Why
domicile your captive in the
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Your boutique financial services centre: |
A domicile for your captive: |
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The TCI are leaders in Niche Hybrid
Reinsurance Companies (previously also known as producer
owned reinsurance companies) |
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·
Strategic location in the region
The Turks and Caicos
Islands offer a link between European,
·
Politically stable
As a
· US Dollar
The local currency is the US Dollar,
and there are no exchange control regulations.
·
Tax neutral
There
are no local sales, income or corporation taxes in the
·
Bespoke personalised services
The financial
services sector in the Turks and Caicos is characterised by several
long-standing practitioners who provide high-end service to all sizes of
clients, supported by experienced accountants, lawyers, bankers and insurance
managers.
·
Legacy of good regulation
Legislation for financial
services has existed in the
TCI Captives also
benefit from:
· Modern legislation: An updated insurance
Ordinance
The insurance laws in TCI are widely
recognised as innovative in their approach. The Insurance Ordinance of 1989
(amended subsequently) permits the creation of purpose designed insurance
programmes to fit the precise needs of the captive client, and therefore allows
for a range of structures to be created.
Nonetheless, the Insurance Ordinance
is currently under further review. The updated Insurance Ordinance will ensure
the continuation of a competitive legislative framework for domiciling captives
and other insurance formations regulated in keeping with international best
practices.
· Accessible regulators
The
Superintendent of Insurance, and the staff of the Financial Services
Commission, is easily accessible to industry and in constant exchanges with
practitioners.
· Cost efficient
The costs of
incorporation, the insurance licensing fees and capitalisation costs are quite
attractive when compared with other jurisdictions. For example, company
incorporation starts at $100.
· Timely application procedures
The requirements for
setting up as a service provider or for setting up a captive in the TCI are
very convenient, subject to the submission of complete, acceptable application
documentation on behalf of qualified principals who are verified to be fit and
proper. The FSC will work with all interested parties to facilitate prompt
responses and procedures.
· Reasonable local requirements
For example, directors
are not required to be TCI residents and board meetings can be held anywhere in
the world.
· A sector for growth
The TCI currently has 62 Captives
and 107 restricted Captives. Since 2003, 36 new captives and restricted
captives have been domiciled in the TCI and we expect to see strong growth in
this area. This is a result of today’s challenging insurance market and also
thanks to a number of forward actions being taken by the Government and private
sector including:
-
a review of the legislative framework,
-
increasingly resources in the regulatory structures and
-
additional marketing and
communication efforts to establish the TCI as a preferred captive destination.
Niche Hybrid
Reinsurance Companies
The Turks and Caicos is the world’s
leading domicile for a specific reinsurance programme – the Niche Hybrid
Reinsurance Company (previously known as the Producer Owned Reinsurance Company
or PORC).
A niche hybrid reinsurance company
is similar to a Captive, but the insurance operations associated with its
business are mainly controlled by the Direct Writing Company from which it
receives business.
The niche hybrid reinsurance company
is effectively a captive reinsurance company, registered in the Turks
& Caicos Islands and regulated by the Insurance legislation, owned by an
entity engaged in supplying or producing insurance business through a strong
well-regulated primary writer.
The primary writer then reinsures a
portion of that insurance business with the captive, enabling the producers to
participate in the underwriting profit.
Usually takes the form of an agreement
between the primary writer and the captive, whereby assets of the captive are
maintained by the primary writer equal to the amount of the reserve liability.
Premiums are paid into a Custodial
Trust Account under the control of the Direct Writer and maintained in that
account at an amount which covers the required reserves for liabilities
regarding unearned premiums and claims with a small margin for fluctuations.
Exemptions
The insurance regulators of the TCI
have recognised the reduced risk attached to such
companies, with low loss ratios and the ultimate claimant being protected by
the primary writer which is regulated in its domestic market. This structure allows for
a company in this programme to enjoy attractive exemptions and more favourable requirements
while maintaining the ability to meet its obligations. The
Insurance Ordinance of 1989 (as amended) includes special provisions for such
companies, commonly referred to by the original section number 7(A).
The exemptions are available to companies
which undertake, in writing, to engage in reinsurance business ceded by one or
more named insurers (the primary writers) acceptable to the FSC. The usual test
of acceptability is an AM Best rating of B+ or higher.
For these reasons, the TCI has established
itself as a world leader in this product. Currently, TCI has over 2,400
companies licensed as niche hybrid reinsurance companies.
Links
TCI
insurance-related legislation can be found on www.fia.tc
under insurance, and further information about the sector can be found at
www.turksandcaicos.tc/aim
Other
information about the TCI’s financial services sector is available from www.tcifsc.tc
Or
from the following points of contact: