On 16 January 2015, the Cayman Islands Monetary Authority (CIMA) amended its insurance regulations for the purposes of enhancing captive flexibility. The new regulations are designed to allow a segregated portfolio company (an SPC) to register subsidiary companies as portfolio insurance companies (PICs) with CIMA.

The benefits of these changes to the insurance industry are significant. The Insurance Managers Association of Cayman (IMAC) flag a number of advantages which include that a PIC:

  • Can now contract with other PICs within the SPC which facilitates reinsurance, quota sharing and risk pooling.
  • Can have a different board of directors to that of the controlling SPC providing for greater governance flexibility.
  • Can merge with another captive.

In addition, a foreign captive can redomicile to Cayman as a PIC where it may not be of a sufficient size to operate as a standalone captive.

According to IMAC, the Cayman Islands is the world’s second largest captive domicile with over 760 companies under CIMA’s supervision. This number seems likely to increase as the new insurance regulations continue to make the Cayman Islands a more attractive jurisdiction to engage in insurance business.