Protected Cell Companies
The Protected Cell Companies Act 2004 allows for protected cell companies engaged in insurance business to be registered and companies engaged in other businesses to be registered with the approval of the Commission. If engaged in insurance business, a protected cell company (PCC) would first require to be licensed as an insurer under the Insurance Act 2004. Further, if that insurer wishes to underwrite programmes on a protected cell basis, it will have to be registered under the Act.
The Act makes provision for the registration of PCCs and sets out rules governing the registration, management and administration of such companies. In the Act a protected cell account is defined as a separate and distinct account (comprising assets, rights, liabilities and obligations) of a protected cell company. However, the establishment of a protected cell account does not create a legal person distinct from the protected cell company. A feature of a protected cell company is that any asset, which is linked to a particular protected cell account shall be held as a separate fund, which is not part of the general assets of the protected cell company, and is held exclusively for the benefit of the account owner of the protected cell account and to any counter-party to a transaction linked to that protected cell account. Assets in such account shall only be available to meet liabilities to the owners and creditors of that protected cell account. The Act provides that any asset which attaches to a particular account shall not be available or used to meet liabilities to, and shall for all purposes be protected from, the general shareholders and from the creditors of the company who are not creditors with claims linked to the particular protected cell account identified in the governing instrument.
The Act further creates statutory rights and obligations with respect to protected cell accounts and to receivership and winding up of protected cell companies.
Application forms and fees are to be found in the Protected Cell Company Regulations 2005.
