Insurance Business

Cayman is a premier global hub for international insurance-business, particularly in the captive insurance and reinsurance sectors.

Key Regulatory Requirements

Under the insurance-act-2010, any person carrying on insurance business or acting as an intermediary must be licensed by cima.

Ongoing Obligations:

• Fitness and Propriety: Directors and managers must be "fit and proper" persons.
• Local Presence: Many international insurers (Class B, C, and D) satisfy local presence requirements by appointing a licensed Insurance Manager.
• Segregated Portfolios: Insurance companies can be structured as corporate-structures#segregated-portfolio-companies to isolate assets and liabilities of different programs.
• Corporate Liability: Criminal liability for regulatory offences extends beyond corporations to include partnerships, limited liability partnerships (LLPs), and unincorporated associations, holding their partners and managers personally accountable for consented or neglected breaches (source: insurance-amendment-act-2023).

Portfolio Insurance Companies (PICs)

A PIC is a separate legal entity (a subsidiary) incorporated by a segregated portfolio of an SPC (source: insurance-portfolio-insurance-companies-regulations-2015).

• Advantage: Unlike a segregated portfolio, a PIC has its own separate legal personality, allowing it to contract in its own name (e.g., for reinsurance) more easily.
• Registration: PICs register with cima but do not require a separate insurance licence if their controlling insurer is licensed.

Capital and Solvency Requirements

Non-domestic insurers (Classes B, C, and D) are subject to a risk-based capital framework (source: insurance-capital-and-solvency-classes-b-c-and-d-insurers-regulations-2018). They must maintain capital above two thresholds:

• Minimum Capital Requirement (MCR): A fixed floor based on licence class.
• Prescribed Capital Requirement (PCR): A risk-based measure calculated on premiums, reserves, assets, and catastrophe risk.

Capital calculations involve classifying assets into eight "admissible" tiers based on liquidity and quality. Falling below the PCR requires a remedial action plan; falling below the MCR triggers direct regulatory intervention by cima.

Licensing Categories

• Class A: Domestic insurance business.
• Class B: Captive insurance (insuring risks of a parent or group). Sub-categorized (i, ii, iii) based on the percentage of unrelated business.
• Class C: Insurance-linked securities (ILS).
• Class D: Reinsurance business.

Dormant Accounts

Class A (domestic) insurers are regulated as "account providers" under the dormant-accounts-law-2011. Any monies claimable or payable to an insured or beneficiary that remain unclaimed for seven years (with no activity from the holder) must be notified and eventually transferred to the Government.

Application and Fees

Applicants must submit a detailed three-year business plan, risk management strategies, and financial projections. Documentation must include personal questionnaires for key personnel and shareholders holding >10% (source: Insurance_(Applications_and_Fees)_Regulations,_2012.pdf).

Fee Schedule (Updated 2025)

Annual renewal fees are set by regulation. As of 2025, fees for Class B insurers were increased (source: Insurance_(Applications_and_Fees)_(Amendment)_Regulations,_2025.pdf):

• Class B(i): $10,450
• Class B(ii): $11,550
• Class B(iii): $14,850
• Class A: $75,000
• Insurance Manager/Broker: $15,000

Related pages

• insurance-act-2010
• insurance-applications-and-fees-regulations
• insurance-capital-and-solvency-classes-b-c-and-d-insurers-regulations-2018
• insurance-portfolio-insurance-companies-regulations-2015
• cima
• corporate-structures