Manx MP Calls For Cell Company Legislation

by Amanda Banks, Tax-news.com, London

15 May 2001

Isle of Man Legislative Council member, Alan Crowe, says the government is discussing the implementation of protected cell company laws and Mr Crowe is urging the authorities to adopt the legislation.

He pointed to other jurisdictions such as Guernsey and Bermuda which have protected cell company laws in place, saying the Isle of Man also needs the legislation to be introduced in order to compete: 'It is understood the Insurance and Pensions Authority is talking about protected cell companies. It is a way to strengthen captive insurance business in the Isle of Man [and] is another company vehicle to demonstrate the benefits of the Isle of Man,' he said.

He told the Isle of Man press: 'Instead of a series of companies you have one with independent cells within it. It is particularly for captive insurance. It is so you can have a separation of assets and liabilities in separate cells rather than a series of companies.'

Guernsey introduced protected cell company status under a 1997 Ordinance. Generally reserved for authorised collective investment schemes, insurance companies and closed-ended investment companies, the Guernsey government recently added a provision to the law which allows for its Financial Services Commission to include any class or description of company that is detailed under the commission's regulations.

Bermuda's Segregated Accounts Companies Act 2000 came into force in November 2000. It allows for the registration of segregated accounts companies by standardised procedures. Segregated accounts companies are mostly used in the insurance sector (where they are often called protected cell companies), for umbrella mutual funds, and in the e-commerce sector where each individual user of a set of trading systems can occupy a segregated space rather than having to register separately.

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