CAPTIVE INSIGHT
and sophistication to satisfy the needs
and requirements of establishing and
maintaining the operations of an Insurtech
entity. It is home to practiced, experienced,
knowledgeable service providers from
banks to lawyers and, most of all, insurance
managers.
At a time when a great number of
prospective insurance businesses are
searching for a stable domicile and many
do not feel that Solvency II is appropriate
for their operations they find their needs
met by a responsive and proactive
insurance management industry (in its
broadest sense) and regulator in Cayman
– thereby further enhancing the reputation
of the Cayman Islands as a practical and
knowledgeable domicile.
As of June 30, 2018 CIMA had issued
licences to a total of 698 Class B, C and
D insurance companies, with 14 of these
licences being issued during the previous
three months. This reinforces the Cayman
Islands’ dominance as the second largest
captive domicile worldwide (where
Bermuda is the largest and Vermont the
third largest). As a leading domicile we must
therefore expect interest from those seeking
to use captives as a way of providing the
coverage which should be considered part
of an effective crypto currency insurance
program and which is currently either
unavailable, prohibitive in terms of cost
or rendered ineffective due to restrictive
exclusions and sub-limits. Those looking to
establish such an insurance program will
probably be seeking to obtain coverages
ranging from cyberliability for both first
party losses and third party liability as part
of an effective network security and privacy
liability insurance policy, ensuring they
have adequate, tailored coverage under
both their professional liability errors and
omissions insurance and their directors’
and officers’ liability insurance as well as
considering commercial crime insurance
and possibly fiduciary bonds.
It is imperative that, in such an environment,
insurance managers in Cayman educate
themselves on the implications for the
Cayman captive industry. This includes
maintaining an open dialogue with the
Cayman Islands Monetary Authority
(CIMA) regarding the challenges inherent
in developing InsurTech and FinTech
opportunities and seeking solutions, either
within the Cayman community or with
regulators in other jurisdictions which may
be facing a different timeline in the products
and business propositions which they are
being asked to evaluate by prospective
captive owners.
When speaking with CIMA it is clear they are
aware that, in order to maintain Cayman’s
well-deserved reputation as a responsive
and responsible domicile, their biggest
challenge will be keeping ahead of the myriad
of changes InsurTech will bring, and ensuring
captives domiciled in the Cayman Islands
understand any new risks they are taking on
in this space. In this respect CIMA is looking
into reviewing its regulatory framework, as
appropriate, to be in a position to identify
the risks and challenges posed by InsurTech
«
FROM AI TO BOTS,
THE INSURANCE
INDUSTRY IS
EMBRACING AND
EXPERIMENTING
WITH THE LATEST
ADVANCES IN
TRANSFORMATIVE
WAYS.