Pictured: Tara Rivers
Cayman responds positively to global regulatory standards and will continue to promote a healthy business environment, writes the Hon. Tara Rivers, Minister for Financial Services and Home Affairs.
Thanks to a sound regulatory and legislative framework that supports a healthy business environment, the Cayman Islands remains a leading jurisdiction in the captive insurance industry.
Credit for much of Cayman’s pre-eminence in this space rests with the hardworking minds of the Insurance Managers Association of Cayman (IMAC). From hosting the world’s largest gathering of captive professionals for over 25 years, to better promoting the industry internationally under its new brand, ‘Cayman International Insurance—The Better Alternative’, IMAC has helped make Cayman a desirable domicile for captives.
The numbers certainly bear out Cayman’s attractiveness in the captive space. According to our financial services regulator, the Cayman Islands Monetary Authority (CIMA), through the first two quarters of 2018 17 new licences were issued for captive insurance companies. With those numbers as of June 30, 2018, Cayman could surpass its 2017 total of 33 new licences.
The captives sector is set for further growth. The current total of 698 class B, C and D insurance companies already eclipses the 2017 total of 696 entities.
There are also encouraging statistics regarding the use of new licence types. As of the second quarter of this year, there were 13 total portfolio insurance companies (PICs) registered in the Cayman Islands.
While these are positive signs of the confidence clients place in the Cayman Islands, we recognise that we are often targets for critics. Contrary to news reports that portray Cayman’s financial services in a negative light, the Cayman Islands responds positively to globally practised regulatory standards, and has also entered into bilateral regulatory agreements when they are in line with these standards.
We have done so for decades because we realise that the soundness of our reputation is what allows our jurisdiction to do well commercially in financial services, inclusive of the captive space.
As you might know, the Cayman Islands is currently involved in discussions with the European Union regarding its assessment of third country jurisdictions’ tax regimes. Cayman has underscored its position through a robust engagement process with EU officials, stating our ongoing work in good governance in the area of taxation and government’s plans to enhance tax transparency and cooperation with the EU, as appropriate.
Throughout this process, the government has made sure the position of captives has been taken into account by consulting extensively with IMAC. In the face of the EU requirements being put forward, we highly value the input of this sector and place great importance on the role of insurance managers.
The Cayman Islands government, CIMA and our industry practitioners are aware of our responsibility to captives and our wider local economy. We also are aware of our responsibility to cooperate, despite the nature of competition, with jurisdictions that are signed up to and practise global standards, and are therefore part of the checks and balances on the global financial services system.
We uphold these standards because they help to uphold economies—in the US, Europe, in Cayman, and worldwide. We welcome the fact that more countries are signing up to these standards, because we know this means there will be fewer places for illicit activity to hide. Our firm belief is that global standards are the best way to ensure that taxpayers, governments, citizens and business itself are protected from criminality.
CIMA’s efforts have not gone unnoticed and with the captive space continuing to grow, the government stands committed to providing the resources needed to adequately monitor and support the sector.
With such a strong focus on captives, Cayman is certainly poised for future growth. Yet, the government knows the attractiveness of this jurisdiction rests in a well-rounded view of our stability. As global standards continue to evolve, we stand committed to adapting our legal and regulatory framework, as we have always done, to maintain an environment conducive to international business.
In addition, many persons in the financial services sectors want and appreciate good infrastructure, and Cayman certainly has that. We know having quality service providers and good infrastructure builds the confidence desired by the captive insurance sector, and indeed other financial services sectors, in deciding to do business here.
To that end, Cayman is advancing several capital projects, such as the redevelopment of our airport, the construction of a modern cruise berthing facility, and the ongoing development of our road networks to increase connectivity. I’m delighted to say that these capital projects will certainly boost our business environment. They supplement our position as a jurisdiction well- suited for all types of business, including captives.
Ultimately, the continued success of our financial services sector rests in a collective approach to attracting business to these shores. Government firmly believes that our business model presents a future that is bright for captives and the jurisdiction. As we go forward together and target our objectives, as always, we welcome input from you and other important stakeholders.
Tara Rivers, IMAC, CIMA, Regulations, Cayman Islands