Jersey: excellence offshore


Geoff Cook details Jersey’s leading position as an offshore financial


domicile and explains why the island has grown increasingly attractive to the international captive industry.


J


ersey’s standing as one of the foremost specialist international finance centres gives it an impressive platform from which it can encourage and attract significant levels of reinsurance and captive insurance business.


The core skills sets required for the administration of insurance structures are not dissimilar to those necessary for administering funds and trusts, two of the sectors of the finance industry for which Jersey is renowned.


Although Jersey’s captive industry has developed only recently because of its late arrival as a significant provider of international, wholesale insurance services, the timing has not proved a disadvantage because it has enabled the jurisdiction to consider how its offering might provide advantages over competitor jurisdictions.


First and foremost, Jersey has been able to examine its legislative framework to see whether it could modify its investment structures to widen its appeal to the insurance sector.


In fact, Jersey has been attracting insurance professionals to the jurisdiction for many years and the Insurance Business (Jersey) Law 1996, which regulates the industry, is also flexible enough to allow individuals, partnerships and other entities to form captive structures. However, there is an ongoing process in Jersey of reviewing the laws associated with financial services so that they remain at the forefront of the marketplace, and practitioners in Jersey, working with legislators and government officials, have pinpointed where enhancements could be introduced that would appeal to a number of sectors, including the insurance market.


New laws One such development was the passing of legislation in 2006


that introduced the concept of the incorporated cell company (ICC), alongside a revised version of the traditional protected cell company (PCC). It was a ground-breaking development, placing Jersey ahead of other competitors in introducing the law and it endorsed Jersey’s existing reputation as a leading force in the offshore financial services market.


The ICC involves the formation of separate, legally recognised


cells within the overall structure, with each cell established as a distinct incorporated Jersey company. Whilst the PCC has been used successfully in other jurisdictions for some years, the Jersey version has been designed to offer more flexibility in both the use and structure. PCCs and ICCs can provide a means of entry into the captive insurance market to entities for which it was previously uneconomic. The overheads of a cell captive can be shared between the owners of each of the cells, making the captive cheaper to run from the point of view of the insured.


One of the objectives of Jersey’s legislative developments has been


to provide flexibility within a robust legal framework. So, for example, organisations forming their own insurance subsidiary company to


26 emea captive 2011


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