The Insurance Act, 1994 is the sole piece of legislation which allows for the establishment of both offshore (captive) and onshore (domestic) insurance companies in the British Virgin Islands.

The total asset size of the captive sector amounts to $1.719 billion and total premiums were $340 million, at the end of 2001.

The regulatory authority for the Territory of the Virgin Islands’ financial industry, captives included, is the BVI Financial Services Commission

The Financial Services Commission requires an audited annual statement from Captives and Domestic insurance companies and an annual statement from credit life companies. Life companies are required to provide actuarial reports annually.

Yes, Captive Insurance companies are required to submit annual audited accounts.

Financial Statements and annual audited accounts are due within three months of the company’s financial year end.

A decision on an insurance application may take from four weeks to three months depending on completeness of the application.

The BVI levies income tax, and corporate tax on companies operating in the British Virgin Islands. However, companies doing business offshore are exempt from similar taxes. The BVI does not have corporate gains tax.

The application fee for a new insurance company is $500.

The application fee in respect of an intermediary is $250.

The Insurance Act 1994 does not define categories of captives nor does it provide restrictions on the type of captives that can be formed. Therefore, risk retention groups and rent a captives can be formed. Specific legislation governing Segregated Portfolios will be available shortly

Under the Territory’s International Business Companies (IBC) legislation, migration to and from the BVI is allowed. However, under the Insurance Act, 1994, migration outward of a licensed insurance company is prohibited without the prior written approval of the Commission.

At the end of 2001, there were 13 Insurance Managers in the Territory.

It is only mandatory for captives to have insurance managers; other type companies have been exempted from the requirement to have an insurance manager.

To add a director, the company is required to complete and submit, to the FSC, a questionnaire which discloses, among other things, any information concerning convictions and requires in support, one financial and two personal references.

The relevant company will be required to complete and submit to the FSC a completed questionnaire that discloses information on convictions and financial and personal character references.

When assessing the fit and proper status of an applicant, the FSC evaluates:

• the honesty and integrity of the individual
• the individual’s competence and capability in exercising his or her duties to the company
• whether the individual is financially sound