This is an insurance company that is formed to insure or reinsure the risks of its parent and affiliated entities within its group. In other words, it is a form of self-insurance where the insurer is owned by the insured. One of the major roles of a captive insurance is to facilitate the efficient financing of risk within the group. Captives do not offer insurance to the public.
An application to form a Captive Insurance Company should be submitted to the FSC, noting that these applications must be submitted through a corporate body. This application should be lodged together with the following documents:
- Certificate of Incorporation;
- A copy of the Memorandum and Articles of Association of the Company or other constitutive documents;
- A Business Plan; and
- The prescribed fee of USD 500 being the registration fee and USD 1,500 being the annual fee.
It must be noted that a pure captive insurance company must have a minimum unimpaired paid up capital of Rs 3,000,000.