Taking control of risk and risk financing are of primary importance to modern corporations, but also offers certain advantages to smaller closely-held businesses as well. Through proper risk management, risk-financing costs can be curtailed to give companies a competitive edge. The global captive insurance market has continued to thrive in the past few years, both in terms of new captive formations and new captive domiciles, and offers tremendous benefits when structuring efficient risk financing vehicles.
New captive insurers generally provide a range of coverage options for a number of industries. Most were established to provide coverage where insurance was unavailable or unreasonably priced. These insurance subsidiaries or affiliates were often domiciled international financial, generally in Bermuda or the Cayman Islands. Recognizing this trend, Belize passed the International Insurance Act Chapter 269, found under the Laws of Belize. This legislation has worldwide appeal among clients and agents who seek the risk management benefits of these captives but also see tax advantages in their application.