International Law

INSURANCE BUSINESS IN THE DUTCH CARIBBEAN (II)

By Karel.Frielink

Limitations apply to a foreign insurance company

A foreign insurance company, i.e. a company not having its seat in the Netherlands Antilles and not operating through any kind of branch office (including a local representative), is allowed to insure a risk located in the Netherlands Antilles (for instance Curaçao), provided this occurs on an incidental basis (Explanatory Memorandum NOSI, Parliament of the Netherlands Antilles, Session 1987-1988, No. 3, p. 7).

In such cases, no license or registration requirements apply. The point is, however, that it is up to the Central Bank to decide whether this criterion has been met. Unfortunately there are no policy guidelines or guidance available (e.g. no case-law) on what is considered ?incidental?. It is likely that, amongst other things, both the number of insurance policies concluded as well as the total of the (yearly) premiums will be of relevance.

Although the Explanatory Memorandum only mentions ?risks situated in the Netherlands Antilles?, I see no justification for the view that ?risks situated outside the Netherlands Antilles? are thus excluded. In my opinion, a foreign insurance company (as defined above) is allowed to insure a risk in or outside the Netherlands Antilles, for an Antillean client, provided this takes place on an incidental basis.

According to Article 44 NOSI, the Minister of Finance of the Netherlands Antilles may, at the request of the Central Bank, issue an order to prevent a particular foreign insurance company from offering its services in the Netherlands Antilles. It may reasonably be assumed that such an order will not affect any insurance agreements previously concluded.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on November 17, 2008 (boomark / email).