Significant developments in Cayman’s insurance and hedge funds sectors, including the licensing of a major new open-market reinsurance company, were highlighted during recent meetings of the Cayman Islands Monetary Authority Board of Directors and its sub-committees.
During the meetings held 24-26 October, decisions were also taken to enhance CIMA’s operations, said a press release from the Authority.
Among them were the approval of a consultant for the Investment and Securities Division’s electronic filing project, the setting up of a Chairman’s Office and the appointment of an Acting Managing Director.
The Board noted that the recent licensing of a company providing open-market reinsurance was a first for many years in the jurisdiction. The new licensee, Greenlight Re, a Cayman-based global property and casualty reinsurance company, has more than US$220 million in capital and specializes in custom tailored reinsurance solutions. Greenlight Re also works with local insurance managers to provide reinsurance for Cayman-licensed captives, the release said.
The CIMA directors commented that Greenlight Re’s decision to domicile here was a significant endorsement of the Islands and will hopefully pave the way for other open-market reinsurers to follow.
Report to Cabinet
On the domestic side, the Board approved the submission to Cabinet of the final report on the Review of the Domestic Insurance Industry Post Ivan. The final report followed lengthy consultation with industry on the team’s initial report.
The Board noted its appreciation to CIMA director Sir Alan Traill, consultant Mr. Terrence Fairs and the Insurance Division for undertaking the project on behalf of CIMA and the Government. Sir Alan said that, while there had been strong debate on aspects of the findings, it was encouraging to note that the industry had already taken the initiative to implement many of the report’s recommendations.
The Directors also examined the global hedge fund industry and the Cayman Islands pivotal position in its growth. CIMA Chairman, Timothy Ridley, said the Board considered a detailed review of the industry was timely because of Cayman’s leadership role and the increasing interest in hedge funds being shown by onshore regulators and international standard setters.
He stressed it was critical that the Cayman Islands’ regulatory regime demonstrate a clear distinction between retail funds marketed to the general public, which form a tiny part of the industry in Cayman, and funds marketed to sophisticated and high net worth investors, which constitute the bulk of the funds domiciled here. There should be continued active engagement with overseas regulators and international standard setters to ensure a proper appreciation of the regulatory regime in Cayman, the release said.
The Board concluded that the existing supervisory framework is broadly appropriate subject to refinement to more clearly delineate the categories of funds and the type of supervision applicable to each category. It further confirmed that CIMA would continue to engage with all relevant parties to protect and ensure the future growth and success of the industry within an appropriate regulatory regime.
Plans for the introduction of an electronic filing (e-filing) system by the Investments and Securities Division progressed with the approval of the retention of Ernst & Young as consultant to advise on the development and implementation of the project.
When completed, the project will see the submission of audited accounts and annual declarations from licensees online. This will ensure the Division keeps pace with the continuing growth in the industry, the release said. Once successfully implemented, the system will be extended to other CIMA Divisions.
Another initiative was the establishment of the Office of the Chairman to provide administrative support and physical space for the Chairman, Deputy Chairman and Directors to more effectively carry out their functions.
Looking ahead, the Board recommended the appointment of Mr. Patrick Bodden, Head of Fiduciary Services, to be CIMA’s Acting Managing Director for five months from 7 January 2006, during the absence of Mrs. Cindy Scotland on maternity leave during the period. Cabinet subsequently approved the appointment on 28 October.