By Mellica McPherson
Government delivered on its plans to strengthen the financial services sector by adopting promised legislation to strengthen the BVI’s insurance offering via captive insurance.
The upgrade came on 2 November when the Insurance Act was amended to introduce new features while at the same time streamlining existing provisions were deemed necessary. The Bill was piloted by Premier and Minister for Finance Dr. the Hon. D. Orlando Smith
A captive insurance company is one which has been set up primarily to insure the risks of its parent company, and for sometime Government has touted this feature as a financial product that will further strengthen the industry’s offering. As recently as 8 October – during a media conference – the Minister for Finance told reporters that government was going to boost captive insurance.
In presenting the objects of the Bill on Monday, the BVI Leader announced: “As a mechanism of opportunities and modernizing the provision of insurance business in and from the Virgin Islands. The most fundamental change in the current insurance regime provided for in the bill is the removal of the strict arrangement before general insurance and long term insurance business.”
One of the features of the Bill is the creation of two categories: the category ‘E’ insurance licence that can only be issued to a BVI business; and the new category ‘F’ insurance licence. “These two new categories provide greater flexibility, and afford greater opportunities for the use of carrying out captive insurance business from within the Virgin Islands.”
Another new feature of the Bill is the introduction of the clause enabling an insurer to apply to the Commission to get a variation of his licence to include an additional cost of insurance or the removal of a class of business.
Furthermore, it was announced that the Bill also allows insurance agents to act as brokers without the need to apply for separate licence or approval from the Commission: “This is considered an appropriate reform considering the broad remit of insurance agents not only to negotiate for insurance business, but also to provide advice on insurance plans,” Hon. Smith said.
However, it was announced that the amendment does not allow an insurance broker to act as an agent. The Premier also mentioned that the Bill contains miscellaneous amendments that are considered essential to the reform of the insurance sector.
The BVI Leader said that the amended Bill will provide a competitive advantage in what is done in the financial services business. He said that the Bill is about introducing new services into the insurance sector, strengthening the regime, and giving more flexibility to be more competitive.