What are the solvency requirements for Exempt Insurance Companies?

Unless the Supervisor otherwise determines, a licensee carrying on general insurance business is unable to pay its debts if:

• at any time in its first financial year, the value of its assets does not exceed the amount of its liabilities by $250,000.00;
• at any time after the expiration of the first financial year the value of its assets does not exceed its liabilities
• by $250,000, where the premium income of the licensee in the preceding financial year did not exceed $1,500,000;
• by 1/5 of the premium income for the preceding financial year, where the premium income exceed $1,500,000 but did not exceed $10,000,000;
• by the aggregate of $2,000,000 and 1/10 of the amount by which the premium income in the preceding financial year exceeded $10,000,000, where the premium income for that year exceeded $10,000,000.

A licensee carrying on long-term insurance business is unable to pay its debts if the value of its assets does not exceed its liabilities.

What is a director's liability for decisions under the Companies Act?

The important fact in determining a director’s liability for action taken as a result of a decision made by the Board is whether that director showed express dissent to the resolution authorising the action taken and voted against it.    Section 96 (1) of the Companies Act, states that “ a director who is present at a meeting of the directors or of a committee of directors consents to any resolution passed or action taken at that meeting, unless

• he requests that his dissent be or his dissent is entered in the minutes of the meeting,

• he sends his written dissent to the secretary of the meeting before the meeting is adjourned, or

• he sends his dissent by registered post or delivers it to the registered office of the company immediately after the meeting is adjourned.

A director who votes for, or consents to, a resolution may not dissent under section 96(1).  A director who was not present at a meeting at which a resolution was passed or action taken is presumed to have consented thereto unless, within 7 days after he becomes aware of the resolution, he (a) causes his dissent to be placed with the minutes of the meeting, or (b) sends his dissent by registered post or delivers it to the registered office of the company. 

How are Mutual Funds licensed and regulated in Barbados?

The regulation, authorisation and control of mutual funds and their managers and administrators carrying on business in, or from  within barbados are prescribed by the Mutual Funds Act, 2002-22 and the Mutual Funds Regulations, 2002.  A mutual fund may, upon application, be licensed to carry on business in or from Barbados where it has applied for and has been granted a licence under the Act, which is administered by the Barbados Securities Commission.  The Act generally makes provision for three types of mutual fund licenses:

• the mutual fund licence: this is a mutual fund licensed in Barbados;    
• the exempt mutual fund licence: this is a mutual fund which is licensed in a foreign jurisdiction  (such as Trinidad and Tobago)and has not suspended operation in that jurisdiction and has been approved by the Minister responsible for Finance in Barbados; and
• the limited investors licence: this is a mutual fund in which the equity interest are held not by more than 15 investors the majority of whom are capable of appointing or removing the operator of the fund and in the case where any of the investors is a corporation, that the corporation does not have more than 4 beneficial owners.

A mutual fund is required to inform the Securities Commission of any change of its registered office or its principal office, a change of its operator; or any material change to its structure, organisation or administration within 7 days of the occurrence of such a change and to submit to the Commission in respect of a financial year:

• a statement containing the prescribed information respecting its activities; and
• its audited accounts

within 4 months after the end of the financial year or within such further period as the Securities Commission may allow.

How are severance payments calculated in Barbados?

In order to qualify for Severance Payments under the Severance Payments Act of Barbados, a person must have been employed for the requisite period of one hundred and four weeks ending with the relevant date, being the date on which the notice to terminate employment expires or whenever the notice is to take effect.

The amount of a severance payment to which an employee is entitled shall be calculated by reference to the period ending with the relevant date during which the employee was continuously employed.  The amount of severance starting at the end of the period and reckoning backwards is as follows:

For each complete year of employment,

• 2.5 weeks’ basic pay for each such year up to 10 years
• 3 weeks’ basic pay for each such year by which the employment exceeds 10 years but does not exceed 20 years, and
• 3.5 weeks’ basic pay for each such year by which the employment exceeds 20 years but does not exceed 33 years.

What is the exchange control system as it relates to doing business in Barbados?

Barbados has a rigidly enforced Exchange Control regime with the Minister of Finance (currently the Prime Minister) being the Exchange Control Authority, delegating several of his powers under the Exchange Control Act to the Central Bank of Barbados, the country’s Reserve Bank.  Residents of Barbados, corporate or individual are prohibited, without prior written permission, from incurring liabilities in foreign currency and liquidating such liabilities, or from holding and dealing in foreign currencies, except that certain “off-shore” companies are expressly exempted from control under their specific constituting legislation such as licenced off-shore banks, exempt insurance companies, international business companies and societies with restricted liability.