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Brunei: Law of Offshore

Insurance Law

Comprehensive and imaginative legislation, coupled with a flexible regime to suit sophisticated business and personal international insurance and insurance related activities are governed by the International Insurance and Takaful Order, 2002 (IITO).
There are 7 types of licence available: general insurance, life insurance, life and general insurance and captive insurance businesses and international insurance manager, international underwriting manager and international insurance broker. Applicants can be companies, including an established foreign or domestic insurance company, or licensed registered agent and trust company in Brunei acting as representative for the purpose of license application.
Special provision is made for financial unit-linked and reinsurance (access to domestic market) insurers. All long term products are protected against creditors in the absence of fraud and the concepts of insurable interest and ability of a beneficiary to enforce a contract enjoy constructive modification.
International insurance business (i.e. non-domestic business, conducted with non-residents, with the exception of re-insurance) must be carried on by an IBC or a foreign international company incorporated under the International Business Companies Order, 2000 (IBCO), a company incorporated under the (domestic) Companies Act (Chapter 39) or a company registered under Part IX of the Companies Act (Chapter 39), which holds a valid licence under IITO (see Forms of Companies).
Furthermore, no person (including a corporation) may carry on any business as an international insurance manager, international underwriting manager or international insurance broker unless he holds a licence relating to such business.
Every application must include a business plan for the first three years of operation; copies of the applicant's constituent documents, where applicable a copy of the applicant's audited annual accounts for the 3 consecutive years immediately preceding the application, and in the case of a takaful or re-takaful provider, the names of the Sharia council duly appointed to advise that provider. The Authority may request further or other information or documents.
Licence applications for international insurance managers, underwriters and brokers must satisfy the Authority that the controllers, directors and chief executive officers of the applicant are fit and proper persons having knowledge of the insurance related activities proposed to be conducted and is able to maintain sufficient funds to cover its expenses in the proposed activities for the period covered by its business plan.
Prior written consent of the authority is required to open an office or establish any subsidiary in Brunei or elsewhere.
Services offered by a licensee are limited to those specified in the licence granted and may be provided only to other licensees under the Order. Services cannot be offered relating to domestic insurance business, but a licensed international insurance broker may, notwithstanding any other written law, handle the re-insurance of domestic insurance business.
No taxes or duties of any description are levied, withheld or collected in respect of international insurance business of any licensee (includes insurer, managers, brokers, underwriters) of shares, and no filing or presentation of documents with or to any taxing or analogous authority in Brunei is required. The tax/duty exemption may, at no extra charge, be evidenced by a certificate issued by the Minister, any such certificate to be valid for a period of 10 years from its date.
Dedicated cell companies (DCCs) are established pursuant to Part XIIA of IBCO, and are subject to the prior consent of the Authority, may be initially established or reconstituted as a DCC. A DCC is a single legal person and may establish one or more cells for the purpose of segregating and protecting dedicated assets. The assets are either dedicated assets or general assets, and separate records and protection of dedicated assets by way of segregation and identification must be maintained.
Creditors are restricted in their rights to the cell in respect of which they have made funds available or have a claim.
Criteria for Licence to Carry on International Insurance Business.
Subject to section 7 (discretion for Authority to require greater or permit a lesser amount), the working funds of an applicant shall meet requirements prescribed by the minister by notice in the gazette, and until so prescribed:

  • where the applicant proposes to carry on long-term insurance business (other than linked long-term business only), shall be at least Brunei $500,000 or its equivalent in any foreign currency;
  • where the applicant proposes to carry on only general insurance business, shall be at least $250,000 or its equivalent;
  • where the applicant proposes to carry on only re-insurance business, shall be at least $1,000,000 or its equivalent;
  • where the applicant proposes to carry on both general and long-term insurance business shall be at least $750,000 or its equivalent currency;
  • where the applicant proposes to carry on only international captive insurance business shall be at least $75,000 or its equivalent in any foreign currency or, if the applicant is a Dedicated Cell Company (under IBCO) having two or more cells, at least $75,000 or its equivalent in any foreign currency in respect of each cell;
  • where the applicant proposes to carry on only linked long-term business, shall be at least $100,000 or its equivalent in any foreign currency plus such amount (if any) as the applicant may deem prudent having regard to that portion of any linked long-term business under which the benefits payable exceed benefits determined by reference to the linked investment.

Every applicant must satisfy the authority:

  • that it meets the prescribed requirements for working capital and that such specified working capital is certified held in a bank in Brunei;
  • its controllers, directors and chief executive officers must be approved;
  • management with adequate knowledge and expertise must be established in Brunei and at least one director must be a resident or a licensed international underwriting manager in Brunei appointed.

The authority will keep a register of all licensees and such register is to be open to public inspection.
Every licensee must appoint an approved auditor, and in the case of long-term business must also appoint an actuary.
Every international insurer shall keep the accounts and funds in respect of each type of international insurance business separate.

Every licensee shall submit audited annual balance sheet, profit and loss account, revenue account and, in respect of life insurance business, a report setting out the actuarial valuation of its assets and liabilities to the Authority.
For a foreign international company a certified copy of its latest audited annual balance sheet in respect of its entire operations both in and outside the Brunei is also required. The IITO contains extensive protections for long-term insurance policy-holders.



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