He added that Anguilla has the advantage of being a “zero-tax jurisdiction.” Other captive services that are needed, such as captive managers, “get built up as you develop the industry,” he said.

Anguillas motivation for establishing itself as a captive domicile competing with such giants as Bermuda, offshore, and Vermont in the United States, he said, is to “widen the appeal of Anguilla in other areas.”

Mike Mead, past president of the Captive Insurance Companies Association and president of M.R. Mead and Company, LLC in Chicago, said that a new domicile raises concerns about “the qualifications and expertise of the regulators and the understanding of the legislature.” He added, “If this is an underfunded or unfunded me-too, it wont amount to much.”

However, if the islands government brings in well-qualified regulators “and spends money to promote the venue, then it will be welcome and have a chance,” he said. “I am not aware of any particular advantages or negatives involving Anguilla. I have never been there, nor do I know anyone there.“

Nick Leighton, manager, insurance services for Caledonian Bank & Trust Limited in Cayman, said that to attract captives, Anguilla “needs to have credibility. Whos going to be the first one to form [a captive] in Anguilla?” he asked.

He said the island most likely is “facing some sort of budgetary deficit and theyre looking at this as a way of getting extra income. Tourisms down.”

He added that the larger domiciles “will continue to get bigger and more professional than the smaller ones because they have the necessary expertise and infrastructure.” But new domiciles on the scene may be “getting in the game too late,” he said. “Its too little, too late. They dont have the reputation or the infrastructure.”

Mr. Lawrence said the main pieces of the legislation include a companies act, an international business companies act, a limited partnership act, a limited liability company act, a company management act, a trust act, a fraudulent dispositions act, a confidential relations act, and an offshore bank and trust companies act.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, May 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.