ABSTRACT
As it has since the 1950s, the offshore financial world offers a home to insurance and mutual fund management companies that most jurisdictions would regulate heavily. Some of the offshore insurance business is legitimate and some is not. To give an extreme example of the illicit, an insurance company in the British Virgin Islands wrote fire insurance for Korean grocers in Los Angeles in the late 1980s. The British Virgin Islands does not regulate insurance. When the Korean grocery stores burned in the 1993 Los Angeles riots, the grocers tried to collect. They discovered that the “insurance company” was an answering machine. It had no assets, no claims office, and was a pure fraud. The grocers had no recourse because they had no one they could identify to sue. The money they paid in premiums disappeared into a maze of offshore accounts.
