After much anticipation, the Cayman Islands Insurance
Law, 2010 ("New Insurance Law") came into force,
1 November 2012. The New Insurance Law makes a number of
significant changes to the current insurance business regime in the
In particular, the New Insurance Law:
provides for the development and suitable regulation of the
reinsurance business, including the provision of two new classes of
Class C - in relation to the provision of reinsurance
arrangements financed through the issuance of cat bonds and similar
Class D - in respect of the carrying on of reinsurance
abolishes the distinction between unrestricted and restricted
Class B licences, instead providing for three new sub-classes of
Class B licence for non-domestic insurers, based on the percentage
of net premiums originating from the insurer's related
tightens the definition of the carrying on of "insurance
business", in particular removing references to contingent
contracts for money;
establishes more comprehensive annual return reporting
requirements for licensed insurers, agents, managers or
regulates transfers or the amalgamation of long-term business
between licensed insurers, including requiring the approval of the
Cayman Islands Monetary Authority ("CIMA");
provides for the settlement of disputes in relation to
contracts of domestic insurance by way of arbitration, even in
circumstances where there is no arbitration agreement in place;
clarifies and significantly strengthens the penalties for
non-compliance with the law, in order to provide a real and
effective deterrent to the carrying on of insurance business
without a licence, or in contravention of the terms of the relevant
licence or of the law.
These changes are made in conjunction with substantial
amendments to the Cayman Islands Immigration Law
in recent days which are intended to incentivise reinsurers and
fund administrators to relocate to, and establish a substantial
physical presence in, the Cayman Islands.These amendments include
the availability of ten-year work permits for executives and
managers in the reinsurance industry and free work permits for
various categories of administrative staff for their first five
years of residence in the Islands. In addition, Permanent Residence
with the Right to Work is now available to approved persons who
make a substantial investment in a home or other developed real
estate. Taken together with the other benefits of life and the
conduct of business in the Cayman Islands, substantial growth in
the reinsurance sector in Cayman is anticipated.
Although the accompanying regulations are not yet in force,
these have already been the subject of a consultation process and
are expected to be enacted by the Governor in Cabinet shortly.
Appleby has the largest number of insurance legal advisors in
the Cayman Islands. We are happy to provide further information and
clarification on the New Insurance Law and related regulations.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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