Micronesia Encourages Establishment Of Captive Insurance Companies

by Mary Swire, Tax-News.com, Hong Kong

25 June 2009

Recent legislation with regard to captive insurance companies in the Federated States of Micronesia (FSM) has aligned rules and regulations with the Japanese tax system, and Micronesia expects to attract many companies that might otherwise be based in Singapore. President Mori, who was actively involved in creating legislation on captive insurance, has welcomed a high power delegation of Japanese and other businessmen to discuss their plans to establish a presence in Micronesia.

The delegation included Mr. Shinji Kasai, the General Manager of the Insurance Business Team for the Marubeni Corporation, one of the top ten companies from Japan to engage in captive insurance. Marubeni submitted a draft application for a license to the Insurance and Banking Commissioner and hopes to begin moving their captive insurance corporate office to Pohnpei by September 1.

Also present were Mr Kenichiro Hamada, ARM of Micronesia Insurance Management Co. Ltd (MIMC), a corporate insurance consulting and management company which has already opened an office in Pohnpei, and Mr. Daniel Koepfer, Managing Director of Aon Global Risk Consulting, a company that will work with Marubeni as a captive insurance management company. MIMC has experience in the formation of captive insurance companies for Japanese Corporations in all major captive domiciles, including Bermuda, Singapore and Hawaii and its senior management was involved in the drafting of the FSM captive insurance law, together with education and training of key government and industry officials.

The FSM Captive Insurance Council has been formed in 2009 by companies interested in the growth and development of the Federated State of Micronesia as a viable captive insurance domicile and the Council believes that the FSM will be the preeminent captive domicile for Japanese-based corporations. Last month the FSM Government and Captive Insurance Council, in cooperation with the United Nations Industrial Development Organization (UNIDO), Japan External Trade Organization (JETRO), and the Japan Institute for Pacific Studies (JAIPAS), sponsored a seminar at the United Nations University in Tokyo entitled “Federated States of Micronesia Investment & Captive Opportunity.” This was the third seminar for Japanese companies and private investors to learn more about FSM as a site for investment. Ambassador John Fritz, FSM Ambassador to Japan, gave introductory remarks that included information about the Pohnpei runway expansion and direct flights between Tokyo and Pohnpei, scheduled to begin in February 2011.

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