As noted in our client update of 3 April 2013, the Insurance Law, 2010 (the "Law") was amended to allow for a segregated portfolio company ("SPC") to register subsidiary companies as portfolio insurance companies (each a "PIC") with the Cayman Islands Monetary Authority ("CIMA"). These amendments to the Law and associated regulations came into force on 16 January 2015.
PICs provide a practical legal solution for Cayman Islands SPCs to transact insurance business between segregated portfolios (or "cells"). Since PICs have the express power to contract with the SPC, any cell and any other PIC related to the controlling relevant insurer SPC, it now allows for PICs within the SPC structure to participate in different cellular insurance strategies. An exempted company whose voting shares are held by a cell can register with CIMA as a PIC to undertake 'insurance business' that is within the scope of the insurance licence held by its controlling relevant SPC.