Chapter INTM210100

Record NumberINTM210100
Published date09 April 2016

Captive insurance companies are insurance companies established with the specific objective of financing risks emanating from within their own group. However, they can also be used to insure risks of the group’s customers as well (for example an extended warranty sold with a washing machine).

It is common within the insurance industry to refer to reinsurance companies as captive insurers, even though they will generally be underwriting risks which originate from unconnected third parties. For the purposes of the Chapter 7 guidance we refer to captive insurance companies as CFCs whose profits fall within Chapter 7; the profits arising from the following activities

  • the insurance (and reinsurance) of risks originating within a connected UK group company, and
  • the insurance of risks with UK resident persons who have bought goods or services from a UK company connected with the captive.

Captive insurance companies resident within beneficial tax regimes have always been a concern for fiscal authorities and they were a primary driver behind the introduction of the old CFC regime in 1984. There are commercial reasons supporting the creation and use of captive insurance companies but a key driver, especially for those resident within such beneficial tax regimes, will be the tax advantages that can be...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT