The British Virgin Islands has gazetted the Virgin Islands Insurance (Amendment) Act 2015 and the Insurance Amendment Regulations 2015. These acts have been introduced to modernise the provision of insurance business in and from the British Virgin Islands. There are some significant changes which will open up new opportunities and improve functionality for both captives and insurers.
The current restrictions on and segregation of general insurance business and long-term insurance business have been radically overhauled. These definitions have been deleted and replaced by two classes:
- business, life and health insurance; and
- property and casualty insurance.
Significantly, whereas previously there was a prohibition on carrying out both long-term and general business, the act now allows a licensee to carry out both classes.
The act provides for two new categories of captive licence. The first is a category E licence, which may be issued only to a BVI business company and entitles the licensee to underwrite related-party business only. The second is a category F licence, which is issued only to a BVI business company that writes related-party business and third-party business. These two new categories should provide greater flexibility and opportunities for carrying out captive insurance business from within the British Virgin Islands.
The act also simplifies the process for enabling an insurer to add or remove a class of insurance from its licence.
The act enables BVI insurers to submit an application to be licensed as a segregated portfolio company. The key feature of the segregated portfolio company is that the assets and liabilities of each cell are statutorily ring-fenced from the assets and liabilities of all other cells of the segregated portfolio company. This ring-fencing makes the segregated portfolio company ideally suited for captive insurers with multiple programmes, particularly where programmes are offered to more than one insured.
The Insurance Amendment Regulations 2015 permit a licenced foreign insurer to opt for a regulatory deposit held by the Financial Services Commission as an alternative to setting up a domestic business trust.
Other features of the acts introduce general obligations on insurers to represent the best interests of the British Virgin Islands and policy holders and not to engage in any activities that might mislead customers. The provisions further solidify the British Virgin Islands as a reputable jurisdiction in which to undertake insurance business and demonstrate the continued efforts of the regulator to innovate and streamline for the benefit of licensees while protecting consumers.
For further information on this topic please contact Adam Rhodes at Harney Westwood & Riegels by telephone (+1 284 852 4318) or email (firstname.lastname@example.org). The Harney Westwood & Riegels website can be accessed at www.harneys.com.
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