8 January 2015Cayman analysis

Stat attack: Cayman captives by numbers

Built on the solid foundations of its robust regulatory environment and deep pool of expertise, the Cayman Islands is the second largest domicile for captive insurance companies globally and a world leader in sectors such as healthcare. Cayman Captive looks at the key statistics and regulatory requirements that make Cayman so successful in the captive insurance world.

Cayman has signed bilateral tax information exchange agreements (TIEAs) with:

Argentina, Aruba, Australia, Belgium, Brazil, Canada, China, Curaçao, Czech Republic, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Guernsey, Iceland, India, Ireland, Italy, Japan, Malta, Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, Qatar, Seychelles, Sint Maarten, South Africa, Sweden, UK, US.

New arrivals: Class C insurer formations in 2014

Name of institution                          Date  Manager

East Lane Re VI Ltd                    02/25/2014         Kane

Residential Reinsurance 2014 Ltd       04/22/2014         Kane

Applicable acts

The Cayman Islands Insurance Law 2010 came into force on November 1, 2012. As well as introducing the greater oversight of Class A or domestic retail insurers, the new law also reclassified Class B insurers into:

Class B(i): 95% or more related party risk;

Class B(ii): Over 50% related party risk; and

Class B(iii): 50% or less related party risk.

The different sub-classes enable CIMA to differentiate between different categories of captives with regard to minimum capital, prescribed capital and margin of solvency requirements.

The new laws also introduced Class C and Class D licences which will facilitate Cayman’s further development of reinsurance and insurance linked securities (ILS) business.

Source: Cayman Islands Monetary Authority

Capitalisation minimal capital requirements (MCR):

Class B(i): $100,000

Class B(ii): $150,000

Class B(iii): $200,000

MCR figures effective as from the new Insurance Law 2010 and the ensuing regulations going into effect in 2012. Flexible, risk-based assessment, ultimately approved by regulator on a case by case basis. Approximately 3:1 to 5:1 premium to capital/surplus ratio.

Cayman taxes:

No income tax (20-year tax exemption, on application).

No premium/insurance or capital gains taxes.

Local office requirements:

Registered office and licensed insurance manager.

Minimum of two directors required.

Local directors are not required.

Reporting requirements:

Written confirmation from auditors on annual accounts.

Annual audited financial statements to be filed six months after the close of the financial year.

Regulatory approval to be sought for all material changes to the business plan.

Annual return to be filed with the Registrar of Companies

Key figures on Cayman

Hon Alden McLaughlin

Premier of the Cayman Islands, Hon Alden McLaughlin, was first elected to the Legislative Assembly in 2000 and has been a legislator ever since.

He served as the Minister of Education, Training, Employment, Youth, Sports and Culture from 2005 to 2009. For his contribution to constitutional development in the Cayman Islands, Her Majesty Queen Elizabeth II awarded him the MBE in the Queen’s Birthday Honours in 2010.

Cindy Scotland

Cindy Scotland has served as the managing director of the Cayman Islands Monetary Authority (CIMA) since June 2002. In this role she oversees the implementation of policies to ensure the sound management of the Cayman Islands’ currency and the effective supervision of the more than 14,000 regulated entities operating in and from the Cayman Islands.

She has responsibility for the development and maintenance of strong working relationships between CIMA and other international regulatory bodies.

She also represents the jurisdiction extensively on regulatory matters to organisations including the Offshore Group of Banking Supervisors, the International Organization of Securities Commissions, the International Monetary Fund and the Caribbean Financial Action Task Force, as well as on a regulator-to-regulator basis.

Hon Marco Archer

Hon Marco Archer is the Minister of Finance & Economic Development. Archer was a respected economic statistician and project manager with the Cayman Islands government before he became a successful attorney-at-law with a leading offshore law firm.

In addition to economic matters, he was a founding director of Generation NOW, a mentoring group and think tank that has hosted several debates on issues of national importance.

Hon Wayne Panton

Hon Wayne Panton is the Minister of Financial Services, Commerce and Environment. Following a career with law firm Walkers, he became a member of the firm’s three-member management committee until his retirement in June 2011.

He has been active in a number of professional, civic organisations, district and community organisations and statutory authorities. He was president of the Caymanian Bar Association, chairman of the Port Authority of the Cayman Islands, vice chairman of the National Trust for the Cayman Islands and a member of the government’s Maritime Sector Consultative Committee.

Roy McTaggart

Roy McTaggart is a councillor to the Minister of Finance & Economic Development and to the Minister of Financial Services, Commerce & Environment. As a former managing partner of one of the world’s largest accounting firms, McTaggart brings excellent accounting and financial expertise to representation from the House.

Rob Leadbetter

Rob Leadbetter is the retiring chairman of the Insurance Managers Association of Cayman (IMAC) and is vice president of USA Risk Group. Leadbetter serves as a primary contact for Cayman clients and the insurance department of CIMA. He has been a member of the Institute of Chartered Accountants in Canada since 2001 and is also a member of the Cayman Islands Society of Public Accountants.

Kieran O’Mahony

Kieran O’Mahony is client services leader at Marsh’s Captive Solutions Group and will take over as chairman of IMAC from Rob Leadbetter.

In his role at Marsh, O’Mahony directs the structuring and management of the captive insurance programmes of Marsh’s US, Canadian, and European clients in the Cayman Islands.

He joined Marsh after 17 years with Aon, where he was deputy managing director and director of insurance of the firm’s Cayman operations.