Guernsey: Developments In Guernsey

Last Updated: 27 August 2015
Article by Richard Searle

Most Read Contributor in Guernsey, September 2018

Richard Searle of BDO in Guernsey considers the development of the cell industry in Guernsey.

Captive Review (CR): How has the cell industry developed in Guernsey?

Richard Searle (RS): We have seen positive news in Guernsey around captives and reinsurance. That's coming through relatively new innovations, particularly around insurance linked securities (ILS).

There has also been a lot of recent success due to the Guernsey rated-reinsurance structures. This is encouraging to see after a period of relative anticipation with regards to the position of captives in the United Kingdom. People are starting to see the benefits of maintaining and creating captive structures.

Guernsey is a centre of expertise that provides a close proximity to an array of different service providers. On the cellular side, we are seeing a lot of growth. It has been a busy year for Guernsey in terms of cell structures. This is especially true of ILS contracts. This has involved the use of both PCCs and ICCs and is obviously related to the various motivations of the investment managers. Whether that be cost or the desire to have segregation of portfolios because of different investment pools, the flexibility this offers is an attractive prospect.

It is highly likely that amendments to the Guernsey company law approved at the end of July and effective in September 2015 will amplify this trend, as PCCs become more flexible for clients. This will include greater flexibility in terms of the conversion of protected cells into a non-cellular company. For example, the law will permit someone wanting to set up a captive as a cell part of an established PCC subsequently converting that cell into a stand-alone company in its own right as scale and requirements grow. The law will also allow greater flexibility in choice of accounts requirements between individual PCC cells and the company as a whole, creating more appropriate options to meet clients' specific needs.

CR: What emerging trends are you seeing for cells?

RS: We have seen overall growth in the number of formations. This is evident in terms of new cells, transactions within cells and new captives.

We audit more ILS structures than anyone in Guernsey, and that is where we are seeing a lot of activity. This has involved different investors and funds looking into alternative asset classes where they can diversify their risk into areas of investment that are not necessarily correlated with what you might consider traditional market risk. These investments tend to be fully collateralised, involve fairly big numbers and they offer an extra level of diversity away from concentrated portfolios. There is a great variety in this area, with areas as unusual as sports risk and other types of risk that are not purely catastrophe type arrangements.

In terms of what trends have emerged as a result of activity in the wider market, there has been an increase in enquiries for migration as a result of the implementation of Solvency II. We have had enquiries for a transfer of a captive from another jurisdiction where Solvency II will be implemented in full, because it is not a requirement here. So this is a new opportunity for Guernsey that has arisen because of the industry's work with the regulator, and the decision not to adopt the policy for captives. This was a decision made on an appropriate basis for the type of business that we run in Guernsey.

CR: How is BDO developing its offering in reaction to these trends?

RS: We have a long and established focus on the captive industry and it is an important part of our business. We are having to address the increasing complexity in terms of the nature of structures and risk being covered.

To do this we have internally created a specific 'centre of excellence' for our approach to captives, with particular focus on ILS. This has been primarily driven out of Guernsey because it is where much of such business is based, but we are also working very closely with our financial services team in London as well. So in this way we have developed a breadth of expertise.

We are also talking with service providers around the longevity risk transfer piece, which is another relatively new angle that is being picked up in Guernsey. So in this case, we are working closely with our head of insurance in London to ensure we have the appropriate skill sets to meet these challenges.

The new UK GAAP and the accounting regulation that has come with it have prompted us to work closely with our clients to help them through the ramifications of these changes. We have actually had one client switch from UK GAP to IFRS ahead of those changes, due to a consideration from their parent group. So it is interesting to see how different clients are approaching these regulatory changes; some from a cost perspective and some from a suitability standpoint. As the fifth largest accounting firm in the world, we are very well placed to advise clients on those technical changes that have come through.

CR: Do you think any of the newly implemented or upcoming regulatory changes will have an impact on the number of cell formations?

RS: This is a difficult one to predict in terms of impact on specific numbers. Clients should and generally do select the most appropriate structure for their specific commercial requirements. Recent regulatory changes, including both the Company Law amendments mentioned previously as well as changes to the solvency regime, will create more options with greater and proportionate flexibility for clients. Consequently, I would expect that this will help to attract new business to the island, reinforcing Guernsey's reputation as the leading Captive Insurance domicile in Europe.

An original version of this excerpt appeared as part of a broader article which was published in Captive Review's 2015 Cell Company Guide, August 2015.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions