Keep up with regulatory changes in Cayman
Companies operating captives based in the Cayman Islands must make every effort to keep up with regulatory changes in the domicile amid a fast-changing landscape.
Delegates at the Cayman Captive Forum were brought up to speed on some of the latest changes to the regulatory regime on the Islands by a panel consisting of Kara Ebanks, deputy head of division at CIMA, Alan Craig, partner, Campbells, and Ric Agrella, partner, PwC.
Craig said that a level playing field was being created in Cayman, especially in the context of changes to the corporate governance framework.
He said that establishing a robust corporate governance framework was important – sound and prudent management and oversight would protect the legitimate interests of relevant stakeholders.
Robust governance is more important than ever due to the rise of environmental, social governance (ESG) as a major topic, the panel agreed.
Risk management is also important – as it is a key element of any insurer. The panel also pointed out that the guidance on internal controls for regulated entities is currently under consultation, with industry comments submitted & being reviewed by CIMA.
They underlined that things have changed since 1992, when some of the original regulations were drawn up by the authorities. Agrella said that there are now expanded expectations for governance oversight over internal controls, increased globalisation of markets & operations, increase in technology, greater level of demands from laws, rules, regulations & standards and better fraud detection – and that insurers must react to meet these demands.
Craig added that core income generating activities (CIGA), or activities of central importance to generation of relevant income, must be carried out on the Cayman Islands. As a result, CIGA must be directed and managed in an appropriate manner on Cayman Islands.
Ebanks pointed out that there will also be tweaks to the rule and statement of guidance on investment activities. Reporting returns for IFRS 17 implementation will see changes in first half of 2023, but she stressed that CIMA will consult with insurers.
Ebanks also listed the emerging risks that CIMA regards as important to the industry, which include climate change, ESG, blockchain / cryptocurrency, cyber risks, complex ownership structures, with the latter resulting from much more sophisticated management policies in recent years.