Dozens of new shareholder-owned insurance companies set up shop in the British Virgin Islands last year, joining a growing list of US insurers seeking to avoid taxes and regulation in their homeland, officials said Thursday.

The British territory's offshore industry expanded with nearly 60 such companies, known as 'captives', in 2006, strengthening its position as the third-largest regional insurance centre behind Bermuda and the Cayman Islands, said Humphry A. Leue, CEO of the BVI International Finance Center.

Last year's expansion, representing 15 per cent growth, brought the British Caribbean territory's total number of captive licences to more than 400, Leue said. More than half of these companies were licensed in the past four years, he said.

A captive insurance company, which shareholders own and operate, lets members stabilise the cost of insurance, invest their premiums and retain profits.

U.S. insurance companies have increasingly moved offshore in recent years to take advantage of the corporate and banking secrecy and tax benefits offered by places such as the British Virgin Islands.

- AP