Cayman Islands: Insurance

Last Updated: 24 March 2006


The Insurance Law of 1979 laid the foundation for the Cayman Islands to become one of the world's largest captive insurance centres. Licensees are regulated by the Cayman Islands Monetary Authority ("the Authority"). All applications for licenses must be submitted to that authority and it is on the Authority's recommendation that approval is given or denied by the Governor in Council. The Authority is staffed by highly qualified personnel and is charged not only with dealing with license applications but with monitoring the operations of all licensees. The Authority maintains close contact with international regulatory bodies in various parts of the world including the National Association of Insurance Commissioners and is constantly monitoring the operation of companies in the Cayman Islands to ensure that acceptable international standards are maintained.

Categories of Licenses

Before carrying on insurance business in or from the Islands, one of the following licenses must be obtained:

1) Class 'A' Insurers License
2) Unrestricted Class 'B' Insurers License
3) Restricted Class 'B' Insurers License
4) Insurance Agents License
5) Insurance Brokers License
6) Insurance Sub-agents License
7) Insurance Managers License
8) Principal's Representative (Insurance) License

The various types of license regulate the type of business which may be written by a licensee, its net worth requirements and reporting requirements. The law has comprehensive provisions which regulate who may be accepted as actuaries and auditors, the type of business (for example long term, general or domestic), net worth requirements and the financial year.

Types of Business which may be written by Licensees

1). A Class 'A' Insurers License permits a company incorporated in the Island or an approved external insurer to carry on business generally. External insurers are defined as insurers having their principal or registered office outside the Islands where legislation for the regulation and supervision of insurers has been ascertained by the Governor to be acceptable.

2). An Unrestricted Class 'B' Insurers License permits an "exempted insurer" to carry on business other than domestic business within the Islands.

3). A Restricted Class 'B' License permits an "exempted insurer" to accept insurance business other than domestic business from its members or such other person as may be specifically approved by the Governor.

An exempted insurer is a company incorporated in the Cayman Islands as an exempted company or an ordinary nonjresident company or an insurer which is constituted through a partnership or other acceptable mutual association by one or more members having a common trade, profession or special interest.

Class 'B' licenses have been specially created for the carrying on of captive business.

Capital Requirements

Minimum net worth requirements vary between US$120,000.00 and US$360,000.00 for 'B' Unrestricted licenses. The amount of this requirement is dependent on the type of business being written, i.e. general and/or life. There are no minimum requirements for Restricted 'B' licenses, but the Authority determines adequate minimum net worth using the projections set out in the applicant's business plan. A ratio of five to one between premium income and capital is generally the norm.

Application Procedure

Applications are made to the Authority on prescribed forms which in general terms require the following information:

(1) Name or proposed name of the applicant.
The Authority checks the name in order to ensure that there is no confusion arising from its use. The Law makes provision for revocation of the license of any licensee which has a name which is closely associated with the name of any other person or company writing insurance business whether within or outside the Islands.

(2) Local Address.
The address of the designated office in the Cayman Islands where all records will be kept. Where an agent or service company is to be employed, details of that company including evidence of its agreement to provide the necessary service is required.

(3) Service of Process.
The name of a person resident in the Cayman Islands authorized to accept notices and service of process in legal proceedings.

(4) Ownership and Control.
The names, addresses and nationalities of the directors, managers and officers with sufficient evidence that they have insurance experience and no criminal record, and also of the shareholders.

(5) Corporate Documentation.
A full set of properly certified corporate documentation in respect of companies incorporated outside the Islands. For applicants that are existing insurers, audited accounts for at least three years are required.

(6) Business Plan.
This plan is an essential element of an application and should give as much information as possible including projections over a three year period. The plan must state the method of capitalization, the classes of business to be written, premium volumes, the proportion of business to be reinsured, the nature of the reinsurance program, the name of the reinsurers, any reinsurance treaties that may exist, the amount of net premiums retained, the maximum liability in respect of any risk and catastrophe and investment and dividend policy. All licensees other than approved external insurers are permitted to carry on business in accordance with the information submitted and any proposed changes must receive prior approval.

(7) Annual Reporting.
All licensed insurers are required to make annual reports to the Authority within six months of the end of the financial year. These reports must set out adequately the volume of business that the company has undertaken during the last year and its financial position. A certificate of compliance in a prescribed form signed by an independent auditor or licensed manager must be submitted annually. The information required in the reports is set out in the Law and varies between the different categories of license.

(8) Auditing Requirements and Returns.
The Law requires that every licensed insurer other than an approved external insurer must appoint an independent auditor. The independent auditor audits the insurer's annual financial statements which are prepared in accordance with generally accepted accounting principles. Comprehensive returns are required from all categories of licensee.

(9) Powers and duties of the Authority.
The Authority has full powers detailed in the Law to regulate licensees, examine books and records, set out and alter capital and liquidity margins and ratios, and to recommend revocation or suspension of a license to ensure that the public is fully protected.

Uses of Captives

Captives are used for a number of insurance purposes such as:-

Medical Malpractice
Worker's Compensation
General Liability
Accident and Health
Professional Liability
(other than Medical Malpractice)
Credit Life
Marine and Aviation
Surety Bonds
Products Liability
Deferred Variable
Insurance Managers

All captive insurers licensed to do business in the Cayman Islands must appoint an insurance manager who is defined in the law as a person operating in or from within the Islands acting as a manager or consultant (but not a bona fide employee) and who provides underwriting and insurance expertise for insurers. All insurance managers must be licensed and within six months of the end of each financial year must submit a variety of information to the Authority including a list of all insurers for whom they act.

An insurance manager is required by the law to use his best efforts to carry on insurance and reinsurance business only with insurers of sound reputation. If a manager has cause for concern regarding the integrity or soundness of an insurer, he must report the fact immediately to the Authority.

Preservation of Confidentiality

Specific provisions in the Insurance Law prohibit the Authority and any person acting under its authority from disclosing any information relating to any application or the affairs of any licensee or of any policyholder of a licensee unless required to do so for the purposes of performing his duties under the Law or when lawfully required to do so by any court of competent jurisdiction within the Islands. After discussions with the financial industry, Government is expected in the near future to introduce legislation to modify these provisions so as to allow the Authority to disclose information to foreign regulators where there exists a reasonable certainty that wrongdoing has taken place. There will be safeguards. The Authority will be able to make disclosure where

(a) it is satisfied that the recipient is subject to restrictions on further disclosure, and

(b) the disclosure relates only to the policy holder who is the subject of the enquiry.

It will also be permitted to disclose information concerning the dissolution of an insurer or the appointment of a liquidator or receiver.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions