Canadian Captives catch Cayman’s attention
The Canadian and Cayman Islands insurance markets are made for each other, according to representatives from the Insurance Managers Association of Cayman, who have been showing increased interest in Canadian captives.
IMAC reps have been travelling regularly to Canada to discuss the advantages of captive structures in general and the benefits of Cayman as a domicile with business owners and executives there. Cayman is home to 764 captives, making it the second-largest domicile.
The group, comprising Bill Messer, managing director of Five Continents and Maggie Papadopoulos, senior account manager at Aon Risk Solutions, is on the move again next month, attending RIMS Canada in Winnipeg, taking place 14th – 17th September, 2014.
They report that Canadian business owners and executives are looking more carefully at captive insurance structures, particularly in the oil and gas, shipping or other heavy industrial companies and that 2013 saw healthy mid-market growth in captives.
The traditional use for American captives are not likely as appealing to the Canadian company, as the Canadian business environment is less litigious and there are already universal healthcare and worker’s compensation programmes. However, Canadian companies are using captive insurance for more innovative purposes such as terrorism threats, environmental pollution, warranty risk and premium or secondary healthcare coverage.
IMAC Chairperson Rob Leadbetter reiterated the reasons for the great synergies between Canada and Cayman for captive insurance: “In addition to the tax information exchange agreement that Cayman has with Canada, which helps Canadian companies take advantage of the same cost effective tax strategies as would be applicable for companies domiciled in Barbados under that double tax treaty, Cayman also offers the effective use of segregated portfolio companies and the newly launched portfolio insurance companies. We are excited to be working with Canadian captives as they tend to really think outside of the box when considering business to put in the captive and it is this kind of innovation that we, as a domicile, thrive on”.