• CIB 2.2 CIB 2.2 Minimum capital

    • CIB 2.2.1 Minimum capital requirements

      (1) A Captive Insurer must have and maintain at all times the minimum capital required under this Chapter
      (2) The minimum capital requirement for a Captive Insurer is the highest of the following:
      (a) the base capital requirement for the Captive Insurer under Rule 2.2.2;
      (b) the premium risk component under Rule 2.2.3; and
      (c) the technical provision risk component under Rule 2.2.4 or Rule 2.2.5.
      (3) Notwithstanding Rule 2.2.1(2) above, the Regulator may, by written notice, direct a Captive Insurer (whether on application of the Captive Insurer or on the Regulator's own initiative) to comply with a higher minimum capital requirement than as set out in these Rules.

    • CIB 2.2.2 Base capital requirement

      The base capital requirement for a Captive Insurer is:

      (a) for a Class 1 Captive Insurer: $150,000;
      (b) for a Class 2 Captive Insurer: $250,000 (unless the Regulator sets a different amount);
      (c) for a Class 3 Captive Insurer: $500,000 (unless the Regulator sets a different amount); and
      (d) for a Class 4 Captive Insurer: $1 million (unless the Regulator sets a different amount).

    • CIB 2.2.3 Premium risk component

      The premium risk component for a Class 1, Class 2, Class 3 or Class 4 Captive Insurer is the amount calculated in accordance with the following formula:

      18% x Captive Insurer's Net Written Premium up to $5 million

      +

      16% x Captive Insurer's Net Written Premium in excess of $5 million

    • CIB 2.2.4 Technical provision risk component — Captive Insurers conducting general Insurance Business

      (1) The technical provision risk component for a Class 1, Class 2, Class 3 or Class 4 Captive Insurer that conducts General Insurance Business is the amount calculated in accordance with the following formula:

      5% × net claims reserve under general Contracts of Insurance,

      where net claims reserve, as at a date, is the amount of the Captive Insurer's provisions for:
      i. claims incurred but not yet paid as at the date, including claims incurred but not yet reported; and
      ii. direct and indirect claims settlement expenses for those claims,
      less the amount of reinsurance and other recoveries expected to be received in respect of those claims.
      (2) Notwithstanding Rule 2.2.4(1), the Regulator may, by written notice, direct a Captive Insurer (whether on application of the Captive Insurer or on the Regulator's own initiative) to include a particular Contract of Insurance or class of Contracts of Insurance in the Captive Insurer's net claims reserve.

    • CIB 2.2.5 Technical provision risk component — Captive Insurers conducting Long-Term Insurance Business

      The technical provision risk component for a Class 1, Class 2, Class 3 or Class 4 Captive Insurer that conducts Long-Term Insurance Business is 2.5% of the policyholder liabilities calculated using actuarial methods for Long-Term Insurance.

    • CIB 2.2.6 Regulator to have regard to certain matters

      (1) In determining an amount for a Class 2 or Class 4 Captive Insurer under this Chapter, the Regulator must have regard to the nature, size and complexity of the Captive Insurer's business.
      (2) Without limiting Rule 2.2.6(1), the Regulator may, in determining an amount for a Class 2 Captive Insurer, take into account the following:
      (a) the third party risks the Class 2 Captive Insurer expects to insure;
      (b) how Closely Linked the business or operations giving rise to the third party risks are to the business or operations of the Group to which the Class 2 Captive Insurer belongs;
      (c) the percentage of Gross Written Premium (up to 20%) that the Class 2 Captive Insurer intends to obtain from third party risks; and
      (d) any burden or undue risks to the Cedant or other policyholders.
      (3) Without limiting Rule 2.2.6(1), the Regulator may take into account the matters in Rule 1.7.2 in determining an amount for a Class 4 Captive Insurer.

    • CIB 2.2.7 Obligation to inform Regulator of any breach of Rule 2.2

      If a Captive Insurer becomes aware, or has reasonable grounds to believe that it is or may be, or may be about to be, in breach of any provision of this Chapter, it must:

      (a) tell the Regulator orally about the matter immediately but within one Business Day;
      (b) by written notice given to the Regulator by no later than the next Business Day:
      (i) confirm the oral notification;
      (ii) explain the nature of the breach or why the Captive Insurer considers it may be (or may be about to be) in breach of the provision; and
      (iii) set out the action that the Captive Insurer proposes to take about the breach or to avoid the breach; and
      (c) not make any distribution to its shareholders or members, whether by way of dividends or otherwise, without the Regulator's written permission.