IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Arkansas Australia Bahamas British Columbia Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Statutory minimum (Superintendent can Producer Captive $300,000 $5,000,000. For certain captive insurers Long-Term Business exempt : In relation to an insurer which has a share CAD200,000 minimum at registration; Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within require additional funding): $300,000 a minimum of $2 million applies. $200,000 A licence may be issued to a company under this Act capital, the minimum amount paid up on the after registration minimum CAD200,000 Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least Pure Captive: $250,000 Pure Captive $100,000 $150,000 when that company has a minimum paid-up capital of share capital where the insurer is registered — in capital and CAD100,000 in reserves Sponsored Captive: $1,000,000 $200,000 Group:$500,000 Association Captive (stock) $400,000 General $100,000 $250 000 or, in the case of an approved mutual insurance as a Class 1, Class 2, Class 3, Class 3A or (retained earnings) Reciprocal Captive: $1,000,000 Reinsurance Only: 50% of above $350,000 company, minimum contributed reserves of $250 000. Class 3B insurer is $120,000; Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on Agency captive: $500,000 Association Captive (mutual) $400,000 [Repealed by 2010 : 60 s. 10] any foreign insurance business, including long-term foreign insurance business, Reciprocal insurer: $500,000 $750,000 insurance: [Repealed by 2010 : 60 s. 10] providing that it has and maintains an issued and paid up capital of at least $200,000; Protected Cell: $1,000,000 Industrial Insured Captive (stock) 20% of net premium income up to 10% Subject to subsection (4), no company may be registered as a Class 4 insurer is $1,000,000; $200,000 $300,000 up to BS$7 million per annum plus 10% to carry on in Barbados [Repealed by 2010 : 60 s. 10] Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on Industrial Insured Captive (mutual) of the excess (a) long-term insurance business unless it has a minimum as a Special Purpose Insurer is $1; general foreign insurance business, but not long-term foreign insurance business, $200,000 $500,000 paid-up share capital of not less than $3 000 000; as a Class A insurer is $120,000; providing that it has and maintains an issued and paid up capital of at least $100,000; Sponsored Captive $500,000 $500,000 (b) general insurance business unless it has a minimum as a Class B insurer is $250,000; Special Purpose Captive $300,000 paid-up share capital of not less than $3 000 000; as a class C, D and E insurer is $250,000; Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on $300,000 (c) both long-term and general insurance business unless in two classes, is the aggregate amount of general foreign insurance business and long-term foreign insurance business, with 2 or it has a minimum paid-up share capital of not less than $5 paid up share capital required for each class more owners of the insurer, and its affiliates, and to carry on no more than 50% of its 000 000; for which it is registered. foreign insurance business (based on net premiums written) or 100% of its reinsurance The Commissioner may require additional (d) motor business only, unless it has a business with persons who are not owners of the insurer or its affiliates, providing that it capital and surplus. All minimum capital minimum paid-up share capital of not less than $1 000 has and maintains an issued and paid up capital of at least $100,000; and surplus requirements must be in the 000; form of cash or an irrevocable and (e) industrial life insurance business unless it has a Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any unconditional Letter of Credit. minimum paid-up share capital of not less than $1 000 foreign insurance business, including long-term foreign insurance business, with a single 000; and owner of that insurer and its affiliates, and employees of the owner or its affiliates, (f) qualifying insurance business, unless it has a minimun providing that it has and maintains an issued and paid up capital of at least $25,000; paid up share capital of not less than $250 000 or such amount as the Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any Supervisor determines, or an equivalent sum in other foreign insurance business, including long-term foreign insurance business, with the sole currency approved by the Supervisor, the capital to be owner of the insurer, if a company, providing that it has and maintains an issued and fully paid up in cash. paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Incorporation documents: Filing Fee $200 An Annual Fee of $5,000 is payable to Application Fee EXEMPT INSURANCE AND QUALIFYING INSURANCE $7,500 Lawyers fee. $4,070 Government fee. CAD500 application fee Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under $75 = Filing charter documents the Australian Prudential Regulation $100 COMPANIES $971 Business License fee (Class I) CAD2,500 registration fee Expenses section 3 (1) $500 $100 = Examiners Revolving Fund License Fee $300 Authority. FILING OF AN APPLICATION CAD2,500 annual renewal fee Annual License Fee: (b) For filing application for an insurance agent, broker ’s or Annual License fee: Year 1 $1,000, Incorporation Fee AMOUNT OF FEE (BBD$) $300 manager’s licence under section 3 (2) $500 Renewal $5,500 Actuary Review Dept. Cost $1,000 (c) For filing application for a sub agent or principal representative Exempt Insurance company 500.00 (insurance) licence under section 3(2) $100 Two or more captives under common Annual Registration Fee for Nonresident Management company 500.00 Issue of Licence and Annual Renewal of a Licence fees ownership will be taxed as though they Insurers Holding company 500.00 (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 are a single captive. Captives must pay $1,000 Qualifying Insurance company 500.00 (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) a minimum tax of $5,000 each year. and (c)) $2,000 Annual Registration Fee for External FOR ANNUAL LICENCE (f) For a Class ‘B’ Association, Group or Single licence (sections 3 Insurers AMOUNT OF FEE (BBD$) (1)(d), (e) and (f)) $1,500 $2,500 for restricted/ $3500 unrestricted Exempt Insurance company 20,000.00 (g) For an Insurance Agent, Broker or Manager licence (sections 3 Management company 20,000.00 (2)(a) and (b)) $1,000 Annual License Fee as an Underwriting Holding company 20,000.00 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 Manager $10,000 Qualifying Insurance company 20,000.00 (i) For a Principal Representative (Insurance) licence (section 3 Audit Fee (2)(e)) $500 $5,000 http://www.fsc.gov.bb/index.php/insurances/fee-schedule

Incorporation time Unknown 2-4 weeks Mandatory 30 day application approval Discussion and agreement with insurance Approx 30 days 3 weeks 30 days 14 days to incorporate. 3 months to time. Pre-approval process may take division obtain license (subject to change). another 60 days.

7/19/2016 Page 1 of 65 Prepared April 2016 Alabama Anguilla Arizona Arkansas Australia Bahamas Barbados Bermuda British Columbia Types of Insurance All lines of commercial property and Class A licences are issued to domestic insurers and Class B licences to foreign All P&C lines, life and disability (some All lines of commercial property and All lines except no third party risks All Lines All, subject to the approval of the supervisor of All All lines except Surety (unless R/I) and That May Be Written , life and disability insurers. exclusions for captive writing direct) casualty insurance, including workers insurance. motor vehicle unless corporate fleet. insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance compensation. Unrelated business is not allowed. compensation insurance and reinsurance. business: (1) Unrestricted licence to carry on foreign insurance business including long-term business. The minimum capital requirement is $200,000 (annual licence fee $2,000). (2) General licence to carry on general foreign insurance business, but not longterm business. The minimum capital requirement is $100,000 (annual licence fee $2,000). (3) Association licence to carry on general and long-term foreign insurance business with two or more owners of the insurer, and its affiliates, and to carry on more than 30% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is $100,000 (annual licence fee $1,500). (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested None for pure and industrial insured; An association captive, a producer Investments weighted according to risk None for nonresident companies. None Investments and advances to affiliates are The Superintendent of Financial Restrictions captives. assets other than cash, LOCs, and same as for other admitted insurers for reinsurance captive, a sponsored capital adequacy subject to the approval of the Minister of Institutions evaluates and approves the other than government securities of 10% to 30%; see Guidance Notes of Allowable association captives and RRGs. captive, and an industrial insured group Finance. At least 75% of general insurance investments that are listed in the Assets Loan to parent requires approval. must comply with the investment must be in relevant assets. captive's annual audited financial Regulator may prohibit investments that requirements contained in the Arkansas statements. threaten the solvency of the captive. Insurance Code. Pure captives and industrial insured captives are not subject to any restrictions on allowable investments. The commissioner may prohibit or limit an investment that threatens the solvency or liquidity of the company.

Tax Issues Premium Taxes: Anguilla has the No premium taxes, direct or assumed. Premium Taxes: Premium Tax: 30 percent local No premium taxes, although1 percent No income or premium taxes for the first 15 years; after No local premium taxes; Income Tax Canadian premium taxes apply by line $1–20 million added advantage of being a no-tax jurisdiction $1–20 million corporation tax. excise tax may be applicable 15 years there is a tax of 2% of net income up to USD exemption until 2035. and by province ranging 0%-5% (3% on Direct 0.4% Direct 0.4% $250,000. average). No premium tax on Reinsurance 0.225% Reinsurance 0.225% In Bermuda there are no taxes on profits, reinsurance or on non-Canadian income or dividends, nor is there any capital exposures. Combined federal and $20–40 million $20–40 million The Corporate Tax Rate in Barbados stands at 25 gains tax, estate duty or death duty. Profits provincial income tax 26%. 11% Direct 0.30% Direct 0.30% percent. can be accumulated and it is not obligatory to provincial tax could be waived for non- Reinsurance 0.15% Reinsurance 0.15% Barbados Taxes pay dividends. Canadian risk. Last Previous $40–60 million $40–60 million Direct 0.20% Direct 0.20% Corporate Tax Rate 25.00 25.00 Reinsurance 0.05% Reinsurance 0.05% Personal Income Tax Rate 35.00 35.00 Sales Tax Rate 17.50 17.50 > $60 million > $60 million Social Security Rate 21.35 21.35 Direct 0.075% Direct 0.075% Reinsurance 0.025% Reinsurance 0.025%

Minimum tax of $5,000; No maximum

7/19/2016 Page 2 of 65 Prepared April 2016 Alabama Anguilla Arizona Arkansas Australia Bahamas Barbados Bermuda British Columbia Applicable Act Alabama Code: Section 27: Subsection Insurance Act ARS Title 20, Chapter 4, Article 14 Arkansas Act 1391 and 1428. Title 23, Insurance Act 1973; General Insurance Insurance Act of 1969 (covers Financial Services Commission Act 2010-10 / Insurance Insurance Act - 1978 (effective 1/1/80), Insurance (Captive Company) Act of 31A & 31B Chapter 63, Subchapter 16 of the Reform Act 2001 nonresident insurers), External Insurance Act Cap 310 / Exempt Insurance Act, Cap 308A / Insurance Amendment Act 2001 and related 1986, the Insurance Act (Amendment) of Insurance Regulations Arkansas Code Annotated, and Title 23, Act of 1983, External Insurance Companies Act, Cap 308 regulations; Companies Act 1981 and 2002, Financial Institutions Act Chapter 63, Subchapter 17, the (Amendment) Act 1996 Companies Amended Act 2001; Segregated Insurance (Amendment) Regulations, 2014 Protected Cell Company Act. Accounts Company Act 2000 and SAC Amendment Act 2002

INSURANCE Insurance Account Rules 2016 3/15/2016 Insurance Account Rules 2016 Insurance (Prudential Standards) (Class 3A Solvency Requirement) Amendment Rules 2016 3/15/2016 Insurance (Prudential Standards) (Class 3A Solvency Requirement) Amendment Rules 2016 Insurance (Prudential Standards) (Class 4 and Class 3B Solvency Requirement) Amendment Rules 2016 3/15/2016 Insurance (Prudential Standards) (Class 4 and Class 3B Solvency Requirement) Amendment Rules 2016 Insurance (Prudential Standards) (Class C, Class D and Class E Solvency Requirement) Amendment Rules 2016 3/15/2016 Insurance (Prudential Standards) (Class C, Class D and Class E Solvency Requirement) Amendment Rules 2016 Insurance (Prudential Standards) (Insurance Group Solvency Requirement) Amendment Rules 2016 3/15/2016 Insurance (Prudential Standards) (Insurance Group Solvency Requirement) Amendment Rules 2016 Insurance (Public Disclosure) Rules 2015 Tax Treaties N/A Anguilla has no existing double taxation treaties. N/A N/A Several tax treaties applicable, more so TIEA: Argentina, Australai, Belgium, TIEA: Denmark, Faroe Islands, Greenland TIEA: Canada, Denmark, Faroe Islands, Yes tax treaties and TIEAs with many to offshore entities. Canada, China, Czech Republic, Finland, France, , Iceland, India, countries Anguilla has concluded 15 tax treaties and is party to a series of treaties under Denmark, Faroe Islands, Finland, Double tax treaties: Austria, Bahrain, Botswana, Canada, , , , Norway, Poland, negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, France, Germany, Greenland, Guernsey, China, Cuba, Czech Republic, Finland, Iceland, Lux, Portugal, , South Korea, , Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom Iceland, India, Japan, Malta, Mexico, Malta, , Mexico, Netherlands, Norway, Panama, Turkey, UK Monaco, Netherlands, Norway, Poland, Seychelles, Singapore, Spain, Sweden, , UK, San Marino, South Africa, South Korea, USA, Venezuela No double tax treaties between Bermuda and Spain, Sweden, UK, USA other nations.

no double tax treaties Supervisory State of Alabama Anguilla Financial Services Commission Arizona Department of Insurance. Mike Pickens State Australian Prudential Regulation Authority Registrar of Insurance FINANCIAL SERVICES COMMISSION Insurance Division, Bermuda Monetary Deputy Superintendent of Financial Jurisdiction Department of Insurance MAICO Building, The Valley Captive Insurance Division Insurance Commissioner Australian Securities and Investments Ministry of Finance Suites 301 & 302, Building 4 Harbour Industrial Park | Authority - www.bma.bm Institutions, Mr. Doug McLean, Financial 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Rae Hughes Arkansas Ins. Dept., Finance Division, Commission P.O. Box N –4849 Bridgetown | St. Michael | Barbados BB11142 Institutions Commission, 555 West Montgomery, AL 36104 Fax: +1 264 497 5872 2910 N. 44th Street, suite 210 1200 West Third Street, Little Rock, AR Level 26 Manx Corporate Building, West Bay St. TEL: 421-2142 | FAX: 421-2146 | EMAIL: Hastings Street - Suite # 2800, P.O. Box 303351 Email: [email protected] Phoenix, AZ 85018 72201, Tel. 501 371-2665 or 800 282- 400 George Street Nassau, Bahamas [email protected] Vancouver, British Columbia, V6B 4N6, Montgomery, Alabama 36130 –3351 9134 Sydney NSW 2000 Tel.: 242–328–1068 Tel. 604-660-3555 Tel.: (334) 269–3550 Australia Fax: 242–328–1070 Fax: (334) 241 –4192 Tel: 61 02 9210 3000 Fax: 61 02 9210 3411

Reserve & Unknown Customary loss reserving Copies of underwriting guidelines and To be discussed with Insurance Must be approved in advance by Minimum solvency margin: 5:1 net exempt insurance: Loss Reserve Specialist Opinion: Class 1: no No underwriting requirements; 3rd-party Underwriting procedures, and rates and pricing Department Australian Prudential Regulation premium to capital/surplus is required, Unless the Supervisor otherwise determines, a licensee requirement (annually if >30% professional business prohibited; shareholders' equity Requirements guidelines, should form part of the Authority. but 3:1 is preferred. carrying on general insurance business is unable to pay lines); Class 2: Triennial (annually if >30% at least greater than amount prescribed application. its debts if professional lines; Class 3/3A/3B & 4: Annual. (CAD$300,000) or amount (a) at any time in its first financial year, the value of its Superintendent considers necessary to assets does not exceed the amount of its liabilities by 2016 solvency requirement amended rules maintain solvency. $250 000; below per license class: (b) at any time after the expiration of the first financial year, the value of its assets does not exceed its liabilities http://www.bma.bm/legislation/Insurance/Insur (i) by $250 000, where the premium income of the ance%20(Prudential%20Standards)%20(Class licensee in the preceding financial year did not exceed $1 %203A%20Solvency%20Requirement)%20Am 500 000; endment%20Rules%202016.pdf (ii) by one-fifth of the premium income for the preceding financial year, where the premium income exceeded $1 http://www.bma.bm/legislation/Insurance/Insur 500 000 but did not exceed $10 000 000; ance%20(Prudential%20Standards)%20(Class (iii) by the aggregate of $2 000 000 and one-tenth of the %20C,%20Class%20D%20and%20Class%20E amount by which the premium income in the preceding %20Solvency%20Requirement)%20Amendme financial year exceeded $10 000 000, where the premium nt%20Rules%202016.pdf income for that year exceeded $10 000 000 http://www.bma.bm/legislation/Insurance/Insur insurance: ance%20(Prudential%20Standards)%20(Class Subject to this section and section 69, an insurance %204%20and%20Class%203B%20Solvency% company shall, for the purposes of the Companies Act, 20Requirement)%20Amendment%20Rules%20

7/19/2016 Page 3 of 65 Prepared April 2016 Alabama Anguilla Arizona Arkansas Australia Bahamas Barbados Bermuda British Columbia Reporting Captives must submit annual reports by Every licensed insurer shall prepare annual accounts in accordance with generally Regulatory filing no later than 90 days Must submit annual report of financial Financial statement of accounts must be Audited financial statements (GAAP Within six months of the close of the financial year end, Annual Statutory Financial Statements filed Application for registration; audited Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an after the end of the captive's fiscal condition (GAAP basis) Association and submitted to the Australian Prudential basis) must be filed annually within 6 exempt companies are required to submit audited by April 30 for Class 3/3A/3B & 4 or June 30 financial statements to be filed annually; principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in year. group captives must file quarterly and Regulation Authority on a quarterly months of the end of the financial year, financial statements, accompanied by an auditor ’s report. for Class 1&2. annual actuarial certification; 3-year approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part Audit CPA opinion to be filed by June 30. annual reports. All captives must submit basis. An annual statement of accounts plus certificates from directors and  In terms of long term business, an actuarial certificate projection (including premium revenue) Premium tax return due March 1st. thereof Automatic waiver for captives with less an annual audit report by an independent must be submitted to the Australian auditors regarding compliance with must be submitted stating that reserves are adequate to and audited financial statements of the than $1m of premium. Other waivers are certified public accountant authorized by Securities and Investments Commission. business plan. A report from the meet liabilities. parent corporation considered. the Commissioner and verified by oath underwriting manager is required under  A certificate of solvency must be submitted by the of 2 of its executive officers. the 1983 Act. auditor, in accordance with section 24 of the Exempt Insurance Act.  A licensee is required to submit an actuarial review of its outstanding claims, where the claims exceed the capital and surplus accounts by 200 per cent.  The actuary giving the review must be approved by the Financial Services Commission

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains In state Manager. Captive insurers Local office, one resident representative No specific local office requirements. Principal office and principal Local office, one resident representative, a registered Registered Office in Bermuda; Principal Registered office required, financial Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager formed as corporations must have at and must hold at least one board of However, a "foreign general insurer" representative must be in . management company. Representative resident in Bermuda; One records must be kept in BC. (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other least one resident of Arizona serve as a directors meeting each year in Arkansas. must have a resident agent and a local Captives must appoint a licensed Bermuda resident Director & a resident least three incorporators or two location approved by the Commission, full and proper records of its business activities. member of the Board. Other service address for service of process. resident underwriting manager, but no secretary or Two Bermuda resident Directors; organizers must be residents of providers may be outside of AZ. local directors are required. Financial records must be kept in Bermuda. Alabama. Captive must maintain Alabama bank account, and utilize an Alabama-based CPA firm, actuarial firm, insurance broker, and attorney.

7/19/2016 Page 4 of 65 Prepared April 2016 Alabama Anguilla Arizona Arkansas Australia Bahamas Barbados Bermuda British Columbia Reinsurance A captive may take credit for reserves not stipulated If not an admitted reinsurer then subject Captive insurers may take credit for Unknown The Minister of Finance must approve all Reinsurance program must be approved by the Upon applying for a license, a captive is Reinsurance programs must be reviewed Requirements on risks or portions of risks ceded to to approval from the Superintendent. reserves on risks ceded to a reinsurer, reinsurance arrangements. Supervisor of Insurance. required to indicate the type of reinsurance it and approved by regulator reinsurers complying with subdivisions Captive insurers cannot accept or cede but no credit is allowed where the intends to use for each class of business, (1) through (4) of subsection (c ) of reinsurance except as provided in reinsurance contract does not result in names of reinsurers and their ratings by a Section 27-5-12. A captive insurer shall section 20-1098.09. Captive insurers the complete transfer of the risk to the recognized rating organization. not take credit for the reserves on risks may provide reinsurance on risks ceded reinsurer. Captive may not take credit or portions of risks ceded to reinsurers by any other insurer per section 20- for reserves on risks or portions of risks not complying with subdivision (1) 1098.09. ceded to a reinsurer if the reinsure is not through (4) of subsection (c ) of Section in compliance with the Arkansas 27-5-12. Insurance Code.

Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 110 2 7 20 236 797 20 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 5 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Colorado Connecticut Curacao Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on For a General(P&C) insurer - $100,00 Class of Insurance. Minimum Capital Requirement ( “MCR”): Prescribed Capital Requirement ( “PCR”) Minimum required to operate: Minimums: Life Insurance Captive: Start-up costs Capital and Surplus Requirements: Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within For a Long Term(life) - $200,000 Class B(i) Pure/Group:$500,000 Pure Captive $250,000 plus minimum solvency margin of 4 Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least Both classes(composite insurers) - General: US$100,000: Long-term: US$200,000: Composite: US$300,000. General: PCR = MCR: Long- percent of net technical provision after Insurer Type Minimum Sponsored Captive: $1,000,000 $200,000 $300,000 term: PCR = MCR: Composite: PCR = MCR Association Captive $500,000 reinsurance (not less than U.S. Capital & Surplus Reciprocal Captive: $1,000,000 Class B(ii) $225,000). Pure Captive $250,000 Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on P&C companies must maintain a 20% General: US$150,000: Long-term: US$300,000: Composite: US$450,000. General: 10% of Net Earned Industrial Insured Captive $500,000 Agency Captive $250,000 any foreign insurance business, including long-term foreign insurance business, solvency margin i.e. assets must Premium (“NEP”) to first US$5,000,000 then 5% of additional NEP up to US$20,000,000 then 2.5% of Non-Life Insurance Captive: Start-up Branch Captive $250,000 providing that it has and maintains an issued and paid up capital of at least $200,000; exceed liabilities by 20 %. additional NEP in excess of US$20,000,000. Long term: PCR = MCR. Composite: amount required to Risk Retention Group $1,000,000 costs plus minimum solvency margin of Association Captive $750,000 support the general business plus MCR 15 percent of net premium income after Industrial Insured Captive $500,000 Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on Class B(iii) Sponsored Captive $500,000 reinsurance (not less than U.S. Sponsored Captive Insurance $500,000 general foreign insurance business, but not long-term foreign insurance business, General: US$200,000: Long-term: US$400,000: Composite: US$600,000. General: 15% of NEP to first Special Purpose Captive $250,000 $170,000). Risk Retention Group $1,000,000 providing that it has and maintains an issued and paid up capital of at least $100,000; http://www.bvifsc.vg/Portals/2/Insurance US$5,000,000 then 7.5% of additional NEP up to US$20,000,000 then 5% of additional NEP in excess of Special Purpose Captive $250,000 %20Act%202008.pdf US$20,000,000. Long-term: PCR = MCR. Composite: amount required to support the general business Reinsurance Captive: Start-up costs plus Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on plus MCR minimum solvency margin of 10 percent general foreign insurance business and long-term foreign insurance business, with 2 or Class C of net premium income (not less than more owners of the insurer, and its affiliates, and to carry on no more than 50% of its General: US$500: Long-term: US$500: Composite: US$500. General: PCR = MCR. Long-term: PCR = U.S. $557,000). foreign insurance business (based on net premiums written) or 100% of its reinsurance MCR. Composite: PCR = MCR business with persons who are not owners of the insurer or its affiliates, providing that it Class D Refer to the following link for additional has and maintains an issued and paid up capital of at least $100,000; General: US$50,000,000: Long-term: US$50, 000,000: Composite: US$50,000,000. Calculated as 100% details: of total of: Cpremium (except catastrophe risk): Non-life Premiums: 15.0% of Net Written Premiums. http://www.centralbank.cw/uploads/files/P Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any Life Premiums: 15.0% of Net Written Premiums. Creserve: Non-life Reserves: 10.0% of Gross Non-life B%201992-50%20English).pdf foreign insurance business, including long-term foreign insurance business, with a single Reserves. Life Reserves: 5.0% of Gross Life Reserves owner of that insurer and its affiliates, and employees of the owner or its affiliates, Casset: Class 1 assets. 0.0%. Class 2 assets. 0.5%. Class 3 assets. 2.0%. Class 4 assets. 4.0% providing that it has and maintains an issued and paid up capital of at least $25,000; Class 5 assets. 5.0%, Class 6 assets. 10%, Class 7 assets. 15%, Class 8 assets. 35% Creinsurance: Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any 5.0% of Total Ceded Unearned Premium Reserve foreign insurance business, including long-term foreign insurance business, with the sole Ccatastrophe: owner of the insurer, if a company, providing that it has and maintains an issued and 20% of a 1 in 100 year event; and paid up capital of at least $10,000. 100% of a 1 in 10 year event;

Registration & Application Fee: Application fees (non-refundable) Set up Costs – US$16,000 estimate Incorporation fees US$730-US$3,000. Annual License fees: Class A $75,000. Class B(i) $8,500. $500 Application Fee; $620 annual Application Fee $800 Application Fee Application Fee $300 Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under Government fees = $4,850 (application Class B(ii) $9,500 renewal fee; $425 Fraud fee. U.S. $3,400 Nonrefundable Processing Fee $3,200 Expenses section 3 (1) $500 $1,000, Licence $3,500, Annual $350) Class B(iii) $10,500 License & Annual Renewal Fee $375 Annual License Fee $400 Annual License Fee: (b) For filing application for an insurance agent, broker ’s or Incorporation fee = $1,150 Class B (Unrestricted) licensees holding licences granted and in force immediately before the coming Annual Fee $300 manager’s licence under section 3 (2) $500 into force of the Law $8,500 U.S. $5,400 –$8,600, depending on the (c) For filing application for a sub agent or principal representative Annual Costs - Audit fees - $12,000 Class B (Restricted) licensees holding licences granted and in force immediately before the coming into amount of authorized capital (insurance) licence under section 3(2) $100 approx force of the Law $8,500 Issue of Licence and Annual Renewal of a Licence fees Government fees – $4,000 approx Class C $5,000 (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 Class D $84,000 (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) Insurance agent $1,000 and (c)) $2,000 Insurance broker $15,000 (f) For a Class ‘B’ Association, Group or Single licence (sections 3 Insurance manager: acting for not more than 10 licensed insurers $15,000 (1)(d), (e) and (f)) $1,500 acting for 11 to 50 licensed insurers $20,000 (g) For an Insurance Agent, Broker or Manager licence (sections 3 acting for 51 to 100 licensed insurers $25,000 (2)(a) and (b)) $1,000 acting for more than 100 licensed insurers $30,000 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 (i) For a Principal Representative (Insurance) licence (section 3 (2)(e)) $500

Incorporation time Unknown 2-4 weeks 4-6 weeks 4 to 6 weeks 30 days Unknown approximately 2 weeks for company Unknown formation

7/19/2016 Page 6 of 65 Prepared April 2016 Alabama Anguilla British Virgin Islands Cayman Islands Colorado Connecticut Curacao Delaware TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on All P&C and long-term lines. All, subject to approval of the Head of Insurance Supervision at the time the license is granted. All P&C including employee benefits All property and casualty lines including The Supervisor must approve all Property, casualty, surety, marine and That May Be Written liability insurance, life and disability insurers. coverages and reinsurance on those employee benefits coverages and reinsurance arrangements. transportation, and reinsurance. No insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance lines of business. reinsurance on those lines of business. personal lines, workers compensation, or compensation insurance and reinsurance. business: No personal automobile or homeowners employer's liability on a direct basis. (1) Unrestricted licence to carry on foreign insurance business including long-term coverage. Unrelated business may be written as business. The minimum capital requirement is $200,000 (annual licence fee $2,000). reinsurance. (2) General licence to carry on general foreign insurance business, but not longterm business. The minimum capital requirement is $100,000 (annual licence fee $2,000). (3) Association licence to carry on general and long-term foreign insurance business with two or more owners of the insurer, and its affiliates, and to carry on more than 30% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is $100,000 (annual licence fee $1,500). (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested all insurers should have a written None for restricted Class B companies but the Head if Insurance Supervision may establish None for pure captives; same as for Association captives and risk retention None for nonresident companies, but the Association captives, special purpose Restrictions captives. assets other than cash, LOCs, and investment policy in place approved by requirements for the investments of an unrestricted Class B. commercial companies for all group groups must comply with the investment Central Bank may object to the nature captives, and risk retention groups are other than government securities of 10% to 30%; see Guidance Notes of Allowable the board of directors. The complexity captives; RBC for group captives. requirements of Chapter 698 of the and valuation of assets. Central bank subject to the same investment Assets of the policy will depend upon the nature Regulator may prohibit investments that general statutes. Pure captives and may require government paper and restrictions as commercial insurers in of the business undertaken. The policy threaten the solvency of the captive. industrial insured captives are not deposits Delaware. Other captives are not subject should be flexible and adjustable to subject to any investment restrictions to investment restrictions, but the changes in internal and external market except that the Commissioner may Commissioner may impose restrictions conditions and other risk factors. It prohibit or limit any investment that on any investment that threatens should contain contingency plans to threatens the solvency or liquidity of solvency. mitigate the effects of deteriorating such company. conditions.

A BVI insurer shall not invest or trade in a derivative without the prior written approval of the Commission, unless the derivative concerned Derivatives. (a) is prescribed as an admissible asset; or (b) is a derivative that the Regulatory Code otherwise permits insurers, or specified categories or descriptions of insurers, to invest or trade in

Refer to Section 5 in the link below for more details:

http://www.bvifsc.vg/Portals/2/Practice_ Direction_Number_2_of_2006.pdf

Tax Issues Premium Taxes: Anguilla has the No premium taxes are due on premiums Income tax – none (renewable 20 year exemption offered as well). No premium or capital gains taxes. 0.5% first $25 million of written premium; Premium (Millions) Direct Income is taxed at 2.4 percent on the Direct Premiums: Flat 0.2% on direct $1–20 million added advantage of being a no-tax jurisdiction for non-admitted insurers. The only 0.25% next $50 million; 0.1% thereafter; First $20 million 0.380% first NAf 100,000 of net income and 3 premiums (maximum tax of $200,000). Direct 0.4% applicable tax for captives is a payroll also, 0.25% first $20 million of assumed $20 to $40 million 0.285% percent on the balance. Municipal surtax Annuity contracts are excluded from tax Reinsurance 0.225% tax reinsurance premium; 0.1% thereafter; $40 to $60 million 0.190% is not applied. Capital gains are not taxed provisions. minimum tax of $5,000 Over $60 million 0.072% but capital losses are not deductible. $20–40 million Reinsurance Premiums: Flat 0.1% on Direct 0.30% Premium (Millions) Assumed Foreign-owned captive and reinsurance reinsurance premiums (maximum tax of Reinsurance 0.15% First $20 million 0.214% companies not in receipt of treaty-related $110,000). $20 to $40 million 0.143% income benefit from a concession that $40–60 million $40 to $60 million 0.048% deems their income to be NAf 100,000, The premium tax on a captive or Direct 0.20% Over $60 million 0.024% giving them a fixed tax rate of NAf management subsidiary of a captive that Reinsurance 0.05% Minimum tax is $7,500; Maximum is 2,400 annually. employs at least 25 people in Delaware $200,000. Two or more captives under is capped at $50,000. The minimum > $60 million common ownership will be taxed as aggregate tax is $5,000 and the Direct 0.075% though they are a single captive. aggregate maximum is $200,000. Reinsurance 0.025% Two or more captive insurance Minimum tax of $5,000; No maximum companies under common ownership shall be taxed as a single captive. Common ownership means 80 percent or more of the outstanding voting securities by the same person or persons.

7/19/2016 Page 7 of 65 Prepared April 2016 Alabama Anguilla British Virgin Islands Cayman Islands Colorado Connecticut Curacao Delaware ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on Insurance Regulations, 2009 Insurance Law, 2010 Article 6, Title 10, Colorado Revised Public Act No. 08 –127, Captive Special Insurance License Decree Title 18, Chapter 69 31A & 31B Insurance Act 2008 Insurance (Amendment) Law, 2012 Statutes. Regulation Insurance Companies. 2011 amendment (National Gazette, May 9, 1992, No. 50): Insurance Regulations Practice Direction Number 3 of 2006 - Insurance (Amendment) Law, 2013 2-3-1 Regulation 3-1- CGS 38a-91bb National Ordinance for Insurance Books and Records for Captive Insurance (Validation) Law, 2013 11 Supervision 1990 Insurance (Amendment) Regulations, 2014 Insurance Companies Insurance (Applications and Fees) Regulations, 2012 Practice Direction Number 2 of 2006 - Insurance (Applications and Fees) (Amendment) Regulations, 2013 http://www.centralbank.cw/uploads/files/P Investment Policy for Captive Insurance Insurance (Capital and Solvency) (Class A Insurers) Regulations, 2012 B%201992-50%20English).pdf Companies Insurance (Capital and Solvency) (Class B, C and D Insurers) Regulations, 2012 Practice Direction Number 1 of 2006 - Insurance (Forms) Regulations (2003 Revision) Definition of Terms – Insurance Insurance (Portfolio Insurance Companies) Regulations, 2015 Allowable Assets Insurance (Reporting) Regulations, 2013 Insurance (Variation of Fees) Regulations, 2009

Tax Treaties N/A Anguilla has no existing double taxation treaties. TIEA: Aruba, Canada, Czech Republic, Bilateral tax information exchange agreements with Argentina, Aruba, Australia, Canada, China, N/A N/A TIEA: Antigua and Barbuda, Australia , Denmark, Finland, France, Germany, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Guernsey, Iceland, Ireland, India, Italy, Bermuda, Canada, Denmark,Faroe Anguilla has concluded 15 tax treaties and is party to a series of treaties under Gurnsey, Iceland, India, Ireland, Japan, Malta, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, South Africa, Sweden, Uk, Islands, Finland, France,Greenland, negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Netherlands, Norway, Sweden, UK, USA. Iceland, Mexico, New Zealand, Saint Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom Kitts and Nevis, Saint Lucia, Saint British Virgin Islands has not yet signed Vincent and the Grenadines, Spain, any Double Tax Avoidance Treaties. Sweden, United Kingdom, . Double Taxation Treaty Access:(Netherlands & Norway)

Supervisory State of Alabama Anguilla Financial Services Commission British Virgin Islands Financial Services Cayman Islands Monetary Authority (CIMA), Insurance Supervision Division Commissioner of Insurance, Colorado Connecticut Insurance Department Bank Van de Nederlandse Antillen Delaware Department of Insurance Jurisdiction Department of Insurance MAICO Building, The Valley Commission PO Box 10052 Division of Insurance, Financial Regulations Division Insurance Supervision Dept. Bureau of Captive and Financial 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Mr. Stanley Dawson, Director of 80 Shedden Road 1560 Broadway, Suite 850 Captive Insurance Regulation Simon Bolivar Plein 1 Products Montgomery, AL 36104 Fax: +1 264 497 5872 Insurance Elizabethan Square Denver, CO 80202 Janet Grace Willemstad, Curacao 841 Silver Lake Boulevard P.O. Box 303351 Email: [email protected] Pasea Estate P.O. Box 418 Grand Cayman KY1-1001 (303) 894-7483 Fax: (303) P. O Box 816 Netherlands Antilles Dover, DE 19904 Montgomery, Alabama 36130 –3351 Road Town, Tortola, VG 1110 CAYMAN ISLANDS 894-7455 Hartford, CT 06142 –0816 Tel.: (599) 434–5500 Jamie Bafundo Tel.: (334) 269–3550 British Virgin Islands Tel.: (860) 297–3813 Fax: (599) 461 –5004 Tel.: (302) 577–5281 Fax: (334) 241 –4192 Tel: 284-494-1324 or 284-494-4190 GMT Fax: (860 297 –3978 Fax: (302) 577 –1212 – 4:00

Reserve & Unknown Customary loss reserving Local legislation does not prescribe any Premiums are generally actuarially assessed or based on commercial market terms. No policy form or Group captives shall limit their exposure Local legislation does not prescribe any Underwriting specific reserve requirements: all rate approval. to loss on any one risk or hazard to an specific reserve requirements Requirements insurers operating through overseas amount not to exceed 10% of capital and companies will have their own reserving surplus, unless such risk or hazard is criteria. reinsured through an insurer which is licensed or accredited in the state or unless other financial safeguards to its financial solvency and stability are in place and are acceptable to the Commissioner.

7/19/2016 Page 8 of 65 Prepared April 2016 Alabama Anguilla British Virgin Islands Cayman Islands Colorado Connecticut Curacao Delaware ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on The financial services commission Class B-written confirmation of auditor on annual accounts; annual certificate of compliance; changes in Captives must file a financial report to Captives must file an annual financial Audited financial statement to be filed Annual financial statement is required Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an requires an audited annual statement nature of business must be reported (confidential) and changes to directors and shareholders the Commissioner, signed and sworn to report using generally accepted annually; actuarial report is also required. using generally accepted accounting principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in from Captives and Domestic Insurance by its chief officers, as of the end of accounting principles with any required principles unless otherwise approved by approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part Companies and an annual statement each fiscal year. Pure captives may file modifications, unless otherwise approved the Commissioner. Captives reinsuring Premium tax return due March 1st. thereof from credit life companies. Life an abbreviated annual report as set forth by the Commissioner. Association life policies as part of a securitization Companies are required to provide in Regulation 2-3-1 captives and risk retention groups must transaction must file quarterly and actuarial reports annually. Captives must submit annual reports as required by annual statements on a statutory submit annual audited accounts as well, sections 38a-53 of the 2008 supplement accounting principles (SAP) basis using which are de with three months of the to the general statutes. License NAIC approved forms. company's fiscal year end. Renewal, Premium Tax Return, Annual Report due by March 1st. Audited financial statements due by April 1st.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Local manager and office required, who Registered office and locally licensed insurance manager required. Class B insurers must be exempted Principal office in Colorado; use of local Captives must maintain their principal Registered office required. At least one Principal office in Delaware, Delaware Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager must meet with one of 13 insurance companies and have a least two directors. Local directors are not required. Cayman managers manager required; records must be kept place of business in Connecticut, and resident managing director. Books and manager preferred, but outside manager (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other supervisors annually. (including Aon Cayman) usually act as Company Secretary for captive under management although in Colorado must hold at least one board meeting in records must be maintained in the can be approved; Delaware incorporation least three incorporators or two location approved by the Commission, full and proper records of its business activities. there is no statutory obligation for captive companies to appoint officers. the state each year. Must have one Netherlands Antilles and kept for 10 not required; books and records must be organizers must be residents of local Director. years. maintained in Delaware. At least one Alabama. Captive must maintain board member must be a Delaware Alabama bank account, and utilize an resident or have a principal place of Alabama-based CPA firm, actuarial firm, business in the state. insurance broker, and attorney.

7/19/2016 Page 9 of 65 Prepared April 2016 Alabama Anguilla British Virgin Islands Cayman Islands Colorado Connecticut Curacao Delaware ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on There are no reinsurers local to BVI, the A captive's reinsurance program is subject to the review of the Head of Insurance Supervision, although Any captive may take credit for Any captive may provide reinsurance on The Supervisor must approve all Captives may provide reinsurance on Requirements on risks or portions of risks ceded to capacity is provided solely by overseas there are no specific requirements reserves on risks ceded to a reinsurer any risks that it is authorized to write reinsurance arrangements. risks, and may take credit for risks reinsurers complying with subdivisions insurers and reinsurers. Reinsurers do pursuant to the provision of 10-3-118. directly. Captives may only take credit ceded to reinsurers in compliance with (1) through (4) of subsection (c ) of not have to be licensed, but they must Captives may cede risks to a reinsurer for reinsurance ceded with companies in the Delaware Insurance Code. Section 27-5-12. A captive insurer shall have an AM Best rating of A- or higher not meeting the standards and may take compliance with Sections 38a-85 or 38a- not take credit for the reserves on risks in order to be approved by the Financial reserve credits if the captive insurance 86 of the general statutes. or portions of risks ceded to reinsurers Services Commission. company receives prior written approval not complying with subdivision (1) from the Commissioner. through (4) of subsection (c ) of Section 27-5-12.

Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 142 708 3 10 12 323 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 10 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Denmark District of Columbia Dubai Dublin / Ireland Florida Georgia Germany Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Minimum Capital for all types of With the implementation of Solvency II a Pure captives must maintain (1) Pure Captives $250,000 With the implementation of Solvency II Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within captives $100,000 (cash or LOC risk based capital model has been unimpaired paid-in capital of at least Association $500,000 (from 2016 onwards) a risk based capital Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least permitted). Minimum Surplus Pure introduced (capital requirements will be $100,000; and (2) unimpaired surplus of Industrial Insured $500,000 model is introduced (capital requirements Sponsored Captive: $1,000,000 $200,000 Captive $150,000; RRG, Group or based on underwriting, market, credit, at least $150,000 if a stock insurer or (1) Risk Retention Group $500,000 will be based on underwriting, market, Reciprocal Captive: $1,000,000 Association Captive (stock) $300,000; operational risk). unimpaired paid-in capital of $0; and (2) credit, operational risk). Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on Mutual or Reciprocal $500,000 Agency unimpaired surplus of at least $250,000 Capital or surplus can be in the form of: any foreign insurance business, including long-term foreign insurance business, Captive $300,000; Protected Cell Minimum levels of capital still apply and if a mutual insurer. (1) cash; (2) certificates of deposit or providing that it has and maintains an issued and paid up capital of at least $200,000; $300,000; Branch: $0. range from €1.2m to €3.7m depending on evidence of FDIC-insured deposits; or the business written. Industrial Insureds must maintain (1) (3) savings accounts, certificates of Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on unimpaired paid-in capital of at least deposit, or similar deposits in savings general foreign insurance business, but not long-term foreign insurance business, $200,000; and (2) unimpaired surplus of and loan associations if the certificates providing that it has and maintains an issued and paid up capital of at least $100,000; at least $300,000 if a stock insurer or (1) are insured by the federal government. unimpaired paid-in capital of $0; and (2) Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on unimpaired surplus of at least $500,000 The Commissioner may require additional general foreign insurance business and long-term foreign insurance business, with 2 or if a mutual insurer. capital & surplus on a case by case more owners of the insurer, and its affiliates, and to carry on no more than 50% of its basis. foreign insurance business (based on net premiums written) or 100% of its reinsurance Special Purpose Captives to be business with persons who are not owners of the insurer or its affiliates, providing that it determined for the Office on a case by has and maintains an issued and paid up capital of at least $100,000; case basis.

Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates, and employees of the owner or its affiliates, providing that it has and maintains an issued and paid up capital of at least $25,000;

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Application Fee $500 plus and No fee for applications. Minimum annual Per section 624.501 of the Florida Initial Fee $600 Annual regullatory costs: EUR 3´000 Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under independent review fee of approximately fee €9,361 Statutes: Renewal License Fee $550 licencing fees Expenses section 3 (1) $500 $3,200 (amount may vary but not to Annual License Fee: (b) For filing application for an insurance agent, broker ’s or exceed $5,000 for pure captives or Initial (non-refundable) application fee An organizational exam may be required $300 manager’s licence under section 3 (2) $500 $7,500 for all others; Licensing $1,500 before a company is licensed - $3,000 (c) For filing application for a sub agent or principal representative Fee/Certificate Fee $300. (insurance) licence under section 3(2) $100 Annual License Tax $1,000 Issue of Licence and Annual Renewal of a Licence fees (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 Statement Filing Fee $250 (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) and (c)) $2,000 (f) For a Class ‘B’ Association, Group or Single licence (sections 3 (1)(d), (e) and (f)) $1,500 (g) For an Insurance Agent, Broker or Manager licence (sections 3 (2)(a) and (b)) $1,000 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 (i) For a Principal Representative (Insurance) licence (section 3 (2)(e)) $500

Incorporation time Unknown 2-4 weeks 30 days or less 16-26 Weeks. 12-20 weeks

7/19/2016 Page 11 of 65 Prepared April 2016 Alabama Anguilla Denmark District of Columbia Dubai Dublin / Ireland Florida Georgia Germany TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on All, except direct personal motor vehicle All life and non-life classes. Both life and All commercial property, casualty, and Casualty, as described in Code Section all lines of business That May Be Written liability insurance, life and disability insurers. or homeowners coverage. Captive may non-life may be written in a reinsurance marine insurance other than workers 33–7–3 but excluding accident and insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance also provide excess WC to parents and captive, however in line with EU compensation and employers liability, sickness insurance as defined in Code compensation insurance and reinsurance. business: affiliates. regulations life and non-life may not be except that an industrial insured captive Section 33–7–2 (1) Unrestricted licence to carry on foreign insurance business including long-term written in the same insurance captive. insurer may apply for a license to Marine and transportation, as described business. The minimum capital requirement is $200,000 (annual licence fee $2,000). provide workers compensation and in Code Section 33 –7–5 (2) General licence to carry on general foreign insurance business, but not longterm employers liability insurance in excess Property, as described in Code Section business. The minimum capital requirement is $100,000 (annual licence fee $2,000). of at least $25 million in the annual 33–7–6 (3) Association licence to carry on general and long-term foreign insurance business with aggregate. No third-party business. Surety, as described in Code Section two or more owners of the insurer, and its affiliates, and to carry on more than 30% of 33–7–7 its foreign insurance business (based on net premiums written) or 100% of its Workers compensation and automobile reinsurance insurance as long as coverage meets the business with persons who are not owners of the insurer or its affiliates. The minimum minimum state requirements for these capital requirement is $100,000 (annual licence fee $1,500). lines (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested An association captive insurer shall Solvency II Jurisdiction. Prudent No restrictions on pure or industrial As per Solvency II guidelines Restrictions captives. assets other than cash, LOCs, and comply with the investment requirements approach to investment strategy must captives except when the Commissioner other than government securities of 10% to 30%; see Guidance Notes of Allowable prescribed for a traditional insurer. A be taken. No specific restrictions, places a restriction on an investment Assets pure captive may invest in any regulatory capital charge associated with that may threaten solvency. For other approved instrument. investments that will be determined by captives, investments can be placed in the spread of investments as well as the the same types of instruments held by credit rating of the investment other insurers in the state of Georgia. counterparty. Letters of credit must be presentable in the state of Georgia and issued by a national bank that is part of the Federal Reserve System or a bank chartered by the state of Georgia.

Loans to parent are allowed with commissioner of approval. Loans of minimum capital and surplus are prohibited. Any loan or investment that would create a hazardous finacial condition is prohibited.

Tax Issues Premium Taxes: Anguilla has the Premium Taxes - Direct $0-$25m 0.25%, Standard corporate rate of 12.5%. 1.75 percent of direct premiums per 0.4% on the first $20 million and 0.3% on No withholding tax. $1–20 million added advantage of being a no-tax jurisdiction $25-$50m 0.15%, over $50m 0.05% section 624.509 and 624.510 of the each dollar of direct premiums Direct 0.4% RRG's $0-$20m 0.38%, $20-$40m Florida Statutes, omitting premiums on thereafter. 0.225% on the first $20 Corporate tax rate is Reinsurance 0.225% 0.25%, above $40m 0.18% Reinsurance reinsurance accepted, and less return million of assumed premiums, 0.150% on (Körperschaftssteuer, Gewerbesteuer $0-$25m 0.225%, $25-$50m 0.15%, premiums or assessments, but without the second $20 million, 0.050% on the and solidarity surcharge) approx 29% $20–40 million above $50m 0.05%; Minimum: $7,500 deductions for reinsurance ceded to third $20 million and 0.025% on each depending on community. This is a result Direct 0.30% RRG: $15,000 Maximum: $100,000 all other insurers. dollar above $60 million. $100,000 of the German tax reform effective Reinsurance 0.15% entity types maximum. Captives under common 1/1/2008 which reduced the effective ownership are taxed as one entity. corporate tax rate from 38% to approx. $40–60 million 29%. Direct 0.20% Reinsurance 0.05%

> $60 million Direct 0.075% Reinsurance 0.025%

Minimum tax of $5,000; No maximum

7/19/2016 Page 12 of 65 Prepared April 2016 Alabama Anguilla Denmark District of Columbia Dubai Dublin / Ireland Florida Georgia Germany ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on D.C. Law 15-262 S.I 485 of 2015 transposed the Solvency Title XXXVII Chapter 628 Part V, Florida Georgia Captive Insurance Company Act VAG, BerVersV, RechVersV, 31A & 31B II Directive into Irish Statutes. Title 33, Chapter 41. Rules of the Office Anlageverordnung, Insurance Regulations Law. of Commissioner of Insurance, Chapter Kapitalausstattungsverordnung, various Insurance Acts 1909 to date that include 120–2–45, Captive Insurance circulars. Insurance (Amendment) Regulations, 2014 Irish implementation of the EU Insurance Companies. Directives. Solvency II is applicable since 2016.

Tax Treaties N/A Anguilla has no existing double taxation treaties. N/A There are 70 treaties in effect - covering Double tax treaties with most EU all major trading nations. VAT 23% (can Member States and other trading nations Anguilla has concluded 15 tax treaties and is party to a series of treaties under be refunded based upon non-EU are in place. negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, premium). The double tax treaty between Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom the US and Ireland specifies that there is Double tax treaty between the US and not FET of 4% on insurance premiums Germany specifies that there is no FET and 1% on reinsurance premiums. of 4% on insurance premiums and 1% on (Subject to formal application approval reinsurance premiums (Subject to formal from the IRS by way of a closing application). Agreement. Supervisory State of Alabama Anguilla Financial Services Commission DC Department of Insurance, Securities The Central Bank of Ireland. Florida Department of Insurance Property & Casualty Supervisor Federal Financial Supervisory Authority Jurisdiction Department of Insurance MAICO Building, The Valley & Banking, 810 First St. N.E., Ste. 701, Office of Insurance Regulation Georgia Insurance and Fire Safety (BaFin) 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Washington, DC 20002; (202) 727-8000 200 E. Gaines St. Commission Montgomery, AL 36104 Fax: +1 264 497 5872 Tallahassee, FL 32399 –0327 2 Martin Luther King Jr. Dr., Ste. 604, W. P.O. Box 303351 Email: [email protected] Tel.: (850) 413–3148 Tower Montgomery, Alabama 36130 –3351 www.floir.com/ Atlanta, GA 30334 Tel.: (334) 269–3550 Tel.: (404) 656–2070 Fax: (334) 241 –4192 Mary Mosteller, Director Fax: (404) 657 –8542 Tel.: (850) 413-5350 www.oci.ga.gov/home.aspx [email protected] Christopher Taylor, APIR Assistant Director/Captive Section Supervisor Phone: (404)657-9206 [email protected]

Reserve & Unknown Customary loss reserving Copies of underwriting guidelines and Company must retain technical Possibility of direct writing from domicile Underwriting procedures, and rates and pricing provisions(claims reserves) based on into other countries for locally admitted Requirements guidelines should form part of the actuarial best estimate plus risk margin. countries and in the EU based on Application. May take credit for risks Premium must be based on arms length Freedom of Services. ceded to any reinsurer approved by the principles in line with transfer pricing Commissioner. guidelines of the risk territory. Possibility of direct writing out of a reinsurance vehicle.

Good access to markets fronting and reassurance markets.

Equalisation reserves as per Anlage zu §29 RechVersV, calculated individually for each class of business, if standard deviation of past loss ratio is at least 5% combined ratio exceeding 100% during last ten years and earned premium exceeding EUR 125'000 for last 3 years. No pooling, i.e. withdrawals limited to each class (contrary to ).

7/19/2016 Page 13 of 65 Prepared April 2016 Alabama Anguilla Denmark District of Columbia Dubai Dublin / Ireland Florida Georgia Germany ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Regulatory Filing 60 days after the end Subject to Solvency II Reporting. This A captive must submit an annual report Annual financial statement and full In line with Solvency II. Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an of the captive insurer's fiscal year. will include: of its financial condition verified by oath convention are required as prescribed by principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in Independent audit, with loss reserve of two of its executive officers within 60 Section 33–3–21. approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part certification, due within 6 months. • Quantitative Reporting: days after the end of its fiscal year and Premium tax return due March 1st. thereof - Quarterly and annual quantitative as often as the department may deem Annual reports required annually by reporting in line with European Insurance necessary. The department may March 1st. Commissioner can request and Occupational Pension Authority promulgate by rule the form in which that companies file monthly financial (EIOPA) templates captive insurers shall report. GAAP reports with the department. reporting is required unless statutory • Annual qualitative reporting: reporting has been approved by the Pure captives can use either GAAP or - Own Risk and Solvency commissioner. SAP. Industrial and Association captives Assessment must use SAP. - Solvency and Financial Condition Report Insurance Department examination - Regular Supervisory Report every 5 years.

Audited financial statements filed annually by June 30th.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Approved Manager, annual Board Registered captive manager. Minimum of 3 incorporators, 2 must be residents. 1 Principal place of business must be in Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager meeting in D.C. No local director 3 board members, one of whom must be board meeting must be held in the state Georgia; one of the directors must be (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other needed, minimum of 1 director is EU resident. each year. Maintain priciple place of Georgia residents; and a majority of least three incorporators or two location approved by the Commission, full and proper records of its business activities. possible. Minimum of two board meetings per year business in state. Appoint Registered directors must be U.S. citizens. organizers must be residents of which should take place in Ireland. agent to accept service of process. Alabama. Captive must maintain Alabama bank account, and utilize an Alabama-based CPA firm, actuarial firm, insurance broker, and attorney.

7/19/2016 Page 14 of 65 Prepared April 2016 Alabama Anguilla Denmark District of Columbia Dubai Dublin / Ireland Florida Georgia Germany ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on May take credit for risks ceded to any Reinsurance (outwards) is fully Captives can provide reinsurance on A captive insurer is permitted to reinsure Requirements on risks or portions of risks ceded to reinsurer approved by the recognised with a capital requirement risks ceded by any other insurer. They the risks of other captives and foreign or reinsurers complying with subdivisions Commissioner. May assume risks from applied based on the default risk may take credit for reserves on risks alien insurers. The alien and foreign (1) through (4) of subsection (c ) of other insurers. calculated based on value at risk, ceded to a reinsurer authorized by the company must meet the ownership and Section 27-5-12. A captive insurer shall number of reinsurers and external rating. department to transact such line of membership requirements of the Georgia not take credit for the reserves on risks insurance or reinsurance in the state. The captive law. or portions of risks ceded to reinsurers commissioner may authorize a captive not complying with subdivision (1) insurer to take credit for reserves on through (4) of subsection (c ) of Section risks or portions of risks ceded to a pool, 27-5-12. an exchange or an association acting as a reinsurer. Any Workers Compensation qualified self-insured plan of its parent and At least 35% of the assets must be affiliates shall be deemed to be managed by an asset manager domiciled reinsurance. in the state.

# of Captives 42 319 13 193 4 85 0 16 9 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 5/12/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 15 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Guam Guernsey Hong Kong Illinois Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Rules per EU - Currently 18% of Minimum Licensed insurer minimum capital Minimum Statutory: Class The minimum capital requirement for a Insurer Type Minimum Capital Minimum Minimum of GBP £50,000 for Pure Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within premium (gross written) or 26% of Capital Minimum requirement of £100,000 paid up 1:$100,000 Class 2:$250,000 captive is HK$2,000,000. Surplus Captives. Opportunity for partly paid-up Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least average of 3 years claims, with up to Surplus capital.Solvency capital requirement to be held Class 3:$500,000 (RRG) Stock Captive $1 million $1 million share capital i.e. GBP0.25 in GBP1 Sponsored Captive: $1,000,000 $200,000 50% reducton with reinsurance. Minimum Pure Captives $50,000 $100,000 in approved assets. $750,000 (Association) Class Mutual Captive — $2 million Reciprocal Captive: $1,000,000 levels apply per EU rules. Group Captives (stock) $100,000 4:$1,000,000 Class 5:As Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on $150,000 determined by the Commissioner of These requirements can be satisfied in any foreign insurance business, including long-term foreign insurance business, Industrial Captives (stock) $150,000 Insurance any of the following ways: providing that it has and maintains an issued and paid up capital of at least $200,000; $200,000 Industrial Captives (mutual) — With cash or cash equivalents Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on $200,000 20 percent of capital and surplus in cash general foreign insurance business, but not long-term foreign insurance business, Protected Cell Captives $150,000 per or cash equivalents with the balance providing that it has and maintains an issued and paid up capital of at least $100,000; cell ($750,000 Max) $250,000 supported by a letter of credit 33 percent of the capital and surplus in Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on cash or cash equivalents with the general foreign insurance business and long-term foreign insurance business, with 2 or balance in irrevocable contractual more owners of the insurer, and its affiliates, and to carry on no more than 50% of its obligations of the members, who are foreign insurance business (based on net premiums written) or 100% of its reinsurance required to satisfy their obligations in a business with persons who are not owners of the insurer or its affiliates, providing that it maximum of three equal annual has and maintains an issued and paid up capital of at least $100,000; installments, with the first installment being due in the calendar year following Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any the year in which the company's license foreign insurance business, including long-term foreign insurance business, with a single is issued. Captive is required to maintain owner of that insurer and its affiliates, and employees of the owner or its affiliates, at least $300,000 cash or cash providing that it has and maintains an issued and paid up capital of at least $25,000; equivalents at all times

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Establishment fees as follows ( £): Application Fee $200 £100 - incorporation within 1 day; £350 - $1,000 Application fee; $300-$1,000 Annual and Authorization Fee HK$22,600 Application Fee $7,000 Minimum of GBP £2,380 (Annual GBP Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under Incorporation and filing - 10; Stamp Duty- - Nil; Incorporation Fee $200 incorporation within 2 hours; £750 - incorporation (annual by class) License and Renewal £5,115). Expenses section 3 (1) $500 General Business-4,000; Captive/Reinsurance Annual Licensing Fee $2,500 within 15 minutes. Fee; $300 Certificate of Authority fee; Filing Fee for Approval of Plan Changes License- 4,000; General (re)insurance- 4345; Life Annual License Fee: (b) For filing application for an insurance agent, broker ’s or Independent Review Fee $5,000-10,000 Review fee (if required by $200 Insurer - 10,000; Protected Cell - 1,500; Extensions $300 manager’s licence under section 3 (2) $500 to license - 3,000. Annual Fees as follows: $3,500–$7,500 Commissioner); $100 Business (c) For filing application for a sub agent or principal representative General (re)insurance - 19,650-21,700; Life Insurer (based- on complexity of application) Registration fee, $25 annual renewal (insurance) licence under section 3(2) $100 20,000; Captive or Reinsurer- 4,345; Life Issue of Licence and Annual Renewal of a Licence fees (re)insurer or captive- 27,250; Protected Cell - (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 1,625. (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) and (c)) $2,000 (f) For a Class ‘B’ Association, Group or Single licence (sections 3 (1)(d), (e) and (f)) $1,500 (g) For an Insurance Agent, Broker or Manager licence (sections 3 (2)(a) and (b)) $1,000 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 (i) For a Principal Representative (Insurance) licence (section 3 (2)(e)) $500

Incorporation time Unknown 2-4 weeks 8-12 Weeks for insurance companies, 2 Within 30 days from receipt of Applications are normally acted upon 30 days 2 months 1 month weeks for cells. completed application and pertinent immediately. financial information.

7/19/2016 Page 16 of 65 Prepared April 2016 Alabama Anguilla Gibraltar Guam Guernsey Hawaii Hong Kong Illinois Isle of Man TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Both long term and general business can All property, liability, and excess workers Both long term and general business can All casualty insurance incl. WC, marine Captives are restricted to accepting All lines of property, liability, and excess Long term business (classes 1 and 2); That May Be Written liability insurance, life and disability insurers. be written by captives. compensation insurance and controlled be written by captives. & transportation, property, credit life & insurance business from its own parent workers compensation insurance. No life, General business (classes 3-9); insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance third-party business. No life insurance. credit disability, surety, title insurance and affiliates. Captives are not personal automobile, homeowners, or Reinsurance for long term business compensation insurance and reinsurance. business: and other lines approved by the permitted to carry on statutory business personal lines insurance. Captives are (class 10); Reinsurance for general (1) Unrestricted licence to carry on foreign insurance business including long-term Commissioner. Personal lines insurance (e.g., motor and employees' also allowed to insure single-employer business (class 11): Captive (class 12, business. The minimum capital requirement is $200,000 (annual licence fee $2,000). is allowed but proof of necessity may be compensation). self-funded employee disability and comprising business within classes 1-11) (2) General licence to carry on general foreign insurance business, but not longterm required. ERISA employee benefit plans. business. The minimum capital requirement is $100,000 (annual licence fee $2,000). (3) Association licence to carry on general and long-term foreign insurance business with two or more owners of the insurer, and its affiliates, and to carry on more than 30% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is $100,000 (annual licence fee $1,500). (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested Per Insurance Companies Act None, except investments that the Few restricitons. Detailed in the Same as other admitted insurers, except Captives are exempt from rules for Pure captives are not subject to Some intercompany investments have Restrictions captives. assets other than cash, LOCs, and Regulations 1996, this provides some Commissioner deems capable of approved assets regulations. pure captives may obtain approval from maintaining investments in Hong Kong. restrictions on investments. Industrial restrictions & are dependent on whether other than government securities of 10% to 30%; see Guidance Notes of Allowable scope for "prudent person" investment threatening solvency or liquidity. the Commissioner for investments not Assets and liabilities must be valued on insured captives are required to follow investments are approved/listed/unlisted. Assets principles and 100% loans back to the specified in the insurance code. GAAP principals. the investment plan they stated in their Restrictions can range from between parent company on certain conditions. application. Association captives must 10% & 25% in xs of the aggregate. 100% adhere to the guidelines developed for loanback to parent is allowed in certain commercial insurers (Article VIII). cases.

Tax Issues Premium Taxes: Anguilla has the 10% headlie corporate tax rate but no tax No premium taxes on qualified captive Zero rate tax applicable in relationto First $25M - .25%; next $25M - .15%; Corporate tax rate is 17.5%. No capital 0.4% on accident & health; 0/10 taxation policy as approved by the $1–20 million added advantage of being a no-tax jurisdiction on investment income. There is no VAT insurers. corporate income tax and there is no over $50M - .05%. No tax on reinsurance gains tax or VAT. Dividend and interest 0.5% on all other lines. EU. Captives benefit from 0% Direct 0.4% or IPT. capital gains tax or anything that affects premiums assumed. No minimum tax. income also are not subject to tax. (same as commercial insurers) corporation tax & no capital gains tax. Reinsurance 0.225% local captives. Insurance management services are VAT exempt. $20–40 million Direct 0.30% Reinsurance 0.15%

$40–60 million Direct 0.20% Reinsurance 0.05%

> $60 million Direct 0.075% Reinsurance 0.025%

Minimum tax of $5,000; No maximum

7/19/2016 Page 17 of 65 Prepared April 2016 Alabama Anguilla Gibraltar Guam Guernsey Hawaii Hong Kong Illinois Isle of Man ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on Insurance Companies Ordinance of 1987 Title 22 Guam Code Annotated, Chapter The Insurance Business (Guernsey) Law, Captive Insurance Law, Chapter 431, Insurance Companies (Amendment) Articles VIIC, XI½ and XII of Insurance The Insurance Act of 2008 (consolidates 31A & 31B and related regulations The Companies 23. 1986 and 2002 . The Criminal Justice Article 19,Hawaii Revised Statutes. Ordinance, 1997 Code, Chapter 215 Illinois Compiled 1986 Insurance Act &1996 Intermediaries Insurance Regulations (Taxation and Concessions) Ordinance of (Proceeds of Crime) (Baliwick of Hawaii Administrative Rules Title 16 Statute. Act & 2004 Amendment); Incorporated 1982 Income Tax (Qualifying Guernsey) Law, 1999 and related Chapter 17. Cell Companies Act of 2010; Corporate Insurance (Amendment) Regulations, 2014 Companies) Rules; the Protected Cell Regulations. The Companies (Guernsey) The Article is scheduled to be repealed Governance Code of Practice for Companies Ordinance, 2001; Insurance Law, 2008. on January 1, 2017. Regulated Insurance Entities Act of 2010 Companies (Prescribed Particulars) (CGC); Protected Cell Companies Act of Regulations 1996. 2006; Insurance (Solvency) (Amendment) Regulations 2012. Insurance Special Purpose Vehicle Legislation 2014 .

Tax Treaties N/A Anguilla has no existing double taxation treaties. None, but over 20 tax Information Double tax treaties with , Malta, N/A Signed with selected countries, with Double Taxation Treaties - UK, Malta, Exchange Agreements in place. UK, 3 DBTs and 38 TIEAs. various dates of effect. Also in the Estonia, Bahrain, Belgium, Guernsey, Anguilla has concluded 15 tax treaties and is party to a series of treaties under process on negotiation with several Jersey, Luxembourg, , Seychelles, negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, others. None with US. Singapore, TIEA's - 30+/ Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom

Supervisory State of Alabama Anguilla Financial Services Commission Commissioner of Insurance, Government of Guam Guernsey Financial Services State of Hawaii Insurance Division, Office of the Commissioner of Illinois Division of Insurance The Isle of Man Financial Services Jurisdiction Department of Insurance MAICO Building, The Valley Gibraltar Financial Services Commission Department of Revenue and Taxation Commission. Captive Branch, Dept of Commerce & Insurance (OCI), Insurance Authority Dept. of Financial and Professional Authority (IOMFSA) & International 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Note: Gibraltar is part of the EU and its P.O. Box 23607 Consumer affairs, PO Box 3614, 335 21st Fl., Queensway Government Regulation Association of Insurance Supervisors. Montgomery, AL 36104 Fax: +1 264 497 5872 regulations apply. GMF, Guam 96921 Merchant St., 2nd Fl, Honolulu, HI Offices, 66 Queensway, Hong Kong, Tel 320 W. Washington St. The IOM is not part of the EU and is not P.O. Box 303351 Email: [email protected] Tel.: (671) 635–1835 96811 (808) 586-0981, Fax: (808) no. (852) 2867-2561 Springfield, IL 62767 directly impacted by Solvency II; Montgomery, Alabama 36130 –3351 Fax: (671) 633 –2643 586-0987 Tel.: (217) 785–4515 however, it is committed to following the Tel.: (334) 269–3550 https://www.guamtax.com/ Fax: (217) 782 –5020 Insurance Core Principles of the IAIS Fax: (334) 241 –4192 www.idfpr.com/default.asp which allows for a proportional approach Types of Coverage That May to capital/solvency.

Reserve & Unknown Customary loss reserving Solvency requirement: 18% of premium The board of directors have autonomy to Individually determined subject to The minimum solvency margin is the All captive insurance companies are Solvency margin is set by IOMFSA and Underwriting income or 26% claims payable (based on set these objects subject to accounting solvency tests per Hawaii Revised greater of: 1) 5% of the net premium required to maintain reserves at all times is dependent on insurance license. No Requirements a 3-year average), whichever is greater. standards. Statutes. Actuarial opinion on reserves income; 2) 5% of the net claims in an amount estimated in the aggregate specific reserve or underwriting Direct-writing captives must meet required annually. outstanding, or; 3)HK$2,000,000 to provide for the payment of all losses requirements. European Union minimum guarantee fund and claims incurred, whether reported or requirement of up to EUR3M depending unreported. of class of business.

7/19/2016 Page 18 of 65 Prepared April 2016 Alabama Anguilla Gibraltar Guam Guernsey Hawaii Hong Kong Illinois Isle of Man ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Annual audited accounts as per EU Pure captives must file an annual An Annual Regulatory Return must be All captives, except Class 3, file annual Quarterly returns - due one month after Unaudited financial statement to be filed Annual Audited Accounts and Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an directives. Annual returns based on UK audited GAAP financial statement and an submitted within four months of year financial statement prepared on a GAAP quarter-end. Annual returns - due four by March 1; audited financial statement Supplementary Information. principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in standards. Quarterly accounts for actuarial review of reserves. Other types end. Annual approved audit, subject to basis, actuarial opinion, and audit. Class months after year-end. Audited financial due by June 1. approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part companies in first few years of of captives must file audited financials limited exceptions. 3 captives file annual audited statutory statements - due six months after year- Premium tax return due March 1st. thereof operation. on NAIC annual statement forms with financial statements and actuarial end. any additional information required by certification. the Commissioner.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains No General Manager requirements for Captives must maintain their principal General representative must be a One annual meeting held in Hawaii. Resident secretary (per Companies Captives must maintain a location in Local Manager required. Flexible & Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager third party business writers. office and all of the books and records in resident director and licensed insurance Principle office, books and records Ordinance, Cap 32). Registered office is Illinois with personnel responsible for the straightforward to set up, manage or exit (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other Guam. There is no requirement to hold an manager. maintained in Hawaii. Use of local required, and must be maintained in operations, books and records, and must captive. least three incorporators or two location approved by the Commission, full and proper records of its business activities. annual board meeting in the territory, but management company is advised. Hong Kong. conduct substantially all of the captive's organizers must be residents of at least one board member must be a underwriting, policy issuing, and Alabama. Captive must maintain Guam resident servicing activities in Illinois. Alabama bank account, and utilize an Alabama-based CPA firm, actuarial firm, insurance broker, and attorney.

7/19/2016 Page 19 of 65 Prepared April 2016 Alabama Anguilla Gibraltar Guam Guernsey Hawaii Hong Kong Illinois Isle of Man ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Reinsurance is individually evaluated by A captive company may provide Reinsurance is individually evaluated by Captive may provide reinsurance on Unknown Captives can provide reinsurance on None Requirements on risks or portions of risks ceded to the Insurance Commissioner. reinsurance, as defined and authorized in the Insurance Director, according to the risks ceded by any other insurer only risks ceded by any other insurer, reinsurers complying with subdivisions Article 8 of Chapter 18, on risks ceded captive's financial strength. upon approval of the reinsurance provided the risks are the same as the (1) through (4) of subsection (c ) of by any other insurer. Any captive agreement by the Commissioner. captive could legally insure on a direct Section 27-5-12. A captive insurer shall insurance company may take credit for basis. They may take credit for reserves not take credit for the reserves on risks reserves on risks ceded to a reinsurer on risks ceded to a reinsurer that is in or portions of risks ceded to reinsurers provided that no captive shall reinsure a compliance with Illinois regulations not complying with subdivision (1) risk or part thereof with reinsurers not Section 123C-13. through (4) of subsection (c ) of Section complying with the provisions of §18802. 27-5-12.

Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 11 3 319 197 3 2 115 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 20 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Jersey Kansas Kentucky Labuan Liechtenstein Luxembourg Maine Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on The minimum paid-up capital is £100,000. Capital and Surplus Requirements: Minimum Capital and Surplus: Pure - Capital and Surplus Requirements: Minimum of EUR 1.2m for reinsurance Minimum capital is : Capital and Surplus Requirements: Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within In addition, an insurer must maintain a $250,000; Association - $750,000; captive. 3.7MEUR for reinsurance Euro 1.225 million or its equivalent in Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least margin of solvency to insure that Industrial Insured - 500,000; Sponsored - Single/Multiple Owner Captives companies. other currency for a reinsurance captive; Insurer Type Minimum Sponsored Captive: $1,000,000 $200,000 adequate funds are available to pay Minimum $1,000,000; Agency - $500,000; Special RM 300,000 Capital & Surplus Reciprocal Captive: $1,000,000 claims. Capital Minimum Purpose - $250,000. 2.5MEUR for direct insurance company. Euro 3.6 million minimum for a Pure Captives $250,000 Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on Surplus Rent-a-Captive, Cell Captive or Similar 3.7M EUR for direct insurance company reinsurance company. Association Captives $750,000 any foreign insurance business, including long-term foreign insurance business, Pure Captives $100,000 $150,000 Vehicle covering lines 10-15 and Life insurance Industrial Insured Captives $500,000 providing that it has and maintains an issued and paid up capital of at least $200,000; Industrial Captives (stock) $200,000 RM 500,000 companies. Euro 2.5 million or Euro 3.7 million for a Sponsored Captives $500,000 $300,000 direct writing captive depending on the Risk Retention Groups $1,000,000 Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on Industrial Captives (mutual) $500,000 Captives are required to maintain a S2 regulations apply. classes of business written. general foreign insurance business, but not long-term foreign insurance business, surplus of assets over liabilities of at The required capital and surplus may be providing that it has and maintains an issued and paid up capital of at least $100,000; Capital may be in the form of cash or least the amount of working funds. Rent- On top, the regulator requests an Solvency II Requirements in force in the form of cash, an irrevocable letter irrevocable letter of credit issued by a a-captives are required to maintain the organisation fund up to 50% of the share of credit issued by a Maine chartered Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on bank chartered by the state of Kansas or above or 20 percent of the net premium capital bank or a member bank of the Federal general foreign insurance business and long-term foreign insurance business, with 2 or the United States comptroller of income for the preceding year for Reserve System, or any other security more owners of the insurer, and its affiliates, and to carry on no more than 50% of its currency, domiciled in Kansas, and general insurance business, or 3 percent approved by the superintendent. foreign insurance business (based on net premiums written) or 100% of its reinsurance approved by the Commissioner. of the actuarial valuation of the liabilities business with persons who are not owners of the insurer or its affiliates, providing that it for life insurance business, whichever is has and maintains an issued and paid up capital of at least $100,000; the greater.

Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates, and employees of the owner or its affiliates, providing that it has and maintains an issued and paid up capital of at least $25,000;

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Incorporation Fee Fees: Application Fees $600, Annual Renewal Fees (Malaysia Ringgit: 3.63 RM~U.S. Setup fee by FMA: Registration fee of EUR 5,000 payable Fees: Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under £200 (£500 for amended certificate of Fees $300 and $600 for Captive RRG, $1): insurance company: 80'000CHF upon incorporation of Luxembourg Expenses section 3 (1) $500 incorporation) Application Fee $500 Other Misc. Fees $155. captives: 40'000CHF companies $1,000 Filing Fee Annual License Fee: (b) For filing application for an insurance agent, broker ’s or Annual Filing Fee $110 Single/Multiple Owner Captive small insurance companies: 30'000CHF $300 manager’s licence under section 3 (2) $500 Registration Fee General Business RM 10,000 Annual CAA Fee: EUR 5,000 $100 Annual Statement Filing Fee (c) For filing application for a sub agent or principal representative Category "A" £2,400 Release fee: CHF 40'000 for captives (insurance) licence under section 3(2) $100 Category "B" £4,200 Master Rent-A-Captive CHF 60'000 for insurance companies $100 Annual Continuation Fee Issue of Licence and Annual Renewal of a Licence fees Protected Cell £1,200 RM 13,000 (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 Cell Company £4,200 (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) Subsidiary Rent-A-Captive and (c)) $2,000 Registration Fee RM 3,000 (f) For a Class ‘B’ Association, Group or Single licence (sections 3 Long-Term Business (1)(d), (e) and (f)) $1,500 Category "A" £4,800 (g) For an Insurance Agent, Broker or Manager licence (sections 3 Category "B" £8,400 (2)(a) and (b)) $1,000 Protected Cell £2,400 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 Cell Company £4,200 (i) For a Principal Representative (Insurance) licence (section 3 (2)(e)) $500

Incorporation time Unknown 2-4 weeks 2 Weeks less than 2 months once the draft 12-16 weeks business plan is approved. Depending on the quality of the business plan: between 6-9 months to have a draft business plan fully reviewed and accepted by the FMA

7/19/2016 Page 21 of 65 Prepared April 2016 Alabama Anguilla Jersey Kansas Kentucky Labuan Liechtenstein Luxembourg Maine TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Both long-term and general business can All lines except personal lines. all lines of business Life and nonlife on an insurance and All property/casualty lines except That May Be Written liability insurance, life and disability insurers. be written by captives reinsurance basis. Direct writers have to personal auto and homeowners. Also insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance be discussed on a case by case basis allowed are credit life and health, marine, compensation insurance and reinsurance. business: with the Commissariat aux Assurances. surety and title insurance. In addition to (1) Unrestricted licence to carry on foreign insurance business including long-term the risks of parent and affiliated business. The minimum capital requirement is $200,000 (annual licence fee $2,000). Related parent risk and unrelated risk for companies, pure captives may also (2) General licence to carry on general foreign insurance business, but not longterm reinsurance insure the risks of other companies with business. The minimum capital requirement is $100,000 (annual licence fee $2,000). which the parent or affiliates have a (3) Association licence to carry on general and long-term foreign insurance business with contractual relationship ("controlled two or more owners of the insurer, and its affiliates, and to carry on more than 30% of unaffiliated business"). its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is $100,000 (annual licence fee $1,500). (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested A category B permit holder carrying on Captives are not subject to investment Association, sponsored and industrial None general restriction: all investments Article 17 of Grand-Ducal regulation of 5 Other than for pure captives, captive Restrictions captives. assets other than cash, LOCs, and general business must have at least 75 restrictions, except that the insured captives must comply with the accepted as long as measurable from a December 2007 requests that assets insurance companies are subject to the other than government securities of 10% to 30%; see Guidance Notes of Allowable percent of assets as approved assets; Commissioner may prohibit or limit any investment requirements contained in the risk management perspective representing technical provisions have to same restrictions on allowable Assets long-term business must have at least investment that threatens their solvency Kentucky Ins. Code. Pure captives and take into account the type of operations investments as other insurers. 25 percent of assets as approved or liquidity. industrial insured captives insuring the carried out by the reinsurance company assets. risks of an industrial insured group are as to ensure sufficiency, liquidity, Pure captive insurance companies are not subject to any restrictions on security, quality, return and congruence not subject to restrictions on investments. However, the of its financial investments. investments, except the Commissioner commissioner may prohibit or limit an may restrict any investment that investment that threatens the solvency Other criteria are pointed out by the threatens solvency. or liquidity of the company. legislator such as diversification of the investments, exclusion of derivatives Loans to parent or affiliated companies unless for hedging and a caution with need approval of the superintendent. A regards to non-listed investments. loan of any minimum capital and surplus funds required under section 6704 is prohibited. The maximum amount of intra-group loan is limited to a sum of 100% of shareholders equity and 30% of the Equalisation provision.

Tax Issues Premium Taxes: Anguilla has the Local Tax: Insurers can elect any one of Two percent subject to KSA 40 –252 A, $1-$20M Direct 0.40% Reinsurance Taxes apply at a rate of 3 percent of All companie subject to a nominal flat Net Wealth Tax: 2% premium tax on all direct premiums $1–20 million added advantage of being a no-tax jurisdiction three options. 40–252 G, 40–252b, 40–252c, and 0.225%; $20M-$40M Direct 0.30% chargeable profits of an offshore corporate income tax rate of 12.5%. 4% NW< EUR 500mio: (Title 36, Part 4, Chapter 357, Section Direct 0.4% 40–253. Every insurance company is Reinsurance 0.150%; $40-$60M Direct company. of the ecnomically needed equity is 0,5% on NW 2513). Reinsurance 0.225% Option 1: No tax, and pay an exempt eligible to receive a credit on premium 0.20% Reinsurance 0.050%; over $60M deductible from the taxable income. NW> EUR 500mio: company fee of £600 each year. taxes or privilege fees of 25 percent of Direct 0.075% Reinsurance 0.025% Income from participations is deductible EUR 2.5mio (=0.5*500mio) + 0.05% on $20–40 million Option 2: A captive can be set up as an taxes or fees if at least 30 percent of Annual minimum tax of $5,000. from the taxable income. Dividend the component over EUR 500mio Direct 0.30% international business company, which is admitted assets are invested in Kansas payment to parent companies exempted Reinsurance 0.15% charged tax on a sliding scale from 2 securities. from withholding tax for new companies. Corporation Income Tax: percent to 0.5 percent, subject to a No capital tax. 29.22% on profits after the application of $40–60 million minimum of £1,200 each year. the equalization reserves allocations Direct 0.20% Option 3: A captive not electing either of Reinsurance 0.05% the first two options automatically pays Minimum CIT from: EUR 535 to EUR a tax of 20 percent on net profits. 32,100 depending on the size and > $60 million structure of the balance sheet Direct 0.075% Reinsurance 0.025% Annual regulatory fee dependent on level Minimum tax of $5,000; No maximum of Premium written.

7/19/2016 Page 22 of 65 Prepared April 2016 Alabama Anguilla Jersey Kansas Kentucky Labuan Liechtenstein Luxembourg Maine ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on The Insurance Business (Jersey) Law, Article 43, Chapter 40 of the Kansas Kentucky Revised Statutes Chapter 304, Offshore Insurance Act 1990, Labuan Financial Market Supervision Act (FMA The legal framework for reinsurance Title 24-A MRS Chapter 83 Captive 31A & 31B 1996, and supporting legislation Insurance Code. Subtitle 49, and Kentucky Administrative Offshore Financial Services Authority Act) updated in August 2015 to include companies is guided by: Insurance Companies. Insurance Regulations Regulations 806 K.A.R. 49:202-49:040. Act 1996 S2 - the Law of 6 December 1991 on the Insurance (Amendment) Regulations, 2014 insurance sector, as amended;

- the Law of 8 December 1994 on annual and consolidated accounts, as amended;

- regulations pertaining to the Law of 6 December 1991, in particular the Grand Ducal regulation of 5 December 2007 with circular letters on reinsurance published by the Commissariat aux Assurances (CAA).

Tax Treaties N/A Anguilla has no existing double taxation treaties. N/A Not with US Double tax treaties with 16 countries and TIEA with nearly 30 countries. Non Double Taxation Treaty with most Anguilla has concluded 15 tax treaties and is party to a series of treaties under EU Members and other trading nations negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom

Supervisory State of Alabama Anguilla Financial Services Commission Jersey Financial Services Commission Commissioner of Insurance Russell Coy II, Captive Coordinator Labuan Offshore Financial Services Financial Market Authority Leichtenstein Ministry of Finance Insurance Maine Bureau of Insurance Jurisdiction Department of Insurance MAICO Building, The Valley Director of Insurance Kansas Insurance Department Kentucky Office of Insurance (KOI) Authority FMA. Commissioner Claude Wirion 34 State House Station 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 P.O. Box 267 420 SW 9th St. Financial Standards and Examination Level 17, Main Office Tower Insurance Commissioner Augusta, ME 04333–0034 Montgomery, AL 36104 Fax: +1 264 497 5872 Nelson House, David Place Topeka, KS 66612–1678 Division Financial Park Complex 7, boulevard Joseph II, Tel.: (207) 624–8475 P.O. Box 303351 Email: [email protected] St. Helier, Jersey Tel.: (785) 296–7820 PO Box 517, 215 West Main St, Jalan Merdeka L - 1840 Luxembourg Fax: (207) 624 –8599 Montgomery, Alabama 36130 –3351 Channel Islands JE48TP Fax: (785) 296 –2283 Frankfort KY 40602-0517 87000 Labuan F.T., Malaysia GD de Luxembourg www.maine.gov/pfr/insurance/ Tel.: (334) 269–3550 Tel.: +44 1534 822015 www.ksinsurance.org/ Phone : (502) 564-6082 Tel.: 6 087 591200 / 591300 Fax: (334) 241 –4192 Fax: +44 1534 822001 Fax: 6 087 413328 / 453442 / 411496 www.jerseyfsc.org/ www.labuanibfc.my/cms/index.php/en/ca ptive-insurance/introduction.html

Reserve & Unknown Customary loss reserving Flexible work to a guideline of 3:1 to 5:1 Equalization reserves for reinsurers and Reinsurers have to allocate the complete Underwriting premium to capital/ surplus ratio captives are mandatory. Allocation of all year profit (technical and financial Requirements profits until 30% of the maximum are balances) to the Equalisation Provision met. Maximum equalization reserves = (EP). This is valid as long as the actual (2.5 ~ 1.7) x average premiums net of EP stays under 30% of the maximum reinsurance over past 5 years. theoretical amount of EP.

Once the captive exceeds the 30% point, it is still allowed to fully transfer the technical result to the EP. The financial one will be partially allocated as profits and will be subject to tax. This partial allocation is determined by applying a technical rate of 100% of the return rate of long-term government bonds to the technical provisions recorded in the latest annual accounts.

Solvency margin per European guidelines.

7/19/2016 Page 23 of 65 Prepared April 2016 Alabama Anguilla Jersey Kansas Kentucky Labuan Liechtenstein Luxembourg Maine ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Annual audited accounts, biannual Each captive must submit an annual Annual GAAP statement of financial Captives are required to submit 4 copies Annual approved audit, quarterly Audited Financials Annual audited GAAP financial Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an financial statements, and other report of its financial condition in the condition. Verification by the oath of two of audited annual balance sheets, profit (reduced) and annual (comprehensive) Annual reporting of the reinsurance statements due annually by June 30th. principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in requirements as established by the form required by KSA 40 –225 and any executive officers is required. and loss accounts, and revenue reporting to the FMA. Under S2 company to the Regulator approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part director. amendments thereto. Association and Industrial Insured accounts in a form approved by LOFSA regulation, RSR, SFCR, QRT, ORSA (Commisariat Aux Assurances) NAIC statement required for association Premium tax return due March 1st. thereof captives must file an annual statement within 6 months after the close of each Separate report for the auditor to the captives and industrial insured captives. convention blank with the NAIC. All financial year. Captives are also required Regulator captive are subject to an annual audited to submit the latest audited annual Regulator relies on audit report, but An actuarial opinion by a member of the by an independent certified public balance sheets in respect of its entire actuarial computations required for Life American Academy of Actuaries or other account authorized by the commissioner. operations both in and outside Labuan Business qualified loss reserve specialist must be within 3 months of filing with the home Quarterly returns for direct writer included in the audited statements. regulatory authorities. Other statistics Quantitative Reporting Templates (under and information may be requested Solvency II Regime) Other reports may also be prescribed by periodically. the state such as summary loss reports and quarterly financial statements.

Examinations at least once every 3 - 5 years based on superintendents discretion.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Registered office and a local director. Principal place of business must be in None Registered office required. Captives No Liechtenstein-resident Board Member Local manager and office required. Maine statutes require that the captive Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager Kansas. Captives must hold at least one must have an operational management or Liechtenstein-resident General maintain its principal place of business in (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other board meeting in the state each year. At office in Labuan or appoint a licensed Manager required, but the active the state and hold an in-state annual least three incorporators or two location approved by the Commission, full and proper records of its business activities. least one member of the board must be underwriting manager. Captives must management of the company need to board meeting. At least one board organizers must be residents of a resident of the state. also appoint a resident director and a remain in Liechtenstein (ie. Own office, member must be a Maine resident. Alabama. Captive must maintain resident secretary. own IT structure, own staff - except for Captives must have at least three Alabama bank account, and utilize an captives that outsource to dedicated incorporators, at least one of which must Alabama-based CPA firm, actuarial firm, management companies. Under S2 be a resident of the state. insurance broker, and attorney. regulations: compliance officer, risk officer, appointed actuary, internal auditor

7/19/2016 Page 24 of 65 Prepared April 2016 Alabama Anguilla Jersey Kansas Kentucky Labuan Liechtenstein Luxembourg Maine ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Reinsurance is individually evaluated by Any captive may provide reinsurance, Captives may take credit for credit for None entity must retain a minimum of 10-20% A captive insurance company may Requirements on risks or portions of risks ceded to the Insurance Director, according to the subject to articles 9 and 11 of the reserves on risks ceded to a reinsurer of the risk. Pure fronting not allowed. provide reinsurance on risks ceded by reinsurers complying with subdivisions captive's financial strength. Kansas Insurance Code. Any risk or that is in compliance with the Kentucky any other insurer to the extent permitted (1) through (4) of subsection (c ) of portions of risks of any captive Insurance Code. For the purposes of by section 6702. The company may Section 27-5-12. A captive insurer shall insurance company that is reinsured sections 304.49-010 thru 304.49-230 of take credit for the reinsurance of risks not take credit for the reserves on risks shall be ceded to an insurance company the code, insurance by a captive for any veded to a reinsurer in accordance with or portions of risks ceded to reinsurers authorized to do business in this state or qualified WC self-ins. program is Title 24-A. not complying with subdivision (1) that has been approved by the considered to be reinsurance. through (4) of subsection (c ) of Section Commissioner. 27-5-12.

Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 3 2 92 40 11 217 3 Last Updated 4/25/2016 4/25/2016 3/16/2015 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 25 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Malta Michigan Micronesia Missouri Nebraska Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Follows Solvency II requirements: Insurer Type, Capital & Class 1 and 2: Minimum initial paid-in Minimum Capital & Surplus Pure Capital and Surplus Requirements: Pure Captive $100,000/$100,000; Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within Retained Earnings capital of $1,000,000, thereafter maintain $250,000; Association $750,000; Association $200,000/$300,000; Agency Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least General Insurance Business (including captive Pure Captive $150,000 minimum capital and surplus of Industrial Insured Captive $500,000 Pure Captives $250,000 $200,000/$300,000; RRG Sponsored Captive: $1,000,000 $200,000 insurance undertakings) Pure Captive (non-profit) $250,000 $100,000. Cash or LOC as approved by the Association Captives $750,000 $200,000/$300,000; Sponsored Reciprocal Captive: $1,000,000 - All risks excluding classes 10 to 15 - Eur2.5 million Association Captive (stock) $400,000 Director. The director may also Industrial Insured Captives $500,000 $200,000/$300,000. Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on - All risks including classes 10 to 15 - Eur3.7 million Association Captive (mutual) $750,000 Class 3: Core member captive must prescribe additional capital and surplus Protected Cell Captive $750,000 any foreign insurance business, including long-term foreign insurance business, Industrial Insured Captive $300,000 maintain minimum paid in capital and based upon the type, volume, and nature providing that it has and maintains an issued and paid up capital of at least $200,000; Life Insurance Undertakings (including captive Sponsored Captive $500,000 surplus of $1,000,000 and each member of insurance business transacted. insurance undertakings) - Eur3.7million Special Purpose Captive - As determined captive must maintain minimum paid in Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on by Commissioner based on busines plan. capital and surplus of $100,000. general foreign insurance business, but not long-term foreign insurance business, Reinsurance Undertakings - Eur3.7million providing that it has and maintains an issued and paid up capital of at least $100,000; Cash, letter of credit, or public Captive Reinsurance Undertakings - Eur1.2million The Commissioner may prescribe obligations. Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on additional capital and surplus general foreign insurance business and long-term foreign insurance business, with 2 or requirements based on the type, volume, more owners of the insurer, and its affiliates, and to carry on no more than 50% of its and nature of insurance. All minimum foreign insurance business (based on net premiums written) or 100% of its reinsurance capital and surplus requirements must be business with persons who are not owners of the insurer or its affiliates, providing that it in the form of cash, cash equivalents, has and maintains an issued and paid up capital of at least $100,000; an irrevocable letter of credit, or securities invested as provided in Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any section 4639. foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates, and employees of the owner or its affiliates, providing that it has and maintains an issued and paid up capital of at least $25,000;

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Insurance and Reinsurance Companies : Registration and Incorporation Expenses Reviewer's fee USD $4,000-$12,000, Application Fee $7,500; Annual License $200 Filing Fee Application Fee $500; Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under - Long term business: minimum fee €5,000 plus €500 = $10,000. The commissioner may also depending on complexity. License fee Fee $7,500; Captive may deduct these $300 Annual License Annual License Fee $300, Incorporation Expenses section 3 (1) $500 per class charge an additional application fee of $500 (initial and annual thereafter). fees from the premium taxes payable Fee Minimum $125, Review fee $3,500 Annual License Fee: (b) For filing application for an insurance agent, broker ’s or - General business: minimum fee of €3,500 plus €300 $2,700 for examination of the application under section 379.1326. If necessary, the commissioner may (average). $300 manager’s licence under section 3 (2) $500 per class by the department and third party also charge applicants for the cost of (c) For filing application for a sub agent or principal representative specialists. reasonable outside legal and financial (insurance) licence under section 3(2) $100 Insurance and Reinsurance Protected Cells : examination services. Issue of Licence and Annual Renewal of a Licence fees €2,500 Annual renewal fee based on premium (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 volume. Premiums less than $5 million = (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) Insurance and Reinsurance Captives : €5,000 $5,000, Premiums $5 - $10 million = and (c)) $2,000 $10,000, Premiums $10 - $15 million = (f) For a Class ‘B’ Association, Group or Single licence (sections 3 Protected Cell Company (PCC) : €6,500 $15,000, etc. to a maximum of (1)(d), (e) and (f)) $1,500 $100,000. (g) For an Insurance Agent, Broker or Manager licence (sections 3 Incorporate Cell Company (ICC) : €2,500 (on (2)(a) and (b)) $1,000 Application) & €2,500 (on Acceptance) Captives will also be charged for (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 examination costs. (i) For a Principal Representative (Insurance) licence (section 3 (2)(e)) $500

Incorporation time Unknown 2-4 weeks Insurance and Reinsurance Companies : 6 months. 2 months Unknown 30 to 60 days For reinsurance companies the timeframe is reduced to 3 months in respect to reinsurance protected cells. Insurance and Reinsurance Protected Cells : 3 months Insurance and Reinsurance Captives : 3 months Protected Cell Company (PCC) : 6 months Incorportated Cell Company (ICC) : 6 months.

7/19/2016 Page 26 of 65 Prepared April 2016 Alabama Anguilla Malta Michigan Micronesia Missouri Montana Nebraska Nevada TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Insurance: All classes; however a company is not A captive insurance company can insure All commercial and personal lines, All real and personal property, intangible That May Be Written liability insurance, life and disability insurers. permitted to carry on long term business and general the risks of its parent, affiliated subject to the Commissioner ’s approval. or tangible; liability and excess WC; insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance business unless: companies and controlled unaffiliated professional malpractice; fidelity and compensation insurance and reinsurance. business: - Long term business is restricted to reinsurance business. No worker's compensation , No captive is allowed to insure risks of surety; accident and health; other (1) Unrestricted licence to carry on foreign insurance business including long-term - General business carried out by the company is long-term care insurance, critical care FSM individual citizens. legitimate forms of insurance not listed business. The minimum capital requirement is $200,000 (annual licence fee $2,000). restricted to accident and sickness classes insurance, personal automobile, above, excl. life and annuities. (2) General licence to carry on general foreign insurance business, but not longterm Reinsurance: Long-term business and General homeowner insurance, or any component business. The minimum capital requirement is $100,000 (annual licence fee $2,000). business ot these coverages. (3) Association licence to carry on general and long-term foreign insurance business with Captives: - Direct: life and non-life business must be two or more owners of the insurer, and its affiliates, and to carry on more than 30% of transacted in seperate companies. - Reinsurance: all its foreign insurance business (based on net premiums written) or 100% of its classes of life and non-life business reinsurance Protected Cell Companies (PCC): business with persons who are not owners of the insurer or its affiliates. The minimum -Cell company and its cells: principals, captives, capital requirement is $100,000 (annual licence fee $1,500). insurance brokers and insurance mangement for (4) Group licence to carry on any foreign insurance business, including longterm general and long-term business of insurance and foreign insurance business, with a single owner of that insurer and its affiliates and reinsurance employees of the owner or its affiliates. The minimum capital requirement is $25,000 -Insurance PCCs: only insurance cell, management (annual licence fee $1,500). PCCs management cells and broker PCCs broker cells (5) Single licence to carry on any foreign insurance business including longterm Incorporated Cell Companies (ICC): insurance business, with the sole owner of the insurer, if a company. Cell company and its cells: business of insruance and The minimum capital requirement is...... reinsurance and affiliated business

Investment No investment restrictions for pure Discounting applies to invested None, however company investments must not Association captives and industrial Captive is allowed to invest in U.S. and Pure - none, except when commissioner Association captives are subject to the An association captive insurer shall Restrictions captives. assets other than cash, LOCs, and breach technical reserve requirements for insurance insured captive insurers must comply Japan Government obligations without may prohibit or limit any investment that restrictions in Title 33, Chapter 12, comply with the investment requirements other than government securities of 10% to 30%; see Guidance Notes of Allowable companies. Solvency II regulations impose a charge with the investment requirements limitation and any medium or high grade threatens solvency. Association sections 33 –2–532 and 33–2–533. Pure prescribed for a traditional insurer. A Assets based on the concentration and riskiness of the prescribed in Sections 910 and 947. Pure obligation subject to limitation of 10% of captives must comply with the captives are not subject to any pure captive may invest in any investment. This must be taken into consideration captive insurers and special purpose total assets. The Commissioner may investment requirements contained in restrictions unless imposed by the approved instrument. when calculating the Solvency Capital Requirement. captives are not subject to restrictions prohibit or limit any investment that chapter 375, Mo.Rev.Stat., and sections commissioner. on allowable investments, except that threatens the solvency or liquidity. 379.080 and 379.082, as applicable. the Commissioner of Insurance may prohibit or limit any investment that Captive may make a loan to or an threatens the solvency or liquidity of the investment in its parent or affiliates up pure captive insurer. to 50% of total assets, subject to the Commissioner ’s approval.

Tax Issues Premium Taxes: Anguilla has the 35% corporate income tax and additional local taxes; No state premium taxes. Renewal fees Premium tax rate: 0.05% on gross $1-$20M Direct 0.38% Reinsurance Direct Reinsurance $1-$20M Direct 0.40% Reinsurance $1–20 million added advantage of being a no-tax jurisdiction however, tax credits can reduce tax to 5% upon are charged based on premium volume. premiums of risk situated or located 0.214% $20M-$40M Direct 0.285% $1–20 million 0.4% 0.225% 0.225%; Direct 0.4% dividend distribution to qualifying shareholders within the Federated States of Reinsurance 0.143% $40M- $20–40 million 0.30% 0.15% $20M-$40M Direct 0.20% Reinsurance Reinsurance 0.225% Micronesia; maximum $20,000. $60M Direct 0.19% Reinsurance 0.048% $40 – 60 million 0.20% 0.05% 0.150%; No premium tax on risks sourced outside over $60M Direct 0.072% Reinsurance > $60 million 0.075% 0.05% over $40M Direct 0.075% Reinsurance $20–40 million of Micronesia. 0.024%. Annual minimum tax of $7,500 0.025%. Direct 0.30% and annual maximum aggregate tax of Minimum Premium Tax: $5,000 Reinsurance 0.15% Income tax 21%. $200,000. Maximum Aggregate Tax: $100,000 $40–60 million Direct 0.20% Reinsurance 0.05%

> $60 million Direct 0.075% Reinsurance 0.025%

Minimum tax of $5,000; No maximum

7/19/2016 Page 27 of 65 Prepared April 2016 Alabama Anguilla Malta Michigan Micronesia Missouri Montana Nebraska Nevada ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on 1998 Insurance Act and Amendments - includes PCC The Michigan Captive Insurance Act, The Insuance Act of 2006 and Captive Captive Insurance Law Mo.Rev.Stat. Montana Code Annotated, (MCA), Title Nevada Revised Statutes, Title 57, 31A & 31B and ICC legislation. MCL Section 500.4601 –4745, Act 218, Insurance Regulations. 379.1300-1350 and Special purpose life 33, Chapter 28. Chapter 694C Insurance Regulations Chapter 46 and Chapter 47 insurance captive laws Mo.Rev.Stat. 379.1353-1421. Insurance (Amendment) Regulations, 2014

Tax Treaties N/A Anguilla has no existing double taxation treaties. Yes, 70+ Double Taxation Agreements N/A N/A

Anguilla has concluded 15 tax treaties and is party to a series of treaties under negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom

Supervisory State of Alabama Anguilla Financial Services Commission Malta Financial Services Authority. Note: Malta is part Department of Insurance and Financial Insurance board of the FSM Government Captive Program Manager, Missouri Dept Commissioner of Insurance and Nevada Division of Insurance, Jurisdiction Department of Insurance MAICO Building, The Valley of the EU and its regulations apply Services Townplaza Building, Suite 12 of Insurance, Financial Institutions & Securities Commissioner of Insurance, 1818 East 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 530 W. Allegan Street, 7th Floor P.O. Box K-2980 Professional Registration, 301 West 840 Helena Ave. College Parway, Suite 103, Carson City, Montgomery, AL 36104 Fax: +1 264 497 5872 Lansing, MI 48933 Kolonia, Pohnpei, FM 96941 Hight St., Ste 530, Jefferson City, MO Helena, MT 59601 NV 89706 P.O. Box 303351 Email: [email protected] Tel.: (517) 284-8759 65101, Tel 573-522-2563 Tel.: (406) 444–2040 Montgomery, Alabama 36130 –3351 Fax: (517) 335 –4978 Fax: (406) 444 –3497 Tel.: (334) 269–3550 www.michigan.gov/difs http://sao.mt.gov/captives/index.asp Fax: (334) 241 –4192 Types of Coverage That May Be Written: Property

Reserve & Unknown Customary loss reserving As per IFRS and Solvency II requirements. Actuarial Actuarial certification required. Each company shall maintain as Copies of underwriting guidelines and Underwriting function required. liabilities unearned premium and loss procedures, and rates and pricing Requirements reserves. guidelines, should form part of the application.

7/19/2016 Page 28 of 65 Prepared April 2016 Alabama Anguilla Malta Michigan Micronesia Missouri Montana Nebraska Nevada ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Quarterly and annual reporting to the MFSA in line with Annual report of financial condition due Yearly filing of Annual Report to Must submit annual GAAP reports unless Captive insurers must submit annual Regulatory Filing due March 1. Audit due Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an Solvency II requirements (exemptions may apply). annually by March 1st. Insurance Commissioner and submission the director approves SAP reports and as reports of their financial condition using with 6 months GAAP or SAP. principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in Audited Financial Statements. of business plans upon any change in supplemented by additional information generally accepted accounting principles approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part Captives must file annual audited business. required by the director. Association unless the Commissioner approves Premium tax return due March 1st. thereof financial statements no later than 5 captives must file annual reports in the otherwise. months after the fiscal year end, using Various accounting principles are allowed, form required by section 375.041, GAAP unless the Director of Insurance such as GAAP and IAS. Mo.Rev.Stat. requires otherwise.

Annual reports must include an actuarial opinion of loss reserve adequacy, unless exempted by the Director.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Required to appoint locally regulated Insurance Captives must maintain their principal Principal place of business Captives in Missouri must maintain their Captives must maintain their principal Approved Manager, auditor and actuary. Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager Manager. place of business in Michigan, and must principal place of business in the state. place of business in Montana. At least Annual Board Meeting in Nevada. (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other hold at least one board meeting in the No resident director required one board member must be a Montana Examination every 3 years. least three incorporators or two location approved by the Commission, full and proper records of its business activities. state each year. They must appoint a resident. Captives must have at least organizers must be residents of Michigan registered agent. At least three An annual board of directors meeting in three incorporators, at least one of whom Alabama. Captive must maintain incorporators are required, two of which FSM (one principal representative is must be a resident of the state. Alabama bank account, and utilize an must be state residents. required to be physically present in FSM) Alabama-based CPA firm, actuarial firm, insurance broker, and attorney.

7/19/2016 Page 29 of 65 Prepared April 2016 Alabama Anguilla Malta Michigan Micronesia Missouri Montana Nebraska Nevada ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Reinsurance arrangements are subject to review by Captive insurers may provide Reinsurers need to be approved by the Captive insurers may take credit for the Captives may take credit for reserves Captives can provide reinsurance on Requirements on risks or portions of risks ceded to the MFSA. reinsurance on risks ceded by any other Insurance Commissioner. reinsurance ceded to reinsurers on risks ceded to a reinsurer complying risks ceded by any other insurer. They reinsurers complying with subdivisions insurer with the approval of the complying the provisions of section with provisions 33 –2–1216 and may take credit for reserves on risks (1) through (4) of subsection (c ) of Commissioner. Captive insurers may 375.246. Prior approval of the director is 33–2–1217 of the Montana Code. The ceded to a reinsurer that is in compliance Section 27-5-12. A captive insurer shall take credit for reserves on risks or required for utilizing reinsurers or state's approval is required for any with Nevada regulations. The not take credit for the reserves on risks portions of risks ceded to a reinsurer that reinsurance agreements no complying reinsurance not in compliance. commissioner may authorize a captive or portions of risks ceded to reinsurers is in compliance with sections 1103 and with section 375.246, except for insurer to take credit for reserves on not complying with subdivision (1) 1105. business written by an alien captive risks or portions of risks ceded to a pool, through (4) of subsection (c ) of Section insurance company outside the US. an exchange, or an association acting as 27-5-12. a reinsurer.

Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 10 23 18 50 196 4 202 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

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The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 30 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Nevis New Jersey New Zealand North Carolina Norway Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on in a case where the applicant proposes to carry on long-term business Minimum capital requirement: Statutory minimum (Superintendent can Capital—$500,000 Pure Captive $250,000 Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within but no other category of business, is $185,000.00 or more; Pure Captive, $250,000; require additional funding): (New Zealand dollars) Association $500,000 Association Captive, $750,000; Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least in a case where the applicant proposes to carry on general business but Pure: Surplus-$150,000 Capital-$100,000; Industrial Insured $500,000 Industrial Captive, $500,000; Sponsored Captive: $1,000,000 $200,000 no other category of business, is $185,000.00 or more; Sponsored (protected cell) Captive, $500,000; Pure Mutual: Surplus-$250,000: Group Risk Retention Group $1,000,000 Reciprocal Captive: $1,000,000 in a case where the applicant proposes to carry on reinsurance business Cash or an irrevocable LoC issued by an in State Stock: Surplus-$300,000 Capital- Protected/Incorporated Cell $250,000 Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on but no other category of business, is $75,000.00 or more; bank. $200,000; Special Purpose Finacial Captive any foreign insurance business, including long-term foreign insurance business, in a case where the applicant proposes to carry on captive insurance Group mutual: Capital-$500,000 $250,000 providing that it has and maintains an issued and paid up capital of at least $200,000; business but no other category of business; a. Single owner Captive $10,000.00 b. Less than 5 owners Captive Based on business plan, the Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on $20,000.00 c. 5 or more owners Captive $50,000.00 commissioner has the discretion to general foreign insurance business, but not long-term foreign insurance business, in a case where the applicant proposes to carry on insurance business reduce the amount of capital & surplus providing that it has and maintains an issued and paid up capital of at least $100,000; as an allied insurer, is $10,000 or more; required for a pure captive. in a case where the applicant proposes to carry on more than one Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on category of business is the aggregate of the amounts required for each general foreign insurance business and long-term foreign insurance business, with 2 or category more owners of the insurer, and its affiliates, and to carry on no more than 50% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates, providing that it has and maintains an issued and paid up capital of at least $100,000;

Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates, and employees of the owner or its affiliates, providing that it has and maintains an issued and paid up capital of at least $25,000;

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Type of Document or Service EC$ US$ $4,000 application fee plus $165 New York Organization Tax (on stock Registration Fee No application fees, no annual fees, and Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under 1. Captive Application 1,215.00 450.00 formation/filing fee ($175 LLC); companies only)-0.05% on amount of par $3,000 New Zealand dollars (U.S. no mandatory examinations. The Expenses section 3 (1) $500 2. Reinsurance Application 1,215.00 450.00 $3,500 application fee for value on all authorized shares. Captive $1,250) Commissioner will exam companies at Annual License Fee: (b) For filing application for an insurance agent, broker ’s or 3. General Insurance Application 6,750.00 2,500.00 redomestication and $265 formation/filing owners must have net worth of at least his/her discretion. Fees for examination $300 manager’s licence under section 3 (2) $500 4. Long Term Insurance Application 6,750.00 2,500.00 fee; $100 million. Annual Fee will be paid by the captive. (c) For filing application for a sub agent or principal representative 5. Insurance Manager Application 810.00 300.00 Annual license fee $300 $500 New Zealand dollars (insurance) licence under section 3(2) $100 6. Registered Agent Application 810.00 300.00 Special Purpose Financial Captives must Issue of Licence and Annual Renewal of a Licence fees 7. Allied Reinsurance Application 1,215.00 450.00 pay a $6,000 application fee and $6,000 (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 8. Allied Annuity Company Application 1,215.00 450.00 licensure fee. (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) 9. Insurance Adjuster Application 810.00 300.00 and (c)) $2,000 10. Insurance Broker Application 810.00 300.00 (f) For a Class ‘B’ Association, Group or Single licence (sections 3 11. Captive Registration 4,725.00 1,750.00 (1)(d), (e) and (f)) $1,500 12. Reinsurance Registration 4,725.00 1,750.00 (g) For an Insurance Agent, Broker or Manager licence (sections 3 13. General Insurance Registration 6,750.00 2,500.00 (2)(a) and (b)) $1,000 14. Long Term Insurance Registration 6,750.00 2,500.00 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 15. Insurance Manager Registration 3,240.00 1,200.00 (i) For a Principal Representative (Insurance) licence (section 3 16. Registered Agent Registration 3,240.00 1,200.00 (2)(e)) $500 17. Allied reinsurance Registration 1,620.00 600.00 18. Allied Annuity Company Registration 3,240.00 1,200.00 19. Insurance Adjuster Registration 3,240.00 1,200.00 20. Insurance Broker Registration 3,240.00 1,200.00 21. Captive Renewal 3,240.00 1,200.00 22. Reinsurance Renewal 3,240.00 1,200.00 23. General Insurance Renewal 6,750.00 2,500.00 24. Long Term Insurance Renewal 6,750.00 2,500.00 25. Registered Agent Renewal 3,240.00 1,200.00 26. Insurance Manager Renewal 3,240.00 1,200.00 27. Allied Reinsurance Renewal 1,620.00 600.00 28. Allied Annuity Company Renewal 3,240.00 1,200.00 29. Insurance Adjuster Renewal 3,240.00 1,200.00 30. Insurance Broker Renewal 3,240.00 1,200.00

Incorporation time Unknown 2-4 weeks not stipulated 30 days Four weeks. 2 weeks - 30 days

7/19/2016 Page 31 of 65 Prepared April 2016 Alabama Anguilla Nevis New Jersey New York New Zealand North Carolina Norway TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Captive Insurance Business All lines except personal lines; no direct All types Any risk of parent, affiliated companies That May Be Written liability insurance, life and disability insurers. Insurance business where the insured is a parent or affiliated company workers comp or controlled unaffiliated business. No insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance of the registered insurer or is a person in respect of whom the personal motor vehicle or homeowners compensation insurance and reinsurance. business: registered insurer is authorised by the Registrar to provide insurance. insurance. No accident and health, work (1) Unrestricted licence to carry on foreign insurance business including long-term Reinsurance comp, employers liability or life business. The minimum capital requirement is $200,000 (annual licence fee $2,000). Insurance business where the risk insured by a person is a risk that coverage on a direct basis. (2) General licence to carry on general foreign insurance business, but not longterm person has accepted from an insurer; business. The minimum capital requirement is $100,000 (annual licence fee $2,000). Long Term Insurance Business (3) Association licence to carry on general and long-term foreign insurance business with Insurance business of any of the following kinds, namely: two or more owners of the insurer, and its affiliates, and to carry on more than 30% of •affecting and carrying out contracts of insurance on human life or its foreign insurance business (based on net premiums written) or 100% of its contracts to pay annuities on human life; reinsurance •effecting and carrying out contracts of insurance against risks of the business with persons who are not owners of the insurer or its affiliates. The minimum persons insured sustaining injury as the result of an accident, or of an capital requirement is $100,000 (annual licence fee $1,500). accident of a specified class, or dying as the result of an accident or of (4) Group licence to carry on any foreign insurance business, including longterm an accident of a specified class, becoming incapacitated in foreign insurance business, with a single owner of that insurer and its affiliates and consequence of disease, or disease of a specified class, being employees of the owner or its affiliates. The minimum capital requirement is $25,000 contracts that are expressed to be in effect for a period of not less (annual licence fee $1,500). than five years or without limit of time and either not expressed to be (5) Single licence to carry on any foreign insurance business including longterm terminable by the insurer before the expiration of five years from the insurance business, with the sole owner of the insurer, if a company. taking effect thereof or are expressed to be so terminable before the The minimum capital requirement is...... expiration of that period only in special circumstances therein mentioned; Investment No investment restrictions for pure Discounting applies to invested At a minimum, insurers must ensure that their accounting procedures No special restrictions. Minimum capital and surplus must be in None No investment restrictions for pure Restrictions captives. assets other than cash, LOCs, and enable them appropriately to match assets and liabilities in order cash, or letter of credit. Pure captive captives. RRG's and association other than government securities of 10% to 30%; see Guidance Notes of Allowable properly to meet claims and other obligations as they arise. In may loan funds to parent with prior captives have investment restrictions Assets considering whether insurers have such appropriate matching, the approval. No other restrictions. based on common NAIC standards. The Registrar shall consider whether their asset portfolios are adequately Insurance Commissioner may prohibit or diversified and liquid. Notwithstanding the general allowability of the limit any investment that threatens the assets listed below, the Registrar may recommend or require any solvency or liquidy of the company. insurer to diversify or restrict its investments in a manner prescribed Loans to parent or affiliates are allowed by the Registrar. with the written permission of the The following assets shall, generally, be considered allowable: comissioner. 1. Cash in hand and on deposit with financial institutions of the United Kingdom or any of its overseas territories or any other OECD countries; 2. Bullion, precious metals, precious stones; 3. Irrevocable letters of credit issued by financial institutions of the United Kingdom or any of its overseas territories or any other OECD countries; 4. Debt securities issued or guaranteed by the governments of the United Kingdom or any of its overseas territories or any other OECD countries; 5. Debt securities traded on a recognised stock exchange and issued or guaranteed by corporations (public or private sector, including municipal corporations). Where such securities are rated at investment grade by a recognised credit rating agency such as Standard & Poor ’s (i.e. equivalent to S&P rating “BBB” and above), the securities shall be considered fully allowable. The Registrar may discount or even disallow the value of such securities with a lower rating; 6. Investments in an index that is traded on a recognised exchange; 7. Mutual funds traded on a recognised exchange; 8. Equities traded on a recognised stock exchange; 9. Mutual funds and hedge funds not traded on a recognised exchange Tax Issues Premium Taxes: Anguilla has the no personal income tax nor capital gains tax in St. Kitts & Nevis. Tax on gross premiums written: Tax on gross premiums written: Tax Rate of 33 percent. Direct Premiums $1–20 million added advantage of being a no-tax jurisdiction Moreover, there is no inheritance nor gift tax, certain tax holidays are $0-$20M Direct 0.38% Reinsurance $0-$20M Direct 0.40% Reinsurance Up to $20 million 0.4% Direct 0.4% available in respect of corporation tax 0.214%; 0.225%; $20 milllion and higher 0.3% Reinsurance 0.225% $20M-$40M Direct 0.285% Reinsurance $20M-$40M Direct 0.3% Reinsurance Companies incorporated in Saint Kitts and Nevis (St. Kitts-Nevis) pay 0.143%; 0.15%; Assumed Premiums $20–40 million corporate income tax (CIT) on their worldwide income with relief $40M-$60M Direct 0.19% Reinsurance $40M-$60M Direct 0.2% Reinsurance Up to $20 million 0.225% Direct 0.30% available under existing double taxation agreements (DTAs). Non- 0.048%; 0.05%; $20 - $40 million 0.150% Reinsurance 0.15% resident companies deriving income from St. Kitts-Nevis are liable for over $60M Direct 0.072% Reinsurance over $60M Direct 0.075% Reinsurance $40 - $60 million 0.050% CIT and should be registered if they have a physical presence in St. 0.024% 0.025% $60 million and higher 0.025% $40–60 million Kitts-Nevis. Minimum tax of $7,500, maximum Minimum tax of $5,000 - No maximum. Direct 0.20% $200,000. Annual assessment to defray regulatory $5,000 minimum and $100,000 premium Reinsurance 0.05% St. Kitts-Nevis imposes CIT at a flat rate of 33%. expenses, based upon New York direct tax. Two or more captives under writings only, generally in the range of common ownership are taxed as a single > $60 million 0.2%-0.4% of New York direct premiums entity. Direct 0.075% written Reinsurance 0.025% Protected Cell captives with more than 10 cells: Minimum tax of $5,000; No maximum $10,000 minimum tax and maximum tax not to exceed the lesser of (i) $100,000 plus $5,000 times number of cells over 10 and (ii) $200,000.

7/19/2016 Page 32 of 65 Prepared April 2016 Alabama Anguilla Nevis New Jersey New York New Zealand North Carolina Norway ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on Nevis International Insurance Ordinance (Revised) Dec 2009, Nevis N.J.S.A. 17:47B-1 et seq. (Captive Article 70 of the New York Insurance Insurance Companies Deposit Act 1953, Captive Insurance Act signed October 31A & 31B International Insurance Regulations 2006, The Nevis International Insurers Act); Law, Article 33 of the New York Tax Law Insurance Companies (Ratings & 2013; as amended in 2014 and 2015. Insurance Regulations Insurance Regulations 2004, Guidance Notes on Allowable Assets for P.L. 2011, c. 25 (N.J.S.A. 17:47B-1 et Inspections) Act 1994, Companies Act the Calculation of the Margin of Solvency, Nevis International seq.) Captive Insurers - Bulletin 11-08; 1993, Financial Reporting Act 1995 Insurance (Amendment) Regulations, 2014 Insurance Amendment Regulations, 2014 N.J.A.C. 11:28 et seq. Captive Insurance Company: Any entity that only insures the risks of entities that in terms of International Accounting Standards (IAS) are:

(a) Its parent;

(b) Related entity, i.e., under the same control;

(c) In a joint venture with that entity or an entity of the type described in (a) or (b) above;

(d) An associate of that entity or an entity of the type described in (a) or (b) above.

Tax Treaties N/A Anguilla has no existing double taxation treaties. TIEA: Aruba, Australia, Belgium, Canada, Curacao, Denmark, Faroe N/A N/A Islands, Finland, France, Greenland, Guernsey, Iceland, Liechtenstein, Anguilla has concluded 15 tax treaties and is party to a series of treaties under Monaco, Netherlands, New Zealand, Norway, Portugal, Sint Maarten, negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Sweden, United Kingdom Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom double taxation treaties with Denmark, Norway, Sweden, Switzerland, the United Kingdom and the United States of America (limited to social security benefits).

Supervisory State of Alabama Anguilla Financial Services Commission Financial Services Regulatory Commission, Nevis Branch John M. Talley, J.D., Chief, Office of Jody Wald, Captive Insurance Ministry of Economic Development North Carolina Department of Insurance Jurisdiction Department of Insurance MAICO Building, The Valley International Insurance Dept. Captive Insurance Coordinator, New York State Insurance Manager Insurance & Superannuation Captive Insurance Companies Division 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 P.O. Box 689, Main Street (609) 292-7272, ext. 50220 Department, One State Street, Unit Dobbs Building Montgomery, AL 36104 Fax: +1 264 497 5872 Charlestown, Nevis Thomas Herriger, Office of Captive 4th Floor, New York, NY 10004 Level 9, 86 –90 Lambton Quay 430 N. Salisbury Street P.O. Box 303351 Email: [email protected] West Indies Insurance PO Box 10–867, The Terrace Raleigh, NC 27603 Montgomery, Alabama 36130 –3351 (609) 292-7272, ext. 50559 Wellington, New Zealand Tel.: (334) 269–3550 Tel: (869) 469 - 1469 Tel.: +64–4–913 3651 Debra Walker Fax: (334) 241 –4192 Fax: (869) 469 - 7739 Fax: +64–4–913 3652 Deputy Commissioner Email:[email protected] www.med.govt.nz/ Phone: (919)807-6165 [email protected]

Kathy Hart Administrative Assistant Phone: (919)807-6180 [email protected]

Reserve & Unknown Customary loss reserving The amount by which an insurer ’s assets must exceed its liabilities shall Actuarial opinion on reserves required Actuarial opinion on reserves required Underwriting be referred to as the minimum margin of solvency. annually. annually. Requirement may be waived Requirements (a) In the case of an insurer other than an insurer carrying on long- term on short-tail risks. business, the minimum margin of solvency shall be at least the minimum amount of paid up capital as prescribed in Section 7 (1) (b) of the Ordinance or, if greater: (i) where the net retained premium of the insurer does not exceed $5,000,000, the prescribed amount is 20% of net retained premium; (ii) where the net retained premium of the insurer exceeds $5,000,000, the prescribed amount is US$1,000,000 plus 10% of the amount by which net retained premium exceeds US$5,000,000. (b) In the case of an insurer carrying on long-term business the minimum margin of solvency shall be at least the minimum amount of paid up capital as prescribed in sub-regulation (a) (ii). (c) In the case of an insurer carrying on long- term business and other business the minimum margin of solvency shall be the aggregate of the amounts required by sub-regulations (b) and (a) in respect of both categories of business. (d) In this Regulation the expression “net retained premium ” means the gross premium income earned in respect of business during any financial year of the insurer reduced by any premiums paid by the insurer for approved reinsurance during such financial year.

7/19/2016 Page 33 of 65 Prepared April 2016 Alabama Anguilla Nevis New Jersey New York New Zealand North Carolina Norway ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on a copy of the registered insurer ’s audited annual accounts shall be New Jersey Captive Annual Report Form Annual statement (in form prescribed by Statutory Financial Report and Audited Direct Economic Impact of NC Captive Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an submitted to the Registrar within 21 days after the date of the meeting by March 1; the Superintendent) to be filed by March Report in accordance with Insurance Insurance Companies - Due 3/1 principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in at which the accounts were approved by the board of directors and in US GAAP unless otherwise required; 1st. Companies Deposits Act. Audited approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part any event not later than six months after the close of the financial year Audited Financial Reports by June 30; Audited CPA opinion to be filed by July Financial Statements are required within Annual Report - Due 3/15 Premium tax return due March 1st. thereof to which they relate Annual Premium Tax and License 1st 6 months of the close of the financial Renewal by March 1; if no premiums year. Annual Audited Financials - Due 6/30 Every registered insurer licensed to carry on long-term business shall, Annual License Renewal by April 1. (possible exemption for captives writing in addition to filing audited accounts as required under section 19, less than $1.2 million in premium) prepare and file every three years an actuarial valuation of its assets and liabilities, certified by an approved Statement of Actuarial Opinion - Due actuary, so as to enable the Registrar to be satisfied as to its 6/30 solvency. (2) The actuarial valuation shall be submitted to the Registrar not later than six months after the close of the financial year to which it Premium Tax Return & Payment - Due relates. 3/15

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Every registered insurer must have a registered agent or insurance Principle office in State; Office in New York, one directors Tax considerations may dictate that the 3 incorporators or organizers, 1 must be Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager manager resident in Nevis. An Insurance Manager may be non-resident Local captive manager; meeting in New York annually, two majority of Board members are New a NC resident. 1 NC resident on board (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other subject to the approval of the Registrar of International Insurance and Annual board meeting in State; directors must be New York residents; Zealand residents and that captive board or subscriber advisory committee. 1 least three incorporators or two location approved by the Commission, full and proper records of its business activities. in this case, the insurance manager must also appoint a registered use of resident manager required; books meetings must be held locally. board meeting per year held in NC. NC organizers must be residents of agent and records must be kept in NY. Registered Agent. Alabama. Captive must maintain Appoint NY Superintendent of Insurance Alabama bank account, and utilize an A registered insurer shall transact business only from its registered as Attorney, and a designate. Alabama-based CPA firm, actuarial firm, office in insurance broker, and attorney. Nevis or in such other place outside of Nevis as is approved by the Registrar. The principal place of business of the registered insurer shall be its registered office in Nevis or such other place outside Nevis as is approved by the Registrar.

7/19/2016 Page 34 of 65 Prepared April 2016 Alabama Anguilla Nevis New Jersey New York New Zealand North Carolina Norway ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Solvency margin for reinsurer and captive insurer. Captives can provide reinsurance on If not an admitted reinsurer then subject None Requirements on risks or portions of risks ceded to Every registered insurer who carries on only reinsurance business of risks ceded by any other insurer. Credit to approval from the Superintendent. reinsurers complying with subdivisions captive for reserves on risks ceded follows the (1) through (4) of subsection (c ) of insurance business shall same regulation on commercial insurers. Section 27-5-12. A captive insurer shall (a) have such surplus of tangible assets or other assets as may be not take credit for the reserves on risks approved by the Registrar over liabilities as may from time to time be or portions of risks ceded to reinsurers prescribed by regulation; and not complying with subdivision (1) (b) demonstrate if required by the Registrar in writing to the satisfaction through (4) of subsection (c ) of Section of the Registrar its financial stability. 27-5-12. Reinsurance Any Workers Compensation qualified (a) a registered insurer may effect reinsurance in respect of any off- self-insured plan of its parent and shore affiliates shall be deemed to be insurance business undertaken by it and may assign to the owner of a reinsurance. policy the rights of the registered insurer against the reinsurer in respect of any particular policy. In the event of such an assignment being effected the owner of the policy shall continue to the extent that the risks covered by the policy issued by the registered insurer have not been so reinsured; (b) an assignment pursuant to paragraph (a) of this subsection shall be valid only if the owner of the policy has consented in writing to this section applying or if the person who will become the owner of a policy upon its issue has so consented prior to the issue of the policy; and (c) nothing in this subsection shall restrict the ability of a registered insurer to effect reinsurance without an assignment pursuant to paragraph (a) of this subsection.

# of Captives 42 319 268 22 63 7 94 11 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 35 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Ohio Oklahoma Panama Puerto Rico Rhode Island St. Lucia Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Pure captive $250,000 Minimum General Lines No Certificate of Authority shall be issued to any Minimum Capital The minimum capital required varies according to the class of Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within Protected Cell captive $500,000 Capital , Minimum U.S. $150,000 International Insurer, unless it possesses and Pure captive $100,000 license. In addition to the capital, each insurance company is Association $400,000 Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least Surplus maintains intact capital and surplus: also required to maintain a deposit of $50,000 in an approved Industrial Insured $200,000 Sponsored Captive: $1,000,000 $200,000 The superintendent may perscribe Long-Term Risks (a) of not less than five hundred thousand (500,000) bank or financial institution (not necessarily in St. Lucia). The Reciprocal Captive: $1,000,000 additional capital and surplus based on Pure Captive $100,000 $150,000 U.S. $250,000 dollars in the case of a Class 1 Authority insurer; Minimum Surplus insurance company will be required to give a written Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on the business plan of the company. Association Captive (Stock) $400,000 (b) of not less than seven hundred fifty thousand Pure captive $150,000 undertaking that the deposit will be kept and maintained free any foreign insurance business, including long-term foreign insurance business, $350,000 Both Licenses (750,000) dollars in the case of a Class 2 Authority Association (stock) $350,000 and clear of all encumbrances during the currency of the providing that it has and maintains an issued and paid up capital of at least $200,000; Capital and surplus can be held in cash, Association Captive (Mutual) — U.S. $250,000 insurer; Association (mutual) $750,000 license. Industrial Insured (stock) $300,000 marketable securities (approved by the $750,000 (c) of not less than one million five hundred thousand Industiral Insured (mutual) $500,000 Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on superintendent), and irrevocable letter of Industrial Captive (Stock) $200,000 Short term USD 150,000.00 (1,500,000) dollars in the case of a Class 3 Authority The minimum capital requirements are: general foreign insurance business, but not long-term foreign insurance business, credit issued by a qualified United States $300,000 insurer; providing that it has and maintains an issued and paid up capital of at least $100,000; financial institution (except special Industrial Captive (Mutual) — $500,000 (d) of not less than one hundred million (100,000,000) The commissioner may prescribe additional capital purpose financial captives). Sponsored Captive $500,000 $500,000 dollars in the case of a Class 4 Authority insurer; and and surplus based on the companies business plan.Class A 1: $50,000 Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on Reciprocal — $1,000,000 (e) in the case of a Class 5 Authority insurer, not less Total including deposit $100,000 Capital and surplus can be in the form of cash or general foreign insurance business and long-term foreign insurance business, with 2 or than seven hundred fifty thousand (750,000) dollars irrevocable letter of creidt issued by a bank chartered more owners of the insurer, and its affiliates, and to carry on no more than 50% of its Cash or an irrevocable letter of credit of capital and surplus, in addition to the requirements by the state of Rhode Island or a member bank of theClass A 2 and B: $100,000 foreign insurance business (based on net premiums written) or 100% of its reinsurance can be used to satisfy minimum capital for other classes of authority. federal reserve system and approved by the Total including deposit $150,000 business with persons who are not owners of the insurer or its affiliates, providing that it and surplus requirements. Letters of commissioner. has and maintains an issued and paid up capital of at least $100,000; credit must be issued by a bank Class C 1: $150,000 chartered in Oklahoma or a member of Total including deposit $200,000 Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any the Federal Reserve System and are foreign insurance business, including long-term foreign insurance business, with a single subject to Commissioner's approval. Class C 2: $200,000 owner of that insurer and its affiliates, and employees of the owner or its affiliates, Total including deposit $250,000 providing that it has and maintains an issued and paid up capital of at least $25,000; It is to be noted that the Act stipulates minimum capital Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any requirements but the actual capital required in each case will foreign insurance business, including long-term foreign insurance business, with the sole be determined by the FSRA based on the nature of the owner of the insurer, if a company, providing that it has and maintains an issued and business to be undertaken. paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) $500 application fee Application Review Fee $200 Initial Application Fee General Application Fee $350 Application fee $1,000 License / Application / Incorporation Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under $500 annual renewal fee Annual License Fee $300 U.S. $1,000 Application Fees Annual Renewal $500 License $ 2, 500.00 Expenses section 3 (1) $500 Class 1 Pure Captives $750 Application fee $ 500.00 Annual License Fee: (b) For filing application for an insurance agent, broker ’s or The superintendent is authorized to retain Annual License Fee Class 2 Assoc. Captives $1,000 IBC Incorporation fee $ 300.00 $300 manager’s licence under section 3 (2) $500 legal, financial, and examination services U.S. $2,000 Annual Fee $5,000 Total government fees $ 3, 300.00 (c) For filing application for a sub agent or principal representative from outside the department at the All international insurers will pay, on or before the date Note: The license fee of $2,500 and the IBC incorporation (insurance) licence under section 3(2) $100 expense of the applicant. of the initial authorization and on each renewal date of fees are pro rated in the year of incorporation on a quarterly Issue of Licence and Annual Renewal of a Licence fees the authorization, an annual contribution according to basis. (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 the volume of written or assumed premiums, as set (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) forth below: B.Annual Fees and (c)) $2,000 1. Five thousand dollars ($5,000): for an amount no These will comprise the license fee of $2,500.00, the charges (f) For a Class ‘B’ Association, Group or Single licence (sections 3 greater than twenty-five million dollars ($25,000,000); for professional services including registered agent / (1)(d), (e) and (f)) $1,500 2. Ten thousand dollars ($10,000): for an amount registered office charges, director's fees and any other (g) For an Insurance Agent, Broker or Manager licence (sections 3 greater than twenty-five million dollars ($25,000,000) services requested. (2)(a) and (b)) $1,000 but less than fifty million dollars ($50,000,000); (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 3. Twenty thousand dollars ($20,000): for an amount After the license has been granted the FSRA will expect to (i) For a Principal Representative (Insurance) licence (section 3 greater than fifty million dollars ($50,000,000) but less have been provided with the following within ninety (90) days (2)(e)) $500 than seventy-five million dollars ($75,000,000); of the grant of the license: 4. Thirty-five thousand dollars ($35,000): for an a. Original (or notarized) bank statement showing that the amount greater than seventy-five million dollars capital has been injected into the company where the capital ($75,000,000) but less than one hundred million dollars is cash, or other evidence of capitalization as the case may ($100,000,000). be; 5. Fifty thousand dollars ($50,000): for an amount b. Original (or notarized) certificate of deposit showing that greater than one hundred million dollars the $50,000.00 security deposit is being held at an approved ($100,000,000) but less than one hundred fifty million bank; and dollars ($150,000,000). c. A duly executed Agreement of Undertaking by the 6. Sixty-five thousand dollars ($65,000): for an company in favor of the Government of St. Lucia in respect amount greater than one hundred fifty million dollars of the security deposit. ($150,000,000) but less than two hundred fifty million dollars ($250,000,000), and 7. Seventy-five thousand dollars ($75,000): for an amount greater than two hundred fifty million dollars Incorporation time Unknown 2-4 weeks 8-12 weeks not stipulated 30 days

7/19/2016 Page 36 of 65 Prepared April 2016 Alabama Anguilla Ohio Oklahoma Panama Puerto Rico Rhode Island St. Lucia TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Commercial multiple peril, ocean marine, All lines authorized by Title 36 of the All commercial property/casualty. subject to approval of the office of the commissioner Any coverage, excluding personal lines. There are no restrictions on the types of insurance that can That May Be Written liability insurance, life and disability insurers. inland marine, medical malpractice, Oklahoma statutes except workers of insurance be underwritten by a St. Lucian international insurance insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance excess workers compensation, compensation, personal automobile, and company. However, there are different classes of licenses compensation insurance and reinsurance. business: commercial auto liability, commercial homeowners insurance. Third-party that depend, firstly on whether the license is for general or (1) Unrestricted licence to carry on foreign insurance business including long-term auto physical damage, fidelity. Special business is prohibited. life insurance, or both, and secondly on whether the insured business. The minimum capital requirement is $200,000 (annual licence fee $2,000). purpose financial captives can reinsure will be directly connected to the insurance company. The (2) General licence to carry on general foreign insurance business, but not longterm life insurance risks of an OH domiciled classes are as follows: business. The minimum capital requirement is $100,000 (annual licence fee $2,000). parent or affiliated company that is Class A — General Insurance: (3) Association licence to carry on general and long-term foreign insurance business with licensed to transact the business of life Sub Class 1 — insured must be the parent or an affiliate or two or more owners of the insurer, and its affiliates, and to carry on more than 30% of insurance in OH. associated company of the insurance company. its foreign insurance business (based on net premiums written) or 100% of its Sub Class 2 — no requirement for relationship between the reinsurance Captives cannot insure or reinsure any insured and the insurance company. business with persons who are not owners of the insurer or its affiliates. The minimum personal lines coverage. Class B — Life Insurance capital requirement is $100,000 (annual licence fee $1,500). Class C General & Life: (4) Group licence to carry on any foreign insurance business, including longterm Sub Class 1 — as above foreign insurance business, with a single owner of that insurer and its affiliates and Sub Class 2 — as above employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested No investment restrictions, but the Pure captives and sponsored captives A minimum of 35 percent of reserves The investments of the International Insurer may Allowable assets include: Restrictions captives. assets other than cash, LOCs, and captives investment policy is required to may invest in any type of security with must be invested as directed by include, without limitation, assets, credit or a. Cash in hand or on deposit with an institution licensed other than government securities of 10% to 30%; see Guidance Notes of Allowable be filed with the superintendent. Loans the approval of the commissioner. Panamanian law. No restrictions on the preferential debt instruments, capital stock and other under the Banking Act of Saint Lucia or with a financial Assets to parent or affiliated companies are Association captives must comply with investment of the remaining reserves. securities, tangible personal property subject to lease, institution in good standing under the laws of a Recognized permitted with superintendent approval. the investment requirements of the The minimum reserve of 35 percent may mortgage loans and real property loans, loans on Country or Jurisdiction, or with other financial institutions Loan back of the minimum capital and Oklahoma Insurance Code. be in State or National bonds, certain securities, repurchase transactions, reverse approved by the FSRA from time to time; and surplus is prohibited. income-producing real estate, guaranteed repurchase transactions, dollar roll transactions and b. Bonds, debentures or other evidence of indebtedness loans by the State, or time deposits and hedging strategy. The Commissioner may prohibit or issued or guaranteed by: ◦The government of Saint Lucia; savings accounts. limit any investment that threatens the solvency or The governments of the United Kingdom or of the United liquidity of an International Insurer. States of America or of any State thereof; The government of Canada or of any province thereof; or ◦ Any other Recognized Country or Jurisdiction or such other government as may be approved from time to time by the FSRA; and

c. Bonds, debentures or other evidence of indebtedness issued or guaranteed by any municipal corporation and secured by rates or taxes levied and collectable by such municipal corporation under the authority of any of the governments mentioned in paragraph (b); and d. Other equity or debt securities quoted and subject to an active listing on an approved stock exchange; provided, that such securities shall be included as allowable assets only to the extent of fifty percent of the total assets of the insurer; e. Premiums receivable under bona fide written contracts of insurance; f. Reinsurance balances receivable under bona fide written contracts of reinsurance; g. Real property located in Saint Lucia by way of a subsidiary; h. Accounts receivable, net of provision for bad and doubtful Tax Issues Premium Taxes: Anguilla has the Premium tax due by March 2nd. Direct Reinsurance No taxes on premiums, capital gains, or The tax incentives conferred to International Premium tax returns due by March 1st. personal income tax 10%-30% $1–20 million added advantage of being a no-tax jurisdiction $0–20 million 0.40% 0.225% profits. Insurers/Reinsurers and Holding Companies include: Direct 0.4% 0.35% on net direct premiums $20–40 million 0.30% 0.15%  Exemption from Premium Taxes. Direct Corporate Tax Rates Reinsurance 0.225% 0.15% on assumed premiums $40–60 million 0.20% 0.05%  Exemption on dividends and other profit First $20 million 0.20% > $60 million 0.075% 0.025% Captive Insurance and reinsurance distributions made by the International Insurer and $20 - $40 million 0.15% Corporation Tax 33.33% $20–40 million $7,500 minimum; $250,000 maximum companies do not pay taxes, only annual International Insurer Holding Company, $40 - $60 million 0.10% Direct 0.30% Minimum annual premium tax is $5,000. fees, USD2,500.00  Exemption on municipal franchise and real and Greater than $60 million 0.0375% Withholding tax 25% (Non-CARICOM Nationals) Reinsurance 0.15% personal property taxes.  Exemption from withholding taxes on payments of Assumed Withholding tax 15% (CARICOM Nationals) $40–60 million dividends and other profit distributions made to third First $20 million 0.1125% Direct 0.20% parties, and from filing tax returns with the Puerto $20 - $40 million 0.075% Reinsurance 0.05% Rico $40 - $60 million 0.025% Internal Revenue Service. Great than $60 million 0.0125% > $60 million  Exemption from state and donation taxation for the Direct 0.075% death benefits and annuity payments made to non $2,500 minimum. Captives under Reinsurance 0.025% residents. common ownership are taxed as one  Isolation of the proceeds and benefits paid by entity. Minimum tax of $5,000; No maximum international insurers because of liquidation procedures from income taxes.  $1.2 million tax exemption on Net Income. Exemption applicable at the individual cell level for Protected Cell Company arrangements and at the company level. Preferred 4 % tax rate on Net Income (not applicable to Holding Company), guaranteed by a decree effective over a period of 15 years, renewable for two additional periods.

7/19/2016 Page 37 of 65 Prepared April 2016 Alabama Anguilla Ohio Oklahoma Panama Puerto Rico Rhode Island St. Lucia ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on OH Title 39, Chapter 3964 Oklahoma Captive Insurance Company The Captive Insurance Company Act of Puerto Rico Insurance Code, Title 26, amended by Captive Insurance Company Act, R.I. 1) Insurance Act, Chapter 12.08 31A & 31B Act, Title 36 O.S Section 6470.1; Captive 1996, Law No. 60 Public Laws No. 399 and No. 400. Gen. Laws 27-43; Insurance Regulation 2) International Insurance Act, Chapter 12.15 Insurance Regulations Insurance Companies Regulation Title 95 3) International Banking Act, Chapter 12.17 365, Chapter 25, Subchapter 15. 4) International Mutual Funds Act, Chapter 12.16 Insurance (Amendment) Regulations, 2014 5) Co-operative Societies Act, Chapter 12.06 6) Registered Agent and Trustee Licencing Act, Chapter 12.12 7) Money Services Business Act, No.11 of 2010 8) Saint Lucia Development Bank Act No.12 of 2008

Tax Treaties N/A Anguilla has no existing double taxation treaties. TIEA: Canada, United States TIEA: Portugal, Canada, Germany, Finland, Faroe Islands, Iceland, Sweden, Greenland, Norway, Aruba, France, UK, Anguilla has concluded 15 tax treaties and is party to a series of treaties under Double tax treaties: Barbados, France, Ireland, Denmark, Belgium, Netherlands, Netherlands Antilles negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Ireland, Israel,Luxembourg, Mexico, double tax treaty with the USA Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom Netherlands, Portugal, Qatar, Singapore, double tax treaties: Denmark, Norway, Sweden, Switzerland South Korea, Spain, United Arab Emirates, United Kingdom

Supervisory State of Alabama Anguilla Financial Services Commission Ohio Department of Insurance Oklahoma Insurance Department Superintendent of Insurance and Office of the Commissioner of Insurance Rhode Island Department of Business Financial Sector Supervision Unit Jurisdiction Department of Insurance MAICO Building, The Valley Office of Captive Insurance 5 Corporate Plaza Reinsurance B5 Calle Tabonuco, Ste. 216 Regulation Mr Calixte Leon, Director 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Tracy Snow, Chief of Captive Insurance 3625 NW 56th St., Ste. 100 Ministry of Commerce and Industry PMB 356 1511 Pontiac Avenue 3rd Floor, Montgomery, AL 36104 Fax: +1 264 497 5872 50 W. Town Street Oklahoma City, OK 73112 P.O. Box 832 –1683 WTC Guaynabo, PR 00968 –3029 Cranston, RI 02920 #1 Bridge Street, Castries P.O. Box 303351 Email: [email protected] Third Floor - Suite 300 Tel.: (405) 521–2828 Panama, Republic of Panama Tel.: (787) 304–8686 Tel:758-468-5500 / 5593 Montgomery, Alabama 36130 –3351 Columbus, OH 43215 Fax: (405) 522 –2640 Phone: 507–214–7484/87 Fax: (787) 273 –6082 Phone: (401)462-9500 758-451-6300 Tel.: (334) 269–3550 Phone: (614)728-1753 www.ok.gov/oid/ Fax: 507–214–7482/83 www.ocs.gobierno.pr Fax: (401)462-9532 Fax: 758-451-7655 / 452-6700 Fax: (334) 241 –4192 www.businesspanama.com/about Email: [email protected] panama/links.php [email protected]

Reserve & Unknown Customary loss reserving Long-term risk insurers must maintain a The value of the assets established in the The Act does not specify the actual solvency margins. Underwriting solvency margin of 6 percent of their international insurer’s financial statement which has However, the FSRA has discretion to fix margins and has Requirements reserves. General lines insurers must been reconciled according to Statutory Accounting issued guidelines, which may be summarized as follows: finish their fiscal reporting periods with a Principles (SAP) set forth in this Rule, at all times ratio of no more than 5 to 1 between net shall exceed the value of the liabilities in the amounts retained premiums and capital. A bond in set forth below: Class A 1: favor of the National Treasury must also a. For international insurers with Class 1 Authority, the greater of $100,000 and 10% of net retained annual be established in the amount of 100,000 the larger of the following amounts: premium balboas ($100,000) for negligence and i. Five hundred thousand dollars ($500,000), or fraudulent acts. ii. Twenty percent (20%) of the net premiums written Class A 2: in the current accounting year. the greater of $150,000 and 20% of the first $5 million of b. For international insurers with Class 2 Authority, net retained annual premium plus 10% of any net retained the largest of the following amounts: annual premium in excess of $5 million. i. Seven hundred fifty thousand dollars ($750,000), or ii. Twenty percent (20%) of the net premiums written Class B: in the current accounting year, or $150,000 (note that the liabilities of a life company must iii. The sum of the amount established in above be certified by an actuary) paragraph (ii) plus thirty-three percent (33%) of the net premiums of insurance written for non-affiliated Class C 1: insureds. the sum of the margin required for Classes A 1 & B 5 c. For international insurers with Class 3 Authority, Class C 2: the larger of the following amounts: the sum of the margin required for Classes A 2 & B

7/19/2016 Page 38 of 65 Prepared April 2016 Alabama Anguilla Ohio Oklahoma Panama Puerto Rico Rhode Island St. Lucia ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Annual report filed within 60 days after Captives must submit an annual Companies must submit audited financial Annual statement of financial condition. Annual report due March 1st or 60 days Audit requirement Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an January 1st. statement of financial condition as statements annually by a qualified after fiscal year end (companies must The application must include confirmation from an approved principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in prescribed by the Commissioner. All independent CPA licensed to operate in request approval to file on a fiscal year auditor in the form of a letter, that he/she has agreed to approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part Annual audited financials on a GAAP captives must have an annual actuarial Panama, as well as a report of all risks basis). Prepared on a GAAP basis, carry out the annual audit required under the Act. Approved Premium tax return due March 1st. thereof basis due June 1st. SAP or other basis review of loss reserves. insured or reinsured, in a format statutory accounting permitted if auditors are generally accountants licensed and practicing in of accounting permitted with specified by the Superintendent. approved by the Director. St. Lucia however the FSRA may approve auditors from superintendent approval. another jurisdiction. The annual auditor's report is to be Examinations at the discretion of the submitted to the FSRA within three (3) months of the end of Internally prepared financial statements department. Company will pay a fee of the company's financial year. Four of the big five accounting should be prepared quarterly and made 150% of the total salaries paid to the firms are represented in St. Lucia where there are over 100 available upon request to the examining personnel of the insurance qualified accountants. superintendent. division engaged in the exam. Actuarial Requirement A confirmation in the form of a letter from the proposed actuary that he/she accepts the appointment must also accompany the application. There is no requirement for the actuary to be resident in St. Lucia. The actuary is also required to certify the accuracy and sufficiency of the reserves for both general and life insurance, which is to be submitted along with the audited report.

Books and Records Every licensed insurance company is expected to maintain permanently at its principal office in St. Lucia books of accounts and records of its insurance business.

Reporting Requirements Insurance managers are expected to know and comply with the various reporting requirements under the Act, the Regulations and conditions of the license.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains One meeting to be held annually in OH, Captives must maintain their principal Captives are required to maintain a Except for sole proprietorships that do not employ Must have at least 3 incorporators, 2 Local Attorney Requirement Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager principle place of business in OH, office and hold at least one board headquarters office in Panama, appoint a anyone (other than the sole proprietor), every entity have to be RI residents. One board (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other resident captive manager, registered meeting in Oklahoma each year. One local representative, obtain a license engaged in a trade or business in Puerto Rico must meeting per year held in state. Principal The Regulations require that an attorney practicing in St. least three incorporators or two location approved by the Commission, full and proper records of its business activities. agent appointed in OH. executive officer must be an Oklahoma from the Panama Superintendency of obtain a federal Employer Identification Number (EIN) place of business maitained in state. Lucia be appointed. There are 130 persons admitted as organizers must be residents of resident. Insurance, and register with the from the United States Internal Revenue Service Resident registered agent. Barristers in St. Lucia. As the profession is fused, these Alabama. Captive must maintain Superintendency. (IRS). persons also carry the designations of Solicitor and Notary Alabama bank account, and utilize an Royal. Many of these lawyers are parts of long standing law Alabama-based CPA firm, actuarial firm, All merchants seeking to engage in a trade or firms with established reputations and international networks. insurance broker, and attorney. business in Puerto Rico must register with the Registry of Businesses at the Puerto Rico Treasury Resident Director Requirement Department at least 30 days prior to commencing business operations. An international insurance company must have at least two directors one of whom must be a resident of St. Lucia. All The Certificate of Registration issued by the Treasury directors must be natural persons. Department must be placed in a location at the trade or business that is visible to the general public. Local Management Requirement

The Act does not mandate the appointment of an insurance manager. However, the application form calls for particulars of how insurance management services are to be provided.

Corporate Management Requirement

The International Business Companies Act requires the appointment of a Registered Agent in St. Lucia, who will incorporate the company and provide the registered office. The Registered Agent also maintains the various registers (shareholders, directors, corporate secretary) of the company that must be kept in St. Lucia.

7/19/2016 Page 39 of 65 Prepared April 2016 Alabama Anguilla Ohio Oklahoma Panama Puerto Rico Rhode Island St. Lucia ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on A captive can reinsure any coverage Captives may take credit for reserves required to obtain the authorization refer to the following rule 80 for details: A captive can provide reinsurance on consult with the Director of the Financial Sector Supervision Requirements on risks or portions of risks ceded to that is is permitted to write directly. on risks ceded to any reinsurer approved of the Board of Directors of the risk ceded by any other insurer. Any Unit reinsurers complying with subdivisions by the commissioner. However, no credit Superintendence of Insurance and http://www.ocs.gobierno.pr/enocspr/documents/interna captive can ceded its risks and take (1) through (4) of subsection (c ) of shall be allowed for reinsurance: Reinsurance tional/Rule%2080- credit for reserves on risk as provided in Section 27-5-12. A captive insurer shall Rules%20Governing%20the%20Operations%20of%20I Chapter 1.1 of Rhode Island Title 27. not take credit for the reserves on risks where the contract does not result in the To operate as Administrator of a nternational%20Insurers%20and%20Reinsurers.pdf or portions of risks ceded to reinsurers absolute transfer of the risk reinsurance company it is necessary to not complying with subdivision (1) unless the reinsurance is payable on the have a license, issued by through (4) of subsection (c ) of Section basis of the liability of the ceding insurer the National Reinsurance Commission 27-5-12. without reduction due to the insolvency and a minimum paid capital of of the ceding insurer US$500,000.00. Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 0 73 10 182 0 13 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 40 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Singapore South Dakota Sweden Switzerland Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on S$400,000 is the net assets required. If Statutory minimum: Pure (stock or LLC) As per Solvency II capital requirement Minimum of CHF 3m for reinsurance Pure captive $250,000 Minimum capital $250,000, actual capital Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within the company writes Singapore risks, it $100,000/ Surplus of $150,000; calculation calculation. Minimum capital captive (C3 license), CHF 10M for Association $500,000 driven by business plan Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least needs to carry, in addition to the SGD Association (stock or LLC) requirement as per EU legislation professional reinsurance companies (C1 Industrial Insured $500,000 Sponsored Captive: $1,000,000 $200,000 400k, the highest of SGD 400,000 or $400,000/Surplus of $350,000 (Mutual): license) . There is a dedicated SST model Risk Retention Group $1,000,000 Reciprocal Captive: $1,000,000 a)20% of net premiums written in $750,000; RRG (stock or LLC) for reinsurance C3 captives and the Protected Cell Captive $250,000 Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on Singapore in the preceding financial year; $200,000/Surplus of $300,000 (Mutual) standard SST model for the rest. any foreign insurance business, including long-term foreign insurance business, or b) 20% of the liabilities from Singapore $500,000; Sponsored $500,000/Surplus The commissioner may prescribe providing that it has and maintains an issued and paid up capital of at least $200,000; claims as of the end of the preceding of $500,000; Reciprocal $1,000,000; On top, the regulator requests an additional capital and surplus based on financial year. For offshore business, Special Purpose Captive - as agreed; organisation fund up to 50% of the share the companies business plan. Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on the Offshore Insurance Fund must have Branch captive $100,000 plus reserves; capital. general foreign insurance business, but not long-term foreign insurance business, assets equal to or not less than the Captive reinsurance company $300m or Capital and surplus can be held in case, providing that it has and maintains an issued and paid up capital of at least $100,000; amount of liabilities. 10% reserves. cash equivalent or an irrevocable letter of credit issued by a bank approved by Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on the commissioner. general foreign insurance business and long-term foreign insurance business, with 2 or more owners of the insurer, and its affiliates, and to carry on no more than 50% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates, providing that it has and maintains an issued and paid up capital of at least $100,000;

Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates, and employees of the owner or its affiliates, providing that it has and maintains an issued and paid up capital of at least $25,000;

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) Application and Incorporation Fee $200 application fee; $300 license EUR 30,000 application fee FINMA incorporating licensing fees Application Fee $675 Application fee $1,500. Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under S$6,000 fee/$500 upon renewal; $3,200 review based on an hourly fee of CHF100-500 Expenses section 3 (1) $500 fee depending on the agent. On average Initial Certificate of Authority $440 Annual License Fee: (b) For filing application for an insurance agent, broker ’s or CHF 50'000 for the setup of a self- $300 manager’s licence under section 3 (2) $500 managed captive. Annual Statement Filing Fee $515 (c) For filing application for a sub agent or principal representative (insurance) licence under section 3(2) $100 Captive Change in Business Plan or Issue of Licence and Annual Renewal of a Licence fees Ownership $400 (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) Protected Cell Change in Business or and (c)) $2,000 Ownership $125 (f) For a Class ‘B’ Association, Group or Single licence (sections 3 (1)(d), (e) and (f)) $1,500 (g) For an Insurance Agent, Broker or Manager licence (sections 3 (2)(a) and (b)) $1,000 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 (i) For a Principal Representative (Insurance) licence (section 3 (2)(e)) $500

Incorporation time Unknown 2-4 weeks 8-12 weeks 20 - 24 weeks 6 TO 9 months 90 Days 30-60 days

7/19/2016 Page 41 of 65 Prepared April 2016 Alabama Anguilla Singapore South Carolina South Dakota Sweden Switzerland Tennessee Texas TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Any risk that is in house risk (i.e. no third No restrictions. all lines of business Captive insurance companies are no direct WC, Personal Lines,Life, That May Be Written liability insurance, life and disability insurers. party risk. No insurance that is permitted to do any and all insurance Annuities,A&H (except ERISA) title, insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance compulsory in Singapore, i.e. no third comprised in 56-2-201(2) and (4)-(7), 56-2- mortgage guaranty, financial guaranty. compensation insurance and reinsurance. business: party motor liability in Singapore and no 202. 56-2-203 and 56-2-204; except May write WC as deductibe (1) Unrestricted licence to carry on foreign insurance business including long-term workers compensation for Singapore personal lines coverage. Excess or stop- reimbursement or reinsurance business. The minimum capital requirement is $200,000 (annual licence fee $2,000). employees).For non in-house risks, the loss accident and health coverage is (2) General licence to carry on general foreign insurance business, but not longterm captive will have to seek approval from allowed unless prohibited by federal law business. The minimum capital requirement is $100,000 (annual licence fee $2,000). the Authority. or the laws of the state having (3) Association licence to carry on general and long-term foreign insurance business with jurisdiction over the transaction. two or more owners of the insurer, and its affiliates, and to carry on more than 30% of its foreign insurance business (based on net premiums written) or 100% of its reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is $100,000 (annual licence fee $1,500). (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested Captives are granted latitude in None on pure, industrial insured and No restrictions as per Solvency II Basically no restrictions. Investment Associations and Risk Retention Groups Pure captive has no investment Restrictions captives. assets other than cash, LOCs, and exercising their investment choices, as sponsored. Association and RRG directive. Riskier investment "punished" policy needs to be submitted to the must comply with investment regulations restrictions but loan backs need prior other than government securities of 10% to 30%; see Guidance Notes of Allowable long as investments are reasonably subject to insurance company by higher capital requirements. FINMA as part of the Business Plan. in Title 56-3-401 through 56-3-409. approval from Commissioner Assets conservative. The companies can loan regulations. A pure may loan to parent. Cash pooling and intercompany loans are back funds to the parent without allowed. No accumulation risk in for C3 Pure captives may invest in any type of restriction or approval. licensed companies security unless it would threaten the solvency or liquidity of the company.

Loans to parent are allowed with commissioner approval.

Tax Issues Premium Taxes: Anguilla has the Captives can apply for a concessionary Direct $1-$20M 0.40% Reinsurance There is no tax paid on income for Tax rates depend on the canton. The tax Premium tax return due March 1st. 0.5% of Gross Premium, excluding $1–20 million added advantage of being a no-tax jurisdiction tax rate of 10% and a tax exemption for 0.225% $20M-$40M Direct 0.35% captives as long as equalizations reseres rate of canton Zug is about 16% but by premium receipts received from another Direct 0.4% 10 years for income generated from Reinsurance 0.15% $40M- are built. When the reserves are means of a tax ruling the rate can be Direct authorized insurer for reinsurance; Reinsurance 0.225% general (re)insurance business of $60M Direct 0.20% Reinsurance 0.05% exhausted, income is taxed at 22%. reduced to about 10%. The first 2-3 First $20 million 0.40% Minimum $7,500 - Maximum $200,000. offshore risks as well as dividends and over $60M Direct 0.075% Reinsurance years can be exempted rom corporate Above $20 million 0.30% $20–40 million investment income arising there from. 0.025% Minimum tax payment of $5,000; taxes in order to build up equalization A captive insurance company is subject Direct 0.30% The captive tax exemption scheme will Maximum of $100,000 reserves. VAT rate is 8%. Assumed to maintenance tax under Subtitle C, Title Reinsurance 0.15% expire on 31 March 2018 and will not be First $20 million 0.225% 3, on the correctly reported gross renewed thereafter. Captive can apply $20 - $40 million 0.150% premiums from writing insurance on risks $40–60 million for a 10 year exemption prior to 31 $40 - $60 million 0.050% located in this state as applicable to the Direct 0.20% March 2018. Income from onshore Above $60 million 0.025% individual lines of business written by the Reinsurance 0.05% insurance is subject to normal corporate captive insurance company. income tax rate of 17%. No local $5,000 minimum; $100,000 maximum A captive that is redomesticating can > $60 million premium tax. Protected cell companies with greater apply to postpone or waive taxes and Direct 0.075% than 10 cells: $10,000 minimum; fees for up to two years. Reinsurance 0.025% $100,000 maximum plus $5,000 multiplied by number of cells over 10. Minimum tax of $5,000; No maximum

7/19/2016 Page 42 of 65 Prepared April 2016 Alabama Anguilla Singapore South Carolina South Dakota Sweden Switzerland Tennessee Texas ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on The Insurance Act (Chapter 142) revised Title 38, as amended in Chapter 90; Insurance Business Law 2010:2043, Swiss Federal Acto fo 17 December Tennessee Captive Insurance Company Senate Bill 734; 31A & 31B 2002 Edition; Insurance (Accounts & Regulation 69-60 and 69-70 Limited Company's Law 2005:551. 2004 on the Supervision of Insurance Act 1978, as amended; T.C.A. 56-13 Texas Insurance Code Ch. 964; Insurance Regulations Statements) Regulations, revised 2004 Companies (Insurance Supervision Act, Texas Administrative Code Ch. 6. Edition; Subsidiary Legislation [Insurance ISA). Insurance (Amendment) Regulations, 2014 Act (Chapter 142) Insurance (General Provisions and Exemptions for Captive Insurers) (Amendment) Regulations 2013];Companies Act (Chapter 50, Revised Edition 2006)

Tax Treaties N/A Anguilla has no existing double taxation treaties. Double tax treaties with many countries No 189 Tax Treaties and 14 TIEA's. Double tax treaties with more than 80 NA NA (incl US), generally following the basic countries Anguilla has concluded 15 tax treaties and is party to a series of treaties under approach of the OECD agreements negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom

Supervisory State of Alabama Anguilla Financial Services Commission Monetary Authority of Singapore (MAS) South Carolina Department of Insurance, Swedish Financial Supervisory Authority Swiss Fiancial Market Supervisory Department of Commerce and Insurance Texas Department of Insurance Jurisdiction Department of Insurance MAICO Building, The Valley Alternative Risk Transfer Division, Jeff Authority FINMA Financial Affairs Section, 500 James 333 Guadalupe, 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Kehler, Captive Program Administrator, Roberston Parkway, Davy Crockett Austin,TX. 78401 Montgomery, AL 36104 Fax: +1 264 497 5872 1201 Main Street, Suite 1000 Columbia, Tower, Nashville, TN 37243-0565 P.O. Box 303351 Email: [email protected] SC 29201, Tel 803-737-6118. Montgomery, Alabama 36130 –3351 Phone: (615)741-3805 Tel.: (334) 269–3550 [email protected] Fax: (334) 241 –4192

Reserve & Unknown Customary loss reserving Sufficient reserves to pay claims. Varies by Captive Premium reserve, reserves for The use of equalization reserves is Actuarial opinion on reserves required Underwriting Policies to be issued from Singapore. No outstanding losses and claims settlement permitted (based on the equalization annually. Requirements actuarial valuation on insurance liabilities cost. reserve policy). These reserves are required. basically unrestricted and tax deductible under the Swiss Code of Obligation. The Appointed Actuary needs to certify the technical reserves. Underwriting needs to be dealt at the arm's length. On top of EQ which is a technical reserve, companies may build up fluctuation reserves that are not in the actuarial scope

7/19/2016 Page 43 of 65 Prepared April 2016 Alabama Anguilla Singapore South Carolina South Dakota Sweden Switzerland Tennessee Texas ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Annual audited MAS returns; quarterly Annual Report due March 1 for all Quarterly and annual reports to the Annual approved audit, quarterly Annual report due by March 15th for pure GAAP basis, with exception for Statutory Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an income and expenditure returns; no companies except RRG and SPGC. supervisory authority. Annual tax (reduced) and annual (comprehensive) captives and industrial insureds. Annual basis when COA is held in another principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in certification of reserves required Audited financials plus certified loss returns. Annual auditor's reports. reporting to the FINMA. Public report due by March 1st for Associations jurisdiction. Captive Annual Report Form approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part reserves - unless waived - due by June disclosures are not applicable to C3 and Risk Retention Groups. Annual 60 days after Fiscal Year end and 3/1 if Premium tax return due March 1st. thereof 30th. licensed companies. ORSA must be reports are required to be filed on a not a Calendar filer, Annual Audit within done and submitted to FINMA. C3 GAAP basis unless the commissioner 150 days of year end (June 1 for licensed companies are exempted approved statutory account principles. calendar year filers)

Examinations are required every 3 to 5 years. If the captive chooses to have an annual audit by a CPA firm they will be put on a 5 year examination cycle.

Actuarial Opinion Summary due by March 1st.

Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Local registered office is required. Must Office in South Carolina; annual Registered local office. Managing Substance can be provided by AIM One executive officer must be a Books and records must be maintained in Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager have a resident director and Chief Directors meeting in state; use of Director and at least 50% of the directors Switzerland, e.g. office facility, local Tennessee resident. Principal office and U.S. Permission needs to be sought to (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other Executive. All captive insurers are resident director and agent required; of the board must be residents in the General Manager and/or local member of records must be in Tennessee. keep books and records outside Texas. least three incorporators or two location approved by the Commission, full and proper records of its business activities. required to establish their operation in financial records must be kept in state. EEA area. the Board of Directors. Under SST Tennessee registered agent must be At least one director's meeting to be held organizers must be residents of Singapore as subsidiaries. regime, compliance officer risk officer, appointed. One meeting held each year annually in Texas Alabama. Captive must maintain appointed actuary, internal auditor in Tennessee. Alabama bank account, and utilize an Alabama-based CPA firm, actuarial firm, insurance broker, and attorney.

7/19/2016 Page 44 of 65 Prepared April 2016 Alabama Anguilla Singapore South Carolina South Dakota Sweden Switzerland Tennessee Texas ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on No restrictions Captives can provide reinsurance on No restriction on premium received entity must retain a minimum of 10-20% Captives may take credit for reserves Credit for reinsurance requirements Requirements on risks or portions of risks ceded to risks ceded by any other insurer. They between Insurance and Reinsurance of the risk. Pure fronting not allowed. on risks ceded to any reinsurer approved follow traditional laws. reinsurers complying with subdivisions may take credit for reserves on risks by the commissioner. Credit for (1) through (4) of subsection (c ) of ceded to a reinsurer that is in compliance reinsurance is reviewed by the Section 27-5-12. A captive insurer shall with SC regulations. commissioner and approved on a case not take credit for the reserves on risks by case basis. or portions of risks ceded to reinsurers not complying with subdivision (1) through (4) of subsection (c ) of Section 27-5-12.

Any Workers Compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

# of Captives 42 319 68 167 14 44 36 127 21 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

7/19/2016 Page 45 of 65 IMAC Domicile Comparison 2016 Prepared April 2016 Alabama Anguilla Turks and Caicos US Virgin Islands Virginia West Virginia Capitalization Pure: $250,000 Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on Capital Requirements Capital & Surplus: Single-paretn $50,000 capital Pure: $250,000; Association: $750,000; Statutory minimum (Superintendent can Stock Pure Captive $100,000 Capital and $150,000 Surplus Association Captive: $750,000 insurance business, including domestic insurance business, generally in or from within Capital requirements for insurers will vary, but $70,000 surplus Industrial insured: Industrial Insured: $500,000; Sponsored: require additional funding): $1 million paid in capital and $3 million surplus $75,000/$125,000/$220,000 (stock) Industrial: Association (stock) $350,000 Capital and $350,000 Industrial Insured Captive: $500,000 Anguilla, providing that it has and maintains an issued and paid up capital of at least those companies engaged in reinsurance, $1,000,000; Reciprocal: $1,000,000. Pure: $250,000 $200,000 surplus Association: $320,000 surplus Mutual Surplus Sponsored Captive: $1,000,000 $200,000 and general (domestic or international) business (mutual). Association: $500,000 $1.6 million surplus Reciprocal Captive: $1,000,000 should expect to have minimum paid-up Industrial insured $500,000; RRGs Association (mutual) $600,000 Surplus Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry on capital of U.S. $100,000. For life companies, $1,000,000; Reciprocals as required for Minimum capital and surplus shall be held in cash, any foreign insurance business, including long-term foreign insurance business, this minimum paid-up capital figure will be U.S. type of captive above. bonds or other securities, or an irrevocable letter of Industrial Insured (stock) $250,000 Capital and providing that it has and maintains an issued and paid up capital of at least $200,000; $180,000. Capital levels will be determined on Sponsored: $500,000 credit. $250,000 Surplus the following criteria (projected Industiral Insured (mutual) $400,000 Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on or actual): general foreign insurance business, but not long-term foreign insurance business, 1. The size of the company as measured by its Risk Retention Group $500,000 Capital and providing that it has and maintains an issued and paid up capital of at least $100,000; assets, capital and/or surplus, reserves, $500,000 Surplus premium writings and insurance in force. Sponsored Captive $250,000 Capital and $250,000 Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry on 2. The kinds of business written, the company ’s Surplus general foreign insurance business and long-term foreign insurance business, with 2 or net exposure and the degree of more owners of the insurer, and its affiliates, and to carry on no more than 50% of its diversification of lines of insurance. Capital and surplus can be maintained in cash or foreign insurance business (based on net premiums written) or 100% of its reinsurance 3. The past and anticipated trend in the size of irrevocable letter of credit issued by a chartered bank business with persons who are not owners of the insurer or its affiliates, providing that it the company ’s capital and consideration of West Virginia or a member of the federal reserve has and maintains an issued and paid up capital of at least $100,000; of premium growth, operating history, loss and system. The commissioner may prescribe additional capital and surplus based on the business plan. expense ratios. Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with a single owner of that insurer and its affiliates, and employees of the owner or its affiliates, providing that it has and maintains an issued and paid up capital of at least $25,000;

Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any foreign insurance business, including long-term foreign insurance business, with the sole owner of the insurer, if a company, providing that it has and maintains an issued and paid up capital of at least $10,000.

Registration & Application Fee: Application fees (non-refundable) 1. Insurer's Licence - Fees: $1,100 application fee; $6,100 Filing of application $200; Review of $500 combined fee for Application Fee $500 Application Fee $200 Incorporation $200 (a) For filing application for a Class ‘A’ or Class ‘B’ licence under (a) where insurer is carrying on domestic annual licensing fee. application $3,600; Initial license fee application/licensure. Annual license Organization Exam - Actual Expenses Expenses section 3 (1) $500 business $1,000 $5,000; Initial e-commerce fee $250; renewal fee is $500 Annual License Fee: (b) For filing application for an insurance agent, broker ’s or (b) where insurer is carrying on business other Taxes imposed on residents of the Virgin Incorporation $52. $5,000 actuarial review Annual Fee $300 $300 manager’s licence under section 3 (2) $500 than domestic business in or from within the Islands include: Incorporation fees vary (c) For filing application for a sub agent or principal representative Islands $500 •Federal Income Tax (same as US (insurance) licence under section 3(2) $100 Insurer's Licence accompanied by an mainland) Issue of Licence and Annual Renewal of a Licence fees undertaking given under section 7(11) of the •Property Tax (d) For a Class ‘A’ licence (section 3 (1) (a)) $2,500 Ordinance- •Employers are required to remove social (e) For a Class ‘B’ Unrestricted or General licence (sections 3 (1)(b) (a) where such undertaking is given by a credit security, Medicare and income tax from and (c)) $2,000 life reinsurer $150 employee pay. (same as US mainland) (f) For a Class ‘B’ Association, Group or Single licence (sections 3 (b) where such undertaking is given by an (1)(d), (e) and (f)) $1,500 applicant other than a credit life reinsurer $500 There is no state tax in the U.S.V.I. (g) For an Insurance Agent, Broker or Manager licence (sections 3 3. Insurance Agent's Licence $500 (2)(a) and (b)) $1,000 4. Insurance Broker's Licence $750 (h) For an Insurance sub-agent licence (section 3 (2)(c)) $250 5. Insurance Manager's Licence $1000 The taxes are at the same rates and use (i) For a Principal Representative (Insurance) licence (section 3 6. Principal Insurance Representative's Licence the same forms and rules as the US (2)(e)) $500 $450 federal income tax under what is called 7. Insurance Sub-agent's Licence $150 the “mirror system ” of taxation. The mirror system applies differently to Annual Fees (Section 5(6)) corporations than to individuals. One of the differences is that in addition to the Annually on or before the 31st March during the regular corporate tax rate, corporations subsistence of the licence, for each category of are also subject to a 10% corporate tax licence as follows- surcharge which brings the maximum (a) Insurer's Licence where insurer is carrying on corporate graduated rate to 38.5%. There domestic business $5,000 are no local income taxes or surcharges (b) Insurer's Licence where insurer is carrying on imposed on individuals over and above business other than domestic business in or the mirror system rates so that the from within the Islands, other than as mentioned overall rate of income tax for individuals below $2,000 is equivalent to the rate that a resident (c) Insurer's Licence accompanied by an of a state without a state income tax Incorporation time Unknown 2-4 weeks 4 weeks not stipulated 4 weeks or less 30 days Application reviewed within 7 working days of receipt.

7/19/2016 Page 46 of 65 Prepared April 2016 Alabama Anguilla Turks and Caicos US Virgin Islands Utah Vanuatu Vermont Virginia West Virginia TypesCapitalization of Insurance AllPure: lines $250,000 of commercial property and Class A‘A licences’ Insurer ’ares Licence issued which to domestic shall permit insurers a local and orClass an external B licences insurer to foreign to carry on Domestic Insurance subject to approval of the division of All P&C lines, life and disability (some A captive insurer may only be licensed All lines of insurance authorized in W. That May Be Written liability insurance, life and disability insurers. 1.Insurance Company Licence banking and insurance exclusions for captive writing direct) to write the classes of insurance in 38.2- Va. Code 33, except personal auto and insurance, and excess workers There are five kinds of Class B licences available for engaging in foreign insurance 2.Agent Licence 110 through 38.2-120, 38.2-124, 38.2-126 homeowners coverages. compensation insurance and reinsurance. business: 3.Broker Licence and reinsurance in accordance with 38.2- (1) Unrestricted licence to carry on foreign insurance business including long-term 4.Sub Agent Licence 136. business. The minimum capital requirement is $200,000 (annual licence fee $2,000). 5.Principal Representative (2) General licence to carry on general foreign insurance business, but not longterm No personal lines coverage is allowed to business. The minimum capital requirement is $100,000 (annual licence fee $2,000). International Insurance be written by the captive unless the (3) Association licence to carry on general and long-term foreign insurance business with 1.Producer Owned Reinsurance Company individual being insured is the parent. No two or more owners of the insurer, and its affiliates, and to carry on more than 30% of 2.Captive Insurance Company coverage for personal auto or its foreign insurance business (based on net premiums written) or 100% of its 3.Insurance Manager's Licence homeowners is allowed. reinsurance business with persons who are not owners of the insurer or its affiliates. The minimum capital requirement is $100,000 (annual licence fee $1,500). (4) Group licence to carry on any foreign insurance business, including longterm foreign insurance business, with a single owner of that insurer and its affiliates and employees of the owner or its affiliates. The minimum capital requirement is $25,000 (annual licence fee $1,500). (5) Single licence to carry on any foreign insurance business including longterm insurance business, with the sole owner of the insurer, if a company. The minimum capital requirement is......

Investment No investment restrictions for pure Discounting applies to invested Permitted Assets the U.S. Virgin Islands is not considered Association Captives, Sponsored None for pure and industrial insured; Captives are subject to the investment Associations and Risk Retention Groups Restrictions captives. assets other than cash, LOCs, and Permitted assets will include: a part of the United States for certain Captives and Industrial Insured Groups same as for other admitted insurers for regulations of Title 38.2, Chapter 14 must comploy with the investment other than government securities of 10% to 30%; see Guidance Notes of Allowable 1. Cash and time deposits with acceptable purposes under the Investment must comply with the same restrictions association captives and RRGs. requirements as set forth in Chapter 33, Assets financial institutions. Company Act of 1940 that a traditional insurance company A Pure may loan to parent subject to Article 8. 2. Fixed interest securities and blue-chip equities must observe. Pure Captive has no approval. traded on recognized stock As a territory of the United States, the restrictions except that the Department There are no investment restrictions for exchanges. U.S. Virgin Islands may not conduct its will not allow investments that threaten pure captive insurance companies as 3. Eurobonds rated at BBB or above by Standard own foreign policy; rather, with the the solvency of the captive. long as the investment does not threaten and Poor. important exception of tax treaties, it is the solvency or liquidity of the 4. Premiums receivable —but excluding included under most other international company. premiums more than 6 months outstanding. treaties and agreements to which the 5. Irrevocable Letters of Credit issued by United States is a party. Importantly, acceptable financial institutions. this includes all of the United States' bi- All assets should be valued at market value and lateral investment treaties and treaties of no amounts receivable from related friendship, commerce, and navigation, parties may be included without prior written which are in force with nearly all Western approval from the Commission. European countries. - See more at: (Amended by Ords. 6 of 2001 and 16 of 2007) http://corporate.findlaw.com/finance/u-s- virgin-islands-an-offshore-tax-planning- jurisdiction.html#sthash.dRMNLiHF.dpuf Prohibited Assets Prohibited assets will include: 1. Yachts, aeroplanes, motor vehicles and livestock. 2. Loans to group or connected companies and individuals. 3. Investments in options, futures or forward contracts. 4. Premiums more than 6 months outstanding from due date.

Tax Issues Premium Taxes: Anguilla has the No premium or income Taxes: Annual franchise tax of $1,000. No premium tax. $5,000 annual fee. Tax on gross premiums written: Title 58.1, Chapter 25 Premium tax return due by February $1–20 million added advantage of being a no-tax jurisdiction or capital gains taxes $250 e-Commerce fee. $1-$20M Direct 0.38% Reinsurance 28th. Direct 0.4% 0.214%; $20M-$40M Direct 0.285% 2.25% on all direct written premiums. Reinsurance 0.225% Reinsurance 0.143%; Tax is paid in lieu of an annual license Direct $40M-$60M Direct 0.19% Reinsurance fee. 0.005% plus 2.0% $20–40 million 0.048%; Direct 0.30% over $60M Direct 0.072% Reinsurance Reinsurance 0.15% 0.024%; Minimum tax of $7,500 - Maximum of $40–60 million $200,000 Direct 0.20% Reinsurance 0.05%

> $60 million Direct 0.075% Reinsurance 0.025%

Minimum tax of $5,000; No maximum

7/19/2016 Page 47 of 65 Prepared April 2016 Alabama Anguilla Turks and Caicos US Virgin Islands Utah Vanuatu Vermont Virginia West Virginia ApplicableCapitalization Act AlabamaPure: $250,000 Code: Section 27: Subsection InsuranceClass ‘A’ Insurer Act ’s Licence which shall permit a local or an external insurer to carry on 19.17 Insurance Premium Sales Tax Ordinance Laws: Virgin Islands Interational Insurers Utah Insurance code Title 31A, Chapter Public Act 28, Title 8, Vermont Statutes, Code of Virginia Title 38.2, Chapter 11 W. Va. Code Chapter 33, Article 31 31A & 31B Act, Title 22, Virgin Islands Code, 37 and Chapter 37a. Chapter 141, 1981 as amended Insurance Regulations 16.06 Insurance Ordinance Chapter 55.

Insurance (Amendment) Regulations, 2014 http://www.tcifsc.tc/departments/insurance/insur ance-legislation

Tax Treaties N/A Anguilla has no existing double taxation treaties. TIEA: Germany, Australia, Foroe Islands, N/A - US territory N/A Finland, Greenland, Iceland, Norway, Sweden, Anguilla has concluded 15 tax treaties and is party to a series of treaties under France, Denmark, UK, Netherlands, Ireland negotiation: Australia, Belgium, Denmark, Faroe Islands, Finland, Germany, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom no double tax treaties

Supervisory State of Alabama Anguilla Financial Services Commission Supervisor of Insurance, Financial Services The Division of Banking and Insurance Utah Insurance Department. David Department of Financial Regulation, Virginia Bureau of Insurance West Virginia Offices of the Insurance Jurisdiction Department of Insurance MAICO Building, The Valley Commission, Turks & Caicos Islands of the Office of the Lieutenant Governor Snowball, Captive Insurance Director. Captive Division, Tyler Building, 6th Floor Commissioner 201 Monroe St., Ste. 502 Phone: +1 264 497 5881 Government, Harry Francis Bldg., Pond St., regulates the activities of insurance 3110 State Office Building, Salt Lake David F. Provost 1300 E. Main Street Financial Conditions Division Montgomery, AL 36104 Fax: +1 264 497 5872 Grand Turk, Turks & Caicos Islands, British West companies and insurance related City, UT 84114 Deputy Commissioner of Captives Richmond, VA 23219 Albert T. Summers Center Building P.O. Box 303351 Email: [email protected] Indies, Tel 649-946-2791 businesses pursuant to Title 22 of the 89 Main Street, Draw 20 1124 Smith Street, Room 102 Montgomery, Alabama 36130 –3351 Virgin Islands Code ("Insurance Code"), Montpelier, VT 05620-3101 Phone: (804)371-9637 Charleston, WV 25305-0540 Tel.: (334) 269–3550 [email protected] Fax: (334) 241 –4192 Phone: (304)558-2100 Fax: (304)558-1365 [email protected]

Mrs. Leah Cooper, Director Phone: (304)558-2100 ext 1184 [email protected]

Reserve & Unknown Customary loss reserving Solvency Ratios What are the general (i.e. multiple lines) Copies of underwriting guidelines and Actuarial opinion on reserves required Gross annual premiums of at least Underwriting Solvency ratios will be established on the basis capital and surplus requirements for P&C procedures and rates and pricing annually. Requirement may be waived $500,000 for pure captives and at least Requirements of risk assessment in each particular case. As a and L&H carriers? guidelines, should form part of the on short-tail risks. Discounting $1 million for associations. An guideline, the minimum net worth requirement will application. sometimes allowed association must also be in existence for be calculated as follows: A. The general capital and surplus at least one year before licensure will be Business Net Annual requirements for P&C and L&H are 4.5 granted, but the commissioner can waive Premium Income million and 2.5 million, respectively. this requirement if each member of the Net Worth association will have gross annual A. General only Up to U.S. $5M 20% of Net premiums in excess of $100,000. Annual premiums Over U.S. $5M U.S. $1M plus 10% of Net Annual premiums in excess of U.S.$5M B. Long term only U.S. $180,000 C. Long term & General Up to U.S. $5M 20% of Net Annual premiums plus U.S. $180,000 Over U.S. $5M U.S. $1M plus U.S. $180,000 plus 10% of annual premiums in excess of U.S.$5M

7/19/2016 Page 48 of 65 Prepared April 2016 Alabama Anguilla Turks and Caicos US Virgin Islands Utah Vanuatu Vermont Virginia West Virginia ReportingCapitalization CaptivesPure: $250,000 must submit annual reports by EveryClass ‘licensedA’ Insurer insurer’s Licence shall whichprepare shall annual permit accounts a local orin anaccordance external insurerwith generally to carry on Every licensed insurer shall furnish to the annual return requirements per type of Regulatory Filing within 60 days after Annual GAAP or SAP if desired, financial Captives are subject to the reporting Annual Report due by March 1st. Requirements March 1st using Statutory accounting accepted accounting principles acceptable to the Commission, audited by an Commission within three company: http://ltg.gov.vi/form- year end. Independent audit with statement 75 days after fiscal year-end; requirements of traditional insurance principles unless GAAP has been independent auditor approved by the Commission except that the ommission may, in months of the end of its financial year or such downloads.html certification of loss reserve within six NAIC statement for RRGs and companies as detailed in Title 38.2, Audited Financial Statements approved by the Commissioner. writing, exempt any licensed insurer from the provisions of this subsection or part longer period not exceeding a months. Association Captives only. Chapter 13 Premium tax return due March 1st. thereof further three months as the Commission, may in Examinations required every 5 years. writing allow in response to a written request, the following annual returns — (a) written confirmation from an independent auditor that annual accounts have been prepared as required under section 8(6) and whether or not the auditor ’s certificate for such accounts is unqualified; (b) a certificate of compliance as required by section 8(2)(c); (c) if the said insurer is carrying on, or has carried on, general business, a financial statement in the prescribed form, certified by an independent auditor, in accordance with section 8(7); (d) if the said insurer is carrying on, or has carried on, long term business, an actuarial valuation of its assets and liabilities, certified by an actuary, in accordance with section 8(9); (e) if the said insurer has a branch or other subsidiary activity in the Islands which is constituted as a separate legal entity, written Local Office The principal place of business of a Every insurer, other than an approved external insurer or an insurer who maintains Registered office required. Captive is required required to report principal office in the One annual meeting in Utah per year, Office in Vermont; one directors' meeting Must maintain priciple office in West Requirements captive must be in the state of Alabama permanently in Anguilla its principal office and staff, shall appoint an insurance manager to appoint a resident agent for service of virgin islands on annual return maintain the principal; place of business in Vermont annually; use of resident Virginia and resident registered agent. (Alabama Code, Section 27-31B). At and shall maintain permanently at a designated principal office in Anguilla, or some other process. Resident insurance manager and in Utah, appoint a resident registered director and agent required; financial Must have at least 1 board member that least three incorporators or two location approved by the Commission, full and proper records of its business activities. records must be kept in the principal office. agent to accept service of process on records must be kept in Vermont. is a resident of West Virginia. organizers must be residents of behalf of the captive in Utah. Alabama. Captive must maintain Alabama bank account, and utilize an Alabama-based CPA firm, actuarial firm, insurance broker, and attorney.

7/19/2016 Page 49 of 65 Prepared April 2016 Alabama Anguilla Turks and Caicos US Virgin Islands Utah Vanuatu Vermont Virginia West Virginia ReinsuranceCapitalization APure: captive $250,000 may take credit for reserves notClass stipulated ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry on It is advisable to consult the Superintendent in information not readily available, Any company authorized to do business Reinsurers must be admitted or on the Reinsurance is allowed on all authorized Requirements on risks or portions of risks ceded to developing a captive's reinsurance program. recommend contacting the The Division in this state may take credit for reserves Authorized Captive Reinsurers List which lines of coverage. reinsurers complying with subdivisions Acceptance of the program is more likely when it of Banking and Insurance of the Office on risks ceded to a reinsurer subject to involves the filing of financial (1) through (4) of subsection (c ) of is written by a reinsurer considered by the of the Lieutenant Governor directly for the following limitations:(a) No credit statements and a $300 fee. Section 27-5-12. A captive insurer shall Superintendent to be adequately reserved and advice shall be allowed for reinsurance where not take credit for the reserves on risks honorable. the reinsurance contract does not result or portions of risks ceded to reinsurers in the transfer of the risk or liability to not complying with subdivision (1) the reinsurer.(b) No credit shall be through (4) of subsection (c ) of Section allowed, as an asset or a deduction from 27-5-12. liability, to any ceding insurer for reinsurance unless the reinsurance is Any Workers Compensation qualified payable by the assuming insurer on the self-insured plan of its parent and basis of the liability of the ceding insurer affiliates shall be deemed to be under the contract reinsured without reinsurance. diminution because of the insolvency of the ceding insurer.

# of Captives 42 319 66 8 450 8 596 0 0 Last Updated 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016 4/25/2016

*Disclaimer

The information contained within this document is for general and/or informational purposes only and is subject to change at the discretion of each regulatory body. It is not intended to provide legal, tax, accounting or investment guidance nor it is not an offer or solicitation for business. The information is a summary of regulatory requirements and should not be viewed as a comprehensive description of the law. We are not liable for any losses or damages in connection with the use of this information.

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