Guernsey update

The captive insurance market has seen a year of expansion in Guernsey – the number of insurers registered at the end of 1995 was 312 (300 captives and 12 offshore life companies).

As well as the additional business coming from newly registered companies, many captives have been expanding their existing insurance programmes.

Notable additions during the past 12 months include the London Transport captive, and the Alliance & Leicester and Chelsea Building Societies, with the two financial institutions writing mortgage indemnity insurance. More recently, the Republic National Bank of New York became the latest bank to set up a captive in Guernsey.

The UK's largest medical legal assistance organisation, the Medical Defence Union, which has been experiencing escalating claims against its medical practitioner members, has formed a new Guernsey-based insurer.

As an alternative to establishing a separate insurance company, the 'rent-a-captive' has continued to be an option of growing interest and the association captive route has also proved popular with several new association-type captives being established. This area should expand further in 1996.

The Limited Partnerships (Guernsey) Law 1995 came into force on 1 February 1996. The features of a Guernsey limited partnership include: a minimum of one general partner and one limited partner; no restrictions on the number of partners; a fixed or unfixed duration, as appropriate; accounts may be maintained in any currency; and tax transparency – the incurring of any liability to tax in the hands of the investors (limited partners) rather than in the hands of the partnership as such.