The Minister of Financial Services André Ebanks is expected to table amendments to the Insurance Act in parliament on Wednesday, 8 June, that will introduce capital redemption contracts.
The Insurance (Amendment) Bill, 2022 aims to strengthen Cayman’s position in international reinsurance and domestic insurance, the ministry said in a press release.
Capital redemption contracts are issued by insurance companies with fixed maturities and fixed interest rates.
The contracts are similar to a life assurance contract, but the payout is not based on the mortality of a particular person.
Their key feature is that they diversify funding sources and reduce overall costs of funds for large insurance and reinsurance carriers, the ministry said.
As such, they are not strict insurance products.
But, because capital redemption contracts would be underwritten by insurers, they would be regulated by the Cayman Islands Monetary Authority, Minister Ebanks said.
In the case of insolvency of the insurance company, contract holders would have the same protection as insurance holders.
Capital redemption contracts already are available in the UK, EU, US and Bermuda, and are known in some jurisdictions, as funding agreements.
The Cayman Islands product stems from a Financial Services Legislative Committee (FSLC) proposal for government to diversify the Islands’ insurance and reinsurance sector.
The FSLC, which includes representatives from the ministry and the local financial services industry, was established by government to propose enhancements to the Cayman Islands financial services regime.
Minister Ebanks will present the Public Recorder (Amendment) Bill, 2022; and table the Auditors Oversight Authority’s Annual Report for the Year Ended 31 December 2021, and Audited Financial Statements for the year ended 31 December 2021.
The Public Recorder (Amendment) Bill aims to ease the financial burden on senior citizens.
It proposes to allow persons 65 years and older to pay $50 to submit a deed poll to General Registry, rather than the $100 fee currently prescribed by law. Deed polls, which are legal documents that formally request a change to a person’s name, are handled by General Registry.
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