30/01/2018

FERMA position statement on Captives in a post BEPS World

captives book cover

Captives are an important element of an enterprise risk management programme for many international companies whose risk managers are represented through FERMA. In addition to providing additional risk capacity, captives are an important source of pricing and loss information to large business, which allows them to focus their mitigation efforts most effectively. Risk managers have also used their company captive to finance successful risk reduction in their companies.

FERMA is representing the views of its members on captives by working with the OECD on the implementation by national authorities of Base Erosion and Profit Shifting (BEPS) measures. It is also increasing understanding of the value of captives to the sustainability of European business through publications and articles. In 2017, FERMA has published an information paper on BEPS guidelines for captive (re)insurance and repurposed it for European risk managers as the first issue of FERMA Perspectives called “Captives in a Post BEPS World”.

In 2018, FERMA is reinforcing the dialogue with OECD on BEPS and working with its member associations to monitor the impacts of Solvency II. It is also examining the implications of IFRS 17 for captives, so that it can provide guidance for members before the likely implementation in 2021.