Washington County Sewer Agency too relocate Insurance subsidiary from Hawaii to Arizona
Following scrutiny over annual business trips, the Clean Water Services board voted to move its captive insurance company from Hawaii to Arizona. The decision comes after a review revealed Arizona as a more beneficial location, reversing previous recommendations.
Clean Water Services began exploring captive insurance options in 2014, initially considering Arizona and Utah before ultimately incorporating the company in Hawaii in 2016. Hawaii was initially favored, in part, due to its advertised business and recreational facilities.Agency leaders have maintained the captive insurance company is financially beneficial for ratepayers, with its capital growing to $5.55 million as of recently - exceeding 2015 consultant expectations for potential catastrophic event coverage.
Though, the rationale for choosing Hawaii was questioned, with public records revealing initial consultant recommendations leaned towards Arizona or Utah. A key factor in Hawaii’s continued preference, according to a 2022 evaluation by Aon, was the established history and relationships the insurance company had built there - an advantage other states couldn’t match.
This summer’s updated review by Aon, wich identified Arizona as the optimal location, utilized a revised evaluation matrix. This new matrix removed factors like “substance and existing relationships” that previously benefited Hawaii.
The board has tasked Clean Water Services with navigating the legal and administrative processes required for the relocation to Arizona. While the agency has until the end of 2026 to complete the move, officials believe it may be accomplished sooner.Director Jerry Willey was absent during Tuesday’s vote.
“We believe this to be a conservative estimate and will continue to adjust the details of the timeline now that the board has made the decision to re-domesticate in Arizona,” stated agency representative Cortez in an email.
