Cayman Islands captive insurance: Class B licenses and specialists
Captives in the Cayman Islands are licensed by the Cayman Islands Monetary Authority (CIMA) under the Insurance Act, 2010. Most are Class B insurers, and the Class B category depends on how much of the business is related to the owners.
International domicile; insurers are licensed and supervised by the Cayman Islands Monetary Authority (CIMA).
The Cayman Islands Monetary Authority (CIMA) licenses and supervises insurers under the Insurance Act, 2010. A captive needs both a Cayman company and a CIMA insurance license; incorporating the company does not by itself authorize insurance business.
Class B categories and related business
Captives are typically licensed as Class B insurers, which carry on non-domestic business. The category depends on the share of net written premiums from related business, which the Act defines as business from the insurer's members or from members of a group linked to it by common ownership or a common risk management plan, or as CIMA determines:
Class B(i): at least 95% from related business
Class B(ii): more than 50% from related business
Class B(iii): 50% or less from related business
Separate license classes cover domestic insurers (Class A) and reinsurance business (Classes C and D). These are not Bermuda classes and should not be compared with them line by line.
Cells and entity form
Cell-style arrangements in Cayman generally use a segregated portfolio company, which keeps the assets and liabilities of each portfolio separate. Confirm the entity form and how each portfolio is licensed with Cayman counsel.
Application, local management and reporting
Applications go to CIMA with a business plan and information on owners, directors and service providers. A Class B insurer must either keep an approved principal office in the Islands or appoint a licensed Cayman insurance manager. Annual financial statements are audited by an independent auditor approved by CIMA, and insurers writing long-term business also need an annual actuarial valuation certified by an approved actuary. Reporting obligations follow the class.
Questions to settle early
Which Class B category fits the expected mix of related and unrelated business?
Will the structure be a standalone company or a segregated portfolio?
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U.S.-based captive insurance consulting company focused on the creation, development and oversight of member-owned group captive insurance companies, including casualty and medical stop loss group captives.
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