The island's redomiciliation regulations are proving very successful.
Eleven new captives were registered in the Isle of Man last year, bringing the total to 167. According to David Findlay, business development manager at the Insurance and Pensions Authority, the domicile has been particularly successful in attracting captives from other jurisdictions, thanks to its redomiciliation regulations which allow such captives to relocate to the island without having to liquidate in the original territory.
"To date, seven captives have relocated to the Isle of Man from Bermuda. Six have UK parents, the seventh has its origins in California," says Mr Findlay, who adds that there is continuing interest in this area.
Of the total number of captives, 160 are of the single variety, 4 group and 3 rent-a-captives. In addition to captive insurers, the Isle of Man holds a sizeable share of the international life assurance market.
The United Kingdom continues to dominate the captive market, but the authorities are actively looking to reduce this dependence. As is evident from table 1, the domicile has attracted business from a wide range of countries and, in Mr Findlay's words, "is seeking to build on that diversification."
The island is also aware it must keep abreast of developments in risk management tools and is evaluating the need to review its legislation and regulations to cater for such developments.
Current regulation is firm but not tied up in red tape. The Insurance Act 1986 is designed to ensure that those who run insurance businesses are fit and proper and that the companies have sufficient resources at all times. Companies may opt to pay tax under the International Business Act 1994, whereby they may elect to pay at a rate between 1% and 35%. Most operate under the provisions of the Income Tax (Exempt Insurance Companies) Act 1981, however companies have the option of paying tax at the standard rate (20%) or they can elect to pay at a lesser rate.
In terms of infrastructure, the Isle of Man is highly developed, with an abundance of financial services sector related expertise. But is there room for future growth? Mr Findlay certainly thinks so. "The Isle of Man has a land mass of 227 square miles inhabited by a population of 72,000. This space and, therefore, the room to expand - a rare commodity in some international financial centres - is one of the island's most prized assets. With an abundance of office space under construction, no residential restrictions and a pragmatic work permit system, the Isle of Man is ideally placed to help businesses expand their interests."