INTRODUCTION
Nevis has been an important international financial centre for over twenty years. It has been known worldwide for its attractive fiscal legislation to execute offshore transactions, as well as for its banking system and convenient legislation on corporations, ship registration and trust. Just recently, the Legislature approved a new and innovative law on private foundations and Captive Insurance. Due to the demands by the international business community, Nevis has adopted a new legislation on captive insurance companies by means of The Nevis International Insurance Ordinance 2004 to complement the services provided by our financial centre, considering that captive insurance has become, second only to banking, one of the most important sectors of the offshore financial industry.
CONCEPT
The decision to use a captive insurance company to provide insurance is the need to reduce costs and to achieve better risk management. This reduction of costs is obtained mainly from the tax benefits that are given by the legislation to offshore insurance or reinsurance.
REQUIREMENT FOR THE ORGANIZATION AND OPERATION OF A CAPTIVE INSURANCE COMPANY The organization and operation of a captive insurance company is composed of two stages.
Incorporation
Application for a license to operate a captive insurance company from Nevis, it is first necessary to request to the Registrar of Insurance and Reinsurance authorization to organize a Nevisian to act as a captive insurance company. This request must be filed with the following documents and information:
I. A draft of its articles of incorporation; a resolution issued by the board of directors of the company authorizing the opening of an office in Nevis, appointing the resident manager or , the Resident Agent and the amount of paid-up capital to carry out the captive insurance or reinsurance business, and its balance sheet.
II. Banking and personal references of all shareholders and directors of the company. company, who can be an insurance management company authorized by the Registrar of Insurance and Reinsurance to manage captive insurance companies.
III. Payment of U$1,000.00 to the order of the Registrar of Insurance and Reinsurance to cover license fee of Insurance and Reinsurance.
Once the above indicated documents have been reviewed and approved by the Registrar of Insurance and Reinsurance it will authorize the incorporation of the Nevisian company or the registration of the foreign company with the Public Registry.
License
After the requirements indicated above have been met, the application for the license to operate the captive insurance company must be filed with the Registrar of Insurance and Reinsurance together with the following documents:
1. Certified copy of the articles of incorporation of the company as they were registered.
2. Certificate of good standing by the Registry certifying the registration of the company.
3. Financial statements audited by Certified Public Accountants. In case of new companies that have not operated, then an initial balance sheet audited by Certified Public Accountant.
4. Margins of solvency must be maintained during the period of operation as required by the legislation.
