BARBADOS REGULATORY ENVIRONMENT AND RENT A CAPTIVES MARCH 2018

Transcription

1 BARBADOS REGULATORY ENVIRONMENT AND RENT A CAPTIVES MARCH 2018

2 Presentation Overview i. Barbados as a Domicile ii. Barbados Regulatory Environment iii. Rent-a-captives iv. SCC v SAC v ICC v. Set-up and Minimum Operating Costs vi. Who we are vii. The isosceles Solution

3 Barbados as a Domicile Mature domicile with legislative enactments since captives (as at April 2017) Extensive Treaty Network System 11 Bilateral Investment Treaties (BITs) 37 Double Taxation Agreements (DTAs) (10 with CARICOM) 4 Tax information Exchange Agreements (TIEAs) Flexibility on accounting and reporting standards GAAP or International Financial Reporting Standards. Not presently seeking Solvency II equivalency Long experience of working with international tax matters Ease in re-domiciliation of existing corporate entities or transfer of loss portfolios from other insurance entities Ability for insurance entity to be established either as a stand-alone or as so-called rent-a-captive Existing stand-alone can be converted to a rent-a-captive and vice versa

4 Barbados - Regulatory Environment Regulatory authority in Barbados is the Financial Services Commission (FSC) and all licensees are subject to one (1) of:

5 Barbados - Regulatory Environment Two (2) Types of insurance licenses:

6 Rent-a-Captives Legislative provision for one of SAC, SCC or ICC Minimum core capital of US$125,000 Each cell established with a minimum of US$12,500 in invested assets The solvency ratio of each cell a minimum of 20% capital to Premium Income Each cell must be approved by the FSC pursuant to a business plan Audits are conducted on a consolidated basis with sufficient information to determine the solvency of each cell and the core

7 SCC v SAC v ICC The legislation governing the segregation of assets and liabilities in Barbados was first introduced by the Companies (Amendment) Act An international insurer in Barbados can now segregate its assets and liabilities as three (3) distinct entities: Segregated Cell Company (SCC) Containing assets and liabilities that are legally segregated from the company s general account and those of the other segregated cell accounts. Each cell is legally protected from adverse experiences of other cells, while the individual cell benefits accrue only to it. Additionally, a cell may be transferred to another SCC or to and ICC Separate Account Company (SAC) Comprising separate accounts that are segregated from the insurer s accounts and the other cell s separate accounts. There are no multi-shareholder requirements and while not as robust as the SCC, the SAC structure does not place the core capital at risk. Incorporated Cell Company (ICC) Comprising incorporated cells as part of the company s legal corporate structure. Each cell of the ICC is a separate legal entity with its own Directors who may be different from those of the ICC. As separate entities, the cells can transact business with each other and can sue and be sued, but must have the same registered office as the ICC but may not own the shares of the ICC.

8 Setup Costs (USD) Item Service Provider Stand-alone Rent-a-captive Incorporation and Licensing Government Fees Manager 10,000 5,000 Regulator 740 Nil License Fee Regulator 10,000 Nil FATCA Tax 2,500 Nil Audit Certification Chartered Accountant 1,000 Nil TOTAL 23,940 5,000

9 Minimum Annual Operating Costs (USD) Item Service Provider Stand-alone Rent-a-captive Management Manager 40,000 Variable - Min of $25,000 per cell or % of Gross Premium Audit Auditor 15,000 Nil Corporate Administration Secretary 2,500 Nil License Regulator 10,000 Nil Actuarial Actuary 5,000 Nil Director Fees Local Executive 2,500 Nil Miscellaneous Misc. 3,000 Nil TOTAL 78,000 Variable - Min of $25,000 per cell or % of Gross Premium

10 WHO WE ARE JLT INSURANCE MANAGEMENT (BARBADOS) LTD. Captive Insurance Company Management Business Consulting Insurance Services International Business Company Management Accounting, Administrative and Trust Services Corporate Administration ISOSCELES INSURANCE (BARBADOS) LIMITED Rent-a-captive Programs Separate Accounts Facility Access to Reinsurance Markets Risk Transformation

11 The Isosceles Rent-a-Captive Solution The JLT solution allows for access to an established facility, Isosceles Insurance (Barbados) Limited A wholly owned by JLT Insurance Management (Barbados) Limited Allows for ease in setup due to simple due diligence procedures and sign-off: - Letter of Understanding - Deed of Guarantee - Preference Shareholder s Agreement - Management Service Agreement One off cost for set up and capitalization With minimum frictional costs the premium spend can typically start as low as USD$125K and significantly less than the USD$1million threshold then is mentioned when considering stand-alone entities No restrictions in lines of business underwritten by the facility

12 15 Contact Ricardo O. Knight, FCCA, FCA CEO & President JLT Insurance Management (Barbados) Ltd. Phone: (246) ext Mobile: (246)