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An Overview of Captive Insurance Companies:
Regulated by Law No. 60 (July 29, 1996)
{types of risk} {application
requirements} {application process} {capital & reserves} {investments} {tax
treatment} {obligations} {prohibitions & limitations} {administrators}
{sanctions} {cancellation of license}
In order to operate a Captive Insurance Company in Panama it is necessary to
first be licensed by the Superintendence of Insurance and Reinsurance.
The licenses offered cover two types of risk:
- Long term risks - individual, collective or group life insurance,
including hospitalisation, pensions or lifetime annuities;
- General risk - all those which are not "long term risks".
The license may be granted to cover long term risks, general risks or both.
In any case, the captive insurance company may only operate in the area for
which the license has been offered.
The initial application should be presented in writing through a
lawyer and should contain the following basic information:
 | Company name (or proposed company name) |
| Office address in Panama (where the commercial, accounting and
administrative documentation will be kept) |
| Domicile of the principal shareholders or parent company |
| Authorised and paid-in capital |
| Company's legal representative (President / CEO), which may also be an
administrator or a resident of Panama. In the latter case, this should
be supported by their curriculum vitae, banking and personal references,
experience in insurance matters and the powers which the person will have of
administration. |
The following documents should also be included:
| Proposed Articles of Incorporation (for a new company) or Memorandum of
Association (if a foreign company) |
| Banking and personal references of the principal shareholders or parent
company |
| Technical information, which should include:
 | Type of risk which will be covered; |
| Particular risks which will be insured or reinsured; and |
| Reinsurance program, if any. |
|
| Certified cheque to the Superintendence for $1,000.00; and |
| Any other requirement established by law or regulations. |
The final application should be presented once the company has been
incorporated. This should include:
| A certified copy of the Articles of Incorporation and other corporate
documents; |
| A Certificate of Good Standing from the Public Registry; and |
| Financial statements of the Company, duly certified by an independent CPA.
In the case of new companies, this may also be an audited opening balance
indicating the paid-in capital. |
None of the above documents may be more than 3 months old at the time of
presentation.
As is readily apparent from the description of the requirements which we have
listed above, the application process is a two-step process.
- An initial application is made, requesting authorisation to
incorporate the Captive Insurance Company. After this has been approved,
the applicant must, within no more than 3 months of the date of approval, have
incorporated the Company and organised the documentation for
- The final application, which is an application for an operating
license.
| General Risk - capital of $150,000.00 |
| Long Term Risk - capital of $250,000.00 |
This capital must, at all times, be unencumbered assets maintained in Panama.
Additionally, companies which insure Long Term Risk must maintain a solvency
ratio of 6% of their reserves. General risk companies must maintain at
least 5% of their premiums liquid.
Investments:
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Last modified
26-Sep-2007 17:37 -0400
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