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Cayman Islands insurance companies are regulated under the Insurance Law 1979 as amended. The Financial Secretary is responsible for insurance regulation. The law requires licensing, under the following categories: |
• Class A licenses permit insurance activities generally, including domestic business (but not reinsurance)
• Unrestricted Class B Licenses permit international insurance activities including reinsurance
• Restricted Class B licenses are for single-parent or group captives
For Class A and unrestricted Class B licenses a minimum net worth of CI$100,000 is required for general insurers, CI$200,000 for life insurers, and CI$300,000 if both types of business are written. Net worth needs to keep pace with premium income: a ratio of 1 to 5 is reckoned adequate. Net worth needs to be provided in cash, readily marketable securities or (to some extent) Letters of Credit.
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 the Superintendent of Insurance - it is normally necessary to meet with the Superintendent. He reports to the Financial Secretary, and the license is granted by the 'Governor in Executive Council', or ExCo. Incorporation then proceeds normally. 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 the Superintendent and Exco have substantial powers to inspect and to apply sanctions when necessary.
source: www.lowtax.net
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