Long-awaited, controversial changes that will have a profound impact on the Cayman Islands financial services industry will be on the agenda next month in what is likely to be the final Legislative Assembly meeting of the current Progressives-led coalition government.
Amendments to the Legal Practitioners Law and the Companies Law that deal with a beneficial ownership registry for Cayman incorporated companies will be debated at the next meeting, which starts on Feb. 22, the premier’s office announced Friday.
Neither piece of legislation had been released for public review as of late Friday afternoon, but both issues have been the subject of significant public debate over the past few years.
The Companies Law amendments will formalize an agreement Cayman made last year with the British government requiring companies incorporated in the islands to maintain a register of beneficial owners. That register is allowed to be searched by a local authority in response to formal queries from law enforcement or tax agencies from other countries.
Legal changes will also seek to require limited liability companies in the Cayman Islands to establish beneficial ownership registers.
The beneficial ownership register will not be made public in Cayman, according to government ministers.
The Legal Practitioners Law amendments, which have been debated for the last 15 years, are an attempt to pass modern regulatory standards for Cayman Islands lawyers ahead of an international financial review here set for mid-2017.
Lawmakers tried to approve that legislation in October, but were foiled by pressure from certain interests in the local legal fraternity and opposition members.
The crux of the dispute over the current lawyers bill centers on law firms that wish to expand their presence in overseas financial services markets to remain competitive in what has become a global industry, on the one hand, and on the other hand, Caymanian-born attorneys who fear they will be left behind in that expansion and believe that globalization will lead to outsourcing.
A number of other significant pieces of legislation are on the agenda for the February meeting. A total of 18 bills are due to be brought before parliament.
Abolishing the independent offices of the information commissioner and complaints commissioner, newly released legislation proposes to create an ombudsman’s office to oversee open records requests, complaints of government maladministration and public complaints against the police.
The Ombudsman Bill, 2016, gives Cayman’s governor the power to appoint an ombudsman to the new post for seven years with no possibility of reappointment. The governor’s selection must be made in consultation with the premier and the opposition leader, according to the bill.
Two deputy ombudsmen will serve under the ombudsman, one to manage Freedom of Information matters and the other to handle maladministration complaints. Power to deal with complaints against police is given directly to the ombudsman but may be delegated, according to the bill.
The proposal to combine the independent offices of the information commissioner and complaints commissioner has been in discussion for more than two years and has been touted by government as a cost-saving measure. The ombudsman office will replace two department directors at a savings of approximately $205,000 per year.
The proposal requires changes to at least six laws, including those governing the information commissioner and complaints commissioner, as well as government public service management and financial management legislation.
Legislation that seeks to “normalize” pay in the Cayman Islands government’s separately operating public authorities is also set to come before lawmakers.
The Public Authorities Bill, 2016, would place rank-and-file workers and senior managers in the statutory authorities and government-owned companies under “the same terms of conditions of service” as a rank-and-file civil servant or civil service manager. In addition, the bill seeks to give Cabinet members far greater control – through appointed boards – over the financial management of those separate entities.
The government has approximately 26 authorities and companies for which Cabinet members now appoint boards, and in recent years lawmakers have alleged – backed by reports from the auditor general’s office – that those entities’ spending was excessive and irresponsible in many cases.
In one example from 2014, lawmakers revealed that the executive directors of the port, Cayman Airways and the airports authority made more than Premier Alden McLaughlin at the time.
Stricter rules for health insurance providers are also considered under the Health Insurance Amendment Bill, 2017.
The legislation seeks to give the Health Insurance Commission power to issue a certificate to show the insurer has been approved to provide health insurance in Cayman.
Certificates granted under the law are good for a year but can be revoked if the insurer does not provide proper health coverage to individuals or groups under its plan.
Insurers can dispute the health commissioner’s decision to revoke a certificate to the Grand Court.
Legal changes that allow for greater regulation of the fuel and water supply sectors in Cayman are also due to be brought during the February meeting.
The effort began in October with the creation of Cayman’s Utility Regulation and Competition Office [URCO] and is expected to be completed with the approval of the Water Authority Law and amendments to the URCO legislation.
The Cayman Islands government will publicly report how much money it earns and how much it spends every three months, beginning in January 2018, according to changes proposed in the Public Management and Finance Law. In addition, legal changes will allow government to pay off debt early if it wishes.