The state issued licenses to 10 new captive insurance companies last year, bringing to 212 the number of licenses approved since the industry was established in 1986.

The new licensees include companies from the United States and Japan that are involved in real estate development, construction, energy, transportation and financial services, according to the state Department of Commerce and Consumer Affairs. Of the 212 licenses issued, there are 163 active captive insurance companies operating as of Dec. 31, the state said.

Captive insurance is a type of self-insurance in which a company sets up a separate, licensed legal entity to provide insurance to the company and its affiliates. In 1986, the state passed a law that gave captive insurers tax breaks and greater flexibility in setting up their policies.

Hawai'i continues to be among the country's leaders in the number of captive insurers and is the fifth largest in the world, the state said. In addition, the captive insurance industry contributes to the local economy with combined assets of $6.4 billion, of which $1.1 billion is invested through financial institutions here annually, according to DCCA.

The captive companies spend about $16 million each year here and employ 100 full-time workers, the state said.

"Prospective captive organizers and astute captive insurance specialists recognize the quality and consistency of our regulatory approach and environment here," said J.P. Schmidt, state insurance commissioner.