Isle of Man approves loans for solvency purposes
The Isle of Man has introduced regulations accepting inter-company loans for solvency purposes.
This will appeal to captives by providing certainty around the admissibility of assets, said the domicile’s captive association chair.
All loans are deemed automatically admissible for solvency purposes, provided certain criteria are met.
Inter-company loans no longer require approval from the Isle of Man Insurance and Pensions Authority.
Previously, only loans of 25% of shareholders’ funds were approved automatically. Any larger amounts were subject to regulatory review.
Automatic approval of loans for solvency purposes is subject to all insureds being related companies of the insurer.
Gaynor Brough, Isle of Man Captive Association chair, said: “This change in regulation is welcomed by the captive sector as it provides certainty around the admissibility of assets and this opportunity for existing and prospective captive clients will certainly add to the Isle of Man’s already compelling value proposition in terms of captive solutions.
“With these changes in place captive owners will benefit from the accessibility to loans in a challenging economic environment where cash is “king” and it is anticipated that there will be a strong take-up.”