33
CAPTIVE INSIGHT
including the IAIS. In August
2018, CIMA entered into a
Memorandum of Understanding
with The National Association
of Insurance Commissioners
(“NAIC”). This agreement offers
a formal framework to provide
mutual assistance and exchange
of information to assist in better
understanding and coordinating
compliance with applicable
laws, regulations, rules and
requirements in each jurisdiction.
The United States remains the
single largest trading partner
of the Cayman’s international
insurance sector, with approx.
90% of Cayman-based (re)
insurers providing coverage to
United States risks. As such, a
stronger relationship with the
NAIC is highly beneficial to the
Cayman Islands reinsurance and
captive industry in particular.
In addition, CIMA will continue to
enhance its regulatory framework
to accommodate sophisticated
reinsurance operations.
CI: What are the key regulatory
issues for captive insurance
companies in the Cayman
Islands now and what is
CIMA doing in this regard?
RJ: Captives are growing in
sophistication and whilst this is
good news for the captive industry
globally including in the Cayman
Islands, this would require captives
to have in place resources and
expertise proportionate to their
sophistication and regulatory
compliance requirements. CIMA
has issued, and will continue to
issue, comprehensive guidance
to the industry by way of Rules
and Statement of Guidance to
assist Cayman’s captive insurers
to identify areas that they should
focus on to remain compliant with
the local regulatory requirements.
In addition, CIMA encourages
boards and management of
captives to meet with them, faceto
face, every 18-24 months to
discuss their captives programs.
CI: What is special about
CIMA’s approach to insurance
regulation?
RJ: The Cayman Islands has
remained a leading captive
jurisdiction for nearly five decades
and whilst there are many reasons
for this success, we believe that
CIMA’s regulatory philosophy to
remain responsive, pragmatic
and accessible to our licensees
has undoubtedly contributed to
Cayman’s overall success over
the years. CIMA welcomes and
encourages our licensees to meet
with us regularly, especially during
visits to Cayman or when CIMA
representatives attend overseas
conferences. CIMA holds around
350 meetings with our insurance
licensees every year, which
includes 40-50 meetings during
the Cayman Captive Forum week.
CIMA regularly engages with the
Cayman Islands government,
and collaborate with other
stakeholders, including industry
bodies such as the Insurance
Managers Association of Cayman
(“IMAC”), to identify areas where
greater efficiency, flexibility
and innovation are necessary.
CIMA also works with various
industry stakeholders including
a large number of international
regulatory bodies to maintain a
flexible business environment that
complies with strict international
standards, and stay ahead of the
game. The continuous evolution
of technology has already
started to change the way in
which people do business. As the
nature of business changes, so
will the nature of risk. Technology
is challenging traditional ways
of thinking and doing insurance
business. Technologies such as
digital platforms, smart contracts,
artificial intelligence, telematics,
drones, and blockchain have
already started to transform the
insurance industry, including its
products and services and their
delivery. Technological innovation
will demand flexible, efficient
and secure regulatory platforms
and jurisdictions with rigid laws
and regulations may struggle
to accommodate fast changing
technologies and innovation.
Cayman’s regulatory framework
is modern, flexible and robust, and
this has allowed the jurisdiction to
grow its industry both during soft
and hard markets. As such, we
are confident that the Cayman
Islands will continue its dominance
as a leading insurance center for
many years to come.
CI: Cayman insurance
managers say CIMA’s Insurance
Supervision Division is
recognised for its flexibility and
willingness to discuss issues
with potential license holders to
help them achieve their goals.
How does this work in practice?
RJ: Accessibility to CIMA’s
supervisory staff is the key. Not
only does CIMA remain accessible
to its licensees, individually or
as an industry, the Authority
encourages regular meetings with
boards and senior management
of its licensees to discuss general
updates and future plans. CIMA
also meets with the Insurance
Managers Association of
Cayman (IMAC) every quarter
to discuss industry matters that
are of importance. Finally, CIMA
takes its responsibilities very
seriously, especially as it relates
to processing applications and
any associated requests. As such,
the Authority works diligently to
ensure that we adhere to these
timeframes and be as prompt as
possible.