Insurance - International Insurance Sector

International Insurance Sector

 

The Barbados Exempt Insurance Act was passed in 1983 to establish the formation of “captives” in Barbados. The Act provides for the licensing of exempt insurance companies to conduct international insurance business from within Barbados.

“Exempt insurance business” is defined as “the business of insuring risks located outside Barbados in respect of which premiums originate outside Barbados and includes the business of an underwriter, broker, agent, dealer or salesman in respect of that business.”

 

Barbados, which ranks among the top seven captive domiciles, has established a reputation as a domicile with a good regulatory framework and one which is conducive for the conduct of international insurance business. The main sources of business for the international insurance sector originate in Canada and the USA.

International insurance business can be conducted by Exempt Insurance Companies (EICs) or Qualifying Insurance Companies (QICs). EICs are licensed under the Exempt Insurance Act, Cap 308A, and QICs under the Insurance Act, Cap 310.

A “qualifying insurance company” is a registered insurer in respect of which “at least 90 per cent of gross revenues from insurance premiums and at least 90 percent of all risks insured originate outside the CARICOM Single Market and Economy”.

 

Advantages of conducting international insurance business in Barbados

1. Business convention expenses incurred by US corporations are deductible against taxes in the US;

2. Under the Canada/Barbados Double Taxation Agreement, dividends paid, out of income earned from captive insurance business in Barbados to a Canadian company, are considered “exempt surplus”, and are not subject to Canadian taxes, provided the risks are non-Canadian;

3. No restriction on insurance business being written;

4. Speed of incorporation and licensing;

5. Minimum capitalization of US$125,000;

6. Regulatory filings that comply with international accounting standards;

7. Special provision for incorporation of mutual insurance companies;

8. Exemptions from tax on income and all withholding taxes;

9. Exemptions from taxes on profits or gains from investments;

10. Exemptions from property taxes;

11. Exemptions from controls on foreign ownership of property; and

12. Economic and political stability.

For further information regarding the establishment of an exempt Insurance company or a qualifying insurance company in Barbados, see Licensing/Registration