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Jersey: Offshore Business Sectors

Insurance

See Offshore Business Review – Insurance for a more general treatment of captive insurance companies.

Captive Insurance is regulated by the Insurance Business (Jersey) Law 1996 (as amended), the Insurance business (General Provisions) (Jersey) Order 1996 and the Insurance Business (Solvency Margin) (Jersey) Order 1996.

Category A permits are issued in respect of insurance business carried on by companies authorised and supervised in another jurisdiction, and Category B permits which apply in every other case including captive insurance business. Permits are subject to conditions which will be determined on a case by case basis. It is possible to prescribe conditions applicable to all, or a class of, insurers.

There were 178 general insurance companies registered in Jersey as of the end of 2012.

The sector is regulated by the director of insurance in the Financial Services Commission. An annual audit is required, as are semiannual unaudited accounts and confirmation that permit conditions are being met.

The minimum capital requirement is GBP100,000 or its currency equivalent. Incorporation costs GBP120 plus a stamp duty on authorised capital at a rate of 0.5%, to a maximum of GBP2,500.

As of October 1, 2009, insurance companies pay the following fees:

  • in the case of a category A permit:
    • GBP5,400 if the permit applied for or to be renewed is to include long term business of any class, and
    • GBP2,700 in any other case;
  • in the case of a category B permit where the applicant or the permit holder is not a cell company or a cell:
    • GBP9,450 if the permit applied for or to be renewed is to include long-term business of any class, and
    • GBP4,725 in any other case; and
  • in the case of a category B permit where the applicant is a cell company or a cell
    • GBP4,725 if the permit applied for or to be renewed is to be granted to a cell company
    • GBP2,700 if the permit applied for or to be renewed is to be granted to a cell and is to include long-term business of any class, and
    • GBP1,350 if the permit applied for or to be renewed is to be granted to a cell and is to include general business of any class.

Jersey's Companies (Amendment No.8) (Jersey) Law 2006, introduced advances to cell company investment structures. The legislation permits the creation of cell companies and includes innovative features which extend the scope of their use for investment purposes.

Jersey legislators have introduced the concept of an Incorporated Cell Company (ICC), alongside an enhanced version of the traditional Protected Cell Company (PCC), to provide investors with greater flexibility when choosing a cell structure to meet their investment objectives.

The new ICC involves the formation of separate, legally recognised cells within the overall structure, with each cell established as a separate incorporated Jersey company. This is in contrast to the traditional PCC where all the cells combined create one legal entity and each cell is not treated as a separate legal personality.

The measures, which Island practitioners describe as the first significant advance from the original PCC model, are expected to provide a boost generally to the Island’s investment capabilities in the institutional market, particularly for the insurance sector and in support of international capital markets activity.

Phil Austin, Chief Executive of Jersey Finance Limited, commented:

"We are not first to the market with PCC legislation, but we have consulted widely and taken into account lessons learned elsewhere. The result is an enhancement to the traditional features of a PCC and the introduction of the ICC concept. Under this new legislation, Jersey has strengthened the asset protection provisions, avoided many of the problems identified with PCCs in other jurisdictions whilst providing the simplified management benefits associated with cell companies."

 

 

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