Cayman Islands: Law of Offshore
Cayman Islands insurance companies are regulated by the Cayman Islands Monetary Authority (CIMA) under the Insurance Law (2008 Revision) formerly known as the Insurance Law 1979 as amended in 2004. The following types of license are available:
- A Class ‘A’ Insurer’s Licence permits a local or an external insurer to carry on insurance business generally in or from within the Islands; an external insurer having its principal or registered office in a place outside the Islands where the legislation for the regulation and supervision of insurers is acceptable to the Authority may be licensed as an approved external insurer under Class ‘A’.
- An Unrestricted Class ‘B’ Insurer’s License permits an exempted insurer to carry on insurance business other than domestic business from within the Islands.
- A Restricted Class ‘B’ Insurer’s Licence permits an exempted insurer only to accept insurance business other than domestic business from its member or members or such other persons as may be specifically approved by the Authority.
- Insurance Agent’s Licence;
- Insurance Broker’s Licence;
- Insurance Sub-Agent’s Licence;
- Insurance Manager’s Licence; and
- Principal Representative (Insurance)’s Licence.
No insurer’s licence other than a Restricted Class ‘B’ Licence will be granted to any person whose net worth- (a) in the case of an insurer effecting general business but not long term business, is less than one hundred thousand dollars; (b) in the case of an insurer effecting long term business but not general business, is less than two hundred thousand dollars; and (c) in the case of an insurer effecting long term business and general business, is less than three hundred thousand dollars.
The licensing process begins once a company name has been approved; an application incorporating a business plan and details of beneficial ownership is made to CIMA. Capital may be provided either by shares or loans.
Insurers must maintain full and proper records at a fully-staffed office in Cayman; alternatively, a local manager can be appointed to administer the business. The manager must also be licensed under the insurance law. It is usually necessary to appoint Cayman Islands auditors; audited annual accounts must be submitted to the Superintendent within six months of the end of the accounting period.
There are many other detailed regulations; and CIMA has substantial powers to inspect and to apply sanctions when necessary.