A segregated accounts company (SAC) is able to hold certain assets and liabilities in a separate account firewalled from the assets and liabilities of the SAC itself (the SAC’s own account is usually referred to as the “general account”) and the assets belonging to its other segregated accounts.

In order for a company to achieve legal separation of its general account and its segregated account(s) it must be registered as an SAC with the Registrar of Companies (ROC) and comply with all relevant laws and regulations governing the operation of an SAC.

SACs are commonly used in the insurance sector, for special purpose vehicles, and in the areas of financial guarantees, and securitisation & derivatives structures.

The Act is the principal legislation governing SACs in Bermuda, however, an SAC must also comply with other legislation applicable to its structure, for example the Companies Act 1981 and/or the Insurance Act 1978.

Documentation and contracts entered into by an SAC are often governed by the laws of a jurisdiction other than Bermuda. In this situation, a bi-location governing law clause should be added that ensures any aspects of the document dealing with the segregated account nature of the SAC are governed by Bermuda law and the Act.

To register as an SAC, a company must apply to the ROC. If the company is engaged in insurance business (as defined in the Insurance Act 1978) then the company may proceed direct to application to the ROC. If it carries on business other than insurance business, it must first obtain approval from the Minister of Finance (Minister).

Share
Twitter LinkedIn Email Save as PDF
More Publications
5 Dec 2022

Business Crime and Investigations in Bermuda: Overview

A Q&A guide to business crime and investigations in Bermuda.

24 Nov 2022

Information Technology, Outsourcing, Privacy & Data Protection

All aspects of Bermuda's economy rely on information technology and data processing - an essential i...

Contributors: Duncan Card
22 Nov 2022

A Look Back on 2022 and What to Expect for 2023

As we approach the end of 2022, we are able to look back and say with certainty that the arena of la...

14 Nov 2022

When will the court enforce a promise?

As we all know, promises are made and broken all the time. What, if anything, can the law do to assi...

4 Nov 2022

Legally speaking: what not to do when outsourcing operations

In the course of my career, I have drafted, negotiated or otherwise provided commercial and legal ad...

1 Nov 2022

The Insolvency Review – Edition 10

The Insolvency Review offers an in-depth review of the most consequential features of the insolvenc...

25 Oct 2022

Bermuda: Mergers & Acquisitions Comparative Guide 2022

This country-specific Q&A provides an overview to Mergers & Acquisitions laws and regulati...

Contributors: Katie Blundy
24 Oct 2022

Directors’ duties on the eve of insolvency

It is common knowledge that directors of companies owe a duty to the company to act in its best inte...

Contributors: James Batten
13 Oct 2022

Employee probation periods: an update

The Employment Act 2000 is the island’s key piece of employment legislation, applicable to employe...

Contributors: Kiara Wilkinson
6 Oct 2022

Centre Stage: Bermuda’s Role In An Insurtech Revolution

Bermuda is rapidly becoming a focus for insurtechs seeking the island’s expertise, the accessibili...