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Cook Islands: Offshore Business Sectors


New legislation in the form of the Insurance Act 2008 came into effect on 1 January 2009. The Act bring domestic insurance and insurance intermediaries under the Financial Services Commission's regulatory umbrella. It also updates the supervisory regime for offshore insurers. In August 2009, the FSC is finalizing an Insurance Code to underpin the new legislation.

Under the Insurance Act 2008, it is an offence to provide insurance unless the company is either licensed by the FSC or is approved as an external insurer under section 11 of the Act. Where there is insufficient market capacity in the Cook Islands to write a specific policy an exemption may be obtained from the Commission under section 7 of the Act for the insurance to be provided by an unlicensed insurer. It is also an offence to act as an insurance agent or broker unless licensed by the FSC.

Transitional provisions apply for those companies, agents and brokers that were conducting business in the Cook Islands as at 31 December 2008.

An insurance licence shall be issued in one of the following categories:

  • Category A which may only be issues to a company incorporated under the Companies Act and entitles the holder to carry on insurance business, including domestic business.
  • Category B, which may only be issued to an external insurer that carries on insurance business in the Cook Islands from and branch office in the Cook Islands and entitles the holder to carry on domestic insurance business.
  • Category C, which may only be issued to a company incorporated under the International Companies Act, and which entitles the holder to carry on international business only.

Prior to the Insurance Act 2008, the law relating to insurance and the licensing of insurance companies was contained in the Offshore Insurance Act 1981 and in the Offshore Financial Services Act 1998.

Only an International Company or a Foreign Company incorporated under the International Companies Act 1981-2 (see Forms of Company) could be authorized to carry out insurance business under the older legislation. A licensee could not therefore deal with the local market and was restricted to offshore insurance business transactions such that all policy beneficiaries had to reside outside the Cook Islands.

Under the Offshore Insurance Act 1981, the licensing fee, payable annually, is NZD3,000 (2012) and the minimum capital requirement is USD2m and the company's tangible assets must exceed its liabilities by USD100,000. Regulations under the Insurance Act 2008 were published in 2009. Audited accounts must be filed every year.

Legislation is pending with regard to protected cell companies.



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