The Cayman Captive Forum, Cayman’s largest conference with 1,485 registered delegates, and the largest captive insurance event in the world, kicked off Wednesday with the opening of its two-day main forum.
Proceedings began Tuesday with pre-conference tutorials that attracted a greater number of participants than expected by the Insurance Managers Association of Cayman, the organizers of the event.
Welcoming delegates, Erin Brosnihan, chairperson of IMAC, said, “Attendance has increased once again this year, which is testament to [the] value of this forum and the strength of this jurisdiction as a whole.”
She noted that 2018 has been “a busy year” for the local insurance industry. Cayman saw 26 new captive formations to date and the Cayman Islands Monetary Authority is reviewing a record number of 20 license applications at the moment, “which we hope to have on the books by the end of December,” Ms. Brosnihan said.
Growth in Cayman’s reinsurance sector has been steady after European insurance regulation and capital requirements for insurers has taken effect in many jurisdictions outside of the Cayman Islands, she said. “As the impact of Solvency II settles in in Bermuda, Cayman has emerged as a legitimate jurisdiction for non-Solvency II operations.”
Cayman currently has 699 licensed captive insurance companies with $16 billion in premiums and $69 billion in assets. Nearly one third, 32 percent, of those captives list medical malpractice as their primary line of coverage with another 22 percent writing primary workers compensation.
Growth in the group captive space has also been “phenomenal in recent years,” the IMAC chair said, citing a recent survey by Cayman Captive magazine, which estimates that approximately 5,000 U.S. companies have left the traditional insurance market in favor of a Cayman Islands group captive.
Meanwhile, regulatory activity equally increased this year with beneficial ownership and economic substance rules being the predominant issues that legislators and industry practitioners had to grapple with, she added.
Tara Rivers, minister for financial services, added the recent Caribbean Financial Action Task Force’s review of Cayman’s anti-money laundering regime to this list in her welcome remarks.
She said, “Committing to international standards serves an important role for the Cayman Islands, as it continues to support and bolster the sound and solid business that is done in the jurisdiction.”
However, it is the EU process of listing jurisdictions as cooperative or uncooperative in tax matters that is occupying government before the end of this year.
Although Cayman was deemed generally cooperative, the EU is demanding that entities in Cayman must have sufficient substance in terms of bricks and mortar offices, employees and specific activities to be carried out locally to be recognized as domiciled in Cayman for tax purposes.
This prompted the Cayman Islands government to commit to introducing such requirements in local legislation before the end of 2018 to avoid an EU blacklisting.
The initiative has led to significant engagement by the Cayman Islands government both with EU bodies and local stakeholders, including IMAC, which has been very active in supporting the ministry in responding to the EU initiative, Ms. Rivers said.
Minister Rivers confirmed to the Cayman Compass that government was “working assiduously” on meeting its commitments to the EU and will make an announcement in due course. Asked whether this will mean another sitting of the Legislative Assembly this year, she said “the intention was always to have a meeting in December, and we will do that.”