7 February 2023Analysis

Cayman insurers seek advice on investment regulation

The Cayman Islands Monetary Authority (CIMA) issued new legislation in February 2022 that aimed to tighten up regulation around the investment activities of insurance companies on the island.

According to financial planning company London & Capital, its executive director and the head of London & Capital’s Caribbean Office Darren Treasure has been working with local insurance managers in Cayman to help them ahead of the February 2023 deadline.

Treasure said that the change in regulations was broadly designed to ensure assets are managed in a manner consistent with the risk profile of the insurer and its liquidity needs, with new principles that echo many of the developments that have been seen in Europe.

In a question and answer article on London & Capital’s website Treasure explained that CIMA is requiring insurance companies to introduce enhanced governance procedures around their investments, with a particular eye on protecting policyholders’ interests.

“Insurers on the island are being asked to ensure they have a much greater understanding of the investments in their portfolios, from both a risk and solvency perspective,” said Treasure. “This means stronger accountability for investment decisions and how they impact the insurers’ ability to pay out claims when the time comes.

“We’ll also see greater transparency around the investment activities of the insurers and achieve some degree of standardisation around reporting and monitoring, which should make it easier for the regulator to monitor the overall health of the sector’s balance sheets going forward.”