A key player for alternative risk solutions


A key player for alternative risk solutions

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Legislation will continue to evolve to meet the needs of captive owners and keep the British Virgin Islands as a prime domicile for healthcare risk managers, says Alicia Green of BVI Finance.

The British Virgin Islands (BVI) has built its reputation as a leading financial centre over the past 30 years by offering products and services that meet the needs of international clients for wealth management and cross-border transactions to facilitate trade, investment and capital flow.

Since founding the financial services sector with its flagship product—BVI International Business Companies—the territory has diversified its product range substantially. The BVI now offers a number of products including wealth management, investment funds, captive insurance, ship registration, trademark registration and a range of other corporate business services.

The BVI has an attractive combination of modern, flexible company legislation backed by an efficient and respected judicial system based on English Common Law and secured by the Privy Council. Furthermore, through the development of our Arbitration Centre alongside the Eastern Caribbean Commercial Court headquartered in Tortola, the BVI has successfully positioned itself as a one-stop shop for dispute resolution. Over time the Court has dealt with more than 350 cases ranging from contested insolvency applications to defended shareholder disputes

"Only those businesses with the highest standards of compliance are able to operate in the domicile, enabling our client base to put their trust in us."

The attraction of the territory and its crucial role in the global economy is demonstrated by the fact that in 2013 alone, BVI companies facilitated the investment of $82.5 billion into emerging market economies. Many of those investments would never have been possible had the BVI not offered corporate structures that make the pooling of resources possible, efficient and safe.

The BVI has gained and maintained its leading international status due to a number of factors. First, it strikes a balance between regulation and transparency, adhering to international standards that govern how we do business and the expectations of our clients. Second, the Financial Services Commission, the independent regulator of financial services within the domicile, ensures that only those businesses with the highest standards of compliance are able to operate in the domicile, enabling our client base to put their trust in us.

Healthcare risk alternatives structures

The BVI places great importance in upholding regulatory standards. In line with this, the Insurance (Amendment) Act, 2015 and Insurance (Amendment) Regulations, 2015 are due to come into effect by the end of the year. These amendments contain a number of key changes that are intended to help BVI captives conduct their business even more efficiently.

One key change is the expected introduction of Category E and Category F insurers. These categories are aimed at pure captives and those which only write related party business in order to qualify as an insurer under the laws of a foreign jurisdiction. Pure captives present a lower risk to the public than those doing business with third parties so it is expected that there will be certain dispensation accorded to them.

An advantage for these new categories of insurer is a favourable fee structure if they have a relatively low level of gross written premiums (GWP). A tiered structure has been proposed whereby the lowest licence fee level will be payable by captives with GWP less than $500,000. The second level is expected to be from $500,001 to $1 million and the third for over $1 million and up to $5 million. The fourth tier would be from $5 million to $10 million and the final tier for captives with GWP over $10 million. It is expected that the fees themselves will be finalised at the same time as the amendments.

In addition to the tiered fee structure, the legislation gives regulators the flexibility to consider applications in the context of the level of risk they pose to policyholders, other company stakeholders and the public as a whole.

The application process

From a corporate standpoint the process of registering a captive in the BVI is very efficient. The overall BVI legislative framework is risk-based so applications are considered according to the level of risk that they pose to the insureds and the public as a whole. The pure captives that fall under the new categories of insurer may be afforded more flexibility than an insurer who sells to the public. The legislation is drafted with a variety of insurers in mind in order to give regulators the flexibility they need when considering different types of application.

A BVI resident insurance manager is a necessity in ensuring that the application meets certain standards prior to submission. The insurance manager also ensures that the BVI’s high standards are adhered to on an ongoing basis and the Insurance Division of the Financial Services Commission is committed to providing a prompt turnaround once a request is complete with all the required information submitted.

BVI’s ability to develop market leading regulation and process relevant documentation efficiently is driven heavily by the Financial Services Commission. In terms of the future of the BVI for risk managers, legislation will continue to evolve to meet the needs of captive owners. This pioneering, innovative quality continues to position the BVI as the premium option for risk managers, attracting businesses looking for alternative solutions from all around the world to the jurisdiction.

Alicia Green, ACI, is marketing manager at BVI Finance. She can be contacted at: agreen@bvifinance.vg

BVI Finance, US, Alicia Green, Insurance, Healthcare, Risk management, Finance, British Virgin Islands