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Insurance

 

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Ranking:


Barbados has been attracting international insurance companies to its shores for decades. Barbados is ranked among the top ten captive domiciles globally (Business Insurance).

 

Insurance Entities

 

Effective January 1, 2019, three classes of licenses came into existence for the insurance sector as follows:

  • Class 1: Insurance companies which restrict the business they can underwrite to related party Business.  These insurance companies will be taxed at zero.  
  • Class 2: Insurance companies which can underwrite risks of third parties.  These companies will be taxed at a rate of 2%.   
  • Class 3: Includes brokers, intermediaries, insurance management companies, insurance holding companies, etc.  These entities will be taxed at a rate of 2%.  

Corporate entities carrying on international insurance business and licensed before October 17, 2017 will be grandfathered until June 30, 2021.

Further details relating to the establishment of these entities are pending.

 

 

Other Insurance Structures

 

Segregated Cell Companies - A Segregated Cell Company (SCC) is an entity containing assets and liabilities legally segregated from the company’s general account and those of the other segregated cell accounts. An existing Barbados company may be converted to a SCC and an external company may be registered as a SCC or continued as a SCC in Barbados.  A SCC must maintain records for the preparation of financial statements.

 

Advantages of Segregated Cells:


•    Legally protected from the adverse experiences of other cells, and the individual cell benefits accrue only to it.
•    May be transferred to another segregated cell company or to an incorporated cell company (ICC).
•    Enjoy the benefits of a captive insurance company without having to form their own captive.

Separate Account Companies - These are legal entities comprising separate accounts that are segregated from the Insurer’s accounts and other segregated cell accounts. The separate account company differs from a SCC in the following ways:


•    There are no multi-shareholder requirements
•    An SAC does not place the core capital at risk like the SCC does
•    The SAC is cost effective but less versatile

Incorporated Cell Companies - An incorporated cell company (ICC) comprises incorporated cells as part of its legal corporate structure. Each cell of the ICC is a separate legal entity with its own directors who may be different from those of the ICC.   As separate entities, the cells within an ICC can transact business with each other and can sue and be sued. However, incorporated cells must have the same registered office as their ICC but may not own shares of the ICC.  

Additional Information:
•    An external company may be registered as an ICC or continued as an ICC in Barbados
•    An existing Barbados company can be converted into an ICC
•    ICCs must submit annual returns for each of their incorporated cells  
•    An incorporated cell may be transferred to another ICC or to a SCC. The latter can also transfer cells to an ICC

Advantages:
•    Use of a common framework and central management can result in savings
•    Assets/liabilities can be segregated according to class and risk
•    Provision of a more robust segregation of assets than the SCC and the SAC


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