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Investing in Bahamian Insurance |
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As one of the world’s leading offshore financial centers, the Bahamas has established itself as a leader in the insurance industry. Second perhaps only to Bermuda in terms of gross dollar amounts of policies written, the Bahamas’ tax neutrality, statutorily enforced privacy laws, and investor-friendly government policies make it easy for legitimate insurance business interests to establish themselves in this island nation. Companies seeking to establish an insurance business in the Bahamas are licensed by the Finance Minister following a thorough application process and upon satisfying the Registrar’s requirements. Companies will need to use Companies Act incorporation, as International Business Companies are not allowed to engage in insurance business in the Bahamas. Domestic Insurance The domestic insurance market refers to the insurance of local risks by locally or foreign owned insurers. This industry maintains a fairly large presence in the Bahamas, supported by seven locally owned and 49 foreign-owned insurers. Business can be written directly or offered via brokers and agents. International (Captive) Insurance The captive insurance market refers to the insurance of foreign risks by investors working through the Bahamas. The majority of captives in the Bahamas are of U.S. origin, and the others are from Europe. Captive insurers must file with the Registrar, who expects to see applications from investors with at least $250,000 initial capital, and the amount that is proposed ought to be more than sufficient to support the estimated volume of business. Initial capitalization should be cash. Letters of credit would only be acceptable if they represented amounts above and beyond the necessary level of working capital. Operational Requirements The Office of the Registrar of Insurance’s Ministry of Finance oversees this sector. All information processed by the Registrar is deemed highly confidential, although members of the public may inspect the Register General’s share register. There are minimal reporting requirements in the Bahamas. The company must operate according to its business plan and an audited financial statement must be filed annually, within six months of the close of the businesses financial year. Companies planning to act as direct insurers may be required by the Registrar to place deposits either locally or in the state where the business is being conducted. There is no legal requirement for funds to be held locally. Application If you would like to take advantage of this Bahamas financial servicesavailable, the government of the Bahamas has streamlined their business processes to make it easy for you. The Bahamas wishes to entice foreign investors and as such has few requirements in order to establish an insurance business. Applicants must provide: • The identity of all key parties such as sponsors, shareholders, directors, officers, and managers must be provided. • Applicant must be able to prove the fitness for duty of those parties involved in the operation. • All parties involved must demonstrate good business ethics. • Applicants must be able to establish the feasibility of the business. • The security of any outward reinsurance must be established. Once these requirements have been satisfied, a knowledgeable advisor can have your business set up in a short amount of time.
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Investing in Bahamian Insurance
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