CAPTIVE INSIGHT
For example, with the captive
insurance concept gaining
wider attention and popularity
as a flexible, cost-effective risk
mitigating tool, as well as a viable
solution for many emerging risks
that are difficult to insure in the
traditional commercial insurance
marketplace, many corporates
have started to use captives for
sophisticated and innovative
purposes. Another example is
blockchain technology, where it is
making inroads into the insurance
industry and reshaping almost
every aspect of an insurer’s
operation.
The Cayman Islands Monetary
Authority has been able to
attract and retain highly skilled,
competent and experienced
regulatory staff. Through its
international engagements
and memberships as well as
involvement in international
standard setting mechanisms,
CIMA is well placed to meet the
challenges of regulating a modern
and sophisticated insurance
industry in the Cayman Islands.
CI: What does this mean
practically for license holders
and potential license holders?
RJ: The Cayman Islands’ legal
and regulatory frameworks
encourage and support
sophistication and innovation.
This coupled with its regulators’
understanding, familiarity and
acceptance of sophistication and
innovation are key to existing
insurance licensees, potential
licensees and service providers
in doing business in the Cayman
Islands. In recognising the unique
skillsets needed to carry out its
supervisory responsibilities, CIMA
is proud to note that staff in the
Insurance Supervision Division
bring prior work experience to the
insurance industry. For example,
CIMA has successfully recruited
insurance and reinsurance
treaty underwriters, catastrophe
modelers, insurance brokers,
claims and policy servicing staff
etc. This has helped CIMA as a
regulator to understand and
appreciate commercial aspects
of insurers’ operations and apply
a risk-based and commercially
sensible approach in supervising
its licensees. In addition, Cayman
has the advantage of having a
single regulator for its insurance,
banking, funds, securities and
corporate services industries, and
this arrangement is immensely to
the benefit of Cayman’s licence
holders and potential licence
holders. There is also a highlevel
of interaction between
the regulatory divisions and
non-regulatory divisions within
CIMA, and as a result, the senior
regulatory staff are well versed in
all areas of the financial services
industry, including insurance.
Captive insurance companies in
particular are known as versatile
and efficient facilities that can
provide endless options to their
shareholder corporates. However,
such entities may need to operate
in a flexible, yet robust business
and regulatory environment.
The Cayman Islands’ legal and
regulatory framework, together
with the sound expertise of its
regulators, provides this scope
of flexibility and robustness
proportionate to the size, nature
and complexity of its insurance
licensees.
CI: What are the current
priorities for the Insurance
Division? What is keeping
you busy?
RJ: CIMA’s Board of Directors
formally approved and adopted
a set of medium-term strategic
priorities to guide CIMA’s work
over the next two to three years.
As a regulatory division within
CIMA, the Insurance Supervision
Division’s ensures that its priorities
and daily actions are aligned with
CIMA’s strategic objectives. Such
priorities are determined within
the context of CIMA’s existing
statutory functions of financial
sector regulation and supervision,
currency management,
international cooperation and
the provision of advice to the
Government, as well as CIMA’s
obligations, as listed in the
Monetary Authority Law. Some of
the goals which CIMA has currently
adopted include: modernising
regulation, enhancing supervision,
strengthening international
cooperation and involvement, and
facilitating further development
of the Cayman Islands as an
international financial services
centre. At the insurance divisional
level, supervising the licensees to
ensure regulatory compliance is
CAPTIVE INSIGHT: WITH AN ESTABLISHED
LEADER, TWO DEPUTIES AND THE ADDITION
OF REINSURANCE EXPERTISE WITH THE
APPOINTMENT OF PETER FOX, CIMA’S
INSURANCE SUPERVISION DIVISION LOOKS
STRONGER THAN EVER. HOW IS CIMA
PLACED TO MEET THE CHALLENGES OF
REGULATING THIS MARKET IN THE MODERN
COMPETITIVE ERA?