Incorporated Cell Companies - ICC's

Saint Lucia has introduced legislation which is similar in effect to the protected cell, though more robust in substance, as each cell is separate legal entity, an International Business Company (IBC). The incorporate cell company regime is based on one entity, the incorporated cell company (ICC) being licensed to provide insurance business through separate companies which are called incorporated cells. The incorporated cell (IC) is not licensed but is registered and that registration is base on its contractual relationship with the parent or (ICC). The ICC must have control of the board of directors of the IC and as such the time for review and approval of the IC registration is significantly shorter than a stand alone insurance license would be.

All of the traditional benefits of a protected cell regime are available with the added protection of the IC’s being separate legal entities. This it is widely accepted, makes them more robust to challenges than protected cell regimes. In the event of dissolution or insolvency in one IC the other ICs assets and liabilities are completely insulated.

With an ICC/IC arrangement there is also the pooling of the professional support required for establishing and managing captive insurance programs. This pool includes the insurance manager, the actuary, auditors, lawyers and promoters who would have the experience and infrastructural support to quickly and efficiently respond to a client’s needs for its own insurance program.

The amendments to the law permitting the establishment of ICC’s and IC’s provide for conversion of traditional insurance licenses to the ICC/IC format. This is achieved by amendments to the articles and memorandum of the company to make it n ICC/IC which is achieved by filing a resolution of the directors with the international business companies registry.

The relationship between the ICC and the IC is governed by an operating agreement which includes inter alia the type of investments allowed, mechanism for accepting and underwriting risk and dividend policy. This effectively is the rule book for the relationship between the two companies that defines the parameters of what can and cannot be done and also defines the key procedures that have to be allowed.

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