NV’s performing so-called captive insurance activities can qualify for the IPC-status, if the activities performed by the Company qualify for the State Decree Captive Insurance (AB 2002 NO. 50), which contains the following definition of a captive insurance company: ”A captive insurance company conducts a business that insures of reinsures certain risks, that exclusively or most exclusively result from the business conducted by its shareholders, affiliated companies or participants in a joint-venture.”

According to the State Ordinance on Supervising Insurance Business (AB 200. No. 82) the Central Bank of Aruba supervises insurers incorporated under Aruban law and the branches and agencies in Aruba of insurers  incorporated outside Aruba. In this respect, please note that the Aruban Central Bank is  very cooperative on the establishment of a captive insurance company.

Based on the State Decree Captive Insurance Companies, 4 different types if captives are recognized:

i) pure captive insurance companies, ii) associative captive insurance companies, iii) rent-a-captive insurance companies, and iv) other captive insurance companies.

The conditions that are to be met for Aruban N.V.’S conducting captive insurance companies are the following:

(a)          The day-to-day management of the captive insurance company is determined by at least one natural person who resides in Aruba;

(b)          The captive insurance company disposes of a solvency margin. The solvency margin can also be held through a bank guarantee at a local bank.:

                • In case of a pure captive insurance company, at least AWG 300.000;

                •In case of an associative captive insurance company, at least AWG 500.000;

                •In case of a rent-a-captive insurance company, at least AWG 1.000.000;

(c)           The Aruban captive insurance company has the disposal of a bank account at an Aruban bank;

(d)          The company is obligated to file an annual report with the Central Bank of Aruba concerning the captive insurance activities within six months after the end of the financial year;

(e)          The Board of the company consists of at least one local insurance specialist not being a(n) (Aruban) management company.

In case you are contemplating on performing captive insurance activities in Aruba, please contact us in case you require in depth information on the requirements, timing and costs involved in your specific situation.