The Captive Insurance Act 2015 was passed before the National Assembly in December 2015. The law will now be proclaimed in stages.
This was a much awaited law as there is a real interest for the incorporation and domiciliation of captive insurance in Mauritius. This new captive Insurance Law is a fine and modern piece of legislation which should establish the jurisdiction as a domicile of choice for captive insurers focusing on Africa and why not Asia too.
The Act only applies to "pure captives" meaning the business of undertaking liability restricted to the risks of parent and affiliated corporations. The Insurance Act 2005 which has now been amended was previously governing captives but unfortunately not in a satisfactory manner. Captive insurers will be regulated by the Financial Services Commission and can also be licensed as Global Business Companies Category I.
The Second Schedule to the Act amends the Income Tax Act to provide for an attractive tax holiday on income derived by captive insurers for a period not exceeding ten years. The licensed captive insurer being a resident of Mauritius, will also beneficiate from the Double Taxation Agreements (DTAs) and the Investment Protection and Promotion Agreements (IPPAs) enjoyed by Mauritius Internationally.
A captive is a wholly owned subsidiary created to provide insurance to its parent company and group. It is essentially a form of self-insurance where the insurer is owned by the insured. It reduces costs and risk management and enhances risk control. These captives do not offer insurance to the public. They do not cover life insurance business or items such as liability for motor vehicles. The types of entities forming captives vary from the large multinationals to non-project organisations and in fact most fortunee 500 companies have their own captives.
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.