Guernsey: Captive Insurance – In Our Own League

Last Updated: 22 November 2016
Article by Peter Child

Most Read Contributor in Guernsey, August 2019

Peter Child, Chairman of the Guernsey International Insurance Association, speaks to Captive Review about the uniqueness of Guernsey.

Captive Review (CR): How does Guernsey differentiate from other jurisdictions? What are its main attractions and how does it stay ahead of the pack?

Peter Child (PC): In the current climate differentiation is more important than ever. Lots of jurisdictions are similar as we are all guilty to some extent of copying one another's legislation in order to stay in line with the latest innovations. This has always been the case in our market and shall continue.

Despite this, Guernsey has always gone that extra mile as our aim is to stay ahead of the pack, take our PCCs and ICCs for example. Importantly, one key area that has assisted Guernsey's variety is that we have always possessed the size and momentum of business to enable the employment of a large number of professionals within the captive management insurance sphere. This means that Guernsey has retained the highest quality of individuals at every firm on the island, from insurance managers, to accountants, company secretaries, actuaries and lawyers. These individuals are able to offer a myriad professional advice and services.

Within a European context, Guernsey can be found at the helm of the industry in regards to the its dynamic ILS and pension longevity structures, as well as arguably being the key pioneer in conversion of the alternative capital which is driving the ILS business into rated reinsurance vehicles.

The location of Guernsey is also second to none. Due to our close proximity to the UK and mainland Europe, we have excellent transport links to both London and major European cities, as well as being located in the same time zone as the UK.

Furthermore, not only are we ideally placed in a geographic sense, but also in terms of us not being a member of the EU. By maintaining a solvency regime that is fully compliant with the principles of the International Association of Insurance Supervisors, and that, though our own option, has not been subjected to a review of Solvency II equivalence by the EU, we are able to offer a differentiated product. Guernsey plays host to international insurers and reinsurers that write European risks either on a non-admitted basis where permissable, or via efficient fronting structures. Some of these choose to be 'equivalent' insurers under the Solvency II definition by dint of securing appropriate credit ratings, others choose to meet either internally calculated capital requirements or the island's mandatory minimum solvency standards. They key is that Guernsey provides the choice.

CR: Do you anticipate any future drawbacks that may impact Guernsey? What are they and how do you plan to combat them?

PC: One key drawback that has been felt across all offshore financial industries is that arising from the reputational issues surrounding perceived tax inequality. Due to events such as the release of the Panama Papers, many offshore jurisdictions have been painted with the same brush by the media. The world environment is changing and there is an agreement between the main economically developed countries, under the auspices of the OECD, that there is a requirement for an equitable tax-base for all of the world's multinational companies. Of course, this is absolutely fair and right. However, thereis, I believe considerable misunderstanding, based on a lack of education, about the differences between offshore jurisdictions, all of which tend to be morphed into the one undesirable whole. This often leads to Guernsey – which has always followed a policy of being 'whiter than white' and fully compliant with all international standards of best practice, as evidenced by the IMF and OECD alike – being incorrectly placed into the same bracket as other jurisdictions.

All that we can do to combat these misconceptions is to carry on as business as usual and try as often as possible to engage with as many bodies as possible: the OECD, IMF, FATF, captive owners, clients and prospective clients, UK government and tax authorities and other offshore governments to try to create a proper and nuanced understanding of the benefits and lack of threat that comes from a proper, well-regulated and transparent offshore jurisdiction.

CR: How dynamic is Guernsey?

PC: Our differentiated products are ever-evolving and growing, and, right now, we more dynamic than we have been for decades. Since the mid-70s and early 80s we have relied upon the growth of captives to develop our insurance management business. Current environmental considerations including: the continuing soft market, increasing challenges to the tax bases of captives, the cost of capital, and a weak investment environment which has drawn alternative capital into the reinsurance space have meant that maintaining and growing that captive base is difficult.

I believe that Guernsey has reacted very well to these environmental changes. We have actively developped alternative products which can be serviced by our core of professionally qualified, highly competent insurance management personnel. These include the ILS structures, rated reinsurance vehicles and pension longevity deals that I referred to earlier, as well as producer owned (re)insurance captives that enable interested parties to benefit from the underwriting profit of books of business where previously they might have received just a flat commission.

CR: Guernsey's reputation is both unblemished and rich, how important is maintaining that reputation for the success of the jurisdiction? How do you maintain it?

PC: It is paramount. Reputation is everything and the only way that we can maintain it effectively is by ensuring that everybody on the island upholds the highest possible standards. Not just in terms of insurance regulation, tax transparency and regulation, company legislation and compliance but also

Guernsey is particularly well trusted jurisdiction for secure data processing and storage, partially shielded as it is from international cyber threats due to its position as an island, and relative control over traffic that flows through a limited number of broadband providers..

Ultimately, we have to make sure that all of this is joined up because reputation is difficult to regain.

CR: What offering developments can we expect from Guernsey in the future?

PC: By the end of the year we expect that we will have further specific legislation around the ILS structures. Additionally, there is a focus on corporate structures and how they can be used within the insurance space. So, looking at things like the use of unlimited partnerships as insurance carriers, which is potentially expanding, will be an area of increasing importance.

CR: In short, why choose Guernsey?

PC: It's about people, physical location and the versatile and pragmatic regulator with fully compliant legislation to a worldwide standard. It is also about the availability of different and flexible company structures , and a realistic capital regime, especially when compared to SII. Adhering to the same principles from where SII comes but with a pragmatic application. In essence, it's about delivering the highest standard of service that cannot be replicated elsewhere.

An original version of this article was first published by Captive Review, October 2016.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions