Obtaining a local insurer licence in the Cayman Islands is worthwhile for working on the domestic insurance market. The permit is issued by the Cayman Islands Monetary Authority (CIMA) and makes it possible to insure residents, local property, transport and other risks connected with the jurisdiction.
The permit is called the Class A Domestic Insurer Licence. It is used for a full-fledged domestic insurance business and differs from captive models, which service a limited circle of connected persons. Obtaining a domestic insurer permit in the Cayman Islands makes it possible to conduct operations directly in the country, to build one's own line of policies, to use the local legal system and to work in the regulated financial environment of the islands.
Obtaining a Local Insurer Licence in the Cayman Islands: the Particularities of the Class A Domestic Insurer
The Class A licence is intended for companies that conduct local business, that is, insure risks connected exclusively with the Cayman Islands. The law classifies as such activity the insurance of life, property, liability and other interests of persons permanently residing in the islands, as well as objects located in the jurisdiction. For automobiles, vessels and aircraft, the place of their usual basing is taken into account.
How a Local Insurer Differs from an External One
A domestic insurer is registered in the Cayman Islands and conducts activity through a local office. An external one works through a foreign structure located in another country with regulation acceptable to CIMA. For obtaining in the Cayman Islands a local insurer licence, a physical presence, employees and management within the jurisdiction are mandatory.
What Types of Business Can Be Conducted When Arranging a Class A Insurance Licence in the Cayman Islands
The permit may cover both general and long-term insurance. The first includes property insurance, liability coverage, medical policies, motor insurance and other areas not relating to life insurance. Long-term covers life insurance, annuities and products the payouts on which depend on the value of assets or indices. The scope of activity is determined by the application, the business model and the approval of the regulator. If the company simultaneously plans to use both areas, a local insurer licence in the Cayman Islands is arranged separately for each.
The Requirements for Arranging a Cayman Local Insurer Permit
When arranging a local insurer licence in the Cayman Islands, CIMA, in addition to the documents, assesses the ability of the company to genuinely conduct insurance operations within the country. A local insurer must be registered under the legislation of the islands. The law requires the presence of a minimum of two directors. The organisation is obliged to have a place of conducting business within the jurisdiction. The regulator assesses the presence of an office, employees, accounting systems, internal records and administrative resources.
Fit and Proper: the Business Reputation of the Directors, Managers and Officers
Within the framework of the licensing of local insurers in the Cayman Islands, CIMA checks the experience, qualifications, financial good faith and reputation of the directors, managers and officers. A negative history in the financial sector, litigation disputes or problems with previous permits may lead to a refusal.
Personnel, Competencies and Operational Infrastructure
To obtain a local insurer licence in the Cayman Islands, it is necessary to confirm the presence of specialists capable of managing underwriting, reinsurance, the settlement of losses and internal control. Additionally, the software systems, accounting and the storage of documentation are assessed.
The Structure of the Insurance Group
If the company is part of an international group, CIMA checks the transparency of ownership and the possibility of supervising all the participants in the structure. Complex chains of ownership without a clear distribution of functions may raise additional questions.
Capital and Solvency for a Class A Domestic Insurer
For obtaining a local insurer licence in the Cayman Islands, separate requirements for capital and financial stability apply. The minimum amount of own funds constitutes the greater of two values: 300,000 USD or the calculated indicator according to the capital requirements formula. In the calculation, the assets, reinsurance, insurance obligations, currency risks and subsidiary structures are taken into account. The prescribed capital requirement (PCR) for registering a local insurer permit in the Cayman Islands constitutes 125% of the MCR (the minimum permissible amount).
The regulator is entitled to establish an increased level of authorised capital after an analysis of the financial condition of the company. Usually this concerns a business with large obligations, a high level of reinsurance or significant catastrophe risks.
After arranging a Cayman Class A licence, a local insurer is obliged to calculate the MCR and PCR every quarter. If the indicator drops below the permissible level, a notification to CIMA is sent within 30 working days of the end of the quarter.
Ready to get started?
Leave a request — we will help with the structure and the submission.
Obtaining a Local Insurer Licence in the Cayman Islands: the Stages of Registering a Class A Domestic Insurer Permit
Obtaining a local insurer permit in the Cayman Islands includes the following stages:
The areas of insurance, the categories of clients, the forecast of premiums, the reinsurance scheme, the structure of capital, the future office in the Cayman Islands, the composition of the directors and the management team are determined. At this stage, it is also decided whether the company will conduct general, long-term insurance or both areas.
The name of the future insurer is preliminarily agreed with CIMA and the Registrar of Companies. Then the request for registering the legal entity in the Cayman Islands, the three-year financial forecast, the business plan, the information about the owners, the directors' questionnaires, the certificates of the absence of a criminal record, the information about reinsurance and the corporate structure are prepared.
The package is sent to the insurance supervision division of the Monetary and Financial Department together with the established fee for the review of the application. The documents are submitted in written form with the attachment of the business plan and the financial calculations.
CIMA analyses the origin of the capital, the qualifications of the management, the structure of the group, the financial forecasts and the operational model. In the course of the review, additional requests and requirements for clarifying information are sent to the applicant.
After the preliminary approval, the registration of the local company is completed. The certificate of incorporation and the final constituent materials are sent to CIMA.
The applicant provides evidence of the contribution of the agreed capital. The size of the amount depends on the calculations of the MCR and PCR, as well as the nature of the future insurance portfolio.
CIMA's board considers the materials and takes a decision on the issuance of the licence. In the absence of remarks, the company obtains the Class A Insurer's Licence. On average, the procedure takes 6–8 weeks.
After approval, the information about the new insurer is published in the Gazette — the official publication of the islands.
Obtaining a Local Insurer Licence in the Cayman Islands: Whom This Solution Is Suitable For
A permit for local insurance activity in the Cayman Islands is arranged by companies that plan to work with the domestic market of the jurisdiction.
Scenario | When the licence may be appropriate |
A new local insurer | The sale of policies to residents and businesses in the Cayman Islands |
An international group | Working with local risks through a separate company |
The expansion of a financial business | The addition of an insurance area to existing services |
A specialised insurance organisation | Working with a separate segment — property, health, life, motor, liability |
Conclusion
Our team supports the project from the preparation of the business model to the obtaining of a local insurer licence in the Cayman Islands and the launch of operational activity. We structure the corporate part, prepare the package for CIMA, help with the financial calculations, the interaction with the registration authorities, the selection of local service providers and the organisation of immigration procedures for the management team.
Is it possible to obtain a Class A Domestic Insurer licence in the Cayman Islands without registering a company in the jurisdiction?
No. For the status of a local insurer, a legal entity registered in the islands is required. A place of conducting business in the jurisdiction is also necessary.
What minimum capital is needed for obtaining a local insurer permit in the Cayman Islands?
The basic minimum is 300,000 USD. The final amount may be higher if this is required by the solvency calculation taking into account the assets, obligations, reinsurance and risks of the portfolio.
Is it possible, under Class A, to insure only one type of risk?
Yes. It is possible to arrange a local insurer licence in the Cayman Islands for a specific area. The main thing is that the business plan, the capital, the reinsurance and the operational model correspond to the chosen type of risk.