Guernsey Captive Insurance Industry Growing In Appeal

by Jason Gorringe, Tax-News.com, London

02 May 2011

Guernsey’s decision not to seek equivalence with Solvency II will act as a differentiator that encourages increasing numbers of captives to domicile in the Island, according to Aon Insurance Managers.

The firm said that the number of captives domiciled in Guernsey – already Europe’s leading captive insurance domicile – is expected to increase significantly as the implications of compliance with Solvency II become better understood.

It suggests that while the capital requirements of Solvency II may be appropriate for commercial insurers dealing with the general public, many captive managers and owners believe the International Association of Insurance Supervisors’ (IAIS) international regulatory standards will be sufficient for most traditional captives.

Paul Sykes, Managing Director of Aon Insurance Managers in Guernsey, said: “Guernsey offers a stable and solid political and regulatory regime while not forcing captives to adhere to the disproportionate demands and excessive capital requirements of Solvency II.”

“Increasingly this will differentiate Guernsey from other domiciles and we fully expect businesses with captives to see Guernsey as the place to do business… Hundreds of household-name companies from the UK and the rest of the world choose to base their captive insurance companies in Guernsey due to our industry expertise and Guernsey’s world-renowned reputation for robust but responsive regulation.”

“We are, however, constantly aware of the competition to Guernsey from other jurisdictions seeking to overcome the island’s position as the premier European domicile for insurance company management. I believe that we will sustain our position as European leader and one of the top four captive jurisdictions globally by embracing international regulatory standards without at this point seeking equivalence under Solvency II.”

Recommended