The Insurance Act 1986, following enactment of the Insurance (Amendment) Act 1995 and the Insurance (Amendment) Regulation 1996 now provides for the Redomiciliation of Captive insurance companies. The Bermudian Authorities have similar legislation.
I understand that transfers from Bermuda to the Isle of Man will be considered on a case by case basis rather than on a designated territory basis. This is despite the fact that Section 132(a) of the Bermudian Companies Act 1981 indicates that a company shall not be continued as a body corporate under the laws of any other country or jurisdiction unless 'the country or jurisdiction is approved by the Minister for the purposes of this part'.
Bermuda has confirmed its satisfaction with the Isle of Man's Redomiciliation legislation. I understand that similar legislation is to be found in other jurisdictions including Cayman and Barbados.
2. PERMIT LEGISLATION
Under the terms of the Isle of Man Insurance Act, 1986, Sections 25 (i)(b) and 25(3), the Insurance Supervisor may issue a Permit. Section 15 of the Regulations applies to Permit Holders.
I believe there are a number of major UK organisations, with captive insurance companies incorporated elsewhere (for example Bermuda) which operate under the terms of existing Permit legislation in the Isle of Man.
In 1995 Willis Corroon obtained Permits for two existing Bermudian based Captives.
3. PRACTICAL DIFFERENCES BETWEEN REDOMICILIATION AND PERMIT HOLDER
a) Domicile
A Redomiciled company would move its domicile to, and be managed in, the Isle of Man.
A Permit Holder remains domiciled in its country of incorporation (for example Bermuda), but carries on its insurance business, in and from, and is managed in the Isle of Man. This means that company secretarial filings and annual returns continue to be required in the country of incorporation.
b)Statutory Insurance and Accountancy Requirements
Dr Hastings (the Isle of Man Insurance Supervisor) requires to receive Statutory filings in the Isle of Man format for both companies domiciled in the Isle of Man and those that are Permit Holders.
In the context of the latter, the Bermudian authorities accept certification by the Isle of Man Insurance Authority, on a "case by case" approved basis, as a substitute to normal local requirements thereby avoiding the expense of reporting in differing formats to two separate domiciles.
c)Isle of Man Licensing Process
I understand that the initial insurance authorisation process for Isle of Man incorporations, Redomiciled incorporations and Permit Holding insurers is virtually the same.
I further understand that the process of changing from a Permit Holder to a Redomiciled company should be a very smooth one as most, if not all, of the regulatory work will have previously been completed.
4. SUMMARY
Companies domiciled in Bermuda may now opt to either Redomicile their Captive or operate under the terms of a Permit in the Isle of Man.
It is expected that most companies will choose the Redomiciliation route as it is likely to prove the most cost effective and efficient way to operate in the Isle of Man.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information on both the Redomiciliation and Permit process, please contact:
James C Boyd Managing Director Willis Corroon Management (Isle of Man) Limited Ten Finch Road Douglas Isle of Man IM1 2PT
Telephone No: 01624 620274
Facsimile No: 01624 661586
or visit the Willis Coroon web site, at Click Contact Link
For further information on Captive Insurance in Europe enter a text search "Willis Corroon" and "Business Monitor".
Business briefing Publishing Ltd, 1997 Tel +44 (0) 171 820 7733
