BVI Maintain Captive Growth In 2005

by Amanda Banks, Tax-News.com, London

19 April 2006

Figures released yesterday by the BVI Financial Services Commission reveal a 10% overall growth in the Territory’s captive insurance business in 2005, solidifying the BVI's position as the third largest offshore centre for captives.

Since the captive legislation was introduced in the BVI, a total of 543 captives have been formed in the domicile, of which 380 renewed or were issued licenses during 2005, in a year when many domiciles posted decreased volumes. A total of 68 new captive licenses were issued during the year, with licenses for six new insurance managers.

Humphry Leue, Chief Operating Officer at the BVI International Finance Centre, comments: “2005 was another very good year for the BVI captives industry, especially in light of the fact that the pace of captive insurer formations slowed globally. The majority of offshore captive domiciles have reported a decrease in volumes, as did a number of European onshore domiciles. In contrast, the British Virgin Islands’ insurance sector can be proud of the fact that it has achieved the best reported growth amongst offshore domiciles; a significant feat and one we are very proud of!”

The United States continues to be the region of origin of parent companies for most BVI-licensed captives. However, the jurisdiction has global appeal and captives originating from countries such as Switzerland, Guernsey, Taiwan, the Middle East and South America have also been formed in the BVI. The construction industry accounts for the most BVI captive licenses, with 21% of the sector. Finance/insurance (18%), Real Estate (16%) and Healthcare (16%) are the other major industries represented.

Segregated Portfolio Companies (SPC’s) continue to gain momentum in the Territory, sparked by the introduction of SPC Regulations at the end of 2005 and expanded SPC provisions in BVI’s enhanced Business Companies law regime.

Simon Owen, Chairman of the BVI Association of Insurance Managers, adds: “Posting 10% net growth rate is an impressive achievement for any business sector, particularly when considering the challenges the global insurance industry faced in 2005. The BVI has long been established as a leading captive domicile, primarily attracting small and medium-sized single-parent captives. Whilst this area remains an integral part of our business model, we are now reaping the benefits of an enhanced regulatory environment and have seen a considerable increase in the number of high-premium volume formations in the BVI. Our diversity continues to be a key factor of our success.”

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