British Virgin Islands: Law of Offshore
In January, 2010, the Financial Services Commission announced the coming into force of the Insurance Act, 2008. The new Insurance Act replaces the Insurance Act, 1994. The Insurance Regulations, 2009, which were gazetted on December 22, replace the Insurance Regulations, 1995. The Insurance Regulations were made by Cabinet, acting on the advice of and in consultation with the Commission, according to powers granted by section 82 of the Insurance Act, 2008.
The Insurance Regulations, 2009, provide more details for classifications for insurance business, maintenance of registers, and specifications for what constitutes public record.
Insurance licenses are issued by the Insurance Division of the Financial Services Commission, and distinguish between Long Term, General and 'Credit Life' insurance companies. Insurance professionals (agent, broker, adjuster, etc) need to have a Certificate of Authority issued by the FSC. Day-to-day supervision of the insurance sector is exercised by the Director of Insurance, an official of the Financial Services Commission.
The minimum paid-in capital required is US$200,000 for Long Term business, US$100,000 for General business, and US$300,000 for both. 'Credit Life' companies require capital of US$10,000.
The minimum solvency margin for Long Term business is US$250,000. For General business the margin is calculated according to Net Premium Income (NPI): for NPI up to US$500,000, the margin is US$100,000; for NPI between US$500,000 and US$5m, 20% of NPI; for NPI above US$5m, the margin is US$1m plus 10% of any NPI above US$5m.
In considering the issue of a license, the authorities will take into account the demonstrated skills of the proposed management, and the viability of the business plan presented as part of the application. Applicants must either be already incorporated, or a Lloyds underwriter
Amendments to BVI insurance legislation in 1995 incorporated 'gateways' into the rules which provide for the disclosure of information to the regulatory authorities and law enforcement agencies in other countries to assist the investigation of illegal or criminal activities. The BVI authorities however do not respond to 'fishing expedition' enquiries from other jurisdictions.
Licensed insurers must maintain a principal office in the jurisdiction and must appoint an insurance manager resident in the BVI. Audited annual accounts have to be filed with the Commissioner within 3 months of the end of an accounting period.
The Insurance (Amendment) Act, 2002 makes provision for segregated portfolio companies. A segregated portfolio company (sometimes referred to as a protected cell company) is an entity that allows each portfolio or cell to have legal separation of assets. Thus, the assets and liabilities within a segregated portfolio would be segregated from the assets and liabilities of other segregated portfolios and those assets and liabilities of the company that are not held in any segregated portfolio. The creation of segregated portfolios is subject to the approval of the Financial Services Commission.