Traditionally, managers of captive insurance companies have offered to their clients "Rent a Captive" facilities. However, whilst such arrangements had some advantages, the principle disadvantage was that each participant within a "Rent a Captive" facility was potentially exposed to any adverse performance within any of the other "Rent a Captives" offered by their manager.
In recent years, the leading captive domiciles have introduced legislation which effectively provides segregation/protection for individual participants in the new era of "Rent a Captives", which is a significant improvement for the client from the old form of "Rent a Captive".
This segregated/protected "Rent a Captive" facility are know by different names within the different countries but in essence, they are all similar.
HSBC Insurance Management offers this facility to it's clients, in the following countries:
Bermuda - known as a segregated account company
Cayman Islands - known as a segregated portfolio company
Guernsey - known as a protected cell company.
Please click on the links below to find out more about these companies.
HSBC Insurance SAC (Bermuda)
HSBC Insurance SAC Limited (HSBC SAC) is a Bermuda domiciled Class III insurance company formed as a Segregated Account Company. It is a member of the HSBC Group and is managed in Bermuda by HSBC Insurance Solutions (Bermuda) Limited.
HSBC SAC has Statutory Capital of US$250,000, comprised of authorised and issued capital of US$120,000 and US$130,000 in contributed surplus.
Clients may participate either by entering into a co-operation and indemnification agreement or by subscribing for non-voting, redeemable preference shares. These mechanisms allow the client to participate in the results of the insurance business that they introduce to the company. All distributions require approval of the Board of Directors of HSBC SAC. The client will also be expected to provide security to the company.
HSBC SAC's insurer licence allows it to underwrite all classes of property and casualty insurance business. Typically, HSBC SAC will act as a reinsurer.
More information:
HSBC Insurance SPC (Cayman Islands)
HSBC Insurance SPC (“HSBC SPC”) is a Cayman Islands insurance company formed as a Segregated Portfolio Company. It is a member of the HSBC Group and is managed worldwide in the Cayman Islands by HSBC Financial Services (Cayman) Limited.
HSBC SPC has an authorised capital of US$950,000 and £20,000, with current issued capital of US$360,000.
Clients may participate either by subscribing for non-voting, redeemable preference shares or by entering into a co-operation and indemnification agreement. These mechanisms allow the client to participate in the results of the insurance business that they introduce to the company, once distributions have been approved by the Board of Directors of HSBC SPC. The client will also be expected to provide security to the company.
HSBC SPC's insurer's license allows it to underwrite all classes of insurance business. Typically, HSBC SPC acts as a reinsurer.
More information:
HSBC Insurance PCC (Guernsey)
HSBC Insurance PCC Limited ("HSBC PCC") is an insurance company formed in Guernsey under the Protected Cell Companies Ordinance 1977. It is a member of the HSBC Group and is owned and managed by HSBC Insurance Management (Guernsey) Limited.
HSBC PCC has an authorised capital of £5 million, with a current issued core capital of £125,000.
Clients may subscribe for redeemable preference shares and/or provide a letter of credit to ensure that the necessary solvency and risk gap requirements are met.
Retained profits can be returned back to the cell owner by way of dividends, profit commission or return premiums.
All dividend payments must be agreed by the Board of Directors of HSBC PCC.
Generally, clients have no involvement in the day-to-day management of HSBC PCC.
On termination of the arrangements (by novation, commutation or other extinguishment of the insurance contracts agreed by HSBC PCC), the cell owner will receive a return of the surplus assets of the cell by means of dividend declarations or the redemption of the shares.
HSBC PCC currently has a licence from the Guernsey Financial Services Commission to underwrite all classes of non-life business. However, it is envisaged that this will be extended in due course to permit HSBC PCC to underwrite life business.
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