The Turks and Caicos Islands has emerged as a competitive domicile for captive insurance, offering an attractive environment for companies and investors

Captive insurance remains a pivotal mechanism for businesses seeking tailored risk management solutions and which are facing new risks particularly related to technology, cybersecurity, and climate change with an ever-increasing regulatory burden.

The Turks and Caicos Islands’ (TCI) agility, innovation, and world-class professionals make it the perfect jurisdiction for small and medium captives – and don’t underestimate the importance of the islands’ political and economic stability.

Regulatory framework

TCI provides a robust regulatory environment for captive insurance companies, governed primarily by the Insurance Ordinance 2019 and the Insurance Regulations 2020. These regulations are designed to ensure that captives operate with a high degree of transparency and integrity, aligning with international standards.

The Financial Services Commission (TCIFSC) is the regulatory authority overseeing captive insurance operations. The TCIFSC is known for its efficient and responsive regulatory approach, which includes streamlined application processes and ongoing support for captive managers and insurance companies.

Advantages of domiciling captives in TCI

1. Favourable tax regime: TCI offers a tax-neutral environment with no direct taxes on profits, income, or capital gains. This tax neutrality is highly attractive for businesses looking to optimise their insurance structures and manage costs effectively.
2. Cost efficiency: The cost of establishing and maintaining a captive insurance company in TCI is relatively low compared to other jurisdictions. This cost-effectiveness extends to regulatory fees, administrative expenses, and operational costs.
3. Regulatory support: The TCIFSC provides a supportive regulatory environment, characterised by clear guidelines and a commitment to efficiency. This support includes timely approvals and a collaborative approach to resolving issues. The dedicated insurance team understands your business and the structures.
4. Legal framework: TCI’s legal system is based on English common law, providing a familiar and stable legal environment for international businesses. This common law framework ensures consistency and reliability in regulatory practices.
5. Geographic and economic stability: TCI benefits from political stability and a well-developed infrastructure, contributing to a secure and conducive environment for business operations. Its strategic location enhances accessibility for international clients.

Recent developments

Recent changes in the TCI captive insurance sector underscore its growing prominence as a global domicile. Key developments include:

1. Regulatory enhancements: The TCIFSC has introduced several regulatory enhancements to streamline the captive insurance process, including faster licensing procedures and simplified compliance requirements. These changes aim to attract a broader range of international businesses.
2. Expansion of services: TCI has seen an increase in the range of services offered to captives, including specialised risk management solutions and advanced actuarial services. This expansion enhances the attractiveness of TCI as a domicile for complex and innovative insurance structures.
3. Global recognition: TCI has gained recognition from international organisations for its compliance with global regulatory standards. This acknowledgment bolsters TCI’s reputation as a reputable and reliable captive insurance domicile.

Conclusion

TCI continues to establish itself as a leading domicile for captive insurance, offering a favourable regulatory environment, cost efficiencies, and robust support for businesses.

As the global insurance landscape evolves, TCI’s commitment to regulatory excellence, its best-in-class service providers, and its strategically advantageous position, make it a compelling choice for companies seeking innovative and effective risk management solutions. For businesses considering captive insurance, TCI remains a jurisdiction worthy of serious consideration.