In December 2018, Deloitte released a brief titled “Tax Convergence in Barbados: the impact on the insurance industry”. The purpose of that brief was to provide an overview on the effect of the legislative changes on the insurance industry in Barbados. The brief is also enclosed for ease of reference.
Deloitte has been monitoring the industry over the last year and also received many queries on how insurance companies were to operate going forward. Accordingly this “Tax Convergence in Barbados: the impact on the insurance industry – UPDATES” document seeks to address those queries. We will also highlight some of the key revisions to the Insurance Act.
Which legislation(s) regulate the operations of captive insurance companies in Barbados?
Given that the Exempt Insurance Act was repealed effective January 1, 2019, exempt insurance companies will now be governed by the Insurance Act, Cap. 310. Further, as it relates to continuation of a licensee, a company that held a license under the Exempt Insurance Act immediately preceding January 1, 2019 shall from that date, be deemed as licensed under the Insurance Act and the provisions shall apply accordingly.
What changes have been made to Qualifying Insurance Companies (QICs)?
The Insurance Act was amended to delete the definition of a QIC. Further, the Income Tax Act has also been amended to include a grandfathering provision for a QIC that is licensed under the Insurance Act and carrying on life insurance business before 17 October 2017 to apply for the Foreign Currency Allowance and levy income tax at the rate of 0.35% from the income year 2019 and ending on 30 June 2021.