Bahamas: Offshore Business Sectors
See Offshore Business Review – Insurance for a more general treatment of captive insurance companies.
The insurance sector in the Bahamas is regulated under the Insurance Act 1969 as amended and the External Insurance Act 1983. The Government is targetting insurance as a sector for expansion, and more modern legislation is in the pipeline.
The domestic insurance sector is very active, with more than 50 licensed insurers; but the international (captive) sector, although growing, is not yet very well developed compared with the leading offshore captive jurisdictions such as Bermuda.
Insurance companies cannot use the Bahamian International Business Company form, necessitating the formation of a Bahamian company under the Companies Act (see Forms of Company), or the use of Foreign Company status, which has the same effect.
Insurance licenses are issued by the Minister of Finance, following recommendations by the Registrar of Insurance Companies. There are statutory minimum capitalisation and solvency ratios, and initial capitalisation is normally in cash. See Law of Offshore and Offshore Legal and Tax Regimes for further details of the licensing regime, minimum capital requirements and fee levels.
In 2004 lawmakers in the Bahamas passed a key piece of legislation known as the Segregated Accounts Companies Bill which will be useful in the insurance sector.
Commenting on the passing of the bill, Financial Services and Investments Minister, Allyson Maynard Gibson, explained that: "It provides in principle, the same basic statutory regimes as other jurisdictions with such legislation. It also permits a company that is registered as a Segregated Account Company to segregate its assets into separate accounts."
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.