Captive.com logo

Captive Insurance News

Free Captive Wire Report

Tax Considerations for Captive Insurers

A FREE 16-page special report courtesy of Captive.com

Dig deep into important issues and trends in captive insurance. Download this FREE special report featuring practical knowledge and insights from nine respected captive insurance thought leaders!

Show Me My Free Report

Cayman Island Insurance Company Formations Clipping Along in 2017

Cayman Flag 480x377
October 17, 2017

To date for 2017, the Cayman Islands Monetary Authority (CIMA) has issued 23 new insurance company licenses. This count includes 20 Class B licenses, 11 of which represent third-party insurers, and 3 Class C licenses. The 2016 year ended with a grand total of 39 new insurer licenses, following 22 in 2015 and 23 in 2014.

The Class B license category under the insurance law captures captive insurance companies including pure captives, segregated portfolio companies, group captives, association captives, special purpose vehicles, open market insurers, and rent-a-captives.

The Class C license category under the insurance law includes entities that provide reinsurance through the issuance of insurance-linked securities such as catastrophe bonds, sidecars, collateralized reinsurance, or similar instruments.

The CIMA website's key statistics reflect that, as of June 30, 2017, there are a grand total of 730 licensed insurance companies. This total is comprised of 29 Class A (domestic) companies, 673 Class B companies, 25 Class C companies, and 3 Class D (commercial reinsurance) companies.

In accordance with Cayman Islands insurance law, CIMA issues the following categories of insurer licenses, according to the CIMA website.

  • Class A insurer's license—permits a local or an external insurer to carry on domestic insurance business or limited reinsurance business as approved by the Authority.

  • Class B insurer's license—permits an exempted insurer to carry on insurance business other than domestic business in respect of which (1) at least 95 percent of the net premiums written will originate from the insurer's related business, (2) over 50 percent of the net premiums written will originate from the insurer's related business, or (3) 50 percent or less of the net premiums written will originate from the insurer's related business.

  • Class C insurer's license—permits an exempted insurer to carry on insurance business involving the provision of reinsurance arrangements in respect of which the insurance obligations of the Class C insurer are limited in recourse to and collateralized by the Class C insurer's funding sources or the proceeds of such funding sources that include the issuance of bonds or other instruments, contracts for differences, and other such funding mechanisms approved by the Authority.

  • Class D insurer's license—permits an insurer to carry on reinsurance business and other such business as may be approved in respect of any individual license by the Authority.

Insurance Managers Association of Cayman Chair Linda Haddleton said, "The picture so far in 2017 continues to look positive and is expected to improve further as we move into the 4Q which is traditionally the busiest season for new formations, as a result Cayman looks on track to repeat the success of 2016."

"It is particularly pleasing to note the number of captives formed to write 3rd party business as the diversity of Cayman licensees continues to develop and shows the undoubted strength of innovation in the Cayman Islands market and the ability to create alternative risk financing solutions."

Ms. Haddleton continued, "There is no doubt that trade and commerce becomes more global every day, bringing many challenges but also opportunities. The more broad your experience, the more innovative you tend to become. Exposure to wide-ranging financial structures allows for lateral thinking when it comes to innovative structuring and development of appropriate regulations. Given the range of well-established sectors in our financial services industry, the Cayman Islands is well positioned to facilitate global business of an insurance nature. This may represent the higher risk end of the spectrum for our industry, but this is where the priority to quality over quantity that is the hallmark of the Cayman Islands Insurance Industry will influence success."

Full licensing statistics are available through the Cayman Islands Monetary Authority.

Captive Insurance Company Reports
Follow Captive.com on Twitter

Twitter Feed