Fiona Le Poidevin, Guernsey Finance
it introduced the protected cell company (PCC) and, later, the innovative incorporated cell company (ICC). This experience means that Guernsey has built a range of financial services professionals with the highest level of expertise in utilising the structure. In addition the Island has, through legislative advancements, developed a regulatory infrastructure that enables its professionals to be particularly widely employed. It is this environment which has led to Guernsey gaining the epithet the “undisputed king of the cell captive world”.
Our innovation and expertise in this field is illustrated by the following:
• Aon’s White Rock Insurance Company PCC Limited was established in Guernsey as the first PCC in the world. Since inception it has been used by more than 50 corporations as a cell captive facility and grown to be the largest structure of its kind in the world;
• White Rock Insurance (Guernsey) ICC Limited—also Aon-owned— was the first ICC in the world to be insurance licensed;
• Guernsey-based Heritage Insurance Management achieved a worldwide first in 2010 by amalgamating two PCCs—with 17 cells between them—into one; and
• In 2011, law firm Bedell Cristin, in Guernsey, advised Swiss ILS managers Solidum Partners AG on a groundbreaking CAT bond transfer, namely a private transformer of catastrophe risks into $12.4 million of securities in three separate deals through a Guernsey-based incorporated cell structure, Solidum Re.
Research results Strategic Risk carried out a practitioner survey and published the results
in a special supplement which accompanied the September 2011 issue.
The results showed that more respondents have their captives in Guernsey than any other domicile and that captive owners who use Guernsey recognise the Island’s expertise in the sector, its strong links to London and the pragmatic attitude of the GFSC.
The research also showed that captive owners view tax as only one part
of the overall decision-making process for establishing a captive. The ‘Zero-10’ corporate tax regimes of the Crown Dependencies have come under scrutiny by the EU but it is already clear that Guernsey is committed to retaining a regime which is both compliant and competitive. Most importantly, the Guernsey government has already stated that tax neutrality for our captive insurance companies is not under threat in any way.
The Strategic Risk research revealed that domicile reputation and the
regulatory environment are also key considerations in location choice and therefore it is not surprising that Solvency II is potentially a key issue which could influence domiciliation or re-domiciliation. I am glad to say this research shows that captive owners using Guernsey are very much in support of our decision currently not to seek equivalence with Solvency II.
Solvency II’s implications There is significant uncertainty around Europe and beyond regarding both
the timing of introduction and the implications in practice of Solvency II.
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