The Insurance Commission of the Bahamas
The Bahamas has seen year-on-year increases in captive formations, says Michele Fields of the domicile’s insurance commission The Bahamas Financial Services Board
Has 2015 been a successful year for captives in the Bahamas?
The Bahamas has continued to see interest in small- to medium-sized enterprises (SMEs) seeking to become involved in the captive insurance industry. We have seen a year on year increase in captive structures formed, both as standalone entities and cell captives. In addition, we have seen a new type of structure introduced to our market this year known as the investor captive.
How many new captives have domiciled in the Bahamas this year?
For the 12-month period ending 30 September, we have approved two new standalone captive insurance companies and 43 cell captives (segregated accounts) established within segregated account companies (SACs). The cell captive structure has been a preferred choice of SMEs because it offers captive owners the same risk management and risk transfer facilities at far less costs than a standalone entity.
The majority of our companies are licensed as general insurers (property, casualty and liability insurance), however, the commission is engaged in discussions with companies and individuals proposing to establish companies to market private placement life products.
These proposals are intended to service clients seeking to use alternative risk transfer mechanisms for their estate planning. We expect to see growth in this area in 2016.
What is new for The Bahamas in terms of regulation? And is there anything on the horizon for 2016?
While there have been no new regulations introduced in 2015, the Insurance Commission of the Bahamas continues to assess both challenges and opportunities associated with the broader legislative framework that affects the incorporation and formation of our insurance companies. The commission remains committed to providing industry support that will facilitate the sector’s ongoing growth while maintaining a robust supervisory framework.
Is captive insurance continuing to grow in the Bahamas? And are you expecting it to continue?
The captive insurance industry remains competitive throughout the region and internationally. The Bahamas, through a robust legislative framework and its experienced financial services providers, will continue to provide a market for international SMEs to develop their risk management and risk financing programmes through captives.
We are confident that while larger ‘onshore’ jurisdictions continue to develop competitive legislation for captive formation, the Bahamas provides a financially safe and sound alternative for those entities desiring to take advantage of the synergies within our financial services sector.
Furthermore, the Bahamas Financial Services Board, along with industry participants, remains committed to developing the Bahamas as the domicile of choice through its international marketing platform. Both of these factors support our expectation of continued growth.
