The British Virgin Islands have seen popularity as a captive destination decline over the last few years, according to a report by research firm Timetric.
By the end of the third-quarter of 2012, the British Virgin Islands had 156 captive insurers and 34 domestic insurers. Although the British Virgin Islands is still a popular captive insurance hub, the number of captive insurers has declined from 88.8 per cent in 2008 to 86 per cent in 2011, following a long downward trend.
The main reason for the large number of captive insurance companies during the 1990's was the nation's low capitalisation requirements. Due to the emergence of other offshore and onshore insurance jurisdictions, the volume of captive companies was knocked down. Another key to the decline was the revised financial service laws, made by the British Virgin Islands to comply with international standards.
The new act, alongside the Insurance Regulations 2009 and Regulatory Code 2009, provides more clarity than the previous system. It was formulated to meet the principles of the International Association of Insurance Supervisors and the EU's Solvency II legislation.
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