Captive news

Captives oblivious to implications of UK's Insurance Act Captive insurers have been slow to wake up to the implications of the UK's Insurance Act, according to insurance governance firm Mactavish. It said this could affect the reliability of reinsurance and raise questions over tax compliance. The Insurance Act, which applies to UK policies from August 12, introduces new disclosure duties and proportionate remedies for insurance buyers and insurers. Mactavish said that while risk managers have been busy applying the Act to upcoming renewals, it appears that its implications for captives have been largely overlooked. "The Insurance Act is a significant issue for the captive industry and one that [it seems] to have missed," according to Bruce Hepburn, chief executive of insurance governance firm Mactavish. Captive insurers will find implementing the Act a complex challenge, he said, adding that captives are potentially captured by the Insurance Act both as a buyer of reinsurance and as an insurer.hideCaptives have yet to get to grips with the Insurance Act, according to Malcolm Cutts-Watson, captive consultant and senior adviser to Mactavish. "It is no wonder the new Insurance Act has slipped under the radar. The captive manager community has been distracted by major changes to insurance regulation - such as the move to risk-based regimes such as Solvency II," he said. "Clearly, captive managers and boards rapidly need to get up to speed and decide on their strategy to respond to the most significant change in commercial insurance law for 110 years." The Act affects all captives that accept or transfer out risk under insurance and reinsurance contracts via UK law, he explained: "As many captives have fronting arrangements with UK-based fronting carriers and use the London facultative market, the impact will stretch across many domiciles." Nick Durant to head Marsh's Global Captive Solutions practice Nick Durant is to become the head of Marsh's Global Captive Solutions Practice. He will be based in New York and report to John Drzik, president of Marsh's Global Risk & Specialties division. He succeeds Chris Lay, who has been named president and CEO of Marsh Canada. Mr Durant brings 20 years of industry experience to his new role, most recently serving as Marsh's global analytics sales leader. Prior to joining Marsh in 2012, he spent 14 years with Guy Carpenter in various reinsurance leadership positions. Bahamian insurance industry growth projected The Bahamian insurance industry grew at a CAGR of 4.7% between 2010-2014, mainly due to the expansion in both the domestic and external insurance sectors, according to a new report from Timetric's Insurance Intelligence Center. The report forecasts the insurance industry to grow at a CAGR of 4.4%, to reach $1.1bn in 2019. Stable growth in compulsory insurance classes, and infrastructure and tourism development will contribute to the industry's growth, it said. "The Bahamas is rapidly emerging as a destination for companies looking for captive insurance solutions to their risk management practices," said the report. It noted that US companies are a particularly large client base for Bahamian captives. Captive insurance accounts for around 13% of total insurance business in the country and the number of segregated captive cells rose from 65 in 2013 to 99 in 2014. Willis to offer captive management in Switzerland Willis Towers Watson has been approved by the Swiss Financial Market Supervisory Authority to begin offering insurance management services under the terms of the local insurance intermediaries registration in Switzerland. Willis Towers Watson said the move is part of Willis Towers Watson's strategy to offer multinational corporations across Australasia, Europe, Latin America and North America, "an effective option for placing risk in a highly respected captive insurance domicile." Nigel Goodlad, regional managing director of Europe, Willis Towers Watson Global Captive practice, said, "Switzerland offers many attractive benefits to the discerning corporate client, including its Solvency II equivalence, high-quality regulation with specific captive reinsurer registration, established double tax treaties around the globe and multilingual capabilities." He added: "In the current environment, the solid reputation of a domicile is starting to carry more favour in the decision-making process. Switzerland is well positioned to offer clients an attractive place to be. We are thrilled to add Switzerland to the list of domiciles where we can provide captive management services."

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Want to read this article?

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