The BVI continues to maintain its reputation as an extremely attractive domicile for captive insurance, providing a secure business environment backed up by a world class regulatory framework and appropriate legislation.
The development of the BVI into a world class financial and captive jurisdiction has been accompanied by a growth in the pool of professional services available within the territory. Many esteemed international legal and accounting firms are represented in the BVI. (Visit the BVI Association of Insurance Managers www.bviaim.org for an active list of service providers).
The Insurance Division of the Financial Service Commission (FSC) is responsible for the prudential regulation of insurance business conducted in and from within the British Virgin Islands. This includes, but is not limited to ensuring that any prospective licensees, which would include insurers (domestic or captive), insurance managers, insurance intermediaries (insurance agents or insurance brokers and loss adjusters) meet the required standards to be licensed in accordance with the Insurance Act, 2008, the Insurance Regulations, 2009, the Regulatory Code, 2009, the Financial Services Commission Act, 2001 and subsequent amendments. Please see www.bvifsc.vg/divisions/insurance.aspx for further regulatory requirements.
Types of Captive Licenses:
- Category C, Granted to BVI business companies
The license holder is entitled to conduct insurance business, not domestic, including reinsurance that is not open market reinsurance.
- Category D, Granted to BVI business companies
The license holder is entitled to conduct reinsurance business, including open market reinsurance.
License Regulatory Fees
- Insurance license application------------------------------------------------USD 1,000
- Captive insurance calendar year license--------------------------------USD 3,500 (*)
- Segregated Portfolio Company (SPC) calendar year license------------USD 7,500
(*) Fees for other licensed entities may vary based on premium income. Note: fees are due to the Regulator (FSC).
Registered Agent, Registered Office, management and other professional fees apply and will vary depending on the size and complexity of each given company.
License Application Process
The application is submitted by the captive manager to the Insurance Division of the Financial Services Commission (FSC). All applications will be filed with the FSC and follow a set course.
The FSC assesses each application individually, to ensure that potential licensees are “fit and proper” to conduct the activity envisaged. In doing so, the applicant’s honesty, integrity, reputation, competence and financial soundness shall be weighed.
In making an assessment, the FSC will weigh the nature, scale, complexity and diversity of the business, its financial viability, the strategies, policies, systems and controls vis a vis the applicant’s resources. The applicant’s submission must include a business plan detailing how he or she intends to conduct the insurance business in the BVI, the levels and classes of business.
The FSC has the power to decline applications and revoke licenses. A license shall not be granted unless the applicant is able to present proof of compliance with:
- Applicable statutory criteria
- The FSC’s general licensing criteria
- Additional licensing criteria as may be applicable to the case
The minimum statutory capitalization must be retained in cash or cash equivalent at all times. The amounts required by law are as follows:
- US$ 200,000 - Long term insurance business
- US$ 100,000 - Any other case including property and casualty captive insurers
N.B. The Regulator reserves the right to review license applications and to increase the minimum capitalization requirements.
BVI Captive Advantages
- Expeditious application and registration process
- Competitive professional and regulatory fees
- Competitive capitalization requirements
- Local attorneys not required on a statutory basis
- Local bank account not required on a statutory basis
- Tax neutrality
- Common Law jurisdiction
- Modern legislation
- Effective / prudent regulatory framework
- Stringent money laundering controls
- Politically stable / business friendly environment
- Government’s commitment to financial services
- World class telecommunications and infrastructure
In addition to its reputation for integrity as a financial centre, the BVI offers a number of competitive advantages that are particularly relevant to the insurance industry and/or alternative risk markets.
- Flexibility - The BVI will consider applications for the establishment of a company to conduct any type of traditional or non-traditional insurance or alternative risk transfer business, whichever side of the balance sheet it protects.
- Simplicity - Simple and swift procedures for the establishment of an insurance company. A decision upon a fully completed application is usually within one month.
- Cost - Freedom from oppressive fiscal burdens combined with highly competitive cost in terms of fees and other operating expenses, makes the BVI an extremely cost effective domicile.
- Meetings - Companies are, of course, encouraged to hold their annual general meetings in the BVI, however it is not mandatory.
- Finance - It is not a mandatory requirement that corporate bank accounts are maintained in the BVI. The local currency is the United States Dollars, thus, there are no exchange control regulations.
- Privacy - The provision of a blanket of strict confidentiality, with appropriate gateways only for justifiable disclosure to assist regulatory and law enforcement agencies in the investigation of criminal activities.
- Exemptions - From any or all provisions of the Insurance Act, 1994 may be granted in specific circumstances.
- Licensing Strategy - Adoption of a licensing strategy designed to preserve the status of the BVI as a well-regulated and user-friendly jurisdiction.
- Philosophy - An open-door policy of continuing consultation between the Commission and the private sector for the benefit of clients.
- Stability -As a British Overseas Territory, the BVI offers all the security and stability that is traditionally associated with the British Flag. It has an independent legal and judicial system based on English Common Law.
- Balance -Client requirements, including the avoidance of excessive bureaucratic demands, are carefully balanced against regulators’ duties to ensure that licensees operate within the Law