Cayman Islands

Overview

The Cayman Islands first established its captive legislation in 1979. Updated legislation (The Cayman Islands Insurance Law 2010), went into force on November 1, 2012. At the end of 2014, Cayman had 759 active captives and is the second largest captive domicile worldwide behind Bermuda.

Classes of Insurance Company

The Cayman Islands Insurance Law 2010 delineates four separate classes of insurer:

  • Class A: Cayman Islands domestic retail insurers
  • Class B: Captive insurance companies, split into three sub-categories: B(i) >95% related business; B(ii) 50%-95% related business; B(iii) < 50% related business
  • Class C: CAT bond reinsurance arrangements
  • Class D: Commercial re/insurers

Minimum Capital – Captives (Class B License)

Class B(i) $100,000 – general business
$200,000 if writing long term business
$300,000 if writing both long-term and general business
Class B(ii) $150,000 general business
$300,000 if writing long term business
$450,000 if writing both long-term and general business
Class B(iii) $200,000 general business
$400,000 if writing long term business
$600,000 if writing both long-term and general business

Key Features of Legislation

Cayman has a flexible regulatory structure with low minimum capital and solvency requirements. The regulator has considerable flexibility over capitalization requirements with low minimum thresholds based on the owner’s risk management controls. All prospective insurers must show they have sufficient capital to support their underwriting.

Cayman was also one of the first domiciles to introduce legislation for Segregated Portfolio Companies or cell captives. In 2015 it introduced legislation allowing for the incorporation of cells or Portfolio Insurance Companies (PICs) within a Segregated Portfolio Company.

There is no premium tax payable in the domicile. An annual licensing fee applies to all insurers.

Specialty

Cayman has developed a specialty for healthcare captives with over 35% of its captives being from the healthcare industry. Most of the leading healthcare captives are domiciled in Cayman. The domicile has also generated a large number of group captives and Segregated Portfolio Companies.

SRS Presence

SRS has been managing captives in the Cayman Islands since 2004. We are one of the top three captive managers on the island.