Segregated Cell - Overview

A segregated cell company is a company containing assets and liabilities that are legally segregated from the assets and liabilities of the company’s general account and the other segregated cell accounts. In Bermuda, this segregation can be obtained either via a private Act of the Bermuda Legislature or through the Segregated Accounts Companies Act 2000.

Advantages of insurance companies writing (re)insurance business through segregated cell:

  • Less expensive and quicker to form than a captive or an insurance company
  • Does not create a legal person distinct from the general account
  • Investors are non-voting preferred shareholders and generally do not need to consolidate their investment in the segregated cell
  • Easier to unwind
  • Not separately licensed

For insurance purposes, the segregated cell company format can be utilized for ‘Rent-a-Captive Vehicle’ or ‘Transformer Vehicle’ purposes. Further information on these types of Vehicles is given below:


A Rent-a-Captive insurer (”RAC”) is a variation of a captive insurer. RACs are typically set up for insureds or investors that do not want to, or cannot afford to fund the capital requirements or assume the risk of a captive company, while wanting to retain some of the benefits.

Under a RAC, third-party investors typically form the company. Insureds or investors wishing to utilize the RAC usually purchase non-voting preferred stock of a specific segregated cell which will issue the insurance policy.

Investors and insureds involved with RAC have included corporations, MGAs, MGUs, Agents and Brokers.


An insurance transformer vehicle is an entity which transforms one type of financial risk into another. Transformers provide a link between the capital markets and the reinsurance market.

An overview of transformer is included in our Information Center, for more information click here

The Horseshoe Group has its own segregated account company, Horseshoe Re Limited. Horseshoe Re Limited is licensed under a private Act enabling the creation and utilization of segregated accounts. Horseshoe Re Limited is also registered as a Class 3 insurer under the Insurance Act 1978. Horseshoe Re Limited is utilized by several of our clients that do no want to set up their own segregated cell company or transformer vehicle.