25/09/19

GUERNSEY: Leap in New Captive Inquiries

As published on weareguernsey.com, Monday September 23, 2019.

Guernsey’s world-leading captive insurance industry is experiencing a big rise in inquiries in the second half of 2019.

Industry figures say that the level of significant inquiries received during the summer easily surpassed recent years.

Guernsey remains Europe’s leading centre for captive insurance, responsible for more than a third of the European captives market, and for more than half of all new captives established in Europe in 2017 with nine new formations. That number dipped to five in 2018, but the Guernsey industry is expecting to see that figure overtaken this year.

Increased interest was expected as market conditions harden, but was proving stronger than had been anticipated, said Dominic Wheatley, Chief Executive of Guernsey Finance.

He added that the increased interest in Guernsey’s captives market dismissed fears raised in Bermuda that EU economic substance requirements were damaging the offshore captives industry.

“Substance demands have not impacted too much for Guernsey captives, because our economic substance regime is robust and as a jurisdiction we have always managed captives properly,” said Mr Wheatley.

“Guernsey offers strong governance processes, competent and credible insurance skills, proper analytics and technical underwriting methodology, and adherence to all of the requirements of CFC rules wherever the captive-owning group is based. All this was verified when the EU code group confirmed that our corporate tax regime met their expectations and requirements as acceptable in terms of transparency and cooperation.

“This verification joins with the recent positive endorsement of our regulatory environment by the International Association of Insurance Supervisors, and Moneyval’s assessment of our AML regime as the most compliant in the world, to provide a unique environment of verified excellence in key areas of international cooperation against poor financial practice.

“We believe that our economic substance and EU tax whitelisting actually enhance our attractiveness as a captive domicile in markets around the world but particularly in our local markets.

“Clients have been generally supportive, and understand and appreciate the benefits that substance brings in terms of the quality of advice, operation, regulation, and governance they enjoy here.”