Change will open the door to more sophisticated types of insurance and reinsurance

The British Virgin Islands is set to enact a more transparent and cost-effective framework for its growing insurance industry.

BVI Insurance Act 2008, which comes into force on 1 February, will simplify existing rules and open the door to the development of more sophisticated types of insurance companies.

The British Virgin Islands (BVI) decided to update its insurance rules when the offshore insurance community received calls from the International Association of Insurance Supervisors (IAIS) and the Financial Action Task Force.

Observers believe the new regulation will lead to renewed interest from international insurers. Ned Jackson, an insurance specialist at the BVI office of law firm Conyers, said the legislation would benefit companies.

"The new act makes significant improvements in terms of flexibility and user-friendliness and, coupled with the recently introduced anti-money-laundering regime, will elevate BVI’s reputation as a pre-eminent offshore insurance jurisdiction,” he said.

Insurance legislation was first introduced in BVI in the mid-1990s, leading to a large influx of captive insurers, the majority of which were one owner self-insurance vehicles. Subsequent amendments in 2001 and 2005 introduced the separate cell structure for insurance companies, a significant move for the jurisdiction.