The new legislation reflects all the best of its precursors in other jurisdictions, but benefits from experience gained in this field to date by ensuring that accredited funds of various types, from genuine public funds to family funds, are regulated properly. The Mutual Funds (Amendments) Act, 1998, amends the seminal law passed in 1997. Over one hundred pages of statutory rules and orders, application forms and schedules accompany the amending legislation. The key elements of the amending Act include statutory recognition of a new class of private "Accredited Fund" for professional and sophisticated investors and exemptions for family funds and certain small offerings.
- Statutory 45 day turnaround time on all applications for recognition and registration
- Special procedure for preliminary approval of public funds prior to formation or capitalisation of offering vehicle
- The most comprehensive tax exemption provisions with every regulated fund receiving a special certificate of tax exemption
- Low fees for registration and annual renewals
- Family funds and small offerings (under 15 investors) exempt from filing requirements
- Provisions to facilitate registration of foreign licensed fund managers as "recognised managers"
- Accredited funds receive automatic 2 week grace period to apply for recognition
This completed Act, which is designed as a comprehensive code to govern all administrative and regulatory aspects of the new Vincentian offshore insurance scheme, contains a number of innovations.
These include detailed provisions for Protected Premium Accounts, an asset preservation feature for premiums paid under life insurance and annuity policies to all Classes of companies formed under the new law. The Protected Premium Account Part of the new act amplifies similar provisions found in external insurance law in Bermuda and the Cayman Islands and is coupled with key aspects of protected cell company legislation as found in Guernsey.
Uniquely, the act prescribes five classes of international insurance companies, which allows applicants to more precisely choose the appropriate vehicle based on cost and regulatory exemptions.
These distinct Classes accommodate the largest and the smallest offshore insurance enterprises. The application process, regulatory requirements and fees for each Class vary according to the size and captive qualities of the insurer. In Classes 4 and 5, trusts registered under the International Trusts Act, 1996, can act as the Group or Single license holder.
The new Insurance Act, like the Mutual Funds Act, is accompanied by comprehensive forms and regulations which facilitate the application process and lead to more predictable results and regulation.