Cayman captives lean into SPCs and PICs
Segregated portfolio companies (SPCs) and portfolio insurance companies (PICs) are growing in relevance as they mature, especially in the Cayman Islands.
That was the message from one of the first panel discussions that kicked off the start of the Cayman Captive Forum 2025, taking place this week, which featured a panel of industry experts. They comprised: Gamu Usai, deputy head of the Insurance Supervision Division at CIMA, Darren Treasure, client director and head of W1M Caribbean, and Steven Lill, vice president at USA Risk Group.
Treasure began by framing the session as an operationally focused look at SPC nuances, regulatory expectations and the evolving role of PICs. Usai provided historical context, noting that Cayman was among the pioneers in adopting SPC legislation in 1998. A defining feature, he explained, is the statutory requirement for SPCs to include the letters “SPC” in their name, offering instant transparency.
The central purpose of the regime – legally segregating assets and liabilities across portfolios – has enabled cost-efficient participation by small and mid-sized enterprises. Over time, Cayman has refined both its legal framework and supervisory approach, ensuring robust governance while preserving flexibility.
The panel highlighted how SPCs vary across jurisdictions, from differences in capital requirements to distinctions between Cayman’s PIC model, Vermont and Barbados’ incorporated cell structures, and Bermuda’s incorporated segregated account companies. Cayman’s approach emphasises clear regulatory boundaries: SPC portfolios may write only the risks approved under the SPC licence, and regulators apply enhanced scrutiny where portfolios mix more complex risk types.
Lill addressed why insurance managers so frequently sponsor SPCs: speed of setup, ease of exit, lower barriers to entry and the ability to offer clients a turnkey risk financing solution. Usai added that captives, MGAs and producer-owned programmes increasingly use SPC structures for portfolio management, revenue retention and as a stepping stone toward forming standalone captives.
Growth trends support these observations. Usai outlined notable increases in SPC and PIC licences from 2022 to 2025, reflecting heightened post-pandemic awareness of self-insurance, persistent geopolitical pressures and capacity constraints in the commercial market. While 2024 saw a temporary dip due to programme maturations and liquidations, 2025 rebounded strongly with 45 newly approved segregated portfolios.
Lill walked the audience through the anatomy of a typical SPC, describing its umbrella structure and the legal ring-fencing that ensures creditors of one portfolio have no recourse to another. This statutory segregation was reaffirmed by Cayman’s Grand Court in 2022, underscoring its importance to users.
A recurring theme was the SPC’s role as an incubator. As Lill explained, some portfolios ultimately “outgrow” the umbrella and convert to standalone captives for greater operational freedom. Usai described the regulatory review required for such a transition, emphasising enhanced governance, clear ownership structures and robust financial projections.
PICs, introduced in Cayman in 2015, add a further dimension. Lill noted that PICs address certain structural limitations of SPCs by granting separate legal personality, enabling portfolios to contract in their own name and interact more flexibly with related parties. Usai reinforced that PIC applications are more intensive, mirroring standalone licence scrutiny, reflecting their increased autonomy and governance requirements.
The panel closed by addressing operational subtleties including share issuance, economic substance obligations and financial reporting models. Their collective message was clear: SPCs and PICs continue to offer Cayman-based captives unparalleled adaptability, governance certainty and strategic scalability – and the jurisdiction’s regulatory maturity remains central to that success.
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