The ISAC Act is a stand-alone piece of legislation and a companion statute to the Segregated Accounts Companies Act 2000.

The introduction and development of uses of the segregated accounts company concept by the Bermuda re/insurance industry has enhanced the island’s standing as an offshore jurisdiction.

Moreover, the use of SACs has been expanded to include areas such as the funds industry.

Purpose-built to cater for the needs of existing and future Bermuda business partners, the new legislation will serve to provide individual industry players with yet another compelling reason for choosing to domicile their businesses on the island.

As is the case with SACs, the uses to which incorporated segregated accounts companies may be applied are many.

This article will provide some leading examples of the application of the ISAC Act to the financial services and other sectors.

A key feature of both an SAC and an ISAC is that the assets of each individual segregated account, or cell, will not be available to the creditors of any other cell.

Moreover, it is possible for individual cells to be subject to winding-up proceedings while the ISAC or SAC and the other cells remain unaffected.

Under the SAC Act, the statutory divisions between accounts do not create separate bodies corporate. The ISAC Act, conversely, is distinguished by the creation of separate bodies corporate.

Under the ISAC Act, it would be possible to offer an alternative to the conventional corporate group structure, with its ultimate parent and numerous intermediate holding companies, affiliates and subsidiaries and the expense that this entails, with a more operationally efficient and cost-effective ISAC structure.

There are numerous potential uses of an ISAC structure in a multinational group environment. Indeed, the ISAC could be the ultimate parent with its incorporated segregated accounts acting as holding companies to each subsidiary and operating in separate jurisdictions so that an ISA is the intermediate holding company for a group’s operation in a specific country or region.

Alternatively, ISAs could act as holding companies in respect of specific classes of business. Another ISA may be the “group” entity which provides administrative, human resource, payroll and other support roles to the group’s other ISA, while yet another ISA may act as owner of all the group’s intellectual property assets.

ISAC structures can also be utilised in both the captive and large commercial re/insurer context and potentially also in short-term and long-term business.

Other examples of potential uses include:

• Securitisation – making use of special purpose vehicle ISAs for the issue of securities, rights issues and other capital raising mechanisms;

• Mutual funds/collective investment schemes/open-ended investment companies – the ISAC structure would be attractive for the umbrella fund, multi-class, multi-strategy funds;

• Hedge funds – ISAC structures would also be particularly useful to hedge funds to better control and ring-fence risk exposures and offer greater flexibility to deal with issues such as redemptions;

• Family office structures – ISAC structures would allow high-net-worth individuals to transfer certain of their businesses to individual family members while retaining a majority/minority shareholding interest within each ISA and ensuring that the assets of each ISA are protected from liabilities of others which are majority/minority owned by other family members; and

• Asset ownership companies – the ISAC structure would provide greater efficiencies for owners of ships and aircraft, where historically each vessel or aircraft has been registered under the ownership of separate subsidiaries.

These are just a few examples of the many structures that the ISAC Act can facilitate. As they demonstrate, the legislation will be a welcome addition to Bermuda’s legislative arsenal, ensuring that the island maintains its leadership position in offshore finance and product development.

Share
X.com LinkedIn Email Save as PDF
More Publications
Appleby-Website-Privacy-and-Data-Protection
28 Jul 2025

Insights from the BMA’s Second Consultation Paper on Digital Identity Service Providers

As jurisdictions around the world grapple with the complexities of authenticating digital identities...

Technology and Innovation
24 Jul 2025

Contracts to Manage AI Risk: Part Two (Bermuda)

In part one of this two-part series about artificial intelligence contracts, I discussed the ways th...

Technology and Innovation
22 Jul 2025

Contracts to Manage AI Risk (Bermuda)

This is the first of a two-part article on how artificial intelligence contracts can be used to mana...

Appleby-Website-Insurance-and-Reinsurance
15 Jul 2025

Captives are the grass roots of Bermuda risk

Bermuda has seen tremendous growth in the life reinsurance and insurance-linked securities markets i...

050-Insolvency-Restructuring-Grid-Image
10 Jul 2025

Bermuda: Restructuring & Insolvency

This country-specific Q&A provides an overview of Restructuring & Insolvency laws and regulations ap...

050-Insolvency-Restructuring-Grid-Image
3 Jul 2025

Insolvency law: secured creditors take note (Bermuda)

The recent judgment delivered by the Supreme Court of Bermuda in the matter of Harold J. Darrell hig...

Appleby-Website-Insurance-and-Reinsurance
2 Jul 2025

Bermuda: Education has helped investors get more comfortable as ILS continues to grow

It’s been an exceptionally busy and record first half of the year for the catastrophe bond sector,...

Appleby-Website-Privacy-and-Data-Protection
25 Jun 2025

Impact of Privacy Law on Bermuda Business

On 1st January 2025, Bermuda’s Personal Information Protection Act 2016 (PIPA) came into full forc...

Appleby-Website-Regulatory-Practice
25 Jun 2025

Simplified Due Diligence in Bermuda

Simplified Due Diligence (SDD) and Reduced Due Diligence (RDD) are critical features of a modern, ri...

Appleby-Website-Employment-and-Immigration
23 Jun 2025

Practical Tips for Conducting Workplace Investigations

Allegations of harassment, bullying or other misconduct in the workplace can create a legal mine fie...