With the publication of the Insurance (Portfolio Insurance
Companies) Regulations, 2015 and the Insurance (Amendment) Law 2013
(Commencement) Order, 2015, insurers (other than Class A Insurers)
formed as segregated portfolio companies (SPCs)
can enjoy the advantages of portfolio insurance companies in the
As of January 16, 2015, a new or existing SPC is able to
incorporate one or more of its segregated portfolios by
establishing a "portfolio insurance company"
(PIC) under the SPC. The PIC would then undertake
the relevant insurance business without the need for a separate
licence and, unlike a traditional segregated portfolio, the PIC
will be incorporated as a separate legal entity.
The main advantages of the PIC are:
the ability to contract with other PICs within the same SPC,
facilitating reinsurance, quota sharing and pooling
each PIC is a separate legal entity with its own board of
directors, permitting governance flexibility and reduced risk of
comingling assets; and
a single PIC can be wound up with no effect on its controlling
SPC or other PICs
The Regulations address in detail the requirements for
registration of a PIC, the fees payable, the margin of solvency,
and the minimum capital and prescribed capital requirements. With
certain exceptions, each PIC is required to submit audited
financial statements and an annual declaration including an
actuarial valuation of its assets and liabilities (including loss
expense provisions) and a certificate of solvency. Full details of
the Regulations are beyond the scope of this alert, but in our view
the regulatory structure for PICs is commercially sensible,
flexible and balanced. For detailed information, contact any member
of Appleby's Cayman corporate team or the contacts set out
The PIC regime is an example of the Cayman Islands government
working closely with industry stakeholders in the private sector to
respond to clients' needs and increase the competitiveness of
the jurisdiction. The PIC is a welcome addition to Cayman's
thriving insurance industry.
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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