No need to panic about new fines and penalties regime: CIMA
“Captives do not need to panic,” about the implementation of the Cayman Islands Monetary Authority's (CIMA) new fines and penalties regime, according to Ruwan Jayasekera, head of insurance at CIMA.
Speaking at the Cayman Captive Forum, Jayasekera said CIMA is only implementing a new fines and penalties regime to demonstrate that it takes compliance seriously. The regulator is not expecting to significantly increase in the number of severity of fines it hands out to Cayman companies, he added.
Alan Craig, partner at Campbells, said the new regime responded to “a theoretical issue,” in that the island was not perceived to have the means to enforce its rules effectively. “We do not anticipate a huge increase in administrative fines because Cayman is a well managed and well regulated jurisdiction,” he said, in words that echoed CIMA's.
Addressing other new regulations coming into force in Cayman, Jayasekera said new rules around AML will likely have a limited impact on captives. However, captives should be careful when conducting transactions with service providers and others, and be aware of phishing emails, he warned.
Meanwhile, life insurance captives that handle large quantities of patient data will be the captives most exposed to the new Data Protection Law that came into effect in Cayman on September 30, 2019, said Damian Pentney, partner at PwC.
Generally speaking captives will not be as heavily impacted by data protection laws as some other sectors, Pentney said. And to the extent that there are additional requirements, captives will outsource most of the extra work to insurance managers, he added.
But they will have to review the way they handle their own data, and understand whether they are controlling their data or only processing it, Pentney said. Those who are controlling data have greater requirements than those who are only processing it, he explained.
“If the captive is not insuring individuals these laws have very limited impact,” added Craig.