In international practice a term exists for an insurance company established by a group to insure its own risks. It must be said at the outset: the Law of Georgia on Insurance Activity does not recognise the term, and no separate captive regime exists in Georgia. Group self-insurance is purely a commercial decision, and the company created for it falls entirely under the general regime of insurance activity: joint-stock form, licence, capital and solvency requirements and permanent supervision. On this page we explain what this means in practice and which articles create the framework a captive plan must fit.
The Legal Position: a Captive Is an Ordinary Licensed Insurer
Under Article 9, an insurer is a legal entity created for insurance activity and licensed for the relevant type of insurance. The only permissible organisational form is a joint-stock company, whose firm name must contain the word “insurance” in Georgian; budget organisations may neither found an insurer nor be its founder.
A group managing its own risks through a separate company therefore establishes an ordinary insurer — restricted shareholder circle, but no softening of legal status. Article 22 licenses only three activities — life insurance, non-life insurance and reinsurance — and the group company chooses among them; shareholder composition is regulated through supervisory conditions, not an exception regime.
Establishment and the Licensing Procedure
The licence applicant submits a substantial package: a written application, founding documents, the registration certificate, an extract from the securities registry on the distribution of shares, banking documents confirming full monetary payment of the minimum capital, fitness documentation for significant shareholding owners and administrators, information on the origin of capital, and a 3-year business plan including the reinsurance programme.
The licence is issued for an indefinite term, to a specific insurer, and is non-transferable. The insurer must use the licence at least once every 6 months; and where an insurer wishing to conduct reinsurance already holds a licence for that type of insurance, no additional licence is needed — it suffices to notify the Service within 10 working days of commencement.
Article 25 sets the grounds for refusal: documents not meeting the statutory requirements and not corrected in time; inaccurate or incomplete information; administrators or significant shareholding owners failing fitness requirements; absence of the right to conduct insurance activity; a revoked licence whose grounds persist; or pending insolvency or bankruptcy against a significant shareholding owner. Refusal is a reasoned written answer, open to appeal.