Cayman - a milestone for innovation and growth
Dr Dax Basdeo, chief officer of the Ministry of Financial Services and Commerce, was the second speaker at the formal opening of Cayman Captive Forum 2024, taking place in Cayman this week.
He stressed the Cayman Islands' leadership in the global captive insurance sector. Representing the Premier, Hon. Juliana O’Connor-Connolly, Dr Basdeo welcomed participants to this premier event, describing it as a hallmark of excellence and collaboration in the industry.
"Thanks to the support of professionals like you, the Cayman Islands Government has been pleased to see this gathering grow into the largest captive insurance event in the world,” Dr Basdeo remarked, highlighting the forum's significance in both economic impact and industry development.
The chief officer provided an overview of the sector's impressive growth. As of 30 September 2024, the jurisdiction housed 696 Class B, C, and D insurance companies—a steady rise from 679 in 2023, 668 in 2022, and 662 in 2021. These companies now oversee assets totalling $154.03 billion, a marked increase from $137.1 billion the previous year.
Segregated Portfolio Companies (SPCs) remain a popular choice, with 145 entities representing 20% of newly formed companies in 2024. "SPCs serve as flexible structures for managing risks associated with complex corporate frameworks," noted Dr Basdeo, adding that pure captives continue to dominate, accounting for 42% of all structures. Pure captives primarily address medical malpractice liability and workers' compensation.
Reinsurance also stands out as a growth area, particularly in the Class B(iii) licensing category. The jurisdiction now boasts 191 B(iii) licences, up from 183 in 2023 and 172 in 2022. These licences cater to third-party reinsurance companies, reflecting Cayman’s evolving role as a reinsurance hub.
Dr Basdeo outlined the government’s proactive legislative measures to support the industry. A new licensing category for specialist reinsurance brokers is being introduced to align with the standards of the US National Association of Insurance Commissioners. Additionally, a proposed Class B(iv) licence will better categorise large commercial reinsurers.
Other initiatives include a managing general agents licence to enhance outsourcing arrangements and amendments to the “fit and proper” requirements, ensuring stringent compliance across senior roles. These measures, Dr Basdeo emphasised, are designed to bolster Cayman's reputation as a premier domicile for insurance and reinsurance services.
He also covered broader regulatory progress. Dr Basdeo praised the jurisdiction's removal from the Financial Action Task Force (FATF) "grey list" in 2023, describing it as a turning point for Cayman’s international standing. The Cayman Islands were recently named a guest member of the FATF's regional bodies initiative, allowing them a seat at the table alongside key global players.
On tax matters, Dr Basdeo reaffirmed the Cayman Islands' commitment to transparency and cooperation. The jurisdiction maintains a strong relationship with the OECD and the European Union, ensuring alignment with international standards while preserving Cayman's tax-neutral investment environment.
Acknowledging the importance of convenience for business travellers, Dr Basdeo highlighted ongoing efforts to enhance accessibility. The government has expanded airline routes and increased hotel capacity, complementing the ongoing expansion of the national airport. "Your presence here today demonstrates the value we place on making the Cayman Islands a premier destination for financial services and conferences," he stated.
As the forum looks at topics ranging from capital risks to emerging technological challenges, Dr Basdeo urged attendees to fully engage in the sessions and share insights. “The Cayman Captive Forum boosts our reputation as the world’s leading jurisdiction for healthcare and human captives,” he said, encouraging professionals to leverage the event for networking and innovation.
In closing, Dr Basdeo expressed his gratitude to the Insurance Managers Association of Cayman (IMAC) for their dedication in organising the event, calling it a cornerstone of Cayman's financial services calendar. "I look forward to hearing your perspectives and ensuring that Cayman continues to lead in this dynamic industry,” he concluded.
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