Turks and Caicos: Law of Offshore
The insurance industry is governed by the Insurance Ordinance 1989 and the Insurance Regulations 1990. These Ordinances together with the 1995 Guidelines on the Issuance of Insurance Licences establish the licensing process.
The main requirements of the licensing process can be summarised as follows:
- The submission of a detailed Business Plan covering stipulated areas such as anticipated premium income by category, assessment of risk factors, reinsurance programme and expected loss ratios;
- The submission of detailed biographical affidavits on the beneficial owners, directors and management;
- Appropriate capitalisation of the proposed insurance company. Although companies engaged in general insurance should have a minimum capital of US$100,000 and those engaging in long term insurance a minimum capital of US$180,000, the desired capitalisation of the company will be determined by the ratio of its net worth to premium volume projected in the Business Plan;
- Identification where appropriate of the local resident representative, the insurance manager, the auditor and for life insurance companies the actuary;
- Details of acceptable arrangements for business production, underwriting and claims handling;
- The company's incorporation papers.
A licence can normally be obtained within thirty days if properly prepared and documented. An application fee is payable on submission of an application for an insurers licence. The licence fee (non-domestic business) is payable at the date of the grant of the licence and annually thereafter. The licensing period runs from 1st April to 31st March.
Restricted licence reinsurers dealing with one direct writer are exempted from paying fees and from a number of other requirements under the Ordinance. Under section 7 (11) of the Insurance Ordinance, if an insurer gives an undertaking that it will not engage in any business other than the reinsurance of risks covered by a single named insurer, it may potentially obtain exemption from practically all the requirements of the Ordinance apart from the need for a licence.
The exemption was tailored to encourage the incorporation in the TCI of producer owned reinsurance companies (PORCs). A PORC is a reinsurance company that is beneficially owned or controlled by the producers of business ultimately reinsured by the PORC. Typical uses include service contract/extended warranty business, mortgage guarantee insurance, provision of life, and accident and health reinsurance coverage to the US car dealership industry.