23 Nov 2011
The Cayman Islands have more going for them than some Western media might suggest when you consider that the Island’s anti-money laundering legislation has been evaluated by the IMF and by the FATF as being one of the very best in the world. The Cayman Islands also have full income tax transparency with the US, proactive tax reporting with 27 members of the European Union, and full Tax Information Exchange Agreements with 26 countries around the world, including Japan and China, thereby well exceeding the number required by the OECD.
Furthermore, as a member of the International Organization of Securities Commissions (IOSCO), the Cayman Islands have full “regulator-to-regulator” disclosure with all IOSCO regulators and the Cayman Islands Monetary Authority (CIMA) has formalised procedures with the four main US banking regulators for the exchange of supervisory information relating to banking institutions that operate in both territories.
A protected reputation
In addition, the Cayman Islands are regularly recognised for their expertise and level of international business value-added, with a recent example of this being The Banker publication, which placed Cayman first in the category of specialised financial centres in its 2011 IFC ratings, the third year running that Cayman has held that distinction. This result comes at a time when statistics from CIMA note that Cayman maintains US$1.8trn in deposits and interbank bookings, is the world’s largest domicile for hedge funds and catastrophe bond transactions, is the second largest domicile for captive insurance, maintains a vibrant stock exchange and is also the preferred shipping registry for the world’s mega-yachts.
Additionally, CIMA provides a very proactive and client-focused regulatory environment, thereby widening investment opportunities and the facilitation of legitimate international movement of funds. The above success is no better evidenced than in the area of captive insurance, where Cayman is the leading domicile for healthcare related captive business and the second largest overall captive domicile behind Bermuda. Cayman is home to 730 captives writing more than $9.5bn in annual premium and having total assets in excess of $58bn.
The continued success of the Cayman Islands as a captive domicile is fuelled by the unique partnership of a sound and business-focused regulatory regime, combined with the unwavering support of the Cayman Islands Government and the Insurance Managers Association of Cayman (IMAC) in the promotion and protection of Cayman’s reputation as the domicile of choice for captive insurance. This only goes to show what can be done when a domicile truly works together towards a common goal.
IMAC’s annual Cayman Captive Forum is a great opportunity to network with and learn from industry experts. The 2010 event attracted over 1,000 delegates and featured a wide range of speakers and educational presentations on all aspects of the captive and insurance industry. The 2011 event is scheduled from November 29 to December 1, at the Ritz Carlton, Grand Cayman, and is already on track to match the previous year’s attendance.
When companies first look into captives, it is normally due to a negative experience, e.g. a lack of availability or reduction in coverage, and/or premium increases. As a result, there is an overriding desire to “take control” of their insurance destiny and to insulate themselves from the fluctuating cycles of the traditional insurance market. This can be achieved by establishing your own captive insurance vehicle, or by joining an existing one.
Either way, a captive can offer many benefits, including such aspects as coverage and programme design flexibility, insulation from market fluctuations, control of costs, improved cash flow, an improved negotiating position, an enhanced safety and claims management “culture” throughout the organisation, flexibility with investment opportunities and the retention of investment returns.
Should you wish to learn more about why the Cayman Islands is the right domicile to meet your captive insurance needs, please contact Mike Gibbs, the President of Kensington Management Group, Ltd, one of the largest independent captive managers in the Cayman Islands, with a diversified portfolio of single parent and group captive clients.
For more information telephone: 345 814 7000 or email firstname.lastname@example.org or visit www.kensingtonmanagement.ky