Isle Of Man 'Capitive Domicile Of Choice' For Vaultex UK

by Jason Gorringe, Tax-News.com, London

04 April 2008

Vaultex UK Limited, a recently formed joint venture between two major international banks to manage their UK cash handling operations, has chosen the Isle of Man to set up a captive insurance vehicle, it was announced on Thursday.

The venture, known as Vaultex Isle of Man Insurance Limited (VIMIL), will insure the property damage, theft, terrorism and the cash handling liabilities of Vaultex UK Limited.

According to Isle of Man Finance, a division of the Treasury that promotes the Island's reputation as a well respected international business centre, Vaultex UK Limited chose the Isle of Man as a domicile partly because of the island’s reputation for its flexible, pragmatic approach regarding captive business.

The new captive needed to be incorporated and licensed in less than a month prior to the deadline for the transfer of assets to Vaultex UK Limited.

This was apparently achieved in record time through the close cooperation between the parties involved in the incorporation and licensing process – Vaultex UK Limited, Marsh Management Services Isle of Man Limited, Marsh Finpro UK, Deloitte and the Isle of Man Insurance and Pensions Authority (IPA).

VIMIL will be managed on the Island by Marsh Management Services Isle of Man Limited (Marsh). The London market will provide reinsurance to VIMIL, except for terrorism cover, which will be reinsured by Pool Reinsurance Company Limited (Pool Re), a mutual reinsurance company supported by the UK Government, which provides terrorism cover to UK insurers.

Derek Patience, Head of Marsh and Chairman of the Manx Insurance Managers Association (MIMA) commented that:

“The new captive had to be incorporated and licensed prior to the deadline of the asset transfer to Vaultex UK Limited. Following considerable cooperation between all parties involved – Vaultex UK Limited, Marsh Finpro UK, Deloitte, the non-executive directors and the Isle of Man Insurance and Pension Authority (IPA) – we were able to meet this tight deadline."

“We are very grateful to the IPA, who handled the review of the captive’s business plan and licence application extremely efficiently, resulting in a prompt issuance of the insurance licence.”

John Spellman, Isle of Man Finance, added that:

“The choice of the Isle of Man’s Marsh Management Services by Vaultex UK Limited over competitor jurisdictions is a fantastic endorsement of the strength of our captive sector and its ability to reinsure specialist risks."

He continued: "The Isle of Man has strong reputation for good teamwork and a quick response to clients who come here looking for a specific solution."

And concluded: "I am confident that our captive industry will continue on a path of accelerated growth that will enhance the Isle of Man’s strong competitive position.”

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