Gibraltar introduces captive friendly annual returns.
Gibraltar added eight new captives to its register in 1998, bringing the total number to 10, of which nine are active, according to Norman Ritchie, assistant insurance supervisor. Five have UK sponsors with two from the rest of Europe and three from North America.
Gross premiums written in 1998 are estimated at £50 million, up from about £32 million in 1997. Net premiums written have risen from an estimated £27 million in 1997 to around £40 million in 1998. Sponsors come from the following industries: insurance two; warranty one; distributive three; other two. Half of the captives' business is mechanical breakdown and half property.
During the past year Gibraltar introduced the Insurance Companies (Accounts & Statements) Regulations 1998 to enable captive insurers who do not transact a significant amount of third party business to produce abbreviated returns. These are called CAP returns to distinguish them from full INS returns required for commercial insurance companies.
The CAP returns have eliminated a number of forms which were of little value in the supervision of captives, while retaining a reporting format that does not depart significantly from the standard so that Gibraltar continues to match UK regulatory requirements. According to Mr Ritchie, no specific new captive legislation is currently planned, but protected cell legislation is under consideration.
As a member of the European Union through its UK dependent status, Gibraltar competes with Dublin and Luxembourg as the only captive domiciles from which captives can write direct business in other EU member states. It is, however, the only one of the three which offers tax exempt status. Alternatively, an insurer has the option of applying for qualifying status, which means it can negotiate a tax rate of between 2% and 35% a year on its profits to the fiscal situation of its parent.
Web site: www.gibraltar.gi/fsc