3 December 2015Accounting & tax analysis

A flagship sector for Cayman

For the Cayman Islands, captives undoubtedly represent one of our flagship financial services sectors, even as it continues to adapt to global developments.

This hallmark is even more important today. For Cayman, monitoring these movements—such as the ongoing formations of captives in various states in the US; the Affordable Care Act, which has been a catalyst for increased merger and acquisition activity between healthcare systems and their respective captives; and keeping an eye on Solvency II jurisdictions from a competitive standpoint—ensures that we are not just keeping pace, but maintaining our advantage.

Our response to meeting global market needs includes legislative change, with the enactment of provisions that allow for the creation of portfolio insurance companies, or PICs. This legislation has given insurers more scope to transact insurance business and hence, provided more flexibility in their ability to capably and excellently meet client insurance needs. The legislation has been well received, and Cayman is looking forward to continuing to see further use of PICs in the future.

"The synergies that can be created by having a presence in diverse markets create benefits that are greater than the sum of their components."

I also am heartened to see that persons in our captives sector are exploring new markets. The attendance of Insurance Managers Association of Cayman (IMAC) representatives at the Canadian Risk and Insurance Management Society was an unmistakable assertion of industry’s intention to expand Cayman’s footprint by raising awareness of our proven strength as a key domicile of choice for captives to operate, and Cayman’s ability to respond to the diverse needs of the Canadian market.

There are opportunities for business development in other jurisdictions as well, and the synergies that can be created by having a presence in diverse markets create benefits that are greater than the sum of their components.

I trust that practitioners—including risk managers, captive directors and managers, CFOs, and service providers—will consider all of this to be exceptionally good news, and that it reinforces their intelligent choice in choosing to do business with our jurisdiction. But it’s also good news for us, because every strong and loyal relationship that is forged on our legislative and regulatory framework enhances our reputation. It becomes, quite simply, a win-win-win: for industry, for clients, and for Cayman.

On behalf of government, I congratulate the members of IMAC for their commitment to promoting Cayman’s captives sector; and to practitioners as well as our financial services regulator, the Cayman Islands Monetary Authority, I acknowledge their firm commitment to upholding the principles of sound business.

The Premier, the Hon. Alden McLaughlin, JP