By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Upcoming legal reforms could attract two of the world’s top captive managers to domicile “a good portion of their business” in The Bahamas and “open the gateway” for insurance to become a new “economic pillar”.

Guilden Gilbert, principal of CG Captive Managers, yesterday told Tribune Business he has met with both entities, who he declined to name, and each has separately voiced interest in “redirecting a good portion of their book of business to The Bahamas” once the correct legislative, regulatory and enabling environment is in place

Confirming that changes to the External Insurance Act are presently out for industry consultation, he added that their passage through Parliament will achieve just that and “help bring The Bahamas into line with the other progressive domiciles” by “providing the foundation” required by the captive insurance sector.

Backing the recent assertion by Ryan Pinder KC, the attorney general, that The Bahamas will be “very aggressive” in seeking to re-establish itself as a captive insurance domicile and “exponentially” grow the sector via reforms to the Act, Mr Gilbert told this newspaper that himself - as well as the Insurance Commission and Bahamas Financial Services Board (BFSB) - have “made some inroads” towards achieving this.

“It’s actually out now for consultation, and I’ve shared it with my contacts internationally,” he said of the revised Act. “We, CG Captive Managers, are one of the only domestic captive managers [in The Bahamas]. I have attended nearly every World Captive Forum and CICA (Captive Insurance Companies Association) conference since 2013, flying the flag for The Bahamas.

“I have been the only attending these events, and working in partnership with BFSB in marketing The Bahamas as a captive domicile. We’ve made some inroads. I am working with one of the top ten global captive managers now to set up an office here in The Bahamas and this will help propel forward momentum on this legislation with the Insurance Commission and Attorney General’s Office...

“There are actually two very large captive managers I have met with, and both of them are looking to re-domicile a good portion of their book of business to The Bahamas. They’re looking to re-domicile a significant percentage of their book of business to The Bahamas in partnership with CG Captive Managers.”

Legislative reform will play a key role in helping to achieve this outcome, and Mr Gilbert added: “There is a lot of work going on behind the scenes, and I’m excited to get this new External Insurance Act passed through Parliament and enacted.

“The Bahamas is seen as a captive domicile, and this legislation will help bring The Bahamas into line with other progressive domiciles. The reforms I’ve been working for, I believe they will likely come through.” Mr Gilbert explained that changes to the Act will include “specific items” not “worded in the legislation”.

“It will contain things to allow the Insurance Commission to set some policies that will attract this business, and that policy will not need to necessarily be passed by Parliament,” he said. “I’m excited on what the Act will bring to The Bahamas. I’ve been pushing captives for many, many years, we do represent a number of captives in this jurisdiction.

“When we talk about a captive manager that sits in the top ten of global asset managers, that’s a big deal. Myself and the Insurance Commission have met with chief executive of this group at the World Captives Forum in January 2024.

“They laid out what they are looking for, what it would take to relocate business to The Bahamas, and I see this [Act reforms] as the Insurance Commission of The Bahamas and the Attorney General delivering on this deal.”

Asked about the potential economic impact from attracting major industry operators to both establish a Bahamas office, and re-domicile a major portion of their global business to this nation, Mr Gilbert replied: ‘It could be very large. I don’t want to put a number to this.

“If we can solidify the deal to get one of the top ten captive managers to have an office here in The Bahamas, that’s potentially opening a gateway for The Bahamas to develop insurance as a second economic pillar.”

Captive insurance, at its most basic, is a means of self-insurance. Captive insurance companies are typically entities wholly-owned and controlled by their insureds, insuring the risks of owners who also benefit from the captive insurer’s underwriting profits. They are often used to insure large and/or unusual risks and liabilities, such as those faced by specialist doctors, as the premium costs can be managed and controlled, and kept lower than with private underwriters.

The Bahamas was once a leading captive insurance jurisdiction, but legal reforms in the early years of the Pindling government promptly saw the sector depart to rival international financial centres (IFCs) such as Bermuda and the Cayman Islands. Re-establishing this nation as a captive insurance player was one of many strategies mulled to diversify the Bahamian financial services industry in the wake of repeated blacklistings, but the effort has yet to grow strong roots.

Mr Gilbert, who grew up in Bermuda, yesterday voiced optimism that the External Insurance Act reforms may provide the required spark and impetus for this initiative. A Bermuda native, he recalled how the territory has become the third largest domicile in the world, and the largest for both captive insurance and reinsurance.

While The Bahamas is unlikely to supplant Bermuda and the Cayman Islands, both of which have well-established “market niches” in captive insurance, Mr Gilbert nevertheless argued: “I think The Bahamas could be a very highly-recognised and regarded captive domicile.

“I’ve said to the groups who are looking at partnering with us that my goal is to bring young Bahamians into this space because I know what the insurance industry did for me in Bermuda when I worked for Marsh.” Asked whether The Bahamas’ captive insurance ambitions, as outlined by Mr Pinder last week, are attainable, Mr Gilbert replied: “I think as long as we put in the work.

“I have always said that all I’ve asked for from the Government is just for them to stand on a soap box and say: ‘The Bahamas is open for business’. Once you say The Bahamas is open for business, it helps solidify that the Government is on board with growing the captive and insurance space. That in itself helps The Bahamas to grow.”

Mr Gilbert said The Bahamas’ close proximity to the US east coast, where many captive owners reside, and ease of access to this destination, were further positives when it comes to attracting the industry to domicile in this jurisdiction.

He added that the sector goes “hand in hand” with tourism, as captive directors will have to fly in to attend Board meetings, while the industry will also provide work for Bahamian attorneys, accountants (auditors), actuaries and other local professionals.

“It’s a good thing. It’s long overdue. I’m hoping it moves forward,” Mr Gilbert told Tribune Business. “I believe the consultation on the Act closes on May 15. I know this is a priority for the Insurance Commission. Their goal was to get it right from day one, which is why it’s taken a while. 

“They want to make sure they get it right, not be amending it here, there and everywhere. They want to make sure that the Bill is comprehensive on the changes made, and provides a foundation for the market to grow.”