The British Virgin Islands (BVI) has reported continued strong growth in the number of captive insurance companies operating in the jurisdiction.
A total of 67 new captives were licensed in 2004, a record for the BVI, continuing the double-digit growth trend of recent years.
"The BVI has further consolidated its position as the world's fourth largest offshore jurisdiction for captives, and we enjoyed a record year in 2004.
Interest from around the world continues to grow, particularly from medium-sized single parent corporations, and the captive vehicle generally is becoming more widely known as an efficient and effective insurance option," said Greg Taylor, chairman of the BVI Insurance Association.
According to information obtained from the Insurance Division of the Financial Services Commission, responsible for the supervision and regulation of financial services providers in the territory, in 2004 new licences were issued to companies with parents domiciled in Canada, Mexico, the Caribbean, Europe and Oceania, in addition to the traditional US market.
New captive business in 2004 stemmed primarily from parent companies operating in three industry sectors: Real Estate and Construction business, Healthcare and Finance and Insurance.
Early signs are that the upward trend is continuing in 2005 with strong interest in BVI as a captive domicile. The jurisdiction is now home to some 350 captives and supports a growing number of professional servicesfirm to manage them.
In another, the BVI Government recently passed into lawa new Business Companies Act. Building on the success of the existing IBC legislation, the new Act introduces several new features to further enhance the jurisdiction's company law regime.
One such feature is the integration of the existing regulations for the creation of protected cell entities,known as Segregated Portfolio Companies (SPCs). SPCs are a highly attractive vehicle for captives and a significant number of captives licensed in 2004 were already structured as such. With the new Act in place, it is expected that the number of captives electing to be incorporated as SPCs in the BVI will increase significantly, to take advantage of the additional benefits and opportunities presented by the new legislation.
Humphry Leue, Chief Operations Officer of the BVI International Finance Centre, said: "Captive Insurance can be a highly effective component of any corporate financial planning solution, and as a premier international financial centre it is natural for the BVI to offer a best-in-class range of services and service providers. The incorporation of segregated portfolio companies into the new BVI Business Companies Act demonstrates the forwardthinking that characterises BVI financial sector legislation, and gives us a demonstrable advantage among captive domiciles."