Captive / Commercial insurersCaptive insurance companies were originally established to write the insurance of all or some of the risks of its parent. Guernsey captives often find themselves with a wealth of specialist insurance and risk management knowledge within their own industries and offer these facilities to third parties. Those captives which write only the risks of the parent are termed pure captives, whereas those captives which write some unrelated business are termed broad captives. After moving from a pure captive to a broad captive they occasionally write much more third party business than that of their parents and become true commercial insurers.
Guernsey is Europe's largest captive domicile, mainly due to the presence of technical insurance expertise and the excellence of the supporting professionals needed for this specialist field of insurance and risk management.
A large percentage of the companies in the UK FTSE 100 (including several of the largest companies based on market capitalisation) have chosen Guernsey as the domicile in which to establish their captive.
In addition to UK companies a number of companies in Europe, USA, South Africa, Australia and the Caribbean have established captives in Guernsey.
Protected Cell Companies (PCCs)Guernsey was the first jurisdiction to introduce the concept of PCCs in 1997. It has proven extremely successful, such that both new and existing companies have taken advantage of the cell structure facility. In recent years other jurisdictions have subsequently adopted PCC legislation, but Guernsey retains its worldwide prominence due to the experience of the insurance managers and the fact that regulation is at a cellular level, which offers additional security to cell owners.
PCCs were established under the Protected Cell Companies Ordinance, 1997 (as amended) and was Guernsey's response to the demand from companies who wished to take advantage of the captive approach to risk management, but did not want to establish their own captive.
The introduction of PCC legislation has laid the foundation of Guernsey's rent-a-captive business. It has proved of particular interest to the promoters of association captives, international groups involving numerous autonomous subsidiaries and insurers who wish to separate the life funds relating to different policyholders into separate cells, or classes, within a PCC. A more recent development has been the use of PCCs as Special Purpose Vehicles (SPVs) to facilitate either the translation of capital market transactions into insurance transactions or risk transfer conduits to enable securitisation of future income streams.
A number of insurance managers have established and administer their own PCCs in Guernsey. These allow low cost access to captive facilities for companies who do not wish to establish their own captive.
Further information is available on:
Application & Licensing of an International Insurer
On going supervision (International Insurers)
Submission of Annual Return |
