Captive Insurance Domicile Comparison for the Caribbean Region

# of captives

Cayman

Turks & Caicos Islands

Barbados

Bermuda

741 97 (excluding Producer Owned reinsurance companies, of which there are 5,494) 223 862 (based on 2011 figures)

Capitalisation requirements

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Class Bi (>94% related business)
Required Capitalisation:
General US$100,000
Long Term US$200,000
Composite US$300,000

Class Bii (>49% related business)
Required Capitalisation:
General US$150,000
Long Term US$300,000
Composite US$450,000

Plus:
10% of NEP to first US$5,000,000
5% of additional NEP up to US$20,000,000
2.5% of additional NEP in excess of US$20,000,000
NEP = "Net Earned Premium"


Class Biii (<50% related business)
Required Capitalisation:
General US$200,000
Long Term US$400,000
Composite US$600,000

Plus:
15% of NEP to first US$5,000,000
7.5% of additional NEP up to US$20,000,000
5% of additional NEP in excess of US$20,000,000
Minimum $100,000 for non life, minimum $180,000 for life A license may be issued to a company when that company has a minimum paid-up capital of US $125 000 or, in the case of an approved mutual insurance company, minimum contributed reserves of US$125 000 Minimum Solvency Margin:

Class 1
Greater of:
a) $120,000 or
b) Premium test – first $6 million net premium written (“npw”): 20% plus – Excess of $6 million npw: 10% or
c) Loss Reserve Test: 10%

Class 2
Greater of:
a) $250,000 or
b) Premium test – first $6 million npw: 20% plus – Excess of $6 million npw: 10% or
c) Loss Reserve Test: 10%

Class 3
Greater of:
a) $1,000,000 or
b) Premium test – first $6 million npw: 20% plus – Excess of $6 million npw: 15% or
c) Loss Reserve Test: 15%

Class 4
Greater of:
a) $100,000,000 or
b) Premium test – 50% of npw (maximum deduction of reinsurance premium cessions is 25% of gross premiums written); or
c) Loss Reserve Test: 15%

Long Term Insurer
$250,000

Liquidity requirements

Cayman

Turks & Caicos Islands

Barbados

Bermuda

None other than general 'Companies Act' solvency requirements to maintain ability to meet obligations as they fall due For general insurance business, minimum solvency margin is 20% of annual premium income for the first $5million of premiums, and 10% thereafter. For long term insurance business, minimum solvency margin is $180,000. For general insurance business, the value of assets must exceed liabilities by US$125,000 during the first year, and also in subsequent years if annual premium income does not exceed US$750,000.

Otherwise, after the first year, the solvency margin is 20% of annual premium income on the firstUS$5 million, and 10% thereafter.  All calculations are based on the net earned premium income of the preceding financial year.  For long-term insurance business, the value of assets must exceed liabilities.
Relevant assets must equal 75% of relevant liabilities

Registration and incorporation expenses

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Incorporation expenses: addressed below

Class Bi (>94% related business)
License application fee: US$10,625

Class Bii (>49% related business)
License application fee: US$11,875

Class Biii (<50% related business)
License application fee: US$13,125
Incorporation fees $100 to $1,000, dependant upon level of authorised share capital
Insurance licence application fee $500
Annual insurance licence $2,000 or pro rated part thereof
  US$
Incorporation 390
Application for license/ certificate of qualification 250
License/ certificate of qualification (calendar year) 10,000
Total 10,640
BMA Registration fees $580, Incorporation fees $2,600

Investment Restrictions (if any)

Cayman

Turks & Caicos Islands

Barbados

Bermuda

None, however, the law permits any assets deemed inappropriate, by the regulator, to be excluded. No restrictions except that only highly liquid assets are allowed for consideration in calculation of solvency assessment For bonds, debentures and equities to be allowed in the solvency calculation, they must be listed on a recognised stock exchange. Those that are not must be approved to be included in the calculation by the regulator. No restrictions except that only relevant assets are allowed for consideration in liquidity calculation (Examples of assets not considered to be relevant include investments in funds and intercompany receivables)

Local taxes

Cayman

Turks & Caicos Islands

Barbados

Bermuda

None. Deminimis stamp duty levied on policies. No local taxes levied Exempt Insurance Company(EIC)
For the first fifteen years of its licence, the registered company's tax rate in Barbados will be 0% and it pays an annual license fee of US$10,000. For subsequent years, the company’s tax rate is limited to 2% of the first US$125,000 of taxable income. However, the license fee of US$10,000 is waived where such taxable income occurs. If the Company does not have any income, the license fee is payable

Qualifying Insurance Company (QIC)
The registered company is liable for tax on its taxable income in accordance with Section 12H of the Income Tax Act at a rate of 25%. Where at least 90% of premium do or will originate outside of CARICOM, the company is eligible for a tax credit that can reduce tax payable on general insurance business to 1.75% of taxable income and on life insurance business to 0.35% of gross investment income

Both EICs and QICs must file tax returns. Those with fiscal year-ends from January 1 to September 30 must file by the following March 15, all others by the following June 15. Corporation taxes must be prepaid at prescribed times.
None. International companies receive an undertaking from the Bermuda government that, in the event of income or capital gains taxes being imposed, these companies will be exempted from such taxes until the year 2035.

Applicable Laws

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Insurance Law, 2010 [of the Cayman Islands] and associated regulations. Insurance Ordinance 1989, Companies Ordinance 1981 (both currently being replaced) Exempt Insurance Act, Cap. 308A
Insurance Act, Cap 310
Income Tax Act, Cap.73
Companies Act,Cap. 308
Bermuda Insurance Act 1978 / Companies Act 1981

Local Regulatory Body

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Cayman Islands Monetary Authority Turks & Caicos Islands Financial Services Commission (tcifsc.tc) Financial Services Commission(http://www.fsc.gov.bb/) Bermuda Monetary Authority (BMA)

Tax Treaties

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Tax Information Exchange Agreements with: Mexico, Canada, Germany, Portugal, Aruba, Australia, Netherlands Antilles, France, New Zealand, The Netherlands, Ireland, Denmark, Faroes, Finland, Greenland, Iceland, Norway, Sweden, United States Tax Information Exchange Agreements with

Australia
Denmark
Faroes Islands
Finland
France
Germany
Greenland
Iceland
Ireland
Netherlands
New Zealand
Norway
Sweden
United Kingdom
Barbados Tax Treaty Network:
Austria, Botswana, Canada, CARICOM, China P.R., Cuba, Finland, Ghana*, Luxembourg, Malta, Mauritius,  Mexico, Netherlands (*protocol), Norway, Panama*, Seychelles, Sweden, Switzerland, United Kingdom, United States, Venezuela

*Treaty/Protocol awaiting ratification
As of March 1, 2013, 38 Tax Agreements have been signed with: United States, Australia, United Kingdom, New Zealand, Sweden, Norway, Finland, Denmark, Iceland, Greenland, Faroe Islands, Netherlands, Germany, Ireland, Curacao*, Saint Maarten*, France, Mexico, Aruba, Japan, Bahrain (DTA), Portugal, Canada, India, P.R. of China, Indonesia, Czech Republic, Argentina, South Africa, Malta, Turkey, South Korea, Italy, Malaysia, Qatar (DTA), Seychelles (DTA), Singapore, Brazil

*Formerly Netherland Antilles (Sept. 21, 2009)
DTA – Double Taxation Agreement

Reporting requirements

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Class Bi (>94% related business)
No statutory basis of reporting

Annual return (declaration in format specific in prevailing regulations) filed within 6 months of financial year end including:
  • Audited financial statements prepared in accordance with a recognised GAAP framework (e.g. US GAAP, IFRS)
  • Long term business reserve valuation certified by actuary
  • Certification of solvency prepared by an approved person
  • Confirmation of no changes to license application details (other than approved modifications)
  • Schematic if insurance program
  • Evidence supporting how required capital is met
Class Bii (>49% related business)
Same as Bi plus:
  • Details of unrated Reinsurers or Reinsurers rated less than A - (by AM Best)
  • Analysis of Unrelated Business
Class Biii (<50% related business)
Same as Bi plus:
  • Audited financial statements must be made available to insured persons and third party beneficiaries.
Annual Chief Executive Officer Certification of activities, annual solvency certification, annual audited financial statements Audited financial statements must be filed with the Financial Services Commission within six months of year-end Exemption from filing GAAP financial statements.

Statutory financial statements to be filed six months from financial year-end for Class 1 and 2, four months from financial year-end for Class 3.

Loss Reserve Specialist opinion not required for Class 1, required tri-annually for Class 2, required annual for Class 3.

Local Office/ Representation Requirements

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Licensees must have a place of business in the Cayman Islands and maintain there such resources, including staff and facilities, books and records as the regulator may consider appropriate.

Generally this is achieved through the appointment of an insurance manager to provide these services. There are numerous high quality insurance management firms present in the Cayman Islands.
Local registered office and resident agent required Local registered office and resident agent requirement Local registered office and a local principal representative, which is normally a captive management company

Audit requirements

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Annual audit under a widely recognised audit framework. Annual audited financial statements within 6 months of year end Audited financial statements must be filed with the Financial Services Commission within six months of year-end. Statutory audit required, GAAP financial statements can be waived upon unanimous consent of the shareholders

Requirements for Directorships

Cayman

Turks & Caicos Islands

Barbados

Bermuda

  • Directors must be approved required by regulator
  • The regulator requires submission of a questionnaire of personal information including background, experience and credentials; three references; police clearance certificate (or equivalent) and photo identification.
Minimum of 2 directors, none required to be local Minimum of one director At least two directors who are ordinarily resident in Bermuda

Estimated Licensing timeline

Cayman

Turks & Caicos Islands

Barbados

Bermuda

4-6 weeks 3 months Two weeks Less than 1 month

Approximate Incorporation costs

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Initial incorporation costs approximately US$5,000 Included in registration and incorporation expense estimate above Included in registration and incorporation expense estimate above. Included in registration and incorporation expense estimate above

Segregated account rules in legislation

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Yes:
  • segregated portfolio legislation enacted
  • portfolio insurance companies legislation drafted and expected to be enacted in 2013 (will offer the same advantages as incorporated cell companies)
 Protected Cell Ordinance 2006 The Company's Act includes provisions for a company whose articles permit the establishment of one or more separate accounts in respect of a contract liability of the company in respect of insurance. Segregated Accounts Companies Act 2000. No separate filings are required for segregated account companies.

Local taxes on company and any blanket exemptions for captive

Cayman

Turks & Caicos Islands

Barbados

Bermuda

  • No taxes
  • Available exemption from any future tax on profits, income, gains or appreciation for up to 30 years.
  See above No local taxes

Annual fees

Cayman

Turks & Caicos Islands

Barbados

Bermuda

US$11,000  $2,000 US$10,000 Class 1 - $971 (general business)
Class 2 - $1,654 (general business)
Class 3 - $10,000 (all types of business)

PwC Assurance Contact Information

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Damian Pentney
Partner - Insurance Leader, PwC Cayman Islands
Direct: +1 345 914 8622
Mobile: + 1 345 938 8622
Email: damian.pentney@ky.pwc.com
Nick Haywood
PwC | Assurance Partner
Office: +1 649 946 4890 | Mobile: + 1 649 332 6723 | Fax: + 1 649 946 4892
Email: nick.haywood@tc.pwc.com
PricewaterhouseCoopers
Abacus House, P.O. Box 63, Leeward Hwy, Providenciales, Turks & Caicos Islands
Michael Bynoe
PwC | Engagement Leader
Direct: +1 246 626 6801
Fax: +1 246 436 1275
Email: michael.bynoe@bb.pwc.com
PricewaterhouseCoopers SRL
The Financial Services Centre, Bishop's Court Hill, St. Michael, Barbados, BB 14004
David Gibbons, CA
PWC | Captive Insurance Leader, Managing Director
Direct Tel: +1 (441) 299 7191
Fax: +1 (441) 295 1242
Email: david.gibbons@bm.pwc.com
PricewaterhouseCoopers, Dorchester House, 7 Church Street, Hamilton, HM 11, Bermuda

PwC Tax Contact Information

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Ian Bridges
Tax Director, PwC Cayman Islands
Direct: +1 345 914 8778
Email: ian.l.bridges@ky.pwc.com
Ian Bridges
Tax Director, PwC Cayman Islands
Direct: +1 345 914 8778
Email: ian.l.bridges@ky.pwc.com
Louisa Lewis-Ward
PwC | Tax Engagement Leader
Direct: +1 246 626 6756
Mobile: +1 246 231 0348
Fax: +1 246 430 9231
Email: louisa.lewis-ward@bb.pwc.com
PricewaterhouseCoopers SRL
The Financial Services Centre, Bishop's Court Hill, St. Michael, BB 14004 Barbados
Richard E. Irvine
PwC | Partner - Tax
Direct: 1 441 299 7136
Cell: + 1 441 505 0257
Direct Fax: + 1 441 279 9136
Email: richard.e.irvine@bm.pwc.com
PricewaterhouseCoopers
P.O. Box HM1171, Hamilton HM EX, Bermuda

PwC Actuarial Contact Information

Cayman

Turks & Caicos Islands

Barbados

Bermuda

Timothy Landick, FCAS, MAAA
PwC | Director, Actuarial and Insurance Management Solutions
Direct: +1 441 299 7110
Cell: +1 441 505 2162
Fax: +1 441 279 9110
Email: timothy.landick@bm.pwc.com
PricewaterhouseCoopers Actuarial Services Ltd
P.O. Box HM1171, Hamilton, HM EX, Bermuda
Timothy Landick, FCAS, MAAA
PwC | Director, Actuarial and Insurance Management Solutions
Direct: +1 441 299 7110
Cell: +1 441 505 2162
Fax: +1 441 279 9110
Email: timothy.landick@bm.pwc.com
PricewaterhouseCoopers Actuarial Services Ltd
P.O. Box HM1171, Hamilton, HM EX, Bermuda
Timothy Landick, FCAS, MAAA
PwC | Director, Actuarial and Insurance Management Solutions
Direct: +1 441 299 7110
Cell: +1 441 505 2162
Fax: +1 441 279 9110
Email: timothy.landick@bm.pwc.com
PricewaterhouseCoopers Actuarial Services Ltd
P.O. Box HM1171, Hamilton, HM EX, Bermuda
Timothy Landick, FCAS, MAAA
PwC | Director, Actuarial and Insurance Management Solutions
Direct: +1 441 299 7110
Cell: +1 441 505 2162
Fax: +1 441 279 9110
Email: timothy.landick@bm.pwc.com
PricewaterhouseCoopers Actuarial Services Ltd
P.O. Box HM1171, Hamilton, HM EX, Bermuda