Bermuda: Types of Company
Segregated Accounts Companies
The Segregated Accounts Companies Act 2000 came into force in November 2000. It allowed for the registration of segregated accounts companies by standardised procedures - previously, segregated accounts companies were being brought into existence by the Private Act route. This can still be used when necessary; but most new formations are likely to be under the new Act.
Segregated accounts companies are mostly used in the insurance sector (where they are often called protected cell companies), for umbrella mutual funds, and in the e-commerce sector where each individual user of a set of trading systems can occupy a segregated space rather than having to register separately. Server farms would be a good example.
The Act specifies that any asset linked to a particular segregated account is held in a separate fund for the beneficial interest of the account holder, and does not form part of the general funds of the segregated account company in the event of liquidation or sale. The concept is not totally unlike that of the trust, with the segregated account company playing the part of the trust manager.
Registered insurers may make use of segregated accounts companies without permission; other types of company need to obtain permission from the Minister of Finance.