More new captives were registered in Guernsey during 1996, than in any year previously. In all, forty new captive insurance companies had their applications approved to establish in Europe's largest captive domicile.
The overall net gain was 28 new companies, with twelve existing companies being wound up. Interestingly, none of these latter companies have ceased operations as a result of the new UK Budget changes to Controlled Foreign Companies, according to Steve Butterworth, Superintendent of Insurance Business at the Guernsey Financial Services Commission. There has been much debate during 1996 as to if, or how these CFC changes by the UK Government might dissuade businesses from forming new captives or encourage the winding up of certain types of existing captive. The pessimists appear to have been proved wrong based upon these latest figures. In other European captive domiciles, such as Dublin, Luxembourg and the Isle of Man, 1996 was a generally a disappointing year in terms of new captive formations.
Whilst interest in establishing new captives in Guernsey still comes primarily from the UK, new business was also attracted from South Africa, the Far East, Switzerland, Sweden, Israel, and the USA. Increasing interest in forming captives was also seen from governmental agencies. Existing captives for UK government owned enterprises such as London Transport, were joined by the British Post Office and the South African Home Loans Guarantee company; the latter with the specific personal sanction of President Nelson Mandela. The recently privatised Railtrack spin-off from the old British Rail structure, was also a newcomer to the Guernsey captive scene.
To encourage this business growth in the captive sector, several joint marketing initiatives were undertaken by the GFSC and the Guernsey Insurance Managers Association in 1996. Seminars held in Cape Town and Johannesburg in November attracted interest from 150 delegates from many of South Africa's largest companies. Guernsey's reputation in South Africa as a one of the most professional of offshore jurisdictions was regularly touched upon by many of the seminar's South African speakers. The GFSC's excellent relationships with South Africa's Financial Services Board has also encouraged considerable interest in new captive formations in Guernsey, and the re-domiciliation to the island of existing captives from other offshore locations.
The Risk'96 Conference in September attracted close to 300 delegates to Guernsey's Beau Sejour Leisure Centre to hear about the wide range of issues facing risk managers today; as well as being intellectually challenged through the medium of a "risk management game" developed especially for Risk'96 by Glasgow Caledonian University. Fifteen workshops were held over the two and half days involving speakers from Bermuda, Switzerland, the USA and University College, London on such subjects as climatic change, pollution exposures and uninsurable risk exposures, as well as the first hand experiences of risk managers at Virgin Atlantic, Candy Domestic Appliances, Du Pont, Manchester Airport, Reed Elsevier, London Transport and Eskom, the state owned South African electricity company. Underlying the risk management theme at Risk'96 was the various uses of captives to assist in controlling risk and funding for future potential liabilities.
The success of these initiatives has already encouraged discussion and planning of similar overseas seminars during 1997 and another Guernsey risk management conference - Risk'98 in two years time.
This information is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.