British Virgin Islands
The British Virgin Islands (BVI), after being settled by various Indian tribes, the Dutch and Spanish, was colonized by Britain in 1672, but ownership of the islands remained in dispute until finally being settled in 1698, when an order of the King in 1694 to prevent foreign settlement in the Virgin Islands was upheld.
Sugar became the main agricultural crop but declined during an extended period of disputes and unrest, where piracy, smuggling and slavery were common. In 1950, BVI became a self-governing British Overseas Territory. The adoption of a new constitution in 1966 led to the development of a financial services sector and in 1984 the International Business Companies Act was passed.
BVI has a population of over 28,000 in an area of approximately 55 square miles, being 15 inhabited islands, with the Capital being Road Town, Tortola.
In 2000, KPMG was commissioned by the British Government to produce a report on the offshore financial industry generally, and the report indicated that nearly 41% of the offshore companies in the world were formed in BVI.
BVI is now one of the world's leading offshore financial centers, and boasts one of the highest incomes per capita in the Caribbean.
Captive Insurance Operations.
The British Virgin Islands Financial Services Commission (BVIFSC), an autonomous regulatory authority, established in 2001, is responsible for the oversight and regulation of the Captive insurance business in the islands. To support the development of the Captive business, by having a proper regulatory framework in place, BVI enacted the Insurance Act 1994, together with the Insurance Regulations, 1995. Most recently, to further modernize its insurance legislation, BVI introduced the new BVI Insurance Act 2008, along with its accompanying Regulations.
The Insurance Act applies to any person carrying on insurance business of any kind in or from within the Islands. It provides for the licensing of insurers and prohibits any person acting as an insurer unless licensed under the Act. It also provides that no person shall act as an insurance manager, agent, broker or adjuster unless granted a Certificate of Authority.
For all insurance entities incorporated in the islands, the minimum paid-in capital required is $100,000 for General (Property & Casualty) business, $200,000 for Long Term (Life, Benefits, etc.) business, and $300,000 for both. The minimum solvency margin for General business is calculated according to Net Premium Income (NPI): for NPI up to $500k, the margin is $100,000; for NPI between $500k and $5 million the margin is 20% of NPI; and for NPI greater than $5 million it is $1,000,000 plus 10% of any NPI above $5 million. For Long Term business the minimum solvency margin is $250,000. The BVI is now listed as the world's fourth largest captive domicile among competitors for enhanced insurance products and services.
USA Risk Group (BVI), Inc. was incorporated on November 1st, 2000. The company manages over 50 captives, and works closely with our other offices, both offshore and domestic, supplying services to several clients that have captives in other domiciles that find BVI’s particular position in the market useful for forming an additional captive to satisfy its needs. USARGBVI’s mix of business tends to be mostly smaller captives, set up to write specific programs or lines of business with relatively small premium volumes.
Why Choose the British Virgin Islands for Your Captive
Some advantages are:
- Political and economic stability
- A legal system based on English law
- Status as a British Overseas Territory with the additional security that brings a pool of professionals who can meet business needs
- Sound infrastructure, including telecommunications
- No exchange controls
- A commitment by Government to enact legislation that meets business needs and protects the integrity of BVI
- A close partnership between the public and private sectors, which ensures effective and efficient legislation
Besides the advantages listed above, some of the BVI’s specific insurance advantages are that:
- It has a modern and flexible insurance act.
- Its insurance supervisor and his team have a reputation for pragmatism and flexibility.
- Its incorporation costs and insurance licensing fees are lower than most other jurisdictions.
- Its application process is relatively simple.
- There are no requirements for directors to be BVI residents, or for directors’ meetings to be held in the BVI.
- There is no requirement for a resident Audit firm to perform the company’s Annual Audit.
- Investment funds do not have to be held in a BVI bank account.
For further information:
Cedar Consulting, LLC
18860 Geauga Lake Road
Chagrin Falls, Ohio 44023
Toll Free: 800/872-7475 x2391
Tel: 440/ 264-9992
Fax 440/ 264-9993