The Insurance Act makes provision for the licensing and regulation of both insurers doing domestic insurance business in Anguilla and insurers from Anguilla engaged in “foreign insurance business”, defined as risks and premiums originating outside of Anguilla.
The Act also provides for specific kinds of captive insurance companies with a view to promoting captive insurance business in Anguilla. Apart from all of the other advantages of forming a captive insurance company, such as minimizing insurance costs, reducing the risks to companies (their insureds would be previously known to them) and access to the re-insurance market, Anguilla has the added advantage of being a no-tax jurisdiction.
The Act also prescribes licensing requirements for insurance agents (persons acting for a single insurer), insurance brokers (persons acting for more than one insurer) and insurance managers.
Insurance business is defined in the usual way as either long-term business or general business. Long-term business is issuing annuities, life insurance, or insuring against accidents. General business is engaging in insurance business other than long-term business but under the new Act also specifically includes issuing credit life insurance or employees’ group life insurance.
Class “A” licenses are issued to domestic insurers and Class “B” licenses to foreign insurers.
A Class “A” licence is a licence to carry on insurance business including domestic insurance business in or from within Anguilla. The minimum capital requirement is US$200,000 (Annual licence fee US$2500).
There are five kinds of Class “B” licenses available for engaging in foreign insurance business:
(1) Unrestricted Licence to carry on foreign insurance business including long-term business. The minimum capital requirement is US$200,000 (Annual licence fee US$2000).
(2) General Licence to carry on general foreign insurance business, but not long-term business. The minimum capital requirement is US$100,000 (Annual licence fee US$2,000).
(3) Association Licence to carry on general and long-term foreign insurance business with two or more owners of the insurer, and its affiliates, and to carry on more than 30% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is US$100,000 (Annual licence fee US$1,500).
4) Group Licence to carry on any foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is US$25,000 (Annual licence fee US$1,500).
(5) Single Licence to carry on any foreign insurance business including long-term insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is US$25,000 (Annual licence fee US$1,500).
Clearly, the Act is designed to attract a broad range of captive insurance business.
With the approval of the Commission, an insurer licensed under the Act may be owned, or later change its ownership to be owned, by a trust which can be either a purpose trust or with beneficiaries.
The Act provides comprehensive protection for the insured by allowing premiums to be placed in protected premium accounts. There are also additional provisions protecting the proceeds of an insurance policy from the creditors of the policy holder or the insured.
The procedures for securing a licence for an insurance company are not complicated. The application procedure is essentially a check on background and qualifications. Approval is obtainable within a short period of time unless there is a need for an extensive background check.