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
8 Apr 2021 |

Doing business from and within our shores

Bermuda is a hub for international business, which is one of the top contributors to our economy and...

25 Mar 2021 |

Changes to the Employment Act 2000 – Part 4

This Article is Part 4 of our series on the amendments to the Employment Act 2000 (“Act”) that w...

25 Mar 2021 |

Full Steam Ahead at the Jersey Ships Registry

Against a backdrop of uncertainty surrounding Brexit and the difficulties created by the global pand...

24 Mar 2021 |

Economic Substance update Q1 2021

Economic Substance update Q1 2021

17 Mar 2021 |

Need for high-layer capacity drives cat bond surge

Catastrophe bonds played a bigger role backstopping the insurance sector at recent reinsurance renew...

12 Mar 2021 |

Material adverse change clauses in light of the Covid-19 pandemic

Experts from each of our key global offices provide jurisdiction specific advice and answer question...

11 Mar 2021 |

Valuation of shares in M&A deals

The continuing presence of the Covid-19 pandemic may prompt companies to consider making strategic a...

8 Mar 2021 |

Appleby Celebrates International Women’s Day

International Women’s Day is celebrated annually in support of gender equality and equal participa...