As global developments shape its future, Cayman stands firmly on its competitive advantages and a solid framework through which to attract business, writes Hon. Alden McLaughlin, Premier of the Cayman Islands.
The Cayman Islands prides itself on the strength of a financial services industry that owes much of its prowess to the fortitude of our captives sector.
We continue to make legislative changes that meet global market needs, such as enacting provisions that allow for the creation of limited liabilities companies, or LLCs, and portfolio insurance companies, or PICs. What this means for our insurers is greater flexibility in conducting sophisticated transactions that will satisfy their clients.
We continue to strengthen our strategic partnerships with the likes of our financial services regulator, the Cayman Islands Monetary Association (CIMA); the Insurance Managers Association of Cayman (IMAC); and our practitioners—including risk managers, captive directors and managers, chief financial officers, and service providers. Together, we help reinforce our international reputation as a jurisdiction of choice for business.
At a macro level, government continues to espouse the tenets of sound business. The same principles which guide our captives influence our fiscal policy. Over the course of my government’s tenure, we have reduced:
- Unemployment—which fell from a rate of 10.5 percent in 2012 to a low of 5.7 percent in spring 2016;
- Business costs—with duty paid by licensed traders dropping from 22 percent to 20 percent; and
- National debt—which fell from about $574 million three years ago to $503 million as at the end of the last fiscal year. By December 31, 2017, under current plans, debt will be further reduced to $451 million.
At the same time, we have observed economic growth—Cayman’s GDP has grown on average by 2 percent annually, with the most recent indicators showing a rise in GDP by 2.4 percent during the first quarter of 2016.
In other words, this government has decreased taxes and spending, and the effect is that the economy has grown. This is simply good economic policy in motion and the benefits have been felt overall, including in financial services.
"Cayman is poised to maintain its place as a leading financial centre for all types of business—especially captives."
Regardless of what developments impact the global marketplace, Cayman will remain a leader in the captive insurance business. Our legislative and regulatory framework, coupled with our available technical expertise and sound fiscal base, point to a future with more insurance business taking place in Cayman.
On behalf of government, I thank the members of IMAC for their commitment to promoting Cayman’s captives sector, and our practitioners as well as CIMA, for their firm commitment to upholding the principles of sound business.
Together, we have seen Cayman make great strides in 40-plus years in the captives sector. Through such a rooted and beneficial partnership, Cayman is poised to maintain its place as a leading financial centre for all types of business—especially captives—well into the future.
The Premier, the Hon. Alden McLaughlin, JP
Alden McLaughlin, Cayman Islands, Captive, Insurance, CIMA, IMAC, Risk management, Legislation, Regulation