Captive Insurance in the USVI

The USVI permits the establishment of insurance companies which are exempt from most local regulation so long as coverages do not involve USVI risks. The exempt insurers statute permits the licensing of “International Insurance Companies” also known as captive insurers. An International Insurance Company may also qualify as a USVI exempt company and thus be eligible for exemption from income and other local taxes. Unlike other types of exempt companies, an International Insurance Company may be owned by U.S. persons and still be eligible for these benefits so long as its income is effectively connected to a USVI trade or business.

The USVI is unique among offshore insurance domiciles in that it is considered a state for the purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”). As a result, it is possible to establish a captive insurance company, or branch, in the U.S. Virgin Islands which may write employee health and retirement plan coverage in the United States. Captives established in foreign jurisdictions are not allowed to write this type of coverage in the United States.

Table of contents