The Insurance Division of the Financial Services Commission (FSC) is responsible for the supervision and regulation of the domestic and offshore insurance sectors in Barbados, as authorized by the Financial Services Commission Act, 2010 -21.
Supervision and regulation of the domestic insurance companies and intermediaries, the Association of Underwriters, and Qualifying insurance companies, is in accordance with the Insurance Act, Cap 310, whereas the Exempt Insurance Act, 308A supervises and regulates exempt insurance companies, management companies and holding companies within the offshore insurance sector.
Regulation of the insurance industry involves licensing and registration of these entities, and the ongoing monitoring through off site analysis and onsite inspection of companies, to ensure compliance with the regulations; approving of all insurance products; investigating of complaints; and imposing of sanctions or other corrective measures where breaches occur.
The Insurance Division of the FSC is represented at regional organisations, such as the Caribbean Association of Insurance Regulators (CAIR) and international organisations such as, the International Association of Insurance Supervisors, (IAIS), and the Offshore Group of Insurance Supervisors (OGIS), of which Barbados is a member. Barbados has adopted the Insurance Core principles as part of the guidelines for regulation in Barbados.
Domestic Insurance Sector
Regulation and supervision of the domestic Insurance Sector in Barbados, began in 1972, with the enactment of the first insurance Insurance Act. A second Insurance Act was passed in 1996, to strengthen the protection given to policyholders, and to generally expand the existing regulatory framework.
The domestic insurance sector has grown steadily over the years, and is well established. The main categories of insurance are General Insurance and Long Term Insurance.
Of the General Insurance, motor and property are the main classes of business written and the main class of business for Long Term Insurance is Ordinary Life. A significant portion of insurance business is also written through brokers.
The Insurance Statistics section of this website, provides more statistical data and other statistical information, on the domestic Insurance Sector.
For further information regarding the establishing of a domestic Insurance company, broker and other intermediaries, see Licensing/Registration requirements and process.
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.
Barbados, which ranks among the top seven captive domiciles, has established its reputation as a strong domicile, in which to conduct International Insurance business.
The main sources of business for international insurance business is are 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.
“Exempt insurance business” is defined as “the business of insuring risks located outside Barbados in respect of which premiums originate outside Barbados”.
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
- Business convention expenses incurred by US corporations are deductible against taxes in the US.
- Under the Canada/Barbados Double Taxation Agreement, dividends paid, out of income earned from captive insurance business in Barbados to Canadian company, are considered “exempt surplus”, and are not subject to Canadian taxes, providing the risks are non-Canadian.
- No restriction on insurance business being written
- Speed of incorporation and licensing.
- Minimum capitalization of US$125,000.
- Regulatory filings that comply with international accounting standards.
- Special Provision for incorporation of mutual insurance companies
- Exemptions from tax on income and all withholding taxes.
- Exemptions from taxes on profits or gains from investments
- Exemptions from property taxes
- Exemptions from controls on foreign ownership of property
- Economic and political stability
For further information regarding the establishing of an exempt Insurance company or a qualifying insurance company, in Barbados, see Licensing/Registration requirements and process.