Captive Insurance in Barbados: What You Need to Know

Captive insurance plays an increasingly important role in global risk management strategies. In Barbados, the Financial Services Commission (FSC) licenses a wide range of captive insurance structures, including captives that are part of large international insurance groups. These entities are formed by businesses to provide insurance coverage for their own risks, offering an alternative to purchasing policies from traditional insurers.
 

What is Captive Insurance?

Captive insurance is a type of self-insurance where a company creates its own licensed insurance company to cover its risks and or those of its related companies. Instead of paying premiums to a third-party insurer, businesses insure or reinsure themselves, giving them greater control over claims, pricing, and risk management.

Captives operating in Barbados are part of a robust, risk-based regulatory environment, and have the option of being licensed as a self-managed insurer or to engage a licensed insurance manager.
 

Structures available to Captives in Barbados

• Incorporated or Registered Company including:
  
  • Segregated Cell Company (SCC) 
  • Incorporated Cell Company (ICC)

Types of Captive Insurance Structures

• Pure Captive: Owned by one company to insure its own risks
• Group Captive: Shared by multiple companies with common risks
• Segregated Cell Companies (SCCs): Allow for separation of risk and assets across “cells” within one company
• Incorporated Cell Companies (ICCs): Each cell is a legal entity with its own directors and liability
• Companies with Separate Accounts: Used for life and annuity products with simpler administration

Licensing Regulatory Requirements

Once incorporated, an applicant for a licence must submit the following to the FSC:

• Application form (stating class of licence being applied for)
• Business plan including financial projections
• Ultimate Beneficial Owner, Shareholder and Director Information
• Management information
• Proof of paid-up capital
• Evidence that it meets statutory and regulatory requirements
• Application fee 

Once licensed, captives are required to among other things:

• Maintain adequate capital
• Submit quarterly and annual returns
• Submit audited financial statements
• File material change disclosures
• Comply with legislative requirements and guidelines

Captive insurance companies operating in Barbados must comply with the regulatory framework set out in the Insurance Act and accompanying guidelines. The FSC continues to monitor developments in the captive insurance space and remains committed to ensuring that licensed entities meet the necessary prudential standards. As the landscape evolves, maintaining sound governance, transparency, and risk management remains critical to sustaining a compliant and resilient captive insurance sector.