ISLE OF MAN TO INTRODUCE NEW LEGISLATION
IN RESPECT OF
PROTECTED CELL COMPANIES ("PCCs")
Following a detailed review of developments in Protected Cell legislation by the Insurance and Pensions Authority ("IPA") the Isle of Man Treasury has announced that appropriate legislation to enable the formation of such companies will be introduced on the Island as soon as possible.
PCC legislation is particularly relevant to captive insurance business. However, as a result of the review the Treasury considers that there may be opportunities for it to be used by other types of companies also and therefore it is intended that the proposals will apply to companies in general.
For this reason, draft clauses will be included in the forthcoming Companies (Amendment) Bill, which the Financial Supervision Commission ("FSC") is currently developing. The IPA and the FSC will be working on the detailed proposals in advance of consulting with all interested parties.
The Companies (Amendment) Bill is due to be introduced to Tynwald during the legislative session 2001/2002.
Notes to Editors
A protected cell company is a corporate entity which holds assets in one or more segregated cells. The purpose of such a structure is to separate the assets in each cell from those in the other cells. In this way companies that are perhaps not large enough to form a captive in their own right may use a "captive"-type structure, for example.
The assets of each cell must be kept separate and be separately identifiable from both the company's non-cellular assets and from assets attributable to other cells. In particular, cellular assets are only available to satisfy the creditors of the company, who are creditors in respect of that cell.
The Protected Cell Company historically has been particularly relevant to captive insurance and the Island's market is particularly keen to be afforded the opportunity to use such vehicles. The announcement will therefore be welcomed by the Island's captive insurance industry.
