Bahamas: Law of Offshore
Bahamian captive insurers are regulated by Office of the Registrar of Insurance, part of the Finance Ministry, under the External Insurance Act 1983. Licenses are issued by the Finance Minister on the Registrar's recommendation after a thorough application process; the Registrar will want to meet applicants and needs to know the identity and to establish the bona fides and substance of the key parties involved.
Insurance companies need to use Companies Act incorporation since the International Business Company is not permitted to engage in insurance activity.
The External Insurance Act lays down minimum net worth figures, but the Registrar will normally expect to see at least USD250,000 provided in cash for an external insurer. There is no legal requirement for these funds to be held locally, but the Registrar may in some cases insist on it. A net premium to capital and surplus ratio of not wider than 3:1 is expected. To qualify for a license under the External Insurance Act, an insurer is normally expected to take in at least USD500,000 of premiums annually; smaller companies will be licensed under the domestic Insurance Act, qualified as non-resident.
The Government knows that Bahamian insurance law needs to be updated, and legislation can be expected soon. See Offshore Legal and Tax Regimes for details of registration and license fees payable.
In mid-2009, a bill was presented in the Senate to revise the law regulating external captive insurance business in the Bahamas.
The Bahamas Financial Services Board and the Ministry of Finance have been working together on The Bahamas’ External Insurance Act to facilitate quick and reasonably priced licence creation and licensing of captive insurance companies in The Bahamas.