The Bahamas Advantage Creates a Fertile Insurance EnvironmentIt is not by chance that The Bahamas is one of the most successful international financial centres in the region today. More than 80 years of thought, effort and co-operation have produced ideal conditions for (Ultra) High Net Worth individuals, families and businesses to manage their wealth efficiently in comfort and style. The country’s mature financial services industry, established infrastructure, progressive government, tax neutral environment, political and economic stability, progressive regulations, work permit and immigration policy and luxury lifestyle all have been carefully cultivated to create advantages for doing business in The Bahamas. These advantages may be summed up very simply: The Bahamas is committed to growth and developing its natural resources and cultivated assets to create an environment that supports business and the enjoyment of life in equal measure. Individuals, companies and family offices all will find a warm welcome when they come to The Bahamas.
Insurance BusinessChoice of domicile is often the first and most important question for an insurance company. The Bahamas, an established and progressive jurisdiction, offers a number of compelling competitive advantages as a domicile of choice. In addition, the Government of The Bahamas has affirmed a strong desire and willingness to maintain the necessary framework which will ensure that The Bahamas is an attractive business centre for insurance.
LegislationThe Bahamas always has had market friendly insurance legislation in place. Legislative changes in recent years consolidated this jurisdiction’s approach to the sector. The Insurance Act 2005 introduced a new system for licensing and regulating domestic insurers based on international standards; it also introduced harmonization with the insurance legislation of a number of other jurisdictions in the region. The Insurance Act provided for the establishment of the Insurance Commission of The Bahamas, an independent supervisory authority holding powers of regulation, inspection and supervision over insurance companies. The External Insurance Act (EIA) 2009 repealed the External Insurance Act, 1983 modernising the legislation and regulations applicable to external insurance business.
CaptivesThe legislative and regulatory regime establishes a clear, predictable and efficient structure whereby a captive insurance company covering risks outside of The Bahamas may be established in The Bahamas. Specifically, the establishment, licensing and business operation of captive insurance companies in The Bahamas are governed by the External Insurance Act, 2009 and the External Insurance Regulations, 2010. The existing regime provides a clear response to the demand for cost effective means of entering into captive or self insurance by small to medium sized enterprises while satisfying international standards. Principal features of the regulatory requirements are:
- Captives must be registered as External Insurers under the Act; such registration is renewable annually
- Company name is subject to approval of the Commission
- Minimum of two directors
- Annual audited financial statement to be submitted to the Commission 4 months after the fiscal year end
- Actuarial valuation of life insurers at least every 3 years
- Every insurer must appoint a Resident Representative in The Bahamas; this person must be able to represent the insurer