto at 10:03 am.  

B.  Minutes of the February 11, 2015 Executive Committee meeting  

Approved as presented.  

C.  Committee Reports  

Legislative Committee:  Gerald Yoshida reported.  See committee report.   Gerald reported that the proposal to amend Internal Revenue Code Section 831(b) was discussed at CICA.  Legislative Committee is monitoring progress of the proposal 

 

‐ it is not a bill yet.  Membership:  Ed Haik reported.  See committee report.  Ed asked Captive Managers to assist with reaching out to new captive owners to inform them of the first year free membership.  Ed will also follow up with service provider members who have not renewed.  Finance:  As this meeting was close to quarter end, Finance will provide their report at the April Board meeting.  Marketing:  Paul Shimomoto provided his report.  See committee report.  Matthew Takamine updated the EC that there is no update to progress with getting HID’s monetary support for the Japan Seminar.  The Commissioner has been provided with the information he asked for.  Awaiting response, but moving forward regardless.    Fay asked Ed, Paul and Matt to reach out to captive owner members to solicit interest in attending Hawaii on the Hill  Scot Sterenberg gave a report on how CICA went.  Well attended, but slight drop in participation, likely due to the location (east coast).  Focus on small captive issues.  Website:  Nothing to report.  Scot requested that the positioning of the Forum link on the website be more prominent.  Discussion was held about WRIN TV.  Decision to keep the link to WRIN TV on the website, just move the placement.    Ward Ching will coordinate with Kari Nettel to make these website changes.  Education & Forum:  Jill Miura and Scot reported.  See committee reports.  Jill asked the EC and others if they had any suggestions for Oahu locations for the Forum.  Ed suggested that if the Kahala was to be considered, Waialae Country Club could be considered as an additional location to accommodate the lack of meeting rooms.  Jill also asked the EC if anyone had contacts at the Sheraton Waikiki as historically they have not been responsive.  Ed said that John Takushi could be contacted as a first point of 

 

contact.  Scot reported that we have received about 11 session suggestions.  Forum committee will be meeting to review and discuss if further recruitment of sessions will be required.  Rough schedule set.  Golf and Community Service activities will be on Wednesday afternoon of the Forum.    Fay inquired about possible time slots for HCIC Board meeting at the Forum – under consideration are Wednesday late morning after ICCIE Wednesday morning webcast.  Industry Liaison Update:  See committee report.  Government Relations Update:  Matthew Takamine reported that he is trying to schedule our next quarterly meeting with HID.    

D.  Other Business  

Upcoming Events – RIMS – Matt is coordinating the dinner with HID and for others from industry.  Discussion was held regarding who is attending this RIMS dinner.  Agreement that invitation is extended to those that volunteered to man the booth, current or past HCIC Board members and HID.  Fay notified Board of the confirmed date, location and time of the Strategic Planning Meeting.  

E.  Adjournment  

The meeting was adjourned at 10:55 am.  

  

P.O. Box 2815 Honolulu, Hawaii  96803 

 

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A G E N D A  

Meeting of the Executive Committee Wednesday, April 8, 2015 10:00 am (Hawaii Time) 1:00 pm (Pacific Time) 

 Offices of AON Insurance Managers 201 Merchant Street, 24th floor 

Honolulu, HI  96813  

Dial +1 (805) 309‐0027 Access Code / Meeting ID: 928‐856‐213        

A. Call to Order/Determination of Quorum  

B. Approval of the February 11, 2015 Executive Committee meeting minutes  

C. Committee Reports 

Legislative  

Membership 

Finance 

Marketing 

Website 

Education & Forum 

Japan Marketing 

Industry Liaison Update 

Government Relations Update  

D. Other Business (if not otherwise covered by committee reports)  

HAR Admin Rules update 

CICA report 

NAIC (F) Committee proposed Accreditation Standards Preamble 

Upcoming Events – RIMS April 26‐29 

Upcoming Events – Hawaii on the Hill June 9‐10 

Next Meeting Strategic Planning Session– June 25, 2015  

E. Adjournment    

P.O. Box 2815 Honolulu, Hawaii  96803 

 

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Prior Year Planning Meeting – Action Items  Planning meeting was held in May 2014.  The Board conducted a “refresher” review of the items at its November 2014 meeting.  We are attaching to each Executive Committee agenda to continue refreshing our memories and confirming relevance of our targets for 2014‐15  Marketing items: 

West Coast trip, July 2014 seemed well received 

Pacific Northwest, 2015? 

Coordinate dates around other known events (e.g. RIMs, CICA, etc.) 

Pursue speaking opportunities / session submissions to other organizations: o Local RIMS – Western Region RIMs conference o Local RIMS – others? o CPCU next annual conference in Hawaii – 2016 o CFMA o ASHRM o RIMs national o CICA o World Captive Forum o SIIA (more interest in medical stop loss captives) o University Risk Management programs 

More frequent press releases – propose to have VPs oversee / coordinate more frequent communications 

 Forum Scholarship: 

Positive feedback from 2014 recipients.  Need to keep in touch with them. 

Suggest limiting to 3 recipients for 2015 Forum. 

Suggest opening the practicum (why Hawaii, formation process) to all interested participants.  Regulatory Opportunities: 

New administration may be opportunity for dialogue 

Effective & efficient exam procedures (certain procedures annually rather than only every 5 years) 

Consistency of exam findings vs. comments vs. best practices 

Re‐evaluate applicability of Article 2 (examiners handbook) to pure captives  Government Relations: 

Established dedicated government relations liaison and outline of 2015 action plan 

Evaluated PAC and determined it might not be the optimum vehicle to support lobbying efforts 

Designate a portion of HCIC membership dues for “lobbying” activities, and continue grass roots efforts 

Contact during administration transition is suggested, particularly at DCCA level.  Sponsorships & other items: 

Higher level of sponsorship to be made available for 2015 Forum. 

ICCIE – drawing for “free” ICCIE session to be considered at 2015 Forum. 

Industry liaison – schedule for 2015 events.  Increased participation in CICA initiatives? 

Purchase of laptops / projectors – under consideration by Education committee 

 

Legislative  Committee  Report    

 Date:   April  8,  2015  

 Submitted  by:   Jerry  Yoshida  

 Committee  Members:   Jerelyn  Brown   Danel  Licari     Paul  Shimomoto       Ward  Ching  

Capri  Haga  Edward  Haik  Mark  Hironaga  Christina  Kamaka  

Chris  Mertes  Jill  Miura  Fay  Okamoto  Jason  Palmer    

Scot  Sterenberg  Matt  Takamine  Colin  Teraoka  Paul  Wagner  Jerry  Yoshida  

          A.   Subject:     Proposed  Administrative  Rules:             Following   discussion   at   the   last   HCIC   Executive   Committee   and   Board   meeting,   Fay   Okamoto   transmitted   a  

notated  version  of  draft  #3  of   the  proposed  changes   to   the   captive  administrative   rules.    We  are   still   awaiting  feedback  and  a  further  meeting  with  Sanford  on  this  matter.    

    B.   Subject:   NAIC  F  Committee  Proposal  re  Multi-­‐State  Captive  Reinsurers:             On  February  24,  2015,  NAIC  staff  transmitted  a  memo  and  proposed  revisions  to  the  Part  A  Preamble  regarding  

captive   life/health  reinsurers.    On  March  17,  2015  the  Chair  of   the  F  Committee  and  Chair  of   the  E  Committee  issued  a  memorandum  to  clarify  that  the  proposed  Preamble  revisions  are  intended  to  apply  to  only  XXX,  AXXX,  variable   annuity   and   long-­‐term   care   captive   reinsurance   transactions.     The   F   Committee   received   numerous  comments   prior   to   and   at   its  March  meeting   in   Phoenix,   including   that   the   language   is   still   ambiguous.       As   a  result,  the  F  Committee  deferred  action  on  the  matter  and  instructed  staff  to  further  redraft  the  Preamble  so  as  to  remove  any  ambiguity.    A  further  revised  Preamble  is  expected  to  be  exposed  prior  to  the  next  NAIC  meeting.  

    C.   Subject:     2015  Hawaii  Legislation    (changes  from  last  report  are  noted  in  red):             1.   HB281:      Requires   the   auditor   to   conduct   a   study   on   the   feasibility   of   the   State   of   Hawaii   establishing   a  

captive  insurance  company  to  manage  the  State's  property  and  casualty  insurance  risks.    Appropriates  funds  for  the  feasibility  study.    Passed  second  reading  in  the  House  but  did  not  crossover  to  the  Senate.  

      2.   SB1265  and  HB1284:   Companion   bills   to   amend   various   provisions   of   the   Insurance   Holding   Company  

System  provisions  of   the   Insurance  Code.    The  Legislature   is  moving  wtith   the  Senate  bill.     SB1265  crossed  over   to   the   House,   heard   by   House   CPC   and   scheduled   for   decision-­‐making   by   House   Judiciary.     No  substantive  changes.  

      3.   SB1094   and  HB925:     Companion   bills   to   amend   various   provisions   of   the   Insurance   Code   as  well   as   some  

other  provisions  relating  to  insurers  over  which  the  Commissioner  has  regulatory  jurisdiction.    The  Legislature  is  moving  with  the  Senate  bill.    There  are  some  provisions  relating  to  Chapter  431K  that  would  impose  fees  upon  purchasing  groups  and  foreign  RRGs,  as  well  as  revise  certain  provisions  relating  to  required  filings  of  foreign  RRGs.    

 

P.O. Box 2815 Honolulu, Hawaii 96803

Membership Committee Report to Executive Committee

Date: 04/08/15

Submitted by: Danel Licari/Ed Haik (Co-Chairs) A. 2015 Membership Renewals

1) 2015 Membership – total 76 members - 46 captive owners (44 X $325 = $14,300). Count includes two free memberships for formations.

- 30 service providers (30 X $800 = $24,000) - Total revenues from service provider and owner members for 2015 = $38,300.

2) 2014 Membership – total 89 members to date - 55 captive owners (49 X $325 = $15,925) Count includes six free memberships (3 formations, 3 anniversaries). - 34 service providers (34 X $800 = $27,200) - Total revenues from service provider and owner members for 2014 = $43,125.

B. 2015 Hotel Benefit Renewals 1) Hotels renewed (website updated): Pending renewals: - Hilton Hawaiian Village - Sheraton Waikiki - Sheraton Maui - Hawaii Prince - Royal Hawaiian - JW Marriott Ihilani - Mauna Kea Resort - Moana Surfrider - Kapalua Ritz - Hapuna Beach Prince - Halekulani - Trump Hotel Waikiki - Parc Waikiki - Kahala Resort - Aulani

C. 2015 Membership Drive 1) Free “1st” year membership to new captive formations will continue for 2015. Eleven formations for 2014 were

offered “free” memberships in 2015 plus another five formed in 2015. So far only two have accepted and one declined since their first captive is a member. Captive managers please reach out to your new formations to take advantage of the “free” membership.

2) HCIC “Award of Excellence” to continue in 2015. 3) Membership committee will try again this year to recruit new captive owner members through anniversary

acknowledgement and gift. Two of three anniversary captives given free memberships last year renewed in 2015. 4) Six service providers have not renewed from 2014. Membership committee to follow up.

D. Ideas/Works In Progress to Increase Membership

1) Membership Committee is open to all ideas related to increasing membership and prize giveaway ideas for next year’s drawing.

2) Possible mass mailing to “new” group of potential members. Target service providers that participate at other domicile forums. Service provider trend seems to be moving towards multi-states.

3) Revisit having the HCIC member application part of captive application process & or ask for regulator “encouragement” to maintain “member in good standing” could that question “Are you a member of the HCIC in good standing?” be asked in concert with the annual licensing update?

P.O. Box 2815 Honolulu, Hawaii 96803

Marketing Committee Report to Executive Committee

08 April 2015

Offices of AON 201 Merchant, Suite 2400

Honolulu, HI 96813

• Japan Marketing Subcommittee o Met on 27 Mar 2015 to discuss outline and concept of 09 Nov 2015 Tokyo Seminar o Attendees: Paul Shimomoto, Asako Shimazu, Tomoko Wong, Jason Palmer, Colin Teraoka, Toni

Kanehira & Yusuke Aonuma o Discussed items relating to anticipated costs, SOH possible participation, format/content of

presentations and attendee invitations o Awaiting response from SOH as to whether or not they will participate/sponsor

• Hawaii on the Hill (in conjunction with Legislative Committee)

o Registration has been submitted o Confirmed attendees (so far): Ed Haik, Paul Shimomoto & Matt Takamine o Have requested meetings with Senator Hirono along with:

§ Jeb Hensarling (TX) who is on the subcommittee for Housing and Insurance. § Orrin Hatch – the Chair of the Finance Committee – represents UT – a burgeoning captive

domicile. § And any other representatives &or staff involved with the Senate Finance Committee where

the proposed 831(b) legislation started. • HCIC Banner

o Working with Kari to purchase a new banner to replace our aging/broken signage o Estimated cost: $250 - $500 for new, three panel, retractable screen system that will be lighter and

easier to transport

P.O. Box 2815 Honolulu, Hawaii 96803

o

Education Report to the Executive Committee  

Date:  April 8, 2015  

Submitted by:  Jill Miura Education Committee Members:  Christina Kamaka, Craig Watanabe, Jamie Asato, Jill Miura, Ryan Nobriga, Kris Olafsson (observer)   

A. 2016 Forum RFP  RFP to be issued by April 10th; responses requested by May 6th  Target dates – October 17 – 19, 2016  Soliciting bids from the following: 

Hilton Hawaiian Village  Sheraton Waikiki & Resort  Possible Four Seasons Ko Olina 

 

P.O. Box 2815 Honolulu, Hawaii 96803

Forum Committee Report to Executive Committee  

April 8, 2015    

Honolulu, HI    

Committee Members: Jason Palmer, Christina Kamaka, Jamie Asato, Jill Miura, Ed Haik, Helen Chang, Kari Nettle Scot Sterenberg, Chair 

     

A. Initial planning meeting held in January 23 where we discussed the following ‐ Sessions and Sponsorship form  ‐ Sponsorship levels and corresponding values – Added new 

“Diamond” level for $12k all other levels stayed consistent with previous off island rates ‐ Set initial schedule of Events per the attached 

  

B. Sessions update C. Sponsor update D. Next Forum Committee meeting planned for April 24  E. Plan to open registration on June 1. 

 

P.O. Box 2815 Honolulu, Hawaii 96803

O c t o b e r 27 - 30, 2015 Grand Hyatt Kauai Resort & Spa www.hawaiicaptives.com

SCHEDULE OF EVENTS

TUESDAY, OCTOBER 27

MORNING INTERNATIONAL CENTER FOR CAP TIVE INSURANCE EDUCATION (ICCIE) WEBINAR & LIVE PANEL

AFTERNOON EDUCATIONAL SESSIONS: BASICS

AFTERNOON EXHIBITOR SET UP

DATE TIME EVENT

WEDNESDAY, OCTOBER 28

MORNING EDUCATIONAL SESSIONS

MORNING EXHIBITOR SET UP

MORNING MEETINGS/NETWORK OPPORTUNITIES

AFTERNOON HCIC SERVICE EVENT

AFTERNOON GOLF TOURNAMENT

EVENING RECEPTION & DINNER

EVENING AFTER HOURS EVENT

THURSDAY, OCTOBER 29

ALL DAY EDUCATIONAL SESSIONS

ALL DAY EXHIBITORS

MID DAY KEYNOTE SPEAKER LUNCHEON

AFTERNOON HCIC ANNUAL MEMBERSHIP MEETING

FRIDAY, OCTOBER 30

MORNING EDUCATIONAL SESSIONS

MORNING EXHIBITORS

Subject To Change

Industry Liaison Report to Executive Committee 08 April 2015

Offices of AON

201 Merchant, Suite 2400 Honolulu, HI 96813

RECAP FROM 2015 CICA CONFERENCE – LEADERSHIP COUNCIL MEETING

• Reputational Challenges Task Force

o CICA is working on a draft of a “best practices” document for 831(b)/ micro captives o Noted that Congressional staff is looking to target abusive practices by amending the IRC o Belief that IRS is overstepping its bounds by trying to regulate the captive industry

• Government Relations Leadership Council

o Need to lobby individual state commissioners to have them speak up in support of captive industry at NAIC meetings

o Noted that state commissioners are generally reluctant to speak out against NAIC initiatives

• Legislative Tracking Software being piloted by Vermont o VT is piloting “FiscalNote” – an online legislative tracking service that will hopefully help VT track all

captive related legislation nationwide. VT reports that service costs approximately $1,000 per month.

o VT will continue to test product and may recommend that CICA invest in the software going forward.

P.O. Box 2815 Honolulu, Hawaii 96803

  

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Synopsis 

Captive Association Leadership Council Meeting 

Monday, March 9, 2015 

 

A meeting of captive association leaders was convened at 4:25 p.m. Eastern time on Monday, March 9, 2015, during the 2015 CICA International Conference in Orlando.  Dennis Harwick, President of CICA, served as the facilitator of the meeting.   

Participants included: 

Captive Insurance Companies Association (CICA)  Dennis Harwick, Scott Beckman, Skip Myers, Joel Chansky 

Bermuda Insurance Owners Association  Tom McMahon

Connecticut Captive Insurance Association  Tom Hodson

Delaware Captive Insurance Association (DCIA)  Jeff Simpson

Hawaii Captive Insurance Council (HCIC)  Jerry Yoshida and Paul Shimimoto 

Kentucky Captive Association (KCA)  Michael Shields 

Missouri Captive Insurance Association (MOCIA)  David Dimit 

Montana Captive Insurance Association (MCIA)  John Huth

National Risk Retention Association (NRRA)  Joe Deems

North Carolina Captive Insurance Association (NCCIA)  Martin Eveleigh, Tom Adams 

Tennessee Captive Insurance Association  Kevin Doherty

Vermont Captive Insurance Association (VCIA)  Rich Smith, Bill Riley  

 

The following topics were discussed: 

1.  Reputational Challenges Task Force – The main topic was micro captives/831(b) captives/enterprise risk captives.  The group discussed the draft “Best Practices” document, the proposed legislation of the Senate Finance Committee to increase the allowable premiums and/or restrict the use of the 831(b) election for single parent captives, and the potential influence of the NAIC on this matter.  A number of different ideas and strategies were debated, focusing on trying to stay out ahead of this issue, including the possibility of drafting some common language so that each domicile could approach their 

  

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local senators and insurance regulators.  After a lengthy discussion, the group agreed that it would be best to wait and see what comes out of the Self Insurance Institute of America (“SIIA”) meeting on this topic, which is supposed to take place the week of March 16, and Jeff Simpson will report back to the group.  2.  Government Analytics – Rich Smith from Vermont reported on Fiscal Note, a web‐based tool that Vermont has purchased for $1,000/month.  The tool searches for regulations and legislation based on user specified inputs, and also predicts the probability of the legislation passing.  Rich described the tool as “pretty cool” and believes that it was useful for tracking captive insurance related regulations and legislation.  Some suggested that having CICA leasing such a product might be a good way of centralizing its use on behalf of all US domiciles.  Rich/Vermont will continue to use the tool and will report back at the next meeting.  3.  NAIC Multi‐State Reinsurer Definition – Skip Myers reported on the latest updates to the definition, and pointed to the new Preamble that appears to restrict the definition for captives to those life captives doing AXXX and XXX business.  This issue will be closely monitored.  4.  Next Meeting – A call will be scheduled in August.  If other matters arise in the interim, additional calls will be scheduled accordingly.  The meeting was adjourned at 5:25pm.  

Respectfully submitted,