One of the sessions at last week's RIMS conference in Atlanta consisted of presentations by various captive domiciles of the benefits of using their particular jurisdictions. Jeremy Cox, Registrar of Companies, told the audience about Bermuda's undoubted success in the insurance industry and that the Island has gained an average of 93 new insurance companies every year for the last seven years. Following on from this The Royal Gazette examines the various requirements of the nine jurisdictions represented at this conference session. These basic requirements form part of the decision making for someone seeking a jurisdiction in which to place their insurance company and Bermuda comes off very well in this straightforward comparison. The jurisdictions examined are: Barbados, Bermuda, British Virgin Islands (BVI), Cayman, Guernsey, Hawaii, Ireland, Turks & Caicos and Vermont. They all have insurance industries and are keen to expand them. The actual costs associated with insurance companies in these jurisdictions are shown in the table below. With regard to which lines of insurance are allowed Bermuda, together with BVI, Cayman, Guernsey, Ireland and Turks & Caicos, allow all lines of business.

Barbados allows general, life, reinsurance and financial reinsurance while Hawaii allows all property/casualty, surety and acean marine lines. Vermont allows all property/casualty lines, employee benefits and some health and life lines. There are no restrictions on reinsurance in Bermuda, Cayman, Guernsey, Ireland and Turks & Caicos. In Barbados reinsurance companies are checked for financial standing using Bests or Standard & Poors and in the BVI front companies and reinsurers must be rated. Reinsurers in both Hawaii and Vermont are subject to approval by the commissioner. There are no restrictions on captive investments in Barbados or on long term captive investment business in Bermuda. But Bermuda requires 75 percent of general insurance liabilities to be in relevant assets. BVI only restricts for solvency margin purposes and Cayman requires approval of investment policies. In Guernsey 75 percent must be approved and in Hawaii captives may obtain approval for investments not specified in the investment code. Restrictions on captive investments in Ireland are as per the EU insurance regulations, in Turks & Caicos investments may be restricted to certain lines and there are none in Vermont for pure and industrial insured and for others it is the same as for other admitted Comparing captive domiciles There are no restrictions on the corporate forms permitted for insurance companies in Bermuda, Barbados, Ireland or Turks & Caicos. In the BVI it is usually international business companies; in Cayman single entity or segregated portfolio; in Guernsey limited liability companies, limited liability partnerships, protected cell companies, mutuals and limited by guarantee partnerships; in Hawaii and Vermont stock, mutual or reciprocal.

A local registered or principal office is required in all nine jurisdictions and local directors are required in Barbados, Bermuda and Guernsey. A local insurance manager is required in BVI, Cayman, Guernsey, Ireland and Turks & Caicos.

Annual audited reports are required in all jurisdictions and the requirement for more frequent reporting varies among jurisdictions and types of insurance.

The estimated application process period varies, with Bermuda and Barbados taking one to weeks, BVI three to four weeks, Cayman four to six weeks, Guernsey between several days and one month, Hawaii 30 working days, Ireland two to three weeks for reinsurance and four months for direct writers, Turks & Caicos 30 days for all except credit life which can be done within 72 hours and Vermont 30 days.

On local/premium tax Bermuda has income exemption until 2016, Barbados has none for the first 30 years after which it is two percent of net income up to $125,000. BVI has no tax on captives, exemption is available in Cayman where there is no income or premium tax and there is no tax in Turks & Caicos.

Guernsey offers a choice of taxes ranging through no tax, sliding scale tax, 20 percent on net profits and international company tax from above zero to 30 percent. In Hawaii there is 25 percent premium tax on two classes and one percent on all other captive premiums and Ireland has 10 percent up to the year 2002 and thereafter 12.5 percent, with no premium taxes on international business. Taxes in Vermont are on sliding scales for both direct and reinsurance.

BUSINESS BUC