Vanuatu: Offshore Business Sectors
Insurance activity in Vanuatu is regulated by the Insurance Act Cap 82. The licensing of insurance companies is carried out by the Financial Services Commission.
Insurance companies in Vanuatu need to be incorporated under the Companies Act, since International Companies are not permitted to engage in insurance activity, although they can hold the shares of a company that does.
Insurers operating domestically would normally use a 'local' limited company, and are called 'local' insurers, while offshore (captive) insurance companies would normally use an exempted company and are called 'exempted' insurers (see Forms of Company).
An exempted insurer is exempt from a number of prudential and reporting requirements under the Insurance Act.
The Financial Services Commission applies fairly stringent criteria to applicants for exempted insurance company status. See Law of Offshore for more details of the licensing process and regulatory regime. A captive (exempted) insurance company may not deal with the public or insure Vanuatu risks. There is no provision in Vanuatu for protected cell corporations or rent-a-captives, although legislation under consideration in 2004 may change this.
The incorporation and licensing process for a captive in Vanuatu takes two to three months. Normally the administration of a captive should be based in Vanuatu, however there are companies in Port Vila providing captive management facilities.
The annual fee for an insurance license is USD5,000 (at the time of writing). There are about 30 captives in Vanuatu.