Thanks to the presence of offshore insurance companies, individuals, families and companies are able to transfer risks incurred by business and personal activities. In essence, offshore insurance business is about risks being absorbed by international insurance companies, in exchange for an obligation by the customer. In most offshore jurisdiction with offshore insurance legislation, general and long-term offshore insurance business are the two principle types of insurance businesses for which offshore insurance companies are licensed. With this being the case, the concepts of general and long-term insurance business is standard throughout, and it is common to find similar international or offshore insurance legislations, especially as international insurance standards are to be adhered to, with the exception of certain regulations and different provisions that may exist for insurers, based on the regulatory requirements established by jurisdictions respectively.
A great reason for going offshore includes getting services for citizenship by investment programs which have been legislated and carried on in some countries for several years now. These second passport programs enable families and investors to make an economic contribution to the country via real estate or otherwise and qualify to apply, along with due diligence. Belize company formation, inheritance and succession planning can be accomplished through the accumulation of wealth. Please submit any questions via the contact page for help with second citizenship requirements.
Under the heading of general offshore insurance business, one would find:
On the other hands, long-term offshore insurance business would normally include:
Life insurance to insure human life, establish payment mechanism for beneficiaries of the life insurance,
Permanent health insurance to insure against the risk of incapacitation, infirmity or injury
Most long-term insurance contracts are without time limit, until the retirement age or are effective for at least five years.
General offshore insurance is explained as offshore insurance that is not referred to as long-term offshore insurance in the respective offshore insurance act. Once acceptable as a class of offshore insurance that can be included under the category of general offshore insurance business, general offshore insurance may cover a board scope of insurance contracts to protect against a variety of risks.
Other forms of offshore insurance include assurance, reinsurance and captive insurance which are treated as categories by themselves in addition to general offshore insurance business and long-term offshore insurance business.
Offshore insurance companies provide the very same benefits that are available locally, including the possibility of obtaining advice on safety, legal matters and loss prevention and settlement. A significant advantage is also available to offshore insurance companies, which are able to capitalize on favorable tax laws, legislation and investment friendliness and the absence of exchange controls in order to run the business profitably, resulting from a reduced tax burden through tax exemptions and the avoidance of costs that could be incurred from foreign exchange and currency fluctuations. In short, an offshore environment creates numerous possibilities and potential for accumulating wealth, especially through offshore banking mechanisms and other offshore entities that help with protecting and managing assets, wealth and facilitate investments in foreign markets.
Opportunities to reach a larger clientele are far greater as an international insurance company, and through development and sophistication as the insurance company grows, the chances of diversifying the company’s portfolio, offerings and better catering to customers’ considerations are enhanced. In turn, a thriving onshore or offshore insurance industry is capable of fortifying economic activity, encouraging entrepreneurship and investment.
Offshore insurance companies that would have expanded tremendously would normally be involved in reinsurance and tend to establish their own offshore captive insurance companies to cover their own risks, as it could be very costly to have the company insured by another private, unaffiliated insurance company. In this sense, offshore captive companies are beneficial and help resolve many of the challenges that international insurance companies may confront. Given the uncertain nature of insurance in itself, in terms of the occurrence of an insure risk, being able to cooperate with other offshore insurers within the market or internally by forming a group of insurers helps to increase expertise in the sector and strengthen insurance companies by spreading risks, especially with the use of captives.
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