A number of new insurance business developments are expected following Guernsey's recent introduction of legislation permitting the setting up of Protected Cell Companies (PCC's}, according to Steve Butterworth, Director of Insurance.
'First, we anticipate growth in rent-a-captive business because the new legislation extends the use of captives from medium to large organisations to hosts of smaller companies and organisations. I also believe, along with many representatives of our insurance industry, that PCC's will interest the promoters of association captives, composite captives involving both life and general insurers, international groups involving numerous autonomous subsidiaries and even insurers who want to separate the life funds of different policyholders into separate cells or classes within one PCC,' he says.
Guernsey's new legislation allows for the creation of PCC's either through the conversion, with the prior consent of the Financial Services Commission, of an existing company or by the creation of an entirely new Guernsey company also provided that it has first been registered or authorised under the Insurance Business (Guernsey) Law 1986 or in the case of umbrella funds, under the Protection of Investors (Bailiwick of Guernsey) Law 1987.
Mr Butterworth says: 'The legislation allows for core capital to be subscribed by insurance companies, insurance managers or participants themselves and, in many instances, can offer an extremely attractive alternative to stand alone captives. The insurance business of different insureds can be written into different cells each of whose assets are protected in law from the liabilities of other cells.'
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