Total No. of Captives: 335 as at December 31, 1996

Captive Premiums (Gross): £1,370,000,000 as at December 31, 1995

Captive Assets: £4,800,000,000 as at December 31, 1995


The second largest of the Channel Islands, Guernsey is a self-governing dependency of the English Crown and is located 110 kms (70 miles) south of England and 50 kms (30 miles) from the north west coast of France. Area: 62 sq. kms (24 sq. miles) Population: 59,000


Stable government - Constitution dates back to 1205; no political parties; enjoys a special Protocol with the European Community, though is conveniently outside the EC for insurance regulation purposes; Guernsey is a member country of the O.E.C.D.


Over twenty daily flights from London and other provincial centres in the UK, together with regular flights from Zurich, Amsterdam and Brussels and a number of other European cities, as well as high speed ferry services from England and France.

Currency: £ Sterling

Insurance Regulation:

Insurance Captives are regulated under The Insurance Business (Guernsey) Law, 1986. All prospective captives must submit applications to the Superintendent of Insurance Business at the Guernsey Financial Services Commission. Guernsey allows the formation of pure captives, rent-a-captives and association captives, as well as commercial (non-captive) insurance companies. Insurance and/or reinsurance coverages can be written, and captives can write both parent and third party business, if they so wish.


1. Incorporation and registration of a captive is usually conducted by an Approved Manager, who must obtain approval from the Superintendent of Insurance Business for the company to undertake insurance business.

2. The captive must have a minimum of two shareholders who may be non-residents.

3. Included in the incorporation documents must be a business plan, financial projections and information on the ultimate beneficial ownership; personal questionnaires need to be completed for all directors not previously known to the GFSC.

4. Formation can be achieved in one week, but 2 to 4 weeks is more usual.


  Type of Company         Minimum         Solvency Margin       

  General Business        £100,000        18% of first £5m of net 
  (Property & Casualty)                   premium and 16% of net 
                                          premium over £5m 

  Long-Term Business      £100,000        The higher of £50,000 or 
  (Life)                                  2.5% of the value of the 
                                          long-term fund consisting
                                          of unearned premiums and 
                                          investment income 

The capital can be in any currency.


Guernsey registered insurance companies can opt for any of four bases:

1. £500 per annum for a Tax Exempt Status, or

2. Variable tax rate up to 30% fixed for five year periods, or

3. 20% on investment income arising from shareholder's funds up to a maximum of £60,000

4. 20% of operating profits

Stamp Duty:

Payable on authorised capital at 0.5% of value (minimum £50 and maximum of £5,000)

Investment Restrictions:

To meet minimum solvency requirements 75% of the assets must be maintained in an approved form e.g. cash, bank deposits, certificates of deposit, Eurobonds, securities on a recognised stock exchange, or irrevocable letters of credit; for long term (life) business the minimum is 25%

Statutory Reserves:

There are no statutory requirements for insurance companies to make catastrophe or other claims reserves

Annual Fees:

  • GFSC Registration - £1,650
  • Company Annual Return - £100
  • Management Company - variable according to time spent
  • Company Secretarial - variable according to time spent
  • Director(s) - local directors £1,500 to £5,000; others as required
  • Auditing - approx. £3,000 to £4,000
  • Legal Advice - variable according to time spent


Each captive must appoint a General Representative who is either:

1. An authorised insurance manager, or

2. A Guernsey resident executive director or employee

By law, only one director is required and he or she does not have to be a Guernsey resident. In practice, captives tend to have at least three directors, two of whom are Guernsey residents.

This information is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.