29 April 2022Law & regulation

Bahamas captive strength supported by regulation

The pandemic of 2020 made only a “small and temporary dent” in the growing numbers of Bahamas-domiciled captives, according to a  new publication supported by the Bahamas Financial Services Board, which promotes the country as an international financial centre.

Total captive insurer numbers in The Bahamas dropped from 166 to 152 between 2019 and 2020 but quickly recovered to 167 in 2021. According to Carl Culmer Jr, manager for policies and practices at the Insurance Commission of the Bahamas, the growth in recent years has been driven by small-to-medium sized entities (SMEs).

“SMEs across varying industries are all interested in the Bahamian captive market. Their aim is to minimise losses that they might incur during the course of their operations,” he writes in an article in the publication.

“The lines of business extended as coverage within these structures include workers’ compensation benefits, cyber-risk, directors’ and officers’ (D+O) insurance and excess liability,” he adds. The country’s legislative framework had supported the sector, and the commission is “determined to keep the applicable law competitive”, Culmer states.

Of the total number of captives in 2021, 150 were captive cells, seven segregated account companies, and ten stand-alone insurance companies.

“The BFSB, along with the Commission, will continue to work with the Government of The Bahamas to target the captive insurance and reinsurance industry as an area of economic interest,” wrote Culmer.